How to create jobs
The jobs summit. It was, no doubt, a sincere effort to find a solution to our monumental levels of unemployment. It is agony watching President Cyril Ramaphosa trying to escape the economic monster busy swallowing us without further annoying the beast. A stimulus that doesn’t stimulate. A monetary policy committee that knows it should be raising interest rates but can’t. Unions that must constantly be soothed. The state assets that can’t be sold.
We South Africans talk too much and there’s a curious security in that. Perhaps the less we do, the fewer mistakes we make?
Or have we talked so much we’ve lost sight of what we are? Yes, there’s colonialism and apartheid and cruelty and division and disdain and greed and theft, and a lot of that is still around. But at our core, economically, we are a nation, black or white, of miners and farmers.
In our divisions we forget that. We’re really good at mining and farming. If we could mine (and process the minerals a bit) and farm (and process the food a bit) at four times the current rate, we’d be much better off than getting stuck on grand plans to create “value chains”.
What is it with “value chains” that so fascinates our policymakers? They’ve convinced themselves that if you carefully study how a product is made and marketed and consumed, you can repeat one success over and over. They take human error or genius or free will out of their equations because the “value chain” is Truth.
Except it isn’t. We should mine our astronomic mineral wealth for all it’s worth. Dig it up and ship it out. That’s our part in the global “value chain”. Instead we say, No, wait, why ship this out when it’ll just come back here as a Japanese screwdriver? Why don’t we make the screwdriver instead?
The “beneficiation” case sounds reasonable, but it’s stupid. The Japanese screwdriver guy already has customers all over the world. When we go into his business ourselves we create a competitor where once we had a customer. We could potentially compete but it would have to be on price. That would mean weakening the rand until a litre of petrol costs more than R35.
Or we induce the Japanese guy to make his screwdrivers here, in SA. On his terms.
We won’t grow this economy until we play to our strengths. The state is preparing to grow the number of black commercial farmers exponentially. Brilliant! We’re good farmers. And it doesn’t have to be complicated. There are markets for everything. There’ve been gun battles in Mexico for control of avocado farms because avo prices have risen so sharply. We could outproduce the Mexicans any day. Plant fruit trees. Export the fruit. The same with plants. You just have to have land and water and patience and we have it all. Patience maybe not so much.
Our economic planning should be simple: ensure a young farmer can harvest an orange on a Thursday and have it in a market in Warsaw, Poland, on Saturday. It means building good roads and more airports. There’s the link between good infrastructure and prosperity.
And then there’s the one slam-dunk get-rich-quick scheme the ANC is just determined not to grasp, a symptom of its addiction to victimhood. It can’t bear to think of SA as a place where foreigners come to play and have fun. It is tourism. The Namibians get it. I remember a Namibian leader imploring his people to look after tourists. “Hold them in our hands, keep them safe, make them want to return,” he said.
The thing is, dear policymakers, the beneficiation you seek is right in front of you.
Fruit and minerals can be processed or exported straight. But in tourism, God has already done the beneficiation. It is our country in all its glory. It is an export we don’t have to send anywhere. People will come to us.
But we make it hard and unpleasant. We should issue 30-day visas on arrival, no questions asked. Then those visitors will spend their hard currency on us. Don’t you get it? How does New Zealand take tourism receipts in 2017 of $10bn (R147.69bn) and we only manage $9bn? How does Thailand pull $57bn? (Clue: visas on arrival.)
The government should trust the people more. The people are resilient. Ask the poor. We don’t need no value chains. Let’s break them chains and do what we do best. Together, keeping it simple.