If confronted by a perilous crisis, would we come together as a nation to objectively assess the situation and then design and execute an effective set of solutions?
General Colin Powell, who served as the US’s chief diplomat and most senior soldier, once said, “The most important thing I learned is that soldiers watch what their leaders do. You can give them classes and lecture them forever, but it is your personal example they will follow.” According to Archilochus, an ancient Greek poet and soldier, “We do not rise to the level of our expectations. We fall to the level of our training.”
So how have we been conditioned by our leaders to confront a mounting crisis? Whereas ANC policies have entrenched the world’s most severe youth unemployment crisis, a new, and unexpected, coalition-style government is now showcasing our nation’s underlying problem-solving abilities. Thus far, some encouraging progress mixes with a reluctance to adequately confront the most formidable threat.
It would seem that, for the ANC, keeping the lights on and the water flowing is largely about getting consumers to pay more. The party doesn’t emphasise objectives like improving efficiency and productivity. Might this change under a coalition government? As the ANC will launch its “National Dialogue” initiative on 16 December, how might input from various sectors of society influence how we collectively set priorities and pursue solutions?
Eskom received much attention as its unreliability had become as costly as it was obvious. Yet the political and economic implications of idling so many young adults are compounding even more perilously.
Jobs
Every year, about 300,000 South Africans in their mid-to-late twenties unceremoniously join several million slightly older cousins whose economic marginalisation has become permanent. A tiny portion of those who several years after leaving school have never been meaningfully employed will, against long odds, eventually find a path to prosperity. Those less fortunate will soon account for a majority of our potential workforce aged between 20 and 40.
A majority of our jobseekers who left school several years ago are now unemployment statistics. Can we confidently predict that a majority of this year’s class of school leavers will meet a similar fate? Yes, our current national discourse lacks solutions which could avoid such an outcome. In addition, the lags between remedies and results are long.
Transitioning from leaving school to becoming permanently marginalised takes several years. More than half of this year’s school leavers will begin that journey. After the first year or two, their bleak employment prospects will begin to steadily worsen. For most of those who remain unemployed five years after leaving school to suddenly find jobs, the economy would need to grow very rapidly and employ many millions of more attractive job applicants. Yet South Africa’s growth rate is expected to remain tepid.
While healthy economies routinely go through cyclical lows which leave large numbers of school leavers stranded, eventually nearly all of them find employment. The volume of our young and young-ish adults who are permanently marginalised, due to their productivity being so low for lack of employment, is extraordinarily rare. Yet we can be certain that the number of such people will still be expanding in five years − and it is exceedingly likely that this expansion will continue well into the next decade. We don’t meaningfully confront this as our national dialogue has become desensitised to this long-expanding crisis.
Localisation
Combining a severe, and severely entrenched, youth unemployment crisis with a policy framework which prioritises localisation is absurdly misguided. Rather than focus on improving efficiencies to compete internationally, our policymakers expect our companies to sell to locals despite a majority of young South Africans being poor and unemployed with meagre prospects. That this is a wholly unworkable plan explains much of why our per capita income peaked about fifteen years ago and that, even with the premature liquidation of pension assets, growth remains anaemic.
Our youth unemployment crisis resembles AIDS as many years pass before the true extent of the threat becomes clear. When South Africans started dying in large numbers from AIDS, our political leadership was largely in denial. The situation became so dire that a foreign government funded an effective, though hugely expensive, pharmacological intervention.
Our unemployment challenges are also much more manageable when viewed from an international perspective. Given the prevalence of localisation-type policies, we can’t rapidly grow employment without swiftly growing our local economy and we can’t sustain adequate domestic growth as most of our young adults are unemployed. An equally severe impediment is that we have an extreme oversupply of low-skilled workers and we falsely presume that because they are low-skilled they can’t be employed serving international consumers. Rather, the opposite is true. There is a limit to any type of worker that our domestic economy can employ. We can only employ a certain number of, say, chemical engineers or any other category one might imagine.
It is not clear what the ANC hopes to achieve with its National Dialogue initiative but we should be mindful that the ANC’s electoral dominance has long benefited from the party’s ability to frame our national discussions around historic injustices. Political weaponisation of the term “inequality” has framed our debates, and hence policies, to benefit ANC elites while devastating the prospects of the majority of South Africans who are poor, unemployed or both.
If we are to refresh our perspectives, we should appreciate that high-income blacks now outnumber whites while we can confidently predict that forty years after apartheid most black South Africans will be entrenched in poverty. Updating our national dialogue is a great idea. It should result in all of us heeding the surveys showing voters’ top priority is jobs.
Geopolitics
The ANC routinely blames external factors, yet two centuries ago over eighty percent of people were extremely poor versus less than ten percent today. Half of the gains have come in the past two generations, spurred primarily by globalisation. That is, during ANC rule the international environment has been remarkably favourable toward upliftment. But to wallop poverty and unemployment, the ANC must purge its localisation mindset.
The ANC will likely depict the new US administration as anti-South Africa whereas many countries across the globe are already adjusting to a more interests-grounded world order. Unlike our ruling elites, their counterparts in many countries appreciate that the harsh economic costs of policy paralysis will trigger political parties being penalised.
Whereas the pressures on German leaders are particularly stark, Europe is broadly vulnerable to a US administration seeking to negotiate new economic and defence arrangements.
The opposite of German or South African reticence is Javier Milei. Argentina’s situation is very different from ours except that they also must adopt broad policy reforms. Its president, Milei, is aggressively testing tolerances. Responsiveness − or the lack thereof − to next year’s geopolitical shifts will shape most nations’ long-term growth trajectories.
Our only real shot at rapidly plunging youth unemployment is by capturing some of the Western consumer spend which is going to be routed away from China. Many millions of Chinese salaries are, in effect, paid by Western consumers and those will be systematically reduced. So the Chinese aren’t going to be creating significant numbers of jobs here.
The least difficult way for the ANC to support entrepreneurial zeal for integrating into global supply chains is to simply provide special dispensations from anti-competitive regulations.
The ANC is risking political capital with its “National Dialogue” initiative. We should support it while insisting our jobs crisis be prioritised and that our entrepreneurs be freed from local constraints to pursue Western consumers.
[Image: Nicky ❤️🌿🐞🌿❤️ from Pixabay]
The views of the writer are not necessarily the views of the Daily Friend or the IRR.
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