In a country where unemployment stood at a staggering 29 percent, the country needed to look at ways to create more jobs especially to absorb the many unskilled labourers.
Trade and Investment KwaZulu-Natal executive manager for investment promotion Sihle Ngcamu said that with such a high unemployment rate, the country needed to balance capital investments and job creation and look at Foreign Direct Investments (DFIs)
“So we think that our focus on DFIs will continue because of the skills, new technology and new practices it brings. However, we also need to increase our domestic investments because over the years. We have noticed that they are able to create more jobs so if we end up striking a balance between the two, we will be able to grow the economy inclusively,” said Ngcamu.
He attributed the impact of the two types of investments on jobs to the level of growth of the economy. He said that as a developing nation in terms of the growth path, a country would be at a particular level of mechanisation when compared to developed countries. “Multinationals are already developed countries so for them it is about efficiency, downscaling on human resources, putting in robots and mechanisations whereas in domestic investments, while there is still technology integrations in terms of operation, they still employ more people.”
Ngamu said that direct DFIs saw multinational companies coming to invest in the country for various reasons as some sought markets, resources while others could be seeking efficiency because KZN was located centrally to different markets. He said when most of them came into the country highly digitised and mechanised and as a result they would invest money on equipment and technology creating less jobs.
University of Zululand based economist Professor Irshad Kaseeram said that the amount of jobs that got realised from both the DFI’s and domestic investments were primarily linked with South Africa’s macro-economic policies of the government. “Our labour policies are designed such that it is expensive to hire and fire people. Rigorous processes have to be followed especially before they are fired because the rights of workers are highly protected, “ said Kaseeram.
He said that due to the inflexible labour policies, the country currently attracted only a few investors who could employ a very small number of people.
Kaseeram added that the unemployment rate was high because it (SA) could not absorb the many unskilled labourers in the country. “The government only has a strategy to absorb the skilled labour but not one for the unskilled labour out there.”
Kaseeram said the mining industry was now moving to mechanisation thereby leaving out the unskilled labour it used to absorb. Kaseeram added that the uncertainty around land expropriation without compensation stopped the farmers who possessed financial muscle from investing in the agricultural sector, thereby leaving the many unskilled potential farm-workers unabsorbed.
SUNDAY TRIBUNE