Labour minister Thulas Nxesi. Picture: Waldo Swiegers/Bloomberg
Labour minister Thulas Nxesi. Picture: Waldo Swiegers/Bloomberg

Of course, the new employment and labour minister will fail in creating a climate conducive to job creation “Nxesi ‘No Silver Bullet for Jobs” (June 3). He is a communist and trade unionist who harbours great ideological hostility towards the private sector and the idea of a private sector-led and market-driven economy.

It would take the revocation of much of the Labour Relations Act and the Basic Conditions of Employment Act to tilt the labour policy environment in favour of the employment of large numbers of skilled people. Will the politburo of the SACP agree to that? Minimum-wage provisions would need to be repealed and “decent work” rhetoric abandoned if the poor are to be priced into jobs.

Even if the minister were so inclined, his cabinet colleagues at the departments of trade & industry and science & technology are equally hardened leftist ideologues whose appointments have already gone down badly in investor circles and whose efforts are likely to shepherd much-needed innovation and investment out of the country.

Several new ministers are prominent campaigners for allowing the state to seize private property without compensation, a policy that is in and of itself sufficient to pin SA to the bottom end of emerging-market growth rankings.

The basic education minister, despite having failed outright in improving the quality and output of the school system, has been reappointed to that portfolio. Against this, consider that SA’s official unemployment rate is a multiple of emerging-market norms: less than half of young people have a job; most of the unemployed have not completed matric; only among university-educated professionals does SA’s labour market absorption rate begin to compete with emerging-market norms; and the historical relationship between job creation and economic growth is unambiguous in suggesting that growth rates in excess of 5% of GDP will need to be maintained for more than 20 years if the unemployment rate is to fall to below 10%.

Yet the new cabinet is so pickled in leftist dogma that had it inherited a growth rate of 5% there would be no chance of it being maintained. To think it possesses the ideas and ideological bent to chase the present rate up to 5% is fairytale stuff.

That some analysts are impressed that the labour department has been renamed to emphasise the importance of employment shows just how little they have found to welcome in many of the new cabinet appointments.

To some extent the problem of state capture is being tackled, but there is little evidence of the ideological shifts taking place that are as, if not more, important if SA is to stage an economic recovery. If anything, the leftist ideologues have been catapulted into a position to capture the cabinet.  

Frans Cronje
CEO, Institute of Race Relations