Picture: REUTERS
Picture: REUTERS

In briefing the SA National Editors Forum on May 31, President Cyril Ramaphosa said: “We are resolved to forge a new economy in a new global reality.” He raised ideas such as more localisation, economic patriotism, a strengthened informal sector; an infrastructure and maintenance programme and more and bigger public works programmes.

As we look with apprehension at the post-Covid-19 economy we must also look again at labour-intensive, low-technology manufacturing in the private sector, particularly textiles and apparel, as a way to increase localisation and create employment. There is no good reason why we should not focus on creating more jobs by making our own shoes and clothes, jerseys and hats, as a part of the new economy.

Labour-intensive manufacturing is the tried and tested method to beat poverty. China focused on this from the early 1990s and produced more than 5.5-million jobs by the mid-2000s. Today, more than 4-million people are employed in the industry in Bangladesh. And the fact is we in SA have also successfully used this method in the past. In the early 1980s, investor-friendly policies were put in place and the Newcastle municipality in KwaZulu-Natal courted textile investors from greater China, mainly Taiwan and Hong Kong, to set up factories as a way to offset the loss of employment at the town’s steel mill. By the early 1990s Newcastle had 1,000 Chinese residents and 54 large Chinese-owned factories providing thousands of jobs, with an estimated R1bn invested in the sector.

There is no need to wait for imports of cloth masks or warm clothes from China; we are and need to remain capable of producing our own essential goods and services in the post Covid-19 world.

However, from the 2000s textile centres like Newcastle have seen a significant economic decline, with tens of thousands of jobs lost. On the one hand, there are cheaper imports from China. At the same time, minimum wage requirements made factories unprofitable. Now only those in the niche market of uniforms and specialised clothing can afford to pay the minimum wages and remain viable. Compared to its heydays in the early 1990s, the textile sector was seen as the “ugly little sister” to a government keen to pursue a path to higher-end manufacturing such as the auto industry. Government and the unions wanted SA to move towards highly skilled manufacturing and leave behind “sweat shops” such as the factories run by Chinese owners.

The truth is, in towns like Newcastle the combination of Chinese investors and local workers — mainly Zulu women, the mama mabhodini or factory mothers — produced millions of pieces of apparel for domestic consumption and export. Fieldwork research has shown that textile workers’ wages provided black women with a sense of pride as their regular pay packets supported their children’s education and gave them financial independence. That is why when the sheriff came to close down Chinese-owned textile factories for noncompliance with national minimum wage regulations, the mama mabhodinis fought alongside their Asian employers against the unions and the bargaining council to keep the factories open.

The promotion of low-tech labour-intensive textile factories is not promoting sweat shops and abusing workers’ rights. Nor does it mean a “race to the bottom”. Just the opposite: regular wages allow the women to join a stokvel  savings association so they can practice better financial planning. Women working together every day on the shop floor have the opportunity to support one another, exchange information and provide a sense of identity and pride. They are not glamorous jobs, but they are jobs nevertheless.

When Ramaphosa announced that cloth masks were an essential item, the Newcastle cut, make and trim factories sprung into action and ramped up production. You may be wearing one of those masks now. There is no need to wait for imports of cloth masks or warm clothes from China; we are and need to remain capable of producing our own essential goods and services in the post Covid-19 world. With ever-growing uncertainty concerning global supply chains, we owe it to ourselves to revive SA’s ailing textile sector.

The truth is that the Chinese textile sector is being battered by the US-China trade war and rising wages. Many factory owners are looking to move excess capacity abroad. Public-private partnerships between the Chinese government and its private companies have resulted in facilities being set up in special economic zones and textile parks in Lesotho, Cambodia and Ethiopia, among other developing countries.

As the ANC big shots hustle for mega investments and massive public works, the Asian experience shows that real investment and job creation comes from family firms. A recent study by American consultancy McKinsey & Company of the Chinese experience confirms this, finding that the main thrust of China’s economic investments in Africa is not the headline-grabbing and sometimes controversial infrastructure projects but thousands of family-run firms investing and setting up businesses across the continent.

The researchers interviewed 1,000 Chinese companies across Africa and found that 89% of employees are African, 64% of firms provide training and 44% of managers are African. Even more encouraging is that 74% of Chinese managers remain optimistic about their business prospects in Africa.

Labour-intensive low-tech textile manufacturing will not solve all of SA’s economic and social woes. But as experience across the developed world shows, it is the most efficient way to produce thousands upon thousands of steady jobs.

• Kuo is a research associate at the University of Pretoria’s Gordon Institute of Business Science.

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