INFRASTRUCTURE IS ONLY ONE PART OF THE JOB-CREATION PUZZLE
President Jacob Zuma's fourth State of the Nation speech this week shows that, at last, the ANC government is coming to terms with the role of the state in facilitating job-creating economic growth.
There is a growing consensus in the centre of SA politics that sustainable job-creating growth is driven by the private sector, especially small, medium and micro enterprises. The job of the state is to create an environment that will attract and retain investment, entrepreneurship and
skills.
In a globalised economy, the state must ensure that the conditions exist for SA businesses to be internationally competitive. A key component of this is the provision of excellent infrastructure, including water, energy, technology, transport and roads, sewage systems etc. It is one of the key roles of the state to lead in the development of infrastructure that creates
a platform for growth.
We welcome the fact that the President focused on this aspect of the state's role in increasing South Africa's competitiveness. Without this we cannot attract investment, grow the economy and create jobs.
But infrastructure is only one aspect of the state's role in increasing a country's economic competitiveness.
There are many other roles the state must play, and this is where the President's speech fell short this week.
Firstly, our constitution has devolved the role of most basic infrastructure provision to local government. And most local governments lack the capacity to do this job because of (among other things) the ANC's commitment to the policy of cadre deployment, which often prioritises political connections ahead of competence, in the placement of staff members in crucial posts.
Unless local government works well, infrastructure-led growth cannot get off the ground. Look at Limpopo. Unless the President has the courage to face the damage done by cadre deployment, and scrap this policy, the infrastructure development projects envisaged in Limpopo, and several other provinces, cannot get off the ground. The same applies to the massive investment in railway infrastructure announced by the President. If the network continues to be run by Transnet or its subsidiaries, there cannot be a sustained positive impact derived from this multi-billion rand investment.
President Zuma must face the fact that the inefficiency and ineffectiveness of Transnet is a massive barrier to growth, a barrier that cannot be overcome by bigger and better infrastructure alone. Just a few weeks ago the Western Cape lost a multi-million rand job creating investment in the West Coast because of Transnet's inefficiency. The infrastructure exists, but so does the inefficiency and red-tape, which often trumps other factors when international investors are choosing from a range of global investment destinations.
The same applies to the welcome reduction of port charges announced by the President in his speech. It creates a greater incentive for ships and oil rigs to stop in our ports for maintenance, which has the potential to create thousands of jobs. But this incentive is not great enough to compensate for the endemic inefficiency of our Ports Authorities.
We therefore applaud the President's commitment to learning from the example of the World Cup, when we delivered on major infrastructure projects against the odds and expectations, and on extremely tight deadlines.
The reason we did so was because we navigated our way around red tape, making ingenious use of 'deviations' in the regulations which only apply in exceptional circumstances. And crucially, we sourced the right project management and technical skills without creating all sorts of complex barriers through laws and regulations.
Unemployment in South Africa must be approached with a similar sense of extreme urgency, just as the World Cup was. Unless the President has the courage to strip away the red tape, South Africa will lag far behind in the competitiveness stakes. And it will continue to take ten years to get a single low-cost housing project off the ground (while millions of South Africans wait for a housing opportunity).
Next, he has got to be serious about addressing corruption, which still mostly goes unpunished. The Manase Report, released after an investigation into the City of eThikweni (Durban) this week, revealed how a small coterie of well-placed, corrupt individuals can bring an entire government almost to its knees. The Report and the picture that it paints of a city rotten to its core, could not have presented a better reality check to the President's optimistic plans. Unless we can end corruption, South Africa cannot be internationally competitive and attract job-creating investment.
Then there is the crucial matter of skills. An incredible range and depth of skills is needed for an infrastructure programme of the size the President outlined, and this applies particularly to the emerging Green Economy and technology infrastructure.
The Further Education and Training colleges need a major overhaul to produce the skills the emerging new economic sectors need. We need to make it easier for skilled foreigners to enter South Africa, and to get work permits without delay. Anyone who uses an opportunity productively, creates an opportunity for someone else.
Finally, no matter how good our railways and harbours are to export our iron ore, coal and fruit, it will have little impact on long-term growth unless we learn how to add value to our products through beneficiation. In this way we can grow a sustainable manufacturing sector.
We need a serious analysis of where the problems lie, and a frank conversation about what we need to do to overcome them. Otherwise our best hopes and biggest plans will be dashed and this year's speech too will go down as a laundry list of unfulfilled promises.
This article by Helen Zille first appeared in SA Today, the weekly online newsletter of the leader of the Democratic Alliance.
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