 The skilled, the highly skilled and the unemployed This was managed without external relief efforts or any heroic international "end poverty now" campaigns. Simply through the expedient of employing people in low-paying work to produce stuff that the rest of the world wants to buy. The workers don't have any of the labour protections or safety rights expected in the developed world. The Chinese - as a people - don't have any of the democratic representation or equality before the law expected by developed nations. So democracy is not a requirement for economic growth. South Africa, which does have a significant preponderance of laws that protect workers rights and democracy, has struggled with an official unemployment rate of 25.6% which has remained fairly consistent for more than a decade. Moodey's, the credit rating firm, recently issued a statement of concern regarding South Africa's skills deficit: "The risks facing Africa's largest economy in 2007 remain skewed to the downside due to a number of structural imbalances and sociopolitical tensions. One of the most pressing macroeconomic challenges ... is the ongoing battle with high unemployment and low skill levels, which pose a significant threat to economic growth while also fanning political and social unrest." They expect unemployment to drop slightly, but to remain stuck above 20% indefinitely. There is a lot right in the new South Africa but there is also a lot wrong. Continued debate over racially motivated and discriminatory legislation has created a large number of obstacles to business efficiency. Without that efficiency South Africa has virtually no hope of being internationally competitive. The rest of the world may sympathise with South Africa's history but they will still buy their products from China. China concentrates on skills development to support businesses. South Africa concentrates on racial profiling of companies and arguing about definitions. A poll released at the World Economic Forum in Davos indicates that 63% of South Africans regard their political leaders as corrupt. Yet the ANC has a 70% parliamentary majority. This is not to declare our democratic experiment a failure. Far from it; it has probably done more to releasing a lot of the frustration that the majority felt. China is still going to have to deal with that frustration and it may yet become extremely ugly - especially as their cities become large and diverse. Many cities are larger than the population of South Africa. But South Africa is not going to achieve significant economic growth until people are told - in so many words - that the government cannot and will not provide jobs. That it will create opportunities to gain skills but that the onus is on individuals to become employable and then to accept terms acceptable to employers. Compromise is required and there has been precious little on offer.
The Europeans are already discovering the bitter lesson that expensive labour rights are wonderful for those who are lucky enough to have jobs, but those rights come at the cost of creating jobs for others. South Africa would do well to learn that lesson now before frustration over unemployment and government corruption undermines the very democratic institutions that so many fought for, for so long.
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By: capdog on 31 January 2007
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