Sunday Times

A bit ‘old economy’ but jobs summit was worthwhile

- 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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