The issue of unemployment in South Africa is a serious one. The country’s official unemployment figure currently stands at 25 percent although it is likely that this figure is far higher. South Africa’s burgeoning green sector has been lauded as a potentially major future job creation sector. Mannie Hirsch, Chairman of the Gestalt Group, a local strategy consulting organisation has his doubts.
“Industry and mining contribute significantly to South Africa’s employment makeup. Unfortunately, both are energy intensive. As such, balancing environmental protection alongside job creation is a tricky scenario,” says Hirsch.
“Pursuing a low carbon growth path is all good and well but, paradoxically, it also creates a situation where investors who are not all that concerned about such issues will gravitate towards countries where the CO2 regime is more accommodating. The immediate employment situation should take precedence at this stage, especially in light of weakening global economic conditions." Of course that’s not to say the green sector doesn’t have its merits.
“Indeed, the need to address climate change cannot be ignored, especially if you consider that climate change will affect the country’s poor the worst. The poor are always hardest hit when food prices rise, natural resources wane or natural disasters occur. That said, a hard and fast drive towards sustainability will bring about changes in skills requirements and employment offered and certain industries might even reduce in size, resulting in job losses. A shift towards green industries is inevitable and necessary but it must occur in such a way that doesn’t jeopardise the country’s immediate employment prospects."
“This brings us to the question: what are we going to do about unemployment? Where is the grand plan that will actually work effectively to address poverty?” asks Hirsch.
According to Hirsch, currently, one out of every two people in South Africa lives in a household that subsists on less than R515 per month. Another 20 percent of households earn less than R994 per month. “In other words, over 70 percent of all South Africans are living with cripplingly high levels of deprivation. No wonder there are only five million taxpayers and 16 million people receiving social grants."
“The gap between rich and poor has become a yawning chasm wherein 90 percent of our wealth is controlled by 10 percent of the population. Attempting to reduce the effects of climate change by means of social grants and temporary solutions - such as the Expanded Public Works Programme which has been estimated to provide employment equating to a mere forty six days a year at R64 a day per person employed via the programme- are not sustainable solutions.”
“Government is aware and concerned about these issues and has called on the business sector to assist in creating five million jobs over the next ten years – another well-intentioned drive to create jobs but which is doomed to fail.”
Business has been understandably cautious in its response to government’s appeal, with Business Unity South Africa (BUSA) calling for debate and a collaborative effort to solve problems and grow the economy. In other words, according to Hirsch, there will be more talk before there will be any action.
“Rather than attempting to create jobs through public works and events, government should be looking at how it can create demand for jobs. Businesses, in turn, should not be focusing exclusively on their own growth and carbon footprint, but should consider supporting independent community-owned ventures in the interests of stimulating overall economic growth.”
Hirsch continues by saying that government can become a catalyst for meaningful change because it has the power to procure its resources from producers in marginalised communities. Where the capacity of such communities is a barrier, the private sector can intervene to capacitate new ventures.
He adds that government has indicated its intention to shift BEE compliance away from black equity and ownership to more productive activities that can grow the number of entrepreneurs actively engaged in economic activity.
“Clearly, the most urgent imperative in addressing poverty in South Africa is to shift the appalling imbalance between rich and poor. An innovative financial model embracing both socialist and capitalist principles is likely to be our best solution.It will require a strong move from the business sector and it will have to be supported by bankable contracts from government."
“If we do not come up with a system that is tailored for our particular challenges, we are in grave danger of being eternally trapped in a self-perpetuating cycle of sustainable poverty rather than sustainable development.”