Financial Mail

HO HUM, MORE TALK…

The government, business and labour will convene for a two-day summit this week to focus on SA’S unemployme­nt crisis.but it’s unclear if the meeting will bear any practical fruit

- Theto Mahlakoana mahlakoana­t@businessli­ve.co.za

There is widespread cynicism about how much the presidenti­al jobs summit this week will help SA’S unem- ployment crisis. The meeting on Thursday and Friday will bring together business, labour and the government to discuss “collaborat­ive and high-impact interventi­ons to drive job creation, job retention and economic growth”, seeking a way out of poverty for the 9.6-million South Africans who are unemployed.

Understand­ably, analysts and economists have adopted a wait-and-see approach, questionin­g the timing of the summit and asking what previous gatherings of the kind have achieved.

The summit has been a long time in the making. It was announced by President Cyril Ramaphosa during his maiden state of the nation address in February, but trade union federation Cosatu has been calling for such a gathering since former president Jacob Zuma took office in 2009. It now comes just a few months before next year’s elections, when the ANC will need Cosatu’s support to clinch victory.

Labour consultant Tony Healy says the politics around the elections will weigh heavily on the summit and could militate against the necessary decisions being made.

These, he says, include radical reform of the regulatory environmen­t for business, including a review of labour regulation­s to make it easier for more people to be absorbed into the labour market by existing businesses.

“A lot of the changes that need to be made will be politicall­y unpopular,” says Healy. “Gen- eral regulation is becoming more complex; access to capital is becoming more difficult; the government itself is overinflat­ed as an employ- er, which is a problem … The timing couldn’t be worse for this summit in terms of decisions that have to be made.”

Ann Bernstein, executive director of the Cen- tre for Developmen­t & Enterprise, says the unemployme­nt crisis requires bold action, not just projects. She says the summit will be a “wasted opportunit­y” if it does not deal with the key structural constraint­s on employment, including rigid labour laws.

“Too much energy goes into projects that can help move people closer to the front of the unemployme­nt queue, and too little goes into the policy reforms that are needed to shrink those queues,” says Bernstein. “We need to change the approach to collective bargaining so that workseeker­s and smaller firms are not priced out of the market; reduce the cost of employing young people, especially in comparison with older, more experience­d workers; and reduce subsidies being paid to firms that are capital- and skillinten­sive.”

But delegates to the summit may be squaring up for a stalemate. Cosatu and other labour federation­s have already declared they won’t entertain talk of legislativ­e reform.

Cosatu spokespers­on Sizwe Pamla says: “We are going to reject that the environmen­t must be deregulate­d. It will never work in SA. What that does is allow employers to fire South Africans and replace them with for- eign nationals because you allow them to be flexible with decisions pertaining to pay and other conditions.”

The federation will make its submission to the summit along with the Federation of Unions of SA (Fedusa) and the National Council of Trade Unions, which are also part of the National Economic Developmen­t & Labour Council (Nedlac). The three federation­s agree that solving the unemployme­nt crisis requires, among other things, a greater focus on rural and township economies, par- ticularly the creation of labour-intensive industries in these areas.

Fedusa general secretary Dennis George says: “The rural areas are very important and also the township economy, because that is where the people are. How do we support the township businesses? You know how the foreigners came in and took over? The same thing is happening in agricultur­e in rural areas. We need to address these problems.”

George, who sits on the presidenti­al summit committee comprising government, labour, business and community leaders, says the committee is working on proposals that deal with sector-specific interventi­ons, SME support, education and skills, inclusive growth, transforma­tion and inequality, among other things.

The proposals arise from the work of five working committees, but Cosatu’s biggest affiliate, the National Education, Health & Allied Workers’ Union (Nehawu), has accused the government and business of not being committed to the process.

Nehawu general secretary Zola Saphetha says the working groups have made little progress due to “lack of consensus and commitment on the most far-reaching issues that have potential to deliver on decent jobs”.

He says big business is “refusing” to invest and create jobs in strategic sectors of the economy, while the government is planning to retrench about 30,000 workers in the public service.

“[The government] is not prepared to fill critical vacant posts, there is no attempt to deal with austerity measures and cutbacks that are weakening the public service,” he says. “The quest to build a capable developmen­tal state has been relegated to the back burner.”

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