A bit ‘old economy’ but jobs summit was worthwhile
If President Cyril Ramaphosa’s administration fails to ignite growth and job creation it will not be for lack of high-level meetings. There have been many with investors in New York and with CEOs at home. There is the investment conference still to come this month and then there was last week’s jobs summit, which showcased the 84-page agreement reached by business, labour, government and community over three months of intensive work and meetings. Despite all the hype and the work, the summit has been dismissed by some commentators and ignored by others. That’s hardly surprising: the agreements, we were told, could yield 275,000 jobs — less than the 300,000 the economy generates annually and a fraction of the 6-million needed. The summit didn’t even try to deal with the dysfunctional policy environment holding back investment and job creation, making it clear its focus was on implementation, not economic strategy.
Even then, there was something rather “old economy” about it all, a sense from the framework agreement that the social partners at the summit were more intent on clinging to existing jobs in traditional sectors than to creating an enabling environment for new ones. The partners agreed to focus on mining, manufacturing, agriculture and related service sectors while tourism and tech rated hardly a mention.
But the summit is worth taking seriously nonetheless, as much for what it says about the contestation among and within the social partners over what’s to be done as for some of the initiatives they did manage to agree on.
Retrenchment was one of the biggest stumbling blocks. The government reiterated its commitment to no retrenchments in the public sector, which is a problem given that it means effectively no sustained cuts in the wage bill nor much prospect of restructuring at state-owned enterprises. There was pressure on the private sector, too, and while the outcome — “Business agrees that everything possible must be done to avoid retrenchments ...” — may appear bland, it was hard won.
So, too, was the degree to which the framework agreement recognised the private sector’s leading role in creating jobs. The notion that the state can and should do it is still very much there within organised labour and government. Sometimes it’s ideological; sometimes it’s because if the state leads the process it facilitates the rent-seeking that’s become endemic in the public sector. But for reasons that have as much to do with history as ideology, there is a distrust of business which weighs on efforts to forge public-private partnerships. Insiders say business contributed 70% of the job-creation proposals: that the social partners went along with them was not a foregone conclusion.
The summit agreement needs to be seen as the result of a contested process and a fractured environment, and to the extent that good initiatives have come out of it, that’s encouraging. The emphasis on agriculture and in particular on partnerships between commercial farmers, lenders and black farmers on land reform and job creation is progress. Large-scale initiatives in early-childhood development which leverage on existing private-sector projects could create jobs and improve children’s life chances. So, too, could scaling up the “pathways” initiative to get young people into jobs. The Sibanye-Stillwater project to turn unused mining land into farms is a model with potential.
None of these are quick fixes, though, and they won’t be fixes at all if government departments block them. The meeting mattered because it was an effort to get the partners to agree on at least something. But if it is to yield even modest gains, the president will have to tackle the damaged fabric of government itself. And that’s a summit he has yet to climb.
No quick fixes but some ideas put forward have potential to create jobs, build bridges, improve lives