SA grappling with 'world's deepest unemployment crisis': Ann Bernstein

16 September 2020 - 17:22 By Ernest Mabuza
Centre for Development Enterprise executive director Ann Bernstein says the country has to be much more serious about the ever-growing jobs crisis.
Centre for Development Enterprise executive director Ann Bernstein says the country has to be much more serious about the ever-growing jobs crisis.
Image: Picture: 123RF/ KRITCHANUT

SA's main challenge is to get millions of unemployed youths into jobs by ensuring that the economy is able to absorb many people, Centre for Development and Enterprise (CDE) executive director Ann Bernstein said on Wednesday.

Bernstein was addressing a webinar hosted by the University of Johannesburg school of economics on SA's economic recovery strategy and what needs to be done if the country is to succeed.

“Sadly, SA has the world's deepest unemployment crisis,” said Bernstein.

She said in January there had been 10.3 million unemployed people, but since the Covid-19 pandemic the country could now have as many as 12 million unemployed people.

Bernstein said statistics showed that the unemployment rate of those aged 15-24 was 70%, meaning that youth unemployment could be described as catastrophic.

“The problem is that everybody in SA wants to avoid the real solution. SA has to get millions of young people into employment ... change the economy and upskill young people for work,” she said.

Policy reform was essential, she said. “We need to make this economy much more labour-intensive.”

In a developing country like SA, she said, low wages for young inexperienced people were better than no job at all.

“The country has to be much more serious about the ever-growing job crisis.”

Bernstein said SA will require leadership in this area.

“When you have millions of people without work and with no prospect of work, we have to adopt a new approach to the jobs crisis. We are very much in favour of continuing with large-scale public works jobs.”

Bernstein said for SA to grow its economy, it needs a strong state. It was now “weak, corrupt and ineffective”.

She said building infrastructure had been mentioned as one measure to help the economic recovery, but cautioned: “How exactly should SA finance this big infrastructure push? The state has little money.”

Bernstein said SA needed to borrow money for infrastructure projects, which would expose the country to international risk.

“We have to make sure that what we spend borrowed money on is important, that we spend it well.”

The recovery plans that had been proposed in the past few months acknowledged state weaknesses, she said, noting that President Cyril Ramaphosa had said SA needed to build a more professional and ethical state, but had not put forward suggestions on how to do so.

Another issue which hampered economic growth was corruption, she said.

“It is an attack on the poor, cripples the state, prevents growth and undermines investor confidence. All recovery strategies do not really engage on how we deal more effectively against corruption.”

She said fighting corruption should have been a key pillar of the recovery strategies, adding that the cost of servicing SA's debt was rising faster than any other item in the  government's budget.

Bernstein said the recovery strategies by the ANC and Business for South Africa mentioned the fiscal crisis but did not spell out implications for the recovery strategies.

“Without growth, SA cannot solve its fiscal situation.”

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