South Africa's Growth Fails to Produce Jobs
Roughly 50 percent unemployment pressures Mandela
CAPE TOWN, SOUTH AFRICA — IT is a scenario most governments would covet: economic growth at a 20-year high (more than 3 percent), robust foreign investment, and record business confidence.
But South Africa, having thrown off the shackles of sanctions and pariah status under the apartheid era, is finding that a healthy economy does not necessarily mean delivery to those who need its benefits most.
Policymakers are stuck with an awkward quandary - economic growth is not creating jobs. And jobs are desperately needed in a society racked by violent crime and a black majority long-starved of opportunity.
Consider David, an unemployed black handyman who lives in Johannesburg. Facing the threat of eviction from their rented house for being behind in their rent for months, he and his wife live off her meager wages as a domestic servant to support their two small children. He gets occasional assignments painting someone's house or doing odd jobs but for the most part has been without regular work for several months.
''Economic growth? I'd like to see it,'' he scoffs. ''My personal economy is not growing.''
About half of South Africa's labor force of 17 million is unemployed. Most of the jobless are black and live in poverty.
''We need a national vision to lift us out of this quagmire,'' President Nelson Mandela said in a state-of-the-nation address marking the opening of a new parliamentary session this month.
His cabinet members, at a series of recent briefings with journalists, painted a picture of a sound economy marred by relentless unemployment and slowness in eradicating poverty.
As the country's first black ministers, they are under special pressure by their once-disenfranchised constituencies to deliver the better living standards promised during the country's first democratic elections nearly two years ago.
Inflation is declining, a long recession is over, and economic growth is on the upswing - expected at 4 percent this year.
Jobless economic growth is a phenomenon present in some leading industrialized countries. But ''in South Africa, we have a more serious case,'' says Pieter Laubscher, an economist at the independent Bureau for Economic Research in Stellenbosch.
The nation's economy has been more protected than those in most Western nations, he says. Now, as the economy opens, competition from imports from emerging-market economies is stiff. As South African companies seek to downsize and become more efficient to survive, jobs are invariably cut or at least not increased, Mr. Laubscher adds.
''The apartheid era has left a legacy of poverty and inequality in spite of the wealth of the country,'' says Jay Naidoo, the minister entrusted by Mr. Mandela with overseeing an ambitious Reconstruction and Development Program (RDP).
He and other ministers see some hope in the gloom.
The RDP may actually create jobs as it picks up pace, economic analysts say. So far it has done little to meet promises to build 1 million houses and bring water and electricity to millions of homes. The program is the government's flagship plan to redress the wrongs of apartheid, the racial segregation that barred blacks from access to the country's wealth. Over the next 10 years, the RDP has allocated 61 billion rand ($16 billion) for infrastructure development alone.
Finance Minister Chris Liebenberg says the only way to create jobs is to ensure sustained growth: ''At the moment, if we want to solve unemployment in the long term, we had better get our macro-economics in place. We need to do more than just speed up the growth rate to address unemployment.'' He urges developing sectors such as tourism and small business.