Sunday Times

Measure every policy by how much it helps the poor and jobless

- MMUSI MAIMANE

The recent downgrade to junk status by S&P Global Ratings — brought on by rampant looting of the state — will hurt the poorest most. We South Africans need to make some smart changes to reverse our poverty and debt trap, and enable an open, high-growth, high-jobs economy.

South Africa is a country of two nations. Around 45% enjoy the freedom to live lives of worth and dignity, while the other 55% are trapped below the poverty line, locked out of the economy.

This divide is structural and sustained and is reinforced by an embedded unequal access to opportunit­ies. We remain a deeply unfair society.

During apartheid, inequality was entrenched and maintained by race-based legislatio­n, denying black people access to ownership and job opportunit­ies.

Since 1994, inequality has been perpetuate­d by poor governance and ill-considered legislatio­n, enriching and empowering a connected elite at the expense of the many. To become a prosperous nation, we must tackle the governance and legislativ­e issues sustaining the divide between insiders and outsiders.

For every single policy decision, we must ask: will this help the 30 million people locked out and left behind? Will it open the economy to the

9.4 million jobless adults? Unless the answer is an unequivoca­l yes, the policy isn’t worth having.

I therefore propose critical policy interventi­ons that can be implemente­d fairly rapidly at no great cost to the fiscus.

First, we must radically reform our stateowned enterprise­s. They are haemorrhag­ing public money and delivering dismal services at exorbitant prices.

We must sell those that are not strategic, or turn them around and then sell them, or close them down. To those deemed strategic, we must appoint fit-for-purpose leadership, ensuring they deliver a quality service to the public at the best possible price.

This requires boards that are independen­t of state interventi­on, similar to the Telkom model.

Eskom is the highest priority. Failure of leadership is the only reason for the high and rising price of electricit­y from a company that is teetering on the edge of collapse.

Eskom is a bottomless pit into which we’ve thrown so much money that our social welfare system is at risk. We must separate production from distributi­on, and open power production to many more companies. The 20% tariff hike Eskom has requested will produce massive job losses.

Second, we must reform our labour market for young people to find employment after leaving school. Small enterprise­s need maximum flexibilit­y to grow, employ as many people as possible and compete with big businesses — not be held back by restrictiv­e regulation and red tape.

The most important gap to close is not between high- and lowwage earners, but between those who have a job and those who don’t. Until the vast majority of the labour force has a job, we cannot afford regulation that actively prevents businesses from hiring people.

A society with 36% unemployme­nt is completely unnatural and unnecessar­y. The joblessnes­s is caused by a labour market designed for those with jobs, not for those without jobs.

When the schooling system has failed you completely, the last thing you need is more obstacles put in your way to find work. A national civilian service year for unemployed matriculan­ts will help provide pathways into formal employment. Third, we need to simplify and reform the empowermen­t system. Regulation­s like the mining charter have shattered investor confidence. We need to empower those left behind, not the elite.

Ask 100 black South Africans whether BEE has benefited them personally and 99 will tell you it has not.

We need a jobs and justice fund, an investment fund incentivis­ing companies to help fund new entrants into key sectors.

Fourth, we must reduce corporate taxes, abolish exchange controls, remove trade barriers and establish export-processing zones to show investors that South Africa is open for business.

Fifth, we must issue visas on arrival to tourists. Tourism is a massive potential source of growth, jobs and foreign exchange.

Sixth, we must appoint the best prosecutor to head the NPA, and remove the presidenti­al power to appoint them.

We need to reduce the size of our state, and make it more efficient. Our public sector wage bill is unsustaina­ble. And we must fix our education system. These will take time, but they must be done.

We need policies that will help bring economic freedom, fairness and opportunit­y — and a new beginning for all of us.

Maimane is the leader of the DA

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