Ramaphosa’s views on job creation are ‘fatally flawed’ – SACP

The South African Communist Party (SACP) has called on President Cyril Ramaphosa to “re-examine” his views about the role played by government in creating jobs.

This after Ramaphosa, during his State of the Nation Address (Sona) on Thursday evening, said the private sector needed to create more jobs, rather than government.

“We all know that government does not create jobs. Business creates jobs. Around 80% of all the people employed in South Africa are employed in the private sector.

“The key task of government is to create the conditions that will enable the private sector – both big and small – to emerge, to grow, to access new markets, to create new products, and to hire more employees,” the president said in his address at Cape Town City Hall.

‘Fatally flawed’

On Friday, the SACP – which is in an alliance with the ANC and trade union federation, Cosatu – said Ramaphosa should re-examine his views about job creation because they were “neo-liberal” and “fatally flawed”.

“The president should re-examine the idea he asserted, that ‘we all know that’ the state does not create employment.

“Besides the fact that the ‘we’ is definitely not inclusive, but in fact refers to the category of individuals who believe in that fatally flawed assertion, it is important to build a capable developmental state with organic capacity to serve the people diligently and capably,” the party said in a statement.

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State-created employment

While acknowledging that the private sector played a significant role in employment, the SACP said Ramaphosa’s views were flawed because the private sector was profit-driven and benefited through state procurement, tenders and contracts.

The party said the employment flowing from the private sector’s work in government was, therefore, state-created employment.

“There are just so many private sector firms performing or depending on work contractually awarded to them by the state, state institutions, other public entities and the government in all spheres. 

“That comprises work not only performed in the private sector and delivered as products or services to the state for payment, but work performed right in the public sector by private sector firms.

“In fact, there is indisputable evidence that supports this observation of reality in the State of the National Address the president delivered. The employment flowing from that work is state-created employment.”

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The SACP said state employment was not only in public service and administration, but also in state-owned entities such as Eskom, Transnet, development finance institutions and many others.  

The party said by turning around public entities, dealing with corruption and expanding the publicly owned sector, the state could make a more direct contribution to employment creation.

International experiences

The SACP said the assertion that the state does not create employment was fatally flawed in terms of international experiences as well.

“If we are to learn from other countries that demonstrably build state participation in their economies on behalf of their people as a whole, it will take a few seconds to notice that the Forbes List of Global 2000 in 2021 has a state-owned financial services provider at the top spot, the Industrial and Commercial Bank of China (ICBC).

“Alone, the ICBC employed 434,798 workers in 2021. The ICBC holds 20.1% shareholding in the Standard Bank of South Africa, a country whose state does not have its own bank primarily because of neo-liberal ideological dominance in its policy landscape.” 

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