JOB CRE­ATION: Sadly, Zuma doesn’t have a magic

Finweek English Edition - - COLUMN - STEPHEN MULHOLLAND

The pro­posed

ban­ning of labour bro­kers and other re­stric­tive labour law pro­vi­sions are cal­cu­lated

pre­cisely to dis­cour­age the pri­vate sec­tor

from em­ploy­ing


EX­CEPT IN SO­CI­ETIES ruled by that de­funct and de­struc­tive ide­ol­ogy known as Com­mu­nism, it’s uni­ver­sally ac­cepted that, by and large, it’s not the func­tion of the state to cre­ate jobs but rather that of the pri­vate sec­tor. There are, of course, ex­cep­tions to that. For ex­am­ple, in times of war, gov­ern­ments have no op­tion but to deny cit­i­zens those rights they nor­mally en­joy. Such ex­cep­tional use of power in democ­ra­cies should be limited to times of emer­gency and used spar­ingly and care­fully.

Thus Franklin Roo­sevelt em­barked upon a vast ar­ray of Fed­er­ally funded projects in an ef­fort to ame­lio­rate the ef­fects on or­di­nary work­ing class Amer­i­cans of the Great De­pres­sion. One of those was the Ten­nessee Val­ley Author­ity, a gi­gan­tic hy­dro­elec­tric project launched by Roo­sevelt in 1933 that be­came the largest en­ergy provider in the United States, hav­ing given work to more than 30 000 in its ini­tial con­struc­tion.

It then played a piv­otal role in sup­ply­ing en­ergy to the de­fence in­dus­try in the US. Since the Fifties it’s been self-funded, rais­ing bonds in its own name and achiev­ing 99,999% re­li­a­bil­ity of sup­ply.

Then there’s the Dwight David Eisen­hower Na­tional Sys­tem of In­ter­state and De­fence High­ways, which changed for­ever the econ­omy of the US through huge in­creases in mo­bil­ity across the 42 000 new miles of broad high­ways.

All this brings us to Pres­i­dent Ja­cob Zuma’s pledge that 2011 will be the year for job cre­ation in SA. Sadly, Zuma doesn’t have a magic wand with which to cre­ate those jobs. If any­thing, his ad­min­is­tra­tion’s leg­is­la­tion – such as the pro­posed ban­ning of labour bro­kers and other re­stric­tive labour law pro­vi­sions – is cal­cu­lated pre­cisely to dis­cour­age the pri­vate sec­tor from em­ploy­ing peo­ple.

We can all learn from ex­pe­ri­ence. Zuma should look back at the er­rors of Thabo Mbeki who, in­stead of em­bark­ing on sorely needed pub­lic works projects – such as the proper fund­ing of Eskom, the erec­tion of new dams, schools, hos­pi­tals and the build­ing and im­prove­ment of roads – em­barked in­stead on an in­sane and point­less frenzy of weapons buy­ing.

As is now uni­ver­sally ac­cepted, the sole pur­pose of the arms deals was to en­rich loyal ANC cadres. That cul­ture must be ended. It must be rooted out and the proper in­ter­ests of the or­di­nary peo­ple of this coun­try pur­sued.

And those in­ter­ests won’t be served by the siren call of col­lec­tivism to ride roughshod over the med­i­cal pro­fes­sion, al­ready direly short of skills and grow­ing in­creas­ingly so. For ex­am­ple, an anaes­thet­ics prac­tice in Jo­han­nes­burg re­cently lost half its part­ners to over­seas of­fers, mainly from Aus­tralia.

Will­ing buyer, will­ing seller as the ba­sis for land trans­for­ma­tion is un­der threat, mean­ing we’ll lose in­creas­ing num­bers of skilled and ex­pe­ri­enced white farm­ers at the same time we have moved from a net ex­porter of food to a net im­porter.

We now have plans to force small busi­nesses cre­ated by whites to have black part­ners, who in­vari­ably will not have cash or ex­per­tise to con­trib­ute. Thus whites will cease cre­at­ing small busi­nesses that, econ­o­mists con­cur, are far and away the most pro­lific cre­ators of jobs. For ex­am­ple, stud­ies in the US have shown that while the top 500 com­pa­nies are al­most con­stantly shed­ding jobs, small busi­nesses are al­most con­stantly cre­at­ing them.

Zuma has him­self re­cently expressed reser­va­tions about the nar­row trend of black eco­nomic em­pow­er­ment in SA. That’s very much to his credit, given that many of his co­horts and fam­ily mem­bers are ben­e­fi­cia­ries of a sys­tem that has re­duced wealth cre­ation be­fore be­stow­ing what’s left on the un­de­serv­ing, who then dis­si­pate it on a high life of con­spic­u­ous con­sump­tion.

Thus if Pres­i­dent Zuma wishes to cre­ate jobs – or, rather, have them cre­ated – it’s es­sen­tial busi­ness be en­cour­aged to in­no­vate, that en­trepreneurs be en­cour­aged to take risks, that or­di­nary work­ers be en­cour­aged to start on the bot­tom rung and work their way up. Govern­ment must in­volve it­self in prop­erly and eth­i­cally man­aged pub­lic works projects that can pro­vide work op­por­tu­ni­ties to the masses and a bet­ter coun­try for all our cit­i­zens.


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