Cyril’s new dawn will take time

WHAT TO DO: GOVT MUST CREATE JOBS

While SA’s economy is among Africa’s biggest, it cannot shake the deep-rooted structural inequalities holding back growth and development.

IMF report finds that SA, Equatorial Guinea, Zimbabwe have negative outlooks for real GDP growth in 2018.

While SA’s economy is among Africa’s biggest, it cannot shake the deep-rooted structural inequalities holding back growth and development.

The International Monetary Fund 2017 regional report, found SA (-1.1%), Equatorial Guinea (-5.1%) and Zimbabwe (-1.5%) were the only three sub-Saharan African countries with a negative outlook for real GDP growth in 2018.

Last year’s Stats SA poverty trends report – considering 2006 to 2015 poverty estimates – showed there are 13.5 million South Africans living below the food poverty lines. They can’t afford to buy enough food to meet the requirements of the United Nation’s minimum daily energy intake.

These numbers must compel policymakers and their political principles to deal with the situation or ask for help.

However, SA society has become socialised to accept the apartheid-created structural problems and its after-effects. Even as the new dawn is mentioned, the reality of the labour force can be seen in the 27% unemployment rate and also in the vast imbalance between unemployed blacks and whites, including graduates.

Blacks continue to face poverty, unemployment, poor living standards and maladies. At this, some people may say: “But you people have been in government for 23 years now and should have fixed this.”

As if it was that easy. How long did it take the Asian tigers?

First, if any attempt at repair is to be made, it must consider the traces of still-lingering inferior education: a system designed to provide barely sufficient basic skills for some blacks, enabling them to work in factories or mines. Until these remnants are erased, any attempt to fix education outcomes will fail.

The presumption is that President Cyril Ramaphosa’s government has plenty of advisors who are aware of the interface between technology and globalisation’s impact on economies like ours.

This new dawn won’t arrive any time soon. As the changes in technology force companies to adapt or become extinct, many old jobs will be displaced by new jobs driven by technological advancement. For SA, those old jobs employ low-income earners with medium skills. For the low-skilled, there’s no place in the workplace of the near future.

Second, unless there’s considerable growth and improvement of the economy, it will be difficult for government to achieve its 15% unemployment reduction goal.

Government’s role becomes crucial. It’s unsustainable to continue as the biggest employer. It must direct resources to where the economy can grow jobs and to where they’re needed.

The new dawn crew must learn from where government has been failing. And then a sense of stability and flexibility must be fostered. This is how governments in East Asia and now India did it. Learn from their example, particularly at a macroeconomic level.

There are 13.5 million people living below the food poverty line and 9.4 million unemployed – 3.3 million of which are under 35. They’re excluded from the economy, from the positive outcome of a democratic SA.

To them there’s no new dawn, only darkness and hopelessness.