South Africa’s president has undertaken to implement “radical economic transformation” and his new finance minister has said that this includes the industrialisation of our economy. However, this is neither radical nor new. A former finance minister, Trevor Manuel undertook to industrialise our economy via the National Development Plan which was supposed to have been implemented in 2011. Industrialisation was not only a very obvious and urgent necessity six long years ago it was also accepted by stakeholders across the spectrum all those years ago as an essential means of creating employment and revitalising the economy.
It thus appears that the President’s announcement is merely another hollow promise to appease the growing number of his detractors.
Up to now, South Africa’s most significant export is jobs. By failing to industrialise and by selling our minerals to our international economic competitors we are enabling them to use these minerals to manufacture goods (such as machinery) and sell them back to South African companies at a premium. The fact these goods are being made by hundreds of thousands of workers in those foreign countries that buy our minerals and not by South African workers means that we are effectively exporting to those foreign countries jobs that should belong to South African workers.
So far, all we have had from government, by way of turning around this economically suicidal situation, is talk. But jobs cannot be created by talk.
A turnaround of South Africa’s economy is still possible. However, it will not be made reality by our credit rating junk status, state capture and highly irrational and irresponsible decisions made by President Zuma.
Deepening unemployment and the poverty that goes with it is not a minor problem correctable by promises. We have a huge national crisis that will be resolved only by changing our macro-economic formula to one of a truly inclusive free market.
All stakeholders, therefore, need to concentrate their efforts on pressuring the government to implement this new macro-economic formula whereby:
- businesses increase their profits on the back of increased labour cooperation and productivity; and
- workers are motivated to cooperate with management because they get a fair share of the additional profits generated by their increased productivity.
South Africa’s downward economic spiral will not be arrested until labour and business form a strong, mutually beneficial partnership. Due to the highly adversarial relationship between these stakeholders government should be robustly acting as a peace broker, providing the wherewithal to heal our sick industrial relationship, turn our economy around and create millions of jobs.
This would constitute the ‘radical economic transformation’ that the government has promised and that our country so urgently needs.