Like many other countries today, South Africa has an awful unemployment problem. But ours is not a new problem. For too long it has simply been denied, and only recently has it become a “big issue.” Now, there’s panic in the land.
As other countries are discovering, disaffected young people who have no hope are extremely dangerous. So it’s in everyone’s interests to do everything possible to deal with the matter. Government must play a key role, not just in employing people and providing a welfare net for those who don’t find jobs, but also in creating a policy and regulatory environment that makes hiring people a good idea. And business, naturally, has a huge part to play too.
Here is a speech I made at a graduation ceremony at the University of Johannesburg on September 29, 2009, which, hopefully, will trigger some reflection … and action.
Tony Manning
Graduation Address
University of Johannesburg
September 29, 2009
Good afternoon, and thank you for inviting me to be here today.
Let me begin by congratulating you on your achievement. I can only imagine the hard work and sacrifice that has brought you to this graduation. I’m very proud to be part of your celebration.
Obviously, when you invite someone to talk at an event like this, you expect them to tell you something interesting or useful or entertaining. But I’d like to start by asking you a question. One that I hope you’ll think hard about in days and weeks to come.
The question is this: what are you going to do to make a difference in this world?
It’s especially important to ask that right now, for the world is in a delicate and dangerous state.
A year ago, Lehmann Brothers collapsed, and the global financial system went into meltdown. Research by some economists shows that on many indicators, the crisis we’re still working through is worse than the Great Depression 60 years ago.
There are massive challenges ahead. As Jeffrey Immelt, the chairman of General Electric has said, this a time of “reset” in which organizations, institutions, systems, processes and values are being turned on their heads. Ideas and deeply-held beliefs about everything from capitalism to climate change, from consumerism to corporate governance—and yes, business education too—are all under the microscope.
But I’d like to focus on just one issue.
Exactly five years ago, in September of 2004, I wrote an article in Business Day headlined, “What if unemployment can’t be fixed?” The former editor of a major newspaper suggested in a letter to the paper that I was being racist—the same tactic now used so quickly when someone doesn’t like what you say.
But consider where we are now.
Some jobs were created as growth improved after 1994. But there weren’t enough of them, given the increase in population, to soak up the new job seekers. So while the unemployment level came down, it remained stubbornly high.
When ASGISA was announced with much fanfare in February 2006, the intention was to light a fuse under the economy in order to halve poverty and unemployment by 2014. And for a brief moment, we happily rode the wave of an international economic super-cycle that was like nothing anyone had seen before.
But then, along with just about everyone else’s, our economy dived from strong positive growth into negative territory. And right now, we’re bumping along, with many things just getting less worse rather than really better.
Even as pressures grow for government to add to an already long list of things to do and expensive promises to meet, Finance Minister Pravin Gordhan warns that the tax take is in a nosedive and the budget deficit is rising fast. Economists see growth in the next few years hovering at perhaps 3% to 4% rather than the 6%-plus ASGISA goal.
This year, anywhere from 250 000 to 475 000 jobs have been lost, depending on which survey you use. And while there is now quite a lot of chatter about “green shoots” of recovery, there are also worrying signs that when it does come, it’s likely to be weaker than we’d wish.
Globally, massive long-term unemployment will plague societies for years. Add this burden to exploding government debt, weak consumer spending, and massive overcapacity in many industries, and there’s a very good prospect of a recovery that’s not V-shaped or U-shaped, but W-shaped – in other words, some short-term good news followed by another sharp slump.
For many years, I have made the point in books and speeches that manufacturing will never be the job-creation miracle it was expected to be. So it’s no surprise that we now hear Ebrahim Patel, the Minister of Economic Development, warning that this country could become de-industrialised. That risk will grow as aggressive foreign companies appear on our doorstep and chase after our local customers in their efforts to recover from this recession. It really is a dog-eat dog world, and the fight will be deadly.
Other sectors of the South African economy—tourism and commodity exports particularly—will take up some of the slack. Infrastructure spending is a timely boon. The FIFA 2010 Football World Cup will undoubtedly give us a boost. But the harsh fact is that in this knowledge age, South Africa is not making the progress it should in creating knowledge work and knowledge workers. At the same time, we’re stuck with a legacy of many millions of people who simply aren’t equipped to get or hold a job in the information age. And we have a basic education system which has been labeled a toxic mess, and which will not produce those workers—perhaps for decades.
The bottom line is that for all the promises, plans, and grand intentions that fly about, we’ll struggle to grow this economy as fast as we must to lift people out of poverty and create a better life for all.
Which brings me to the critical point.
A few months back, Johnny Steinberg wrote an article in Business Day in which he commented on a UCT study of young people in three communities around Cape Town. He noted especially how very hopeful they were of a bright future. This, in the face of the harsh reality that most will be disappointed, frustrated, and deeply angered by their inability to ever escape their lives of perhaps not-so-quiet desperation.
Then about two weeks ago, Brian Whittaker, the Chief Executive of the Business Trust, picked up on that article, and in an article of his own in the same paper said this:
“… leaders are going to have to build a shared understanding of where we want to go as a nation and lead their constituencies to places they would not go on their own.
“For business leadership, this means coming to terms with the fact that the building of a prosperous nation requires simultaneous attention to growth inequality and poverty.”
And he posed this question: “…if we expect those who have the least to defer their demand for a better life, what will those of us who have prospered in this land give in return?”
What indeed? This is the big question—our elephant in the room. The Development Indicators report released last week by the Presidency paints a disappointing picture of our fight against poverty. As Professor Haroon Bhorat commented, South Africa is “the most consistently unequal society in the world.”
The 2009 Budget Review reports that government spending on social protection shot up from R72.3bn in 2005/06 to R118.1bn this year. About 13.4 million people rely on grants. We are entrenching dependence, poverty, inequality, and exclusion.
Pre-empting other commentators, I ended my 2004 article by saying, “As a matter of extreme urgency, leaders in all sectors need to consider not just how to create jobs, but also how to deal with a society in which expectations are high and jobs do not come. There are dangers ahead, and we are denying them.”
So back to my question: what are you going to do to make a difference in this world? This should be the question that keeps you awake at night.
Many years ago, Marshall McLuhan, a famous media expert, coined the term “global village.” In his book, Understanding Media, which became a best-seller long before anyone imagined the Internet and cellphones, he made the point that courtesy of new media “none of us can any longer think of ourselves as passengers on Spaceship Earth; all of us are crew.” And so it is with Spaceship South Africa—all of us are crew.
You are among the fortunate few, educated to succeed in a modern economy. You are our best and brightest, our hope for the future. The choice now is whether to be just another passenger on Spaceship South Africa … or one of the crew.
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