Youth unemployment – a ticking time bomb, or is it already here?

“Feel it, it is here!” This slogan somewhat incredulously reminds us that South Africa hosted the 2011 World Cup. A year on, the slogan still resonates in our conversations.
However, another catchphrase, the “ticking time bomb,” has emerged to underscore the strong possibility of a youth uprising in the future.
The recognition that South Africa faces a significant challenge, especially with respect to including young, unemployed, African males in our economy, marks an important acknowledgment of the challenge facing our society. Yet the metaphor of the “ticking time bomb” suggests some distant future for a popular uprising when in fact, appropriating the World Cup slogan, “Feel it, it is here!” would be more appropriate.
The metaphor of a “ticking time bomb” has gained support, as young activists in North Africa and the Middle East have toppled governments in what is called the “Arab Spring.” Moeletsi Mbeki has popularised the idea arguing that South Africa is facing the possibility of greater social upheaval due to high levels of youth unemployment. In fact, according to Statistics South Africa, 72% of the unemployed are between the ages of 15-34 years old.
The COSATU General-Secretary, Zwelinzima Vavi, further elaborated upon this theme at a recent lecture on an “employment guarantee” in South Africa, warning again of the prospect of an uprising, if the challenges facing young people are not addressed quickly.
It is a theme that has routinely featured in COSATU’s documents over the last decade, even if many were not willing to pay heed. Vavi, however, provided an organisers perspective, arguing that Johannesburg is surrounded by a “ring of fire.”
[leftboxlarge element=”div” width=640] Spatially speaking, service delivery protests are concentrated in poorer communities and especially in informal settlements, which are located on the periphery of cities. Plotting protests on a map does give the impression of a ring of fire. The metaphor however suggests something more: that coordinating these service delivery protests is spatially possible and enhanced with technological advancements, such as cell phones. [/leftboxlarge]
On the other end of the ideological spectrum, the Centre for Development and Enterprise produced an important research paper in 2006, which traced the histories of 1000 young people, and later argued that current interventions, by both government and business, are not addressing the problem. Importantly, there is even in the business community, an important and early recognition of the problem, even if the policy options proposed by business are open to debate.
The National Planning Commission adopts a more national perspective and reports in its diagnostic report that if a young person does not get a job by age 24, they are likely never to get a job. The NPC then amplifies this by saying that “about 60 percent of an entire generation could live their lives without ever holding a formal job. This time bomb is the greatest risk to social stability in South Africa.”
The African National Congress Youth League (ANCYL), at its recent congress, agreed to pursue a programme for economic transformation, which it calls the “7 cardinal pillars.” The programme includes nationalisation and expropriation without compensation.
The radical rhetoric emerging from the ANCYL can be understood in the context of a growing recognition that the exclusion of youth is our biggest challenge. Thus far, the ANCYL has provided a radical expression for the views of youth, but as several political commentators argue, they play another useful function: that of containing anger.
However, there is a disconnect between protesting communities and the African National Congress — leadership of young, unemployed youth will have to be constructed on the ground, rather than be proclaimed from Congress podiums.
The space for more ambitious programmes of transformation has thus been improved with the growing consensus that we face an uncertain future if youth unemployment remains at current levels. This is an encouraging development, as changes are clearly needed to address the problem of youth unemployment. In answering this policy question, there are two important policy directions that must be emphasised.
First, that the challenge is not simply about tweaking incentives, but rather that providing work to the current generation of unemployed youth will require wider interventions.
One possibility is to scale-up the Community Works Programme (CWP), which provides community based work opportunities with regular transfers of income by government. Other possibilities exist in the areas of increasing public service employment, or in undertaking a mass-retraining programme.
The exactness of the policy package has however been debated for the last decade with government and its social partners failing dismally to lend coherence to the problem. In important senses, the spadework for a wider intervention has been completed, but the leaders in our society have failed to create consensus and allocate resources to a programme to tackle the challenges.
Importantly, the disconnect between leaders and disillusioned youth was a precursor not only to the Arab spring, but in South Africa’s liberation struggle too.
Second, policy must not only address the fears of the middle and upper classes, but far more importantly, express the hopes of young unemployed people.
Current proposals in public policy propose social safety nets, gaining initial work experience in the public sector and even a subsidy to enter the workforce. These are important policy proposals that need to be quickly decided upon as a class of policies, which could be called “social stabilizers.”
However, in building the South African dream, transforming the economy will need to consider the importance of creating an entity that provides a fair chance for anyone to participate in it and attain their dreams. The idealism in such an approach requires dealing with the hard features of our economy, which in its current form has a default position that supports larger firms and current incumbents.
Certainly, structural changes to the economy will take time, but even the most ambitious programme of social stabilisation will only attain sustainable results as part of a broader programme of economic restructuring.
South Africa is thus at a crucial point where the social conditions for a stronger push towards addressing inequality – because of the reality of exclusion – are becoming more apparent to those who are part of the economy.
However, the metaphor of a “ticking time bomb” may lull us into a false sense of security. Look around, listen and you might just recognise that an uprising is not a distant reality. Current protest action may be small and uncoordinated, but it is happening – “Feel it, it is here!”
This article first appeared on SACSIS.

Nationalise! Expropriate! The Pillars for Economic Transformation according to the ANCYL

ancyl_article_picAs the African National Congress Youth League (ANCYL) starts its 24th National Congress, the focus will be on the elections, especially since everyone in South Africa has a view on Julius  Malema. The policy debates will be reduced to the background, but potentially have a bigger impact on public policy in South Africa, than the outcome of elections. This article summarises the discussion document titled A clarion call to economic freedom fighters: Programme of action for economic freedom in our lifetime.This article seeks to understand the argument, an important first step to debating the issues at a later stage. The proposals focused on youth are contained in a separate document.The discussion document can be downloaded at the ANCYL website.

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The Little Guy and the National Planning Commission

Cover of the diagnostic report by the NPC. Will the “little guy” find the links?

A problem well-defined is a problem half solved. The expectations from the diagnostic report of the National Planning Commission (NPC) are that it would  define the problems facing our society in a way that stimulates discussion, and through a process unites us in defining the problem and the plan to resolve them. In that spirit,I am arguing that the section on enterprise development in the Diagnostic Report will require a recognition of realities of uneven market power in South Africa as a foundation to define the problem and develop solutions. At the core is that the NPC must take a stance to back the “little guy” in the economy, and all people excluded from the economy. It should do this initially through defining the problem, however it has not yet embedded in the way the NPC approaches the definition of the problems we face.
The NPC provides a useful way of describing the surface manifestations of low levels of entrepreneurial activity in South Africa. It notes in this regard that:

  • Small business contributes 40% of GDP and employs 60% of workers in South Africa
  • Notes that only 2% of adult population are involved in start-up activity
  • Highlights that South Africa has relatively low levels of entrepreneurial activity

It then summarises the policy response as follows:
Factors that hinder the development of  Small, medium and micro enterprises (SMMEs) include inappropriate regulation, lack of access to finance and external factors such as crime. Furthermore, because they have supply chains across the country, large firms are able to sell their products at prices smaller companies cannot match. A strategy to promote SMMEs cannot take hold without addressing the challenge of accessing established supply chains.
 
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Treasury launches Jobs Fund

 

The Jobs Fund - National Treasury funds, DBSA implements

Minister Pravin Gordhan has launched the Jobs Fund, first mooted in President Jacob Zuma’s State of the Nation Address. The fund  targets 150 000 jobs I three years and  has three unique characteristics:
 

  1. Co-finance projects with the potential of job creation, supporting both existing and new programmes.  The fund thus seeks to gear additional funding into the programme
  2. Grants instead of loans – Importantly, the funds provide grants for projects, signalling a shift in government to directly fund projects through grants and supporting venture capital. There will be no repayment or financial return sought, although funds that  are  not spent for the  purpose for which they were allocated,  or  are misappropriated, will be reclaimed by  the  National Treasury.
  3. Supporting existing and new programmes – The fund is designed to provide for a range of different partnerships, including for existing government programmes and new programmes.

Details on the application forms and criteria can be found at http://www.jobsfund.org.za/
The fund has a wide ambit, covering four areas:
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Book Launch – Poor economics by Abhijit Banerjee and Esther Duflo

poor economics banner from website
Banner from the Poor Economics Website

 
“Revolutions need love” argued Minister Trevor Manuel in his introduction to Professor Abhijit Banerjee. Minister Manuel passionate reference to the link between love and revolution was as a reference of reverence to Albertina Sisulu – an outstanding and passionate leader of the South African revolution. In fact, the setting of Constitutional Hill – an old women’s prison – in a room decorated with powerful images of the female freedom fighters incarcerated at the jail providing a powerful backdrop to  the South Africa  launch of a book called “Poor Economics: A radical rethinking of the way to fight global poverty”.  Professor Banerjee, the speaker for the evening, is co-author with Esther Duflo of a hotly debated book. It has become a major talking point in the online channels focussed on development, especially as it challenges other mainstream attempts to make development issues real and popular.
I am hoping to have time to read and write a review of the book. The launch lecture however was exceptionally interesting, demanding and humbling. One description of the book given by Minister Manuel was that it was like learning to understand how the internal combustion engine works before learning to drive. Minister Manuel opinion was that the book told us that about how the engine of public policy worked, and through in turn the drivers of public policy became better drivers.  In a telling admission Minister Manuel indicated that there many issues that went beyond the econometric modelling that guided the frontend of public policy.  The Minister would have been more accurate to argue that the book tells policy makers not only why the engine is broken, but also questions if econometric modelling is the appropriate engine!
Banerjee highlighted four areas in development policy where slogans and ideology have driven policy choices. The book he argued was a reaction to this overly ideological context that informs anti-poverty policy. He argued that this focus on ideological solutions was a rhetorical stance, but more worryingly that public policy failures could be explained through the powerful; imposing their solutions on poor communities. The examples covered health, education, health, hunger and microcredit.
The details for each of these areas is different, but the storyline  is remarkably the same across the different areas discussed. Policy development is initiated by government officials; often on the advice of multilateral institutions; to solve a particular problem. The solution is praised as an innovative approach to the problem, but often reflects a particular stance on a problem, with a premade solution. The solution is often unlikely to work because:
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A "politically immature" note on non-racialism and inequality

 
The Ahmed Kathrada Foundation hosted a public symposium on the prospects of non-racialism in South Africa. It provided a demanding set of inputs, and left this “politically immature” writer, with the sense that an important discussion on race in South Africa is starting. Here are some initial  thoughts on an issue I need to spend more time engaging with.
 
 

Ahmed Kathrada Foundation Logo for Zapreneur
Critical conversations from the Ahmed Kathrada Foundation



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The silent majority did not vote! Comparing population estimates with the voter roll

Over 15 million potentially eligible voters did not cast their vote in the recent local government elections. This analysis compares the mid-year population estimates with the voters role.
A development worker in Cape Town pointed out that there was a significant gap between the potential number of voters, and those on the voter’s role. It piqued my interest, and I asked a couple more community activists about this. They all confirmed the view that in their areas, the level of voter registration was low. Could this view from the ground be correct? The proposition is that they may exist – in the words of one of the community workers – “an excluded majority” not even on the voters roll. To explore this question, we have compared the voters roll with population estimates.
In sum, this exploration seeks to find out what proportion of the population are on the voter’s roll. In undertaking this analysis, only official data has been utilised. These are:

  • Indepedent Electoral Commission (IEC) reports on voter turnout by province were generated using the IEC’s report generator;
  • Statistics South Africa’s Mid-Year Population Estimates (2010). The cut-off point in the data is at 20, which means that potential voters between 18 and 20 are not counted in these results. Including 18-20 year olds in the analysis would potentially increase the size of the so-called “silent majority”.

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Youth unemployment as a poverty trap

Youth subsidy
KwaZulu-Natal Midlands: Ceramic painters Zama Nqubuku (foreground) and Wiseman Ndlovu at work in the Ardmore Ceramics studio. Photo: Hannelie Coetzee

 
This presentation provides a conceptual argument that high levels of youth unemployment are a manifestation of a deeper poverty trap in South Africa. Argues that the expansion of social security, community works and building assets are potentially viable responses that must be included in a discussion on youth unemployment. Importantly, there are young unemployed people who simply lack information, or are holding out for a better paying job. However, the majority of young unemployed South Africans have little or no prospect of finding work. Providing regular income and work to these unemployed young people requires that as a society we create mechanisms for economic inclusion.
 
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