LETTER: Government intervention in various sectors will not help SA’s economy

Employment quotas — to be set by the employment and labour minister — will not solve SA’s economic problems. The Treasury’s forecast of an average 1.8% growth rate over the next three years will not be improved by yet more government intervention in various sectors of the economy.

Bureaucrats may fool themselves into thinking they know best how millions of people make economic decisions every day, and that the state should have the power to ban foreign workers from certain sectors.

Employment and labour minister Thulas Nxesi introduced the National Labour Migration Policy (NLMP) and Employment Services Amendment Bill for public comment on February 28. The policy aims to introduce quotas on the total number of documented foreign nationals with work visas that can be employed in agriculture, hospitality and tourism, as well as construction, along with other sectors.

The quotas will differ per occupation, sector or region. Quotas would apply not only to formal employees, but also to anyone paid for any work as well as “platform workers”, such as Uber drivers. The level of envisioned state involvement in the minutiae of economic activity is stunning — but not surprising.

The number of jobs in an economy is not fixed. Furthermore, in a context of higher economic freedom, with few regulatory barriers and lower taxes, businesses of all sizes can start and grow more easily — with all the concomitant job opportunities. But given the ideological and policy choices of SA’s government over the last 10 years, economic freedom has steadily shrunk. No surprise, then, that the unemployment rate sits at over 46%.

No number of employment quotas will fix the inherent economic damage caused by the government’s own policy choices. The quotas also fall far short of fixing problems in the country’s wider immigration policy framework. They merely seek to exploit the political opportunism of the moment, avoiding the necessity for government to take charge of how it administers immigration processes.

Employment quotas will not secure property rights, which are under threat by the Expropriation Bill and Land Court Bill. These quotas will not free industry and businesses from the decrepit government-enforced monopoly that is Eskom. They will not unlock billions of rand in foreign direct investment, financial and hard capital formation, skills development and business growth.

Chris Hattingh, Institute of Race Relations

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