Wednesday, June 07, 2017

COSATU's Response to This Year's First Quarter Unemployment Statistics
The Congress of South African Trade Unions has noted that South Africa's jobless rate rose to 27, 7% in the first quarter of 2017 after falling slightly to 26.5 percent in the fourth quarter of 2016 according to Statistics South Africa. This report also pointed out that the expanded definition of unemployment, which includes people who have stopped looking for work, increased to 36, 4% from 35,6 percent in the fourth quarter of last year.

This report has corroborated the federation's assertions that the report of the last quarter of 2017 was defective because it reflected changes that were influenced by December holiday part-time workers. We have long argued and we continue to argue for Jobs Summit to develop a jobs plan for the country and also to help us deal with the retrenchment.

Long term the unemployment problem in South Africa can only be resolved if we work to address the flawed structure of the South African economy. South African government needs to be decisive because the problem of unemployment is a global phenomenon and therefore needs government intervention, especially since we have an ongoing investor strike.

All around the world the various policy interventions that have been used to stimulate economic growth, including quantitative easing and cheap credit, have yielded nothing but lower economic growth rates if not stagnation in many of the advanced economies. The current higher average rates of unemployment in many countries, including South Africa, are increasingly becoming a permanent feature of capitalism in the 21st century. The unemployment forecast predicts that unemployment shall surpass 200 million by the end of this year, growing by 3.4 million in 2017.

The global economic crisis has also deepened in epicentres of capitalism. Vulnerable forms of employment are expected to stay above 42 per cent of total employment, accounting for 1.4 billion people worldwide this year. In South Africa over 5O% of young people remain unemployed and this is compounded by the massive job losses in the mining, agriculture and in the manufacturing sector, in particular (the steel and the auto sector).

This has led to us becoming part of the seven of the world's 20 most unequal countries are in Africa, with Swaziland the most unequal, followed by Nigeria, Namibia and our country.

This country needs to help support the small business sector if we are to resolve the legacy of concentration and domination of the South African economy by a few monopolies. There has to be a deliberate effort from government to create more space for SA small firms to succeed and create jobs for the 9 million unemployed workers. Government should help reduce the costs of high administered prices like electricity, transport costs, non- availability of cheap finance, and also resolve the issue of contractionary macroeconomic policies, which stifle the impact of industrial policy.

The manufacturing sector which is supposed to be the driver of broad-based industrialization and growth is facing serious challenges, complicating this situation is a crisis in State-Owned Enterprises, which have become the terrain and the preserve of the parasitic bourgeoisie which accumulates on the basis of corrupt means relying on proximity to some sections of the state. COSATU strongly believes that the prevailing chaos in most of the State Owned Enterprises militates against the progressive developmental agenda that these SOE's are supposed to play in the economy and in society. It is for this reason that we will work to mobilize workers and the society at large to lead a campaign against state capture.

We are also worried by the continuing investment strike by big business despite the presence of clear policies like the National Development Plan, the New Growth Path and the Industrial Policy Action Plans. We reiterate our call for a decisive state intervention in strategic sectors of the economy, including through strategic nationalisation and state ownership. We are disappointed to see that government has so far failed to use the levers at its disposal to regulate and channel investment, production, consumption and trade to deliberately drive industrialisation, sustainable development and decent employment creation.

The important and progressive policies that could help us tackle unemployment, inequality and poverty have to be implemented. Unfortunately , it does not seem like our movement is ready to abandon the long trajectory of self destruction that was adopted in 1996. This is despite the ANC NEC telling the government earlier in the year that every cent spent by government should be directed towards employment creation. We have so far not seen this happen in any government department, province or municipality.

Whilst foreign direct investment is to be welcomed it is not the panacea to all our economic problems as the disinvestment by General Motors has shown. These companies also repatriate most of their profits, for instance through the payment of dividends. These payments have caused the current account to be in a deficit as payments to the outside world tend to exceed the inflows.

Also the fanatical stance on interest's rates by the Reserve Bank and its monetary committee has already made the South African exports uncompetitive and as a result this has decimated many sectors of the economy. This makes a mockery of any commitment to reviving the ailing manufacturing sector, because many companies are not going to borrow any money from the banks in order to expand their operations and create more jobs.

This jobs crisis calls for an activist government that will deliver on the promise of making sure that every cent spent by government creates jobs, and that will also have a hands on approach in the economy.

Issued by COSATU

Sizwe Pamla (National Spokesperson)

Tel: +27 11 339-4911 Direct 010 219-1339
Mobile: 060 975 6794- 082 558 5962

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