A bit ‘old econ­omy’ but jobs sum­mit was worth­while

Sunday Times - - Business Opinion & Bits - by Hi­lary Joffe

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

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