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Post-World Cup reality

Andrew Harding | 15:27 UK time, Tuesday, 20 July 2010

A dose of post-World Cup reality for South Africa from the OECD this week.

The Organization for Economic Cooperation and Development - a club of the world's richest countries - has just released its first economic survey of the country.sa595ap.jpg

"You're steering the ship well enough, but watch out for those gaping holes beneath the waterline," is my sense of what the report is trying to say in its 128 pages of detailed analysis.

The OECD's fairly orthodox assessment zooms in on the biggest structural challenges facing South Africa - its failing schools, its over-regulated economy, its highly unionised labour market, and the "overriding policy challenge" of "extreme" and sustained unemployment, which now exceeds 50% among black youths. The report contrasts South Africa's high unemployment with the BRIIC countries of Brazil, Russia, Indonesia, India and China.

Let's leave aside, if we may, the legitimate question of whether South Africa should be taking economic advice from the likes of the US and UK right now rather than, say, China and Brazil, and instead focus on the choice that the OECD seems to be setting out for the country's leaders.

Although the report acknowledges the complexities of South Africa's situation and history, and the lack of a single silver bullet to address unemployment, it highlights the issue of an increasingly under-skilled workforce searching for jobs in an economy that is moving in a different direction.

The choice - although the OECD doesn't put it quite so crudely - seems to be between the protection of "decent jobs" and lowering unemployment.

"Decent jobs" is a worthy, and familiar, slogan and ambition of the ruling ANC.

But in an unusually trenchant paragraph, the OECD criticises "government rhetoric" and warns of "the current pattern of a core of well-paid labour market insiders existing alongside a similar number of excluded and impoverished outsiders." In blunter words, the unions are protecting their jobs and benefits at the expence of the unemployed.

Is this a fair choice? Is President Zuma the man to break the deadlock? Or does South Africa need a Thatcher, a Lula, a Lee Kuan Yew, or a Deng Xiaoping to tackle the demon of joblessness?


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