South Africa needs to concentrate on one aspect only: getting people into jobs.
Of course we need an effective State, low inflation and school lunches for hungry children – these are not small problems either. But the big problem is that only four out of ten adults work.
Even just 5% more people finding work at say R4 000 per month would create wonders, such as helping to reduce inequality and of course, poverty.
I have a few ideas that could make a small difference.
- Distinguish between moral ‘crimes’ and real crimes and allow moral ‘crimes’ to become legal. This would for example make some soft drugs legal, which would help to create real jobs in rural areas – at least on the definition that doing something illegal cannot be a job.
This would include jobs such as prostitution; selling and planting dagga; and allowing a host of sellers next to roads and highways. Sure take safety, environmental and health issues into account but do not just ban things outright.
- A more difficult one is people who ‘steal’ minerals and public goods. With this I mean the ‘Zama Zamas’ in our abandoned mines who we could provide a way to sell their gold by legal means to official gold miners who would get a licence but also have to provide certain safety aspects. It could also fall under an official body that buys the gold, for example the Reserve Bank.
Perhaps one can do something similar around some poaching and allow kind of income-generation from this …perhaps as a start to a national wild meat industry export drive?
- Free up the economy by letting some rules go. For example allow any airline that has certain safety standards to fly into any of our airports and encourage our neighbours to do the same. The same would apply to licences such as liquor, doctors rooms, shops etc. We allow a whole host of traders to trade in poorer areas but once we get to the suburbs we expect more and more rules. This often does not make sense.
Concentrate more on crime and less on business regulation as unnecessary red tape just increases the opportunity for bribery. This, along with other legalisation, would free up the police to deal with the real criminals and not people trying to make a living.
Get a one-visa system for Southern African Development Community (SADC) countries and drop ideas like stronger entrance requirements. Remember our taxi industry has been a very successful job creator without too many rules and regulations being implemented.
Allow the same relocation of rules in other industries as we need an economy not a legal quagmire that enriches professionals.
- Give landownership to the people – even in traditional areas. Allow freehold and title deeds to every citizen not only us lucky ones who stay in places outside of traditional leadership control. Moreover all the houses such as RDP houses that still belong to the State should be handed over to the people staying in them for a much shorter time period of say one year to 18 months. The building industry in many places is taking off as people get access to their piece of land and very often the small dull box is spruced up and rental income is made or shops and bars are started.
- Concentrate on what the world will need. For example the richer world is getting older fast and Africa is still young – very young. So for the richer world we could put in place retirement villages with amenities such as parks; frail care; etc. The rich world government has a big pension problem, so having some senior citizens reside here cheaper would have many spin-offs for us, such as pensioners’ children visiting and spending. Some of these pensioners even have skills that they could impart in programmes to our citizens that would give both sides an interest angle.
For Africa and the Middle East we should look at schooling our citizens – as we are young countries. We have some great schools and universities that could benefit from programmes where we also involve their governments. This would also help fill our houses etc. (SA has many underutilised buildings.) Training people in nursing for example could be (partly) paid for by richer countries for their older citizens as well as younger countries for the training of their citizens and we would get our bread buttered on both sides – perhaps.
- Reward people who create profits and jobs. If your current company has good profits and is growing and creates actual new jobs, the company will get a much lower tax rate say 20% instead of 28%. If the company exports say at least 40% of its product or 25% of its service, then the tax rates get reduced to 15%.
Shareholders should also get a reward in this so if the company does this for two more years the dividend tax will be halved as well on the specific company. This could then create sustainability. Once no more new jobs are created as the company has matured; ease back on the tax discount but over say two years – so that the company can still get a benefit of sustainability of jobs.
That would create a massive incentive at the right place. SA companies would think differently and they would look at creating employment, not only mechanising. Also remember the Laffer curve which shows that the lower the tax rate, the better the tax collection. It already happened in the early part of the last decade as corporate taxes were lowered and we collected more company and personal taxes (partly due to higher commodity prices too).
- Have a SADC initiative where the infrastructure on interlinking countries gets a huge boost. All border posts must be open for at least 18 hours and most tariffs must be removed. Transport infrastructure must be improved in all countries and the SA Development Bank can and should provide that funding. Where possible one set of standards such as the one visa mentioned above, but also the weight of trucks and similar plug points. Economic infrastructure must come first and foremost as that will pay for other things. (I have seen some plans over the years that were exciting).
- Pay poor people to make learners food for school. Pay poor people more and expand public works programmes. Reduce expenditure on public servants that is currently nearly 14% of GDP to about 9% of GDP (the other half goes to the tax incentives mentioned above) and use at least half of that money on public works programmes planting, for example, olive trees and fruit trees which can over time generate their own income for communities.
- Give everyone who does not finish school another chance via a national service programme that involves training in practical skills, for instance cooking, welding, hairdressing or basic nursing. This second chance could allow us to concentrate on the learners that have little chance of getting a job. With practical training their employability can only improve. This could complement the idea of bringing in older people from the richer world.
- Stop talking about failures. Our government talks more about things that are wrong than things that are alright. For instance we have one of the highest rates of home ownership in the world, so let’s make it even better.
Some ideas are crazy perhaps but times are hard and the situation is not going to get better if we do nothing.