UNEMPLOYMENT VIRUS IS A NATIONAL DISASTER

South Africa’s mass unemployment crisis – is just that – a crisis. More than 40% of the working age population have been cast onto the scrapheap; their creativity, imagination and energy, vital to the rebuilding of our country and region, destroyed! Excluded from official statistics are the beggars, scavengers, the hawkers and others amongst the active unemployed who have no choice but to subsist by some means or starve and by virtue of earning some income are not recorded as unemployed. As a result a two tier labour market has emerged with a third of all workers now employed in the informal sector with no rights and poor working conditions. 70% of the unemployed are youth and the majority are women. Some parts of the country record more than 70% unemployment. South Africa's unemployment levels is one of the worst in the world and must be understood as a national disaster, not a natural one but a social disaster - the outcome of failed policies.

For millions without a job it is not just the loss of being able to afford the basic things of life it is also the loss of dignity that destroys people and their communities. It is why we can talk about unemployment as a virus, which has turned our communities into places of fear and misery, with violence, abuse and crime our daily reality. It is women as the most exploited section of the workforce, as caregivers, as mothers and as young girls who are forced to carry the bulk of this burden.

On the 6^th of May 2013, Statistics South Africa released the Quarterly Labour Force Survey which indicated that again, South Africa’s unemployment rate is 25.2%. In simple terms, this means that more than a quarter (4.6 million) of active and employable South Africans who are diligently looking for employment opportunities cannot find jobs. Added to this, more than 2.4 million active and employable South Africans are now discouraged work-seekers, bringing the expanded (real) unemployment rate to 36.7% of the South African labour force, the highest since 2008.

Now for Africa’s biggest economy and member of a group of developing economies in the world, BRICS, alongside genuinely developing economies of Brazil, Russia, India and China, this is disastrous and a humiliation. Nevertheless, what is more disastrous and humiliating is the persistent failure of Policymakers and Government leaders to correctly diagnose the real cause of South Africa’s crisis levels of unemployment. Politicians and neo-liberal Policymakers at the highest level of policy making and implementation recurrently blame low levels of skills and the cost of labour for unemployment. All unemployed people are employable in one sector of the South African economy or another, particularly in manufacturing, agriculture and mining.

Whilst important, skills shortage is not the reason why South Africa has experienced and will continue to experience crisis levels of unemployment. For instance, Zimbabwe’s skills ratio is above that of South Africa, yet unemployment is still very high. The structural inability of the South African economy to absolve the entirely of its labour force, i.e. joblessness is instead the major cause of unemployment and it will remain so unless decisive State led economic development interventions are made on research and development, innovation, infant industries, manufacturing, and small scale agriculture. Even if all unemployed people can be skilled in two weeks, the economy still cannot absolve all of them. This is reflected on the reality that 100 000 people who had jobs in December 2012 no longer have jobs as of April 2013, and it is not because they lost their skills or capacity to work within the three months.

Since 1994, South Africa has misconstrued development as simply meaning the provision of free services such as houses, education, healthcare, social grants, and attainment of the Millennium Development Goals (MDGs). Whilst these social welfare aspects are vital in South Africa, they do not constitute the core of development realised by all industrialised and developed nations in the world, particularly those that realised massive economic from the mid 20^th century, such as Singapore, South Korea, Taiwan, and Hong Kong. These also do not reflect the core of economic development underway in Brazil, India and China. The common and irreplaceable feature about these developed and developing economies has been State aided industrialisation, particularly of tradable sectors in manufacturing and industrialisation, i.e. development of the productive forces. This is usually buttressed by salient, yet subtle import substitution through protection of infant industries, tariffs, and other measures, including insulation of agriculture and food production.

If realisation and attainment of these important service delivery measures is real development, then countries such as Cuba with unparalleled access to healthcare, education, social welfare services, low infant mortality rates, longer life expectancy, would be the most developed territories in the world. Cuba does not fall in the category of developed nations because the correct understanding of developments realised in the 20^th century development of Singapore, South Korea, Japan, Finland, and Taiwan is about development of manufacturing industries for domestic and global consumption. South Africa should, concurrent to provision of essential services, pursue this kind of economic development to create sustainable jobs.

Now, due to South Africa’s development economics’ naïveté and the need to be seen to be doing right in the eyes of Neo-liberal powers, the country adopted neo-liberal policies that lowered tariffs, removed or neglected protection of infant industries and agriculture, and lowered trade exchanges, which could absolve a larger section of the country’s labour force. Heterodox economists such as Cambridge University’s Ha-Joon Chang and Massachusetts Institute of Technology’s Alice Amsden have perfectly illustrated the reality that virtually all developing economies that imbibe and naturalise the neo-liberal policy prescriptions of the International Financial Institutions (World Bank and International Monetary Fund) have and will never realise real economic development witnessed in all developed economies. Ha-Joon Chang describes the IFIs and their masters as ‘kicking away the ladder’ because they impose policy prescriptions, which they did not use to climb to their own labour-absorptive economic development.

UNEMPLOYMENT IS A CRISIS OF GLOBALISED CAPITALISM;

Yet, even though SA has one of the highest unemployment rates in the world, the unemployment crisis is a global phenomenon. Capital, released from its national constraints, has been freed to rove every corner of the globe in thirst of profits. The intensification of competition has led to a race to the bottom as companies seek ways to reduce costs to the absolute minimum and profits to all time highs. As a result wages, working conditions and jobs have shrunk. More than 200 million workers are estimated to have been made unemployed.

The state, regardless of country or which party is in power, has become a haven for investors, financiers and the super-rich at the expense of the worker, the landless and the poor. Tax cuts for the rich, cuts in public spending, privatisation, free trade policies and export led growth with increased mechanisation and high interest rates policies have not only killed jobs but destroyed decent work and attacked the welfare of the majority. The poor and the unemployed are now expected to pay for everything, water, energy, schooling, health, transport as these are no longer run as services but as profit maximising enterprises.

WHAT IS TO BE DONE?

As a broad but necessary approach, the South African state and government should develop the productive forces, deriving only useful lessons from the late industrialisers which realised massive industrial expansion post World War II. While there are varying and sometimes contradictory narratives on how the late industrialisers caught up in industrial expansion, the observations made by Robert Wade (1990) holds some water and constitute key components of what South Africa should pursue.

Discussing the Developmental State in a document prepared for the Development Bank of Southern Africa, Gumede (2009) cites Robert Wade (1990), who argues that “market ‘guidance’ in East Asia happened essentially by (a) redistributing agricultural land in the early post-war period, (b) controlling the financial system and making private financial capital subordinate to industrial capital, (c) maintaining stability in some of the main economic parameters that affected the viability of long-term investment, especially the exchange rate, the interest rate and general price levels, (d) modulating the impact of foreign competition in the domestic economy and prioritising the use of scarce foreign exchange, (e) promoting exports, (f) promoting technological acquisition from multinational companies and building a national technology system, and (g) assisting particular industries and, in the case of Japan after 1970, introducing industry-specific policies to prevent industrial decline” (Gumede, 2009).

Now, these are elements of what South Africa should pursue, but the distinguishing factor between what happened in East Asia and what should happen in South Africa is that the state should play a decisive leading role, particularly in ownership and control of strategic sectors of the economy. Coupled with the concrete interventions and strategies outlined below and decisive political leadership that does not cow to the dictates of dishonest trading partners in the World Trade Organisation, South Africa can realise developed productive forces and full employment within a generation. Now, here is what is to be done:

1. 
   REDISTRIBUTE WEALTH TO CREATE DECENT WORK;
   

Apartheid was a system that ensured the concentration of wealth in the hands of a few. A major outstanding task of the post-apartheid government is to carry-out major redistribution of wealth reforms to overcome inequality, poverty and unemployment.

1. 
   Land Reform
   

Just more than 3% of the land has been redistributed since the end of apartheid. Rapid land redistribution can facilitate massive job creation in agriculture and in related industries. To facilitate this the government needs to scrap the willing seller willing buyer policy and greatly expand the agricultural support given to new or recently re-stored farmers.

2. 
   Nationalise natural resources for local beneficiation and industrialisation.
   

An important component of our struggle is to ensure that strategic natural resources are brought under state control and ownership with the sole aim of ensure massive local beneficiation and industrialisation.

3. 
   Reverse privatisation
   

Privatisation represents a form of wealth redistribution, from the poor to the rich. State assets worth R32 billion have been sold since 1994. The privatisation and commercialisation of a number of state-run enterprises and services has led to massive job losses, increases in the cost of basic services and huge profits for the new owners. Not only should these be reversed but the public sector must be massively expanded to meet the needs of job creation and sustainable development.

We need a radical restructuring of our health service, by, amongst others, urgently and rapidly eliminating the two-tier health system inherited from apartheid, in which most money and resources goes to the small – and reducing – minority with private health insurance Similar expansion in primary, secondary and tertiary education is needed to overcome the legacy of Bantu education and to meet the needs of a fundamental social transformation.

State investment and the development of state enterprises will be needed to, not just to expand infrastructure, but to ensure the diversification of our economy away from its dependence on the production and export of raw materials. It will be the state and not the private sector that will need to initiate these new industries as was done in the first phase of industrialisation which saw the government establish ESKOM, ISCOR, TELKOM and the transport industries.

4. 
   Build State capacity to do business and provide services.
   

For industrial expansion, the state should play a leading role. There are existing state owned corporations that are playing a critical role and state owned. The state should build capacity to engage in massive projects which no private individual or corporation can immediately engage in. These include high technology projects and electronic engineering and manufacturing.

5. 
   Combat Transfer Pricing:
   

The most complex difficulty defining South Africa as a resource rich country are the phenomena of transfer pricing. Transfer pricing refers to the practice of multinational corporations establishing subsidiary companies. Proper legislation should be put in place to combat all forms of transfer pricing, base erosion and profit shifting. This will in turn mean more resources for South Africa and can provide a solid basis for localisation of upstream and downstream industrial expansion.

2. 
   TOWARDS AN ALTERNATIVE ECONOMIC STRATEGY
   

1. 
   Growth through Redistribution
   

Growth through redistribution requires the redistribution of wealth as a pre-condition for economic growth to occur. Such a strategy begins with the state taking control of the productive and financial resources of the country and redirecting them towards housing, feeding, clothing and educating our people. Overcoming poverty and inequality is the means for creating a sustainable productive base for our economy. This can be done through:

2. 
   Inward oriented industrial strategy
   

Production of basic needs in terms of durable and non-durable goods as well as social programmes of education, health, environmental repair, transport, housing, infrastructure and communication lie at the base of an alternative development strategy.

3. 
   Diversify our economy
   

To satisfy these needs we need to diversify the economy away from the production of raw materials and heavy industrialised goods. We need to use our mineral wealth as a platform to produce light intermediate capital goods such as machinery and other equipment necessary in the production of finished goods.

4. 
   Different Trade Policy
   

This cannot be achieved within a “free trade” framework currently policed by the WTO. To ensure the space to meet our people’s needs through the production of local goods and services we need to be able to support our industries especially new, vulnerable and strategically important ones. These must be protected from international competition and allow us to ensure decent work and a living wage. This means we must not only resist the WTO free trade agenda but fight for a different framework for regulating trade internationally, i.e. based on equality and solidarity.

5. 
   Consider Dual Currency
   

6. 
   Integrate our region and promote regional solidarity
   

3. 
   CONSTITUTIONALISE THE RIGHT TO WORK
   

1. 
   Launch Campaign for the Right to Work
   

2. 
   Guarantee the Right to Work as a fundamental Human Right
   

3. 
   Protect the rights of all workers
   

More than eight million people are without any work and income. Most are condemned to lives of absolute misery in rural and urban slums. The unemployed can no longer be treated as outcasts, excluded and marginalised. The first step towards reversing this situation is our demand for the immediate implementation of full unemployment benefits starting with a basic income grant financed through a tax on the wealthy.

Government must provide free transport for unemployed workers so they can effectively look for work rather than excluding them from the statistics on the basis of being as so-called “discouraged workers” because they cannot afford to look for work.

State nutrition schemes must be implemented in poor communities to ensure that no one goes to bed hungry. These can and should be incorporated into public works programme.

All unemployed people shall receive free basic services such as water and electricity. The amount provided in the case of water and electricity shall be sufficient to meet real needs, in a rich country in the 21^st century. Privatisation of social service provision should be immediately stopped and reversed.

Many unemployed people have fallen into a debt trap unable to repay their debts – much of which was irresponsibly off-loaded on to them by unscrupulous lenders. These loans should be immediately cancelled and the system of blacklisting should be abolished.

A government that says it cannot create jobs nor is it their responsibility to do so, is unfit to govern. Our country needs to be rebuilt after the apartheid years of skewed development and underdevelopment during apartheid. Enormous resources exist to overcome the destruction of the Bantustan policies and to put an end to our apartheid divided cities and towns. Millions are without houses and other basic infrastructure. Millions are ready to give of their sweat and toil to overcome this legacy of apartheid but we need to match supply with demand. This will mean the state will have to take the lead by providing the “bricks and cement” for rebuilding South Africa. Black economic empowerment should be black employment empowerment with employment placed at the centre of government policy.

1. 
   Introduce national reconstruction service
   

Urgent measures are needed to combat youth unemployment. As part of marking the anniversary of the 1976 youth uprising, our government must introduce a compulsory national reconstruction service for 18 year olds who would be conscripted into a national service for one year into programme for reconstruction, where skills will be gained in agriculture, construction, conservation, education, health and a host of other work experiences and for which a basic income will be provided.

2. 
   Expand the EPWP
   

In order to meet the immediate needs of more than 8 million people for work the EPWP must be reorganised and expanded to provide a million jobs annually at a living wage for at least one year. The practice of using the EPWP as a means of creating a black bourgeoisie by outsourcing public sector activities like road construction to private companies must be stopped. The EPWP must be directed towards expanding the public sector.

3. 
   Developing Skills Providing Apprenticeships
   

While it is not true that poor skills explains South Africa's unemployment crisis, decent education and skills development are important for young people in finding decent work and in contributing to the rebuilding our country. There is a massive housing shortage in our country. This will require plumbers, electricians, engineers, carpenters and other skilled workers. We demand the development of the apprenticeship system whereby young people have the opportunity to develop skills and knowledge, gain qualifications and earn money at the same time.

4. 
   Fill all posts in the public sector
   

Presently hundreds of thousands of jobs in the public sector are frozen. Millions of unemployed could be in work if these positions were filed and the scandalous rollover of unspent monies would be overcome. As a result public sector capacity would be enhanced, services improved and needs met.

5. 
   Increase Public Sector Investment
   

Presently public sector investment lags way behind what is needed in spite of government increases in infrastructure investment. If jobs are to be created at a scale needed to absorb new entrants to the job market much greater state resources need to be spent. Sustainable jobs can be created if government undertook, amongst other projects, a massive housing programme as proposed in the RDP. Investing in housing would have the virtue of stimulating downstream industries leading to more jobs in construction, furniture, appliances, etc. With more working people employed at a living wage greater demand would be created for food, clothing and other consumer goods leading to further economic expansion and faster job creation. The same logic applies with the development of a decent public transport system. As opposed to elite projects like the Gautrain, fast national rail systems should be developed to transport people and goods across the country. An effective public transport system would ease the burden on our roads, drastically reduce the death and carnage on our roads and overcome current high levels of carbon-dioxide pollution.

6. 
   
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