Wednesday, August 29, 2012

Unemployment in South Africa 'Exceptional'

Economist: Unemployment in South Africa 'exceptional'

28 Aug 2012 15:19 - Sapa

Economist Chris Hart says the South African economy faces a major problem with its escalating levels of unemployment.

"The reason for unemployment is internal more than external," he said in Johannesburg.

"Unemployment [in South Africa] is exceptional."

Hart, chief economist at Investment Solutions, was speaking at a Johannesburg Chamber of Commerce and Industry breakfast.

He compared South Africa's unemployment rate to that of Brazil. In 2002 joblessness in both countries started decreasing. Then came the 2008 global financial crisis.

The period between 2002 and 2008 generated many jobs. Brazil's unemployment rate decreased after this, but not South Africa's, he said.

"Polokwane also happened ... and that's a problem," he said referring to the ANC's elective conference, held in Polokwane in December 2007, where President Jacob Zuma was voted in as ANC president.

"The unemployment rate suggests that we need to be looking at this as a national priority. I think job creation is one of our lowest policy priorities."

Levels of unemployment
Hart said the only other countries with the same levels of unemployment as South Africa were Greece and Spain, who were in "deep crisis".

South Africa and Brazil were in the same position, but small business made a difference in Brazil.

Hart said talk about job creation never mentioned employer creation.

"The need is not five million jobs in 10 years. That's the most awful target I've ever heard of.

"The actual need, the solution, is 15-million jobs in 10 years ... We need to create 15-million jobs and we actually need to create it in a shorter space of time, and I think it is possible."

Hart said for that to happen, policy needed to be changed. Between two and three million new small businesses needed to be created, he said. – Sapa

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