Cold War II sets the stage to integrate the people in Africa into the global economy. The integrators will be a motley crew of determined, individualistic collaborators.
Trying to spot large-scale opportunities without keen situational awareness is reckless and fated to fail. Our government’s interpretation of global trends is as inept as its economic stewardship. Only failed states have youth unemployment crises comparable to ours.
Our national dialogue expresses a collective belief that we must first fix our government and our economy and only then can employment and upliftment opportunities flourish. Such thinking reflects poor situational awareness.
The latest polling does not support hopes that next year’s elections will be transformative. Nor do economic forecasts suggest that our economic growth will noticeably outpace population growth between now and the 2029 election. Our youth unemployment is very nearly certain to worsen.
It was sensible for big business to seek to align interests with our governing party by focusing on investment-led growth. However, not only have the results been disappointing but even best-case outcomes would have only modestly reduced our youth unemployment rate.
Our economy is hobbled, but not irreparably so. The situation is vastly worse for this generation of school leavers who don’t soon find employment. After a few years of having never been employed, while a large majority of one’s former classmates are similarly stranded, jobseekers abandon hopes of becoming productive members of society.
Many will begrudgingly adjust to a subsistence lifestyle and some will even express their gratitude for grants by voting for today’s ruling party. But, as others will be prone to crime and militancy, we should better appreciate the implications of how investment-led growth prioritises capital-intensive initiatives while disparaging the prospective productivity of our young adults. We need separate initiatives for spurring capital and labour mobilisation.
Our perception that creating jobs follows from attracting investment capital seems to have been inspired by the sanctions era that provoked a permission-based set of pre-conditions for creating jobs. Investors are expected to sign-off on our national politics and individual company prospects and only then can the pace of job creation increase. Such thinking is misconceived and self-defeating.
ANC policies and practices undermine our economy’s growth potential while discouraging the few companies which are growing from expanding their employment rosters. The breadth of their anti-business and anti-competitiveness policies results in very few domestic or international companies hiring South Africans to add value to exports. This, however, doesn’t mean that the portion of our young adults adding value to exports can’t increase dramatically.
Today, there are young South Africans who achieve micro credentials online and then earn a living online independent of any need to mobilise capital in South Africa. Unlike making employment dependent on investment-led growth or rising government competency, such opportunities are tied to the depth and vigour of the global economy.
Key global trends will expand such opportunities. Services make up a much larger portion of the global economy than manufacturing and the portion of services which are tradeable across borders continues to rise. Many such jobs are location agnostic while favouring English-speaking workers. Meanwhile, many affluent nations have ageing populations and contracting youth populations.
It is easy to imagine reasons why our poor education outcomes will constrain our young adults from competing, but such thinking ignores a great deal. The rise of Asia was not spurred by education achievements. Hundreds of millions of poorly educated Asian school leavers who were initially employed at very low wages developed valuable skills leading to much higher wages.
Also, the faster the pace of change, the greater the appeal of youth to employers. And it seems likely that AI can greatly offset education shortfalls.
The last cold war led to the world-changing rise of Asia. Yet Western countries still account for most of the world’s discretionary income and they still favour democratic governments and free trade. Whereas in the first cold war they sought to block the spread of communism, now they seek to limit the spread of authoritarian and autocratic regimes.
We can’t confidently presume that our democratic era will extend beyond 2029. Nor is it reasonable to think that the ANC will be competitive in that election or that their various leaders will support a legitimate national election which would almost surely lead to many of them being criminally prosecuted.
Irrespective of whether we expect our democracy to survive until the end of this decade, we should be supporting large-scale job creation that places little or no reliance on our government or business leaders. The saying about it being better to teach a man to fish than to give him a fish is valid, but both our public and private sector leaders benefit from overfishing in the small lake which is South Africa’s domestic economy.
Our economic debates are far too accepting of most of today’s young South Africans being condemned to life-long poverty. Those showing the way forward are the young adults who, with scant domestic support, are successfully integrating into the global economy.
The views of the writer are not necessarily the views of the Daily Friend or the IRR
If you like what you have just read, support the Daily Friend