Rampant youth unemployment doesn’t inspire an anti-ANC backlash because no one is promoting a workable remedy. Electing a more responsible government would immediately benefit commercial interests and productive workers, while initiating an extremely slow trickle-down effect.
Fixing Eskom while sharply reducing corruption and cadre deployment would reverse the decline in the discretionary income of those affluent households not reliant on government largesse. Such important successes would not unlock sufficient increases in domestic spending to noticeably increase employment.
The ANC continues to exploit racial inequality to camouflage massive patronage. This has remained a formidable electoral strategy notwithstanding the party’s horrific economic stewardship. Abundant ANC beneficiaries are well motivated to vote ANC.
The anti-ANC groups with the most economic credibility focus on the damage caused by the party’s corruption. While their accusations are well supported, focusing on corruption detracts attention from the ANC’s many destructive policy choices. High corruption motivates honest taxpayers to vote but there are far more patronage-inspired voters.
Tackling corruption offers little potential to spur high-volume job creation. This requires focusing the debates on policy pivots. If those being crushed by ANC policies protested electorally, that would trigger a political realignment. Nearly all non-patronage-dependent households would likely benefit as it is easy to upgrade from ANC policies and practices.
This misses how steadying the economy and middle class households would barely benefit the unemployed and the poor in the near- and medium-term. If opposition groups had a workable plan to surge employment, that would be a genuine game-changer, economically and politically. But that is only possible if the emphasis is on spurring value-added exports and this receives little attention.
There is also a terrible ticking-clock problem. A poorly educated twenty year old who has never been employed can fully blossom within a well-managed work environment. Within several years however, youthful aspirations and adaptability fade. The damage to life prospects and SA’s economic trajectory are compounding perilously.
Subset of patronage
Many countries with much healthier economies have governments which are as corrupt as ours. Corruption, a subset of patronage, is mostly about political elites directing spoils to their supporters at the expense of economic elites.
The primary reasons our economy is in long-term decline trace to policies which are disdainful toward this era’s defining global trends. Such disconnects explain why surpluses are shrinking and forward momentum has stalled. President Ramaphosa wants to attract investment capital to top-up our waning fixed investment capital; he hopes this will spur economic growth. He seeks to package this within the context of a social compact to imply unifying leadership.
The ANC prioritises redistribution ahead of growth to justify policies which fund massive patronage via a bloated civil service, cadre deployment and tenderpreneurs. BEE and our labour policies are highly anti-competitive. Localisation initiatives further block growth through value-adding exporting to affluent markets. Rather than focusing on growing the economy, the latest idea is to create jobs by deporting foreigners. Yet their home countries are still expected to buy our exports.
The situation is muddied by anti-ANC voices conflating policy errors with corruption. It is unrealistic to think economically sidelined adults will vote to oust the ANC when opposition parties can’t articulate plans to rapidly expand employment.
If unqualified cadres are replaced and corruption greatly reduced, the highly productive segments of society will benefit meaningfully. If such progress isn’t accompanied by sweeping policy reforms, it will take at least twenty years to reduce our obscene youth unemployment to a level which is merely horrific. The typical unemployed young adult needs to have been formally employed by age thirty to avoid chronic poverty.
Fixing Eskom or sharply reducing corruption could stem the slide in business prospects thus significantly benefiting many upper-income households. This could reverse the slide in per capita income which peaked over a decade ago. But we are about twelve million jobs shy of full employment. Creating half that number through growing domestic discretionary income would be a long, perilous journey. Dozens of high-growth countries have, instead, chosen policies and practices which rapidly create millions of value-adding jobs through integrating into global supply chains.
Jostling among themselves
Dispatching the ANC would end an era which resembles feeding off the economy as if it were a carcass. But from the perspective of marginalised young adults, if the economy was then revived, they would still be left jostling among themselves to suck from the hind tit.
It is telling that the ANC frames our youth unemployment crisis as a trade-off between the moral obligation to provide subsistence payments versus prudent fiscal management. That the emphasis is not on growth and jobs has been broadly – though not universally – accepted.
It is no less unhelpful to attribute our youth unemployment crisis to insufficient motivation and horrific education outcomes. Motivation and opportunities are tightly linked. Our domestic economy would need to be at least a third bigger to substantially increase employment. Alternatively, our policies should be spurring much deeper integration into global supply chains. As we are on track toward completing a second decade of per capita income stagnation, ultra-high unemployment and economic wallowing have become mutually reinforcing. Neither social compacts nor capital mobilisation can change that, whereas policy shifts can.
Our current employment situation is roughly in equilibrium with our economy’s domestic purchasing power. The ANC’s redistribution- and localisation-focused policies block our creating jobs adding value to exports. Thus our employment creation capacity is limited to our stagnating domestic purchasing power. Global purchasing power is hundreds of times greater but tapping into that is incompatible with the ANC’s fixating on redistribution.
Most political analysts expect the ANC to dominate a post-2024 national coalition government. Optimistic public commentators suggest a reform-minded coalition will somehow come into power. This, however, would require that the economically marginalised, who have tended not to vote, come out in large numbers to counter the ANC’s support from its many patronage beneficiaries.
ANC opponents overlook how meagre the incentives are for the economically marginalised to vote. Rather, their messaging condenses to: we don’t have much of a jobs plan but if you help us oust the ANC, eventually your circumstances will improve.
Global purchasing power
Many hundreds of millions of people have been lifted out of poverty in recent decades through creating jobs which did not require high numeracy or literacy. What was required was an aligning of youthful aspirations with access to global purchasing power.
This path conflicts with the ANC’s wanting to maximise dependency on the state to support its patronage-based electoral strategy. As their policies are so redistribution and localisation focused, they undermine competitiveness. Thus, when SA businesses expand overseas they rarely create many local jobs.
Many of today’s most successful economies lack sufficient young workers. Various English-speaking countries stand out in this regard. Global jobs growth will be concentrated in services while digitisation is encouraging employers to expand working-from-home and location-agnostic jobs.
High-volume job creation through adding value within global supply chains is alive and well. It is migrating with the global economy as the emphasis shifts from manufacturing to services. India is responsive whereas we convince ourselves that our school leavers can’t compete. We erroneously assess both the opportunities and how many of our school leavers can flourish internationally by finding the right niches.
Fixing our economy requires adopting policies common among successful countries. Advocating for those requires expressing faith in the next generation. This could reshape the 2024 elections.
[Image: Orna Wachman from Pixabay]
The views of the writer are not necessarily the views of the Daily Friend or the IRR
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