Despite its grand promises of investment, the WEF Africa gathering has not been able to deliver on real economic interventions. 
Photo: File
Despite its grand promises of investment, the WEF Africa gathering has not been able to deliver on real economic interventions. Photo: File

OPINION: SA’s economic strategy continues to build elite prosperity over empowerment

By Christopher Rutledge Time of article published Sep 9, 2019

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The World Economic Forum Africa gathering, which received overwhelming media attention, showed that it was clear that the type of economy being prioritised was fundamentally no different from the economic policies that produced one of the most unequal countries in the world.

The focus on high-level foreign investment which is oriented towards increased mechanisation and service-oriented growth, highlights the disjuncture between the structural requirements of the South African economy which desperately requires labour-intensive economic solutions, and the need of capital to achieve growth and profits at any cost.

Despite its grand promises of investment, the WEF Africa gathering has not been able to deliver on real economic interventions, which can impact on the lived reality of the country’s high unemployment rate and the desperate poverty.

By contrast, during the same week, a gathering of artisanal miners in Johannesburg who argued, based on empirical studies, that proper regulation of the sector could contribute to immediate solutions to both economic growth and employment was completely ignored by the media and the government.

The way that the elite society and its media invisibilises those movements of marginalised people who offer well thought out and empirically informed options to escape the morass of unemployment and poverty, is indicative of the way in which the poor and marginalised are forced by the sheer weight of their erasure from the mainstream society to resort to violence and protest.

If the minister of finance, who recently released an economic strategy paper that is meant to move the country away from its current “unsustainable” economic trajectory towards an economy that promotes “economic transformation” supports “labour-intensive growth” and results in a “globally competitive economy” is correct in his analyses that the current economic path is unsustainable, then the WEF Africa gathering only serves to illustrate the point that government’s rhetoric and its practices are not aligned.

If Einstein was correct when he said that “a new type of thinking is essential if mankind is to survive and move towards higher levels”, then the strategy paper and the government and the media’s continued denial of bottom-up solutions fails to either introduce a new type of thinking, and almost certainly will not be able to move the country to a higher level that it so desperately needs.

During last week’s meeting of artisanal miners under the banner of the National Association of Artisanal Miners (NAAM), a research report, undertaken by Pontsho Ledwaba of Wits University, in collaboration with ActionAid South Africa and MACUAwas presented to the conference.

The research indicates that the artisanal mining (AM) sector is an area of informal employment that has been largely ignored as a contributor to solving the country’s unemployment crises.

While the government and the media were hobnobbing around the idea of high-level foreign investment that does not offer many opportunities for resolving the immediate needs of the South African masses of unemployed, the AM sector our research shows, presents an empirical case as a significant source of employment that not only contributes to feeding significant numbers of people, but which also offers as a pathway towards transforming the fundamental structural bias of the current unsustainable economic trajectory.

Significantly, the research points towards a number of possibilities and conclusions which not only debunks some of the more unfounded claims made by corporate mining interests, but which brings into stark relief the wholly ineffective contribution of the corporate mining sector to resolving the most urgent needs of the South African economy.

Drawing from the research, one of the first claims that the research comes up against was the number of artisanal miners working in the country. For years the Minerals Council’s number of 30000 has been used, but the research suggests that this could be much closer to 100000 people actively working as artisanal miners, and feeding close to half a million people.

More disturbing than the number of people gaining sustenance from the informal mining sector without support from the state, and facing active discrimination from the state is the comparative calculation of the social benefits offered by formal mining against the benefit offered by informal mining.

If we use the Minerals Council’s estimate that informal mining accounts for about R8 billion per year (0.2percent of total revenue in the mining sector) in revenue, and assume that the sector employs over 100000 people, then an extrapolation of those numbers presents us with an economic reality that demands the full attention of the government and society.

Currently, the formal mining sector employs just more than 400000 people and generated a revenue of about R380 billion in 2017. This implies that informal mining accounts for 0.2 percent of the mining sector but employs 100000 people. If this were then extrapolated, and we were to assume that the informal sector was encouraged to grow to 10 percent of the mining sector then all things being equal, the informal sector has the potential to create 5 million jobs.

At the very least, growing the sector through proper regulation could add at least a million jobs to the economy. How such a significant contribution to overcoming unemployment, poverty and transformation can be overlooked is deeply connected to the elite bias of our society, and the way that marginalised people are systemically excluded from the mainstream economy and public discourse.

An additional pause for thought is offered in the way that the economic wealth which the mining sector generates is utilised. While most of the profits from the formal mining sector are expatriated out of the country, both legally and illicitly, the informal mining sector almost exclusively invests in the South African economy leading to more job creation and sharing of wealth.

The research found that the majority of miners earn regular incomes from artisanal mining, and evidence suggests that the AM activities around certain communities contribute to the development of other small businesses in the area, as well as the development of supply chains which further build local economies and distribute the wealth at local level.

The much-vaunted scare stories promoted by vested interests in the mining sector of foreigners and criminal gangs are wildly overstated, and our research found that more than 70 percent of the respondents were South Africans who merely wished to place a plate of food on the table.

The government’s attempts to wish the sector out of existence by not including it in economic strategy considerations or excluding it from legislation, and generally criminalising and vilifying citizens who are desperate for a plate of food, is the same attitude which has seen the frustration of the poor and marginalised erupt into orgies of violence and chaos.

If our government is too invested in corporate private interests, then it is left to the people of the country to demand that the patterns of dispossession which continue to be promoted by the government, be set aside in favour of more socially empowering economic pathways because the alternative of social chaos and violence is too ghastly to contemplate.

Christopher Rutledge is the executive director of the Macua-Wamua Advice Office.


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