CHRIS GILMOUR: We cross to Tanya Cohen, who is the CEO of Busa [Business Unity South Africa], looking at the Jobs Summit and how South Africa plans to tackle unemployment. Good evening, Tanya.
TANYA COHEN: Good evening.
CHRIS GILMOUR: Tanya, Einstein is widely accredited with the old adage about what the definition of insanity is, and that’s doing the same thing over and over and expecting a different result. Why should we be optimistic that anything will be different when we are going to emerge from this Jobs Summit?
TANYA COHEN: I think there are a number of differentiators from previous similar processes. One is that previous job summits have been the launch of something where all the aspirations are set out and the work has then to start, whereas in this Jobs Summit we’ve actually done quite a significant amount of work and we’ve got an action plan in place that we are ready to implement. So it is a culmination of work, rather than the start of an intention. So that’s different.
I think the other thing that’s different is that it has been very much the outcome of a collaborative process, where each of the constituents have actually engaged with the proposals and have put their weight behind it, which is very different from previous processes.
And then the other thing I think we can’t ignore is that it is part of a series of interventions that government is making that are moving in a similar direction, which is positive for the economy but which is also going to have the potential to create jobs.
So, if we look at, for example, the economic stimulus package that was announced recently, and the Jobs Summit, and as we move towards the investment conference, there are a lot of common things that are being addressed to these processes. And we do think, certainly from a business perspective, there is a lot more comfort that some of the top policy areas are being unblocked and some of the processes are going to become more efficient.
CHRIS GILMOUR: Yes, I’ve certainly got the impression that an awful lot of this is due to a lack of execution. The will is there, but it’s been progressively more and more difficult to actually get the execution coming through. Cyril Ramaphosa, I saw earlier, said 260 000 jobs per year could be created as a result of this summit. How realistic do you think that is?
TANYA COHEN: That is a realistic figure, and it’s quite a conservative figure because, if one adds in multipliers, in that each direct job potentially can create two to three indirect jobs, then potentially that can be a lot higher. Obviously that means that we’ve got to execute what we’ve said we are going to execute. But I think a lot of the proposals that we are seeing have the ability to contribute to jobs in quite an exponential way, not just adding the same number each year.
So it does create a bit of momentum, it is a bit of a catalyst. Is it the solution to our job challenge? Absolutely not. It’s not enough by any means, and I think this is a very serious recognition by all the social partners that we’ve got to have some of those deeper conversations about those directions that the economy is going in, about the structure of the economy, and about how we prepare for the Fourth Industrial Revolution, for example – and that there’s a lot of hard work that still needs to be done.
CHRIS GILMOUR: A couple of days ago I was at the Absa consumer conference, and Professor Haroon Bhorat of UCT [University of Cape Town] was there, and I found it incredibly refreshing to listen to his views on job creation. I don’t know if you are familiar with his views, basically looking at manufacturing, but not necessarily hidebound by what we already manufacture – rather looking at the ability to actively promote manufacturing in like industries. In other words, this is not rocket science but taking what type of capacity and what capability you’ve already got, and improving upon that. Wouldn’t something like that go a long way towards getting rid of the kind of low-growth trap we currently find ourselves in?
TANYA COHEN: I think the other work that Professor Bhorat has done, which is really interesting, is looking at the contribution of the private employment agency sector, or what is commonly known as labour brokers, because some of the flexibility element in terms of how workforces are mobilised is exactly what the economy needs in terms of adapting to trade fluctuations, to seasonal fluctuations, and the daily, hourly fluctuations within business.
So there’s a lot of work I think that’s certainly being done by Professor Bhorat, but by a lot of other professionals in the field who demonstrate what is possible. And I think some of those proposals have found their way into the Jobs Summit agreements.
We’ve seen a lot if innovative projects which also have multiplier effects. They don’t just create jobs, but they also solve social problems or they generate an enterprise at the same time. There is one lovely project around early childhood development centres, where it’s actually young women who will develop these small enterprises in township areas. And in addition to that there would be funding redirected from government grants [so] that they will start those early childhood development centres. And you have then the benefits of children being cared for before they go to school.
So those type of projects have really been quite inspiring, I must say.
CHRIS GILMOUR: It’s often said that South Africa has got the highest persistent rate of unemployment in the world. First of all, is that accurate? The reason I’m asking is because Spain, for example, has managed to go from around a 25% unemployment figure to nearer 15% in just a matter of a few years. What is it that makes South Africa get into this kind of persistent pattern, and it doesn’t seem to be able to get out of that?
TANYA COHEN: That goes and speaks to the structure of the economy. It simply is too concentrated to be able to absorb people. And I think it speaks to an apartheid legacy that we have. We have not managed to bring the large portion of our population into quality education, and into quality skills-development that makes people ready to participate in the world of work. So that is a key factor in terms of contributing to our unemployment rate.
And then I think the sluggish economy over the past few years has really not been helpful at all. You certainly can’t create jobs when your economy is stagnant.
CHRIS GILMOUR: Yes. I saw a graph a couple of days ago, showing how South Africa has decoupled from many parts of the rest of the world in terms of economic growth. I take your point that it has to be very much a structural attack on jobs and unemployment, rather than just trying to tinker with it at the periphery.
But many, many thanks for your valued input there. Some fascinating insights.