Globally, there is widespread acceptance that the state must play a special role in mitigating impacts and underpinning growth, be that by stimulating financial transactions or by offering special industrial support. Not many governments are bailing out distressed companies, despite the perception. Mostly, help is being given to companies that commit to strategies that will get them back on track.
In the longer term, the future of decent work depends on building an infrastructure platform comprising world-class telecommunications, an efficient transport system, availability of energy and water, a skilled workforce, the ability to innovate, and an impressive presence in markets that influence our future. These are high-cost investment programmes that also require substantial improvements in operating efficiency.
Yet it is unlikely that average growth from 2004 to 2014 will exceed 3,3%. It is therefore unlikely that job creation will exceed two-thirds of that needed to halve unemployment.
Special interventions to mitigate the social impact of a slowdown are essential, but must be implemented so as not to take the economy off course from a longer-term trajectory that reduces unemployment and poverty.
The economic slowdown is likely to have the worst impact on workers who lose their jobs and on school leavers. The emerging working and middle classes could be hit with income lost, houses repossessed and pensions devalued. School leavers' chances of finding employment (50% currently) will deteriorate.
New public programmes announced in the 2009 budget could make a difference. First is the commitment to doubling enrolments in further education & training by 2014. This doesn't create jobs, but does pull otherwise unoccupied young people into skills development while the economy is recovering. Second is the decentralisation of decision making in the Expanded Public Works Programme (EPWP) to enable its faster expansion. The EPWP employment incentive will pay about R50/day to those who work on projects led by provinces, municipalities, or non profit organisations. The community works programme will create opportunities for at least one to two days a week on projects identified by communities.
Plans for the expansion of the public service could focus on semi skilled paraprofessionals. Short-term opportunities can be created by the state and private sector for school leavers and recent graduates.
A renewed commitment by the public service to paying suppliers within 30 days could reduce business failure. This should be matched by large companies. Smallholder agricultural production could be expanded: 2,5m households are involved in own-production. With support (seeds, land access, water, implements, market access), some of these producers could produce a surplus. Such interventions could combat unemployment and, mostly, have already been budgeted for. I participated in the recent Dinokeng scenarios. The message is citizens will get the kind of state they are willing to invest in.
This is not about absolving the state from responsibility. Government must deliver on its commitments. Achieving long-term social and economic objectives while mitigating the impact of the slowdown will pose astounding challenges for budget prioritisation. These challenges will demand mature dialogue to improve the quality of public spending, to ensure accountability, and to enhance civic involvement in the solutions.
Altman is executive director, Centre for Poverty, Employment & Growth, Human Sciences Research Council
