A summary of this committee meeting is not yet available.
LABOUR PORTFOLIO COMMITTEE
12 October 1999
IMPLEMENTATION OF THE JOBS SUMMIT AGREEMENT: BRIEFING
Documents handed out:
Department of Labour Presentation
Declaration of the Presidential Jobs Summit
Department of Labour
The Deputy Director General of the Department of Labour, Mr Les Kettledas, said it is no secret that new jobs have been elusive and we are all concerned about the continued shedding of jobs throughout our economy.
After the Summit meeting the Inter-Ministerial Committee on the Jobs Summit was established, consisting of the Ministers of most departments, under the chairmanship of the Minister of Labour and they have been meeting regularly to ensure that agreements reached would be implemented.
Mr Kettledas then reported on the progress reached under headings such as Tourism, Housing, Social Security, Education and Training, Youth, Women, People with Disabilities and Special Employment Programmes.
Government has earmarked funds from the Poverty Relief Fund amounting to R1 billion for the year 1999/2000 as well as specific funds to line departments to implement government's commitments to job creation. The Minister of Finance announced an additional allocation from the Poverty Relief Fund. The Job Creation Trust sponsored by the trade union movement has a current account of about R20 million.
There is concentration on providing training and re-training for the unemployed and those who have never worked, i.e. 6000 learnerships over the next three years in tourism and ensuring that at least 70% are placed in employment.
The Social Plan Agreement is another result of the Jobs Summit. Arising from this, the Social Plan Technical Support Facility explores alternatives to employment as well as establishing a Retrenchment Response Team and other services to cope with cases where jobs cannot be saved.
Local authorities are encouraged to identify new opportunities for income generation, to assist with the skills audit of the community as well as to provide training to support areas of economic activities, such as pig-farming, plastering, welding, computer skills, etc.
The Deputy Director General reported that the first of three mass housing projects has been established to pilot sustainable and affordable mass housing delivery, including rental stock.
Under Social Security he reported that Government has conducted an audit of the existing social security system and a Task Team under Nedlac has finalised a draft conceptual framework which will be further discussed by the social partners.
Mr Raymond Parsons, Overall Business Convenor of Nedlac, said that Business was supportive of the need for a Jobs Summit but warned against expecting 'quick-fix' solutions. He praised the Government's determination to be steadfast about its macro-economic policies which he said were fundamentally sound.
In many countries most employment growth comes from new and small enterprises and the Jobs Summit agenda is meeting their concerns here. Small businesses require a high degree of flexibility.
Ultimately, he said, job creation is the product of growth which, in turn, is the result of investment, both domestic and foreign. Hence the need for continued emphasis on 'investor-friendly policies.'
Mr Neil Coleman, speaking for Labour, warned that government needed to guard against smugness. There has been no net job creation but a job loss. The unemployment level is deteriorating. In the non-agricultural field 400,000 jobs have been lost. There should be tighter regulations against retrenchments, i.e. in the gold mines. Despite Government's efforts to meet all the demands made by investors, investments have declined. South Africa must re-consider its macro-economic policies and examine the causes of unemployment. In this Parliament has a vital role to play.
Questions by members:
Mr B Mhkize, ANC, asked how training is being provided for domestic workers.
The Deputy Director said that they had been consulting with the stakeholders with regard to training of domestic workers. The discussion was about which of those training centres will provide training and when it will be implemented. A place where training will be available for domestic workers is still being sought. This should be available by April next year.
Ms E Thabethe, ANC, said more time was needed to absorb the issues raised. She questioned what were the short-term, medium-term and long-terms issues that were agreed? Who checks the implementation of agreements? Who checks whom? Are we following investor-friendly policies? What does it mean? Are our current policies not suitable?
Ms Thabethe commented that there should be way of enforcing agreements reached and monitoring the progress made in regard to such agreements. She asked who is monitoring what progress is made.
The Deputy Director said that NEDLAC has a Job Supervisory Structure, which consists of senior leadership from Labour, Business and Government. In the last meeting on 11 August they agreed that certain Jobs Submit agreements should be prioritised. There is a Cluster committee which a range of ministers serve on. It is here where co-ordination and monitoring takes place.
Mr Rasmeni (ANC) asked what mechanism is put in place to ensure that black farmers are supported. He had heard via the media that 200 black farmers were in need of assistance in order to continue farming. He raised the issue of eviction of farm workers and wanted to know what is being done to ensure that the jobs of people who are working on farms are kept. Mr Rasmeni also wanted more information about the Social Plan.
Mr Parsons responded that he cannot speak for agricultural sector and he requested the committee to interact with the agricultural sector.
Mr Kettledas said that the Social Plan has three phases, the first phase avoids retrenchments and it applies where enterprises and customers are experiencing difficulties and they can request assistance to conduct studies so that they can find out what are the causes of difficulties and the way forward. The second phase applies where there are job losses and in this phase a team of people go to the enterprises and give advice on what retraining the people who are retrenched can receive. The third phase applies where a large group of people have been retrenched and they go back to their place of birth. The Social Plan would support those communities that have suffered large-scale retrenchments, a process spearheaded by the Provincial and Local Government. New opportunities will be identified for these people.
The meeting was adjourned.
INTRODUCTORY STATEMENT BY RAYMOND PARSONS, OVERALL
BUSINESS CONVENOR IN NEDLAC, TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON LABOUR IN CAPE TOWN ON TUESDAY,12thOCTOBER
May I thank the Portfolio Committee on Labour for the opportunity of giving a 15 minute introduction to this subject.
Nearly a year has passed since the Presidential Jobs Summit was held on 31st
October 1998. It is appropriate that we should in general - and the Parliamentary
Portfolio Committee in particular - review the outcomes of the Summit.
The idea of a Jobs Summit was originally proposed by the Labour Market Commission of Enquiry in 1996. After some delay, planning for the Presidential Jobs Summit gathered momentum in 1998 - and it took place on 31st October last year. Business was supportive of the need to hold a Jobs Summit and believes that the summit made a valuable contribution to the job-creation process in South Africa.
Business has nonetheless constantly stressed that, in forming expectations around the Jobs Summit, it is necessary to accept that painless, "quick-fix" solutions to South Africa's employment challenges are not available. There is, unfortunately, no magic wand that can eliminate unemployment overnight. This is partly due to structural elements in our economy, and partly due to the historical and global context in which we have found ourselves. Both structural and cyclical factors contribute to the unemployment problem. 'We must remember that South Africa has embarked upon extensive economic restructuring.
It is important to cast our minds back to last year - when the Jobs Summit was being planned and held - and to the economic circumstances then prevailing. A discussion of job creation and unemployment can never be divorced from its economic context. We were in the midst of global financial turmoil which was seen as the most serious situation in world financial markets for several decades. There was much gloom about the outlook for the global economy and consequently for the South African economy. Interest rates soared as our economy - as an emerging market - was compelled to adjust to the external shock of international financial turbulence. In addition, the unwise international statements last year about how to assist high debt countries through gold sales by the International Monetary Fund (IMF) were beginning to undermine gold price sentiment.
In the midst of much analysis and considerable opportunistic hype at the time about what lessons could be learnt from the South East Asian economic collapse, it was necessary for business to.
Â· Firstly, behave in a way which was most conducive to, or supportive of, the Government's determination to be steadfast about those macro-economic policies which were fundamentally sound: the world was watching to see whether South Africa would "chop-and-change" its basic macro-policies. To their credit, leaders in Government kept a cool head. It was important to maintain economic perspective in the light of changing external circumstances.
Â· Secondly, business recognised that South Africa nonetheless faced a particularly intractable problem with regard to unemployment. Under these circumstances it was necessary to think beyond "business as usual" solutions and seek creative and "burden-sharing" contributions to what has been seen as a national challenge. In this spirit the business constituency engaged fully in the Jobs Summit discussions. Although the Business Trust Initiative was not a part of the Jobs Summit negotiations, it was offered as a substantial contribution to these challenges. In addition, business was pro-active in such areas as the Presidential Lead Project on housing - and supportive of other spheres such as the Social Plan and especially the promotion of small business.
In many countries, most employment growth has come from new and small enterprises. If we are to create jobs, the policy framework should reflect the needs of these businesses. In some respects, smaller businesses have special needs. Mostly, however, small business require the same kind of environment as required by large businesses, only more so. In particular, small businesses require a high degree of flexibility in the operation of their businesses in order to ensure their survival in rapidly changing circumstances. The concerns of small business found resonance in several points of the Jobs Summit agenda.
Where do we now stand? The global situation has improved remarkably. This partial recovery in global confidence comes at a propitious moment. A more sensible plan for the handling of gold sales to help highly indebted countries has boosted the gold price. Just bear in mind, though, that even if the gold price stays over $300, it will still have to go some way to match last year's average price. Nonetheless, it is a happy reversal of the previous trend. The South African business cycle now also appears to have passed its lower turning point. Inflation has fallen to its lowest level in thirty years. On the available economic evidence South Africa can now expect a growth rate of about 3% next year, compared with about 1% this year.
Against that very different background there are the following aspects to be stressed:
1. South Africa's adherence to sound macro-policies through last year's crisis (and before) contributed to a better economic outcome relative to those other countries which were casualties of extreme capital flight. It has also won South Africa considerable credit for its policies, now reflected in a comparatively favourable risk rating and good capital inflows. We have reaped these benefits because we have offered a degree of certainty and predictability in our basic economic policies.
2. We cannot assume that these positive economic developments will bring early relief in the form of rapid employment growth. Employment always lags in the economic recovery cycle. In addition, some sectors will continue to reflect attrition for longer-term or structural reasons. The extent to which aspects of current labour legislation are not perceived by business to be employment-friendly is also under investigation. It remains important when we discuss net job losses in the economy to make a balanced assessment of benefits of South Africa's policies - bearing in mind the weaknesses in employment statistics.
This brings the work of the Jobs Summit back into focus. The summit must be seen as a process, not as a package, and its outcomes continue to evolve. In assessing the achievements of the Summit it is important to have a clear grasp of its various components.
Business believes that, if we classify the elements arising from the Jobs Summit, we will see that they fall into three categories -
Â· Certain things that were agreed
Â· Other matters that were not agreed Issues that were not raised
As a first priority we need to hasten the implementation of the agreements reached at the Summit. Where any programmes or projects have not yet been initiated they should be given urgent attention. Debate also needs to continue on those things not agreed and discussion must commence on the new issues. These aspects need to be vigorously pursued and NEDLAC does provide a focus for constructive engagement. The work flowing from the Jobs Summit needs to be coordinated and more agreements should be sought which could take the form of appropriate "accords". Deputy President Jacob Zuma has already challenged NEDLAC to finalise which he called a "tough employment accord" by the NEDLAC Summit in May 2000.
In conclusion: we should not underestimate what the Jobs Summit of October 1998 achieved. We have made an important start. There were significant agreements reached. We need to make more effort to quantify the outcomes and give them a higher public profile. Successful employment strategies will require a national effort, in which all the key stakeholders are involved.
Ultimately, of course, job creation is the product of growth. Economic growth in turn is the result of investment - both domestic and foreign. Hence the need for continued emphasis on "investor-friendly policies". Economic growth is a necessary condition, although not a sufficient one, for job creation. We want to maximise the number of jobs created at any given growth rate and the work of the Jobs Summit has sought to achieve that focus. More benefits will become apparent if we can sustain our efforts on the job creation front and generally strengthen our economic performance.
12th October 1999
Department of Labour Presentation
BRIEFING ON THE IMPLEMENTATION OF THE JOB SUMMIT'S AGREEMENTS
12 October 1999
It is no secret that new jobs have been elusive and we are all concerned about the continued shedding of jobs throughout our economy. But there are no easy solutions to the complex array of challenges facing our country and our economy, not least of which is the high level of unemployment. It was indeed our determination to address this challenge which led to the convening of the Jobs Summit on 30 October 1998 and the reaching of a common understanding and commitment among all its participants to actively contribute to increase the number of jobs created in our economy.
The Summit recognised that our economy, in the early stages of a profound transition, faced the threat of a global economic crisis and resolved that continuing on the path of restructuring and strengthening our economy to promote growth, investment and sustainable employment was more important than ever before.
But the wide range of participants at the event were at one that this would not happen overnight. "We harbour no illusions about the difficulties ahead of us as we strive to succeed in this collective endeavour. Success depends on restructuring and building a vibrant and sustainable economy. Each and every one of us must be part of this work. It is not the work of the government or any one social partner alone. Through a commitment to work; dedication to learning and the acquiring of skills, spending and saving wisely; using our imagination; exhibiting entrepreneurship and by our disciplined consideration of the greater good; each of us can make our personal and collective contribution to the building of this new vibrant economy.
Within this context the Summit crafted and reached agreement on a wide range of policy instruments, programmes, projects and activities which would complement and enrich existing measures aimed at employment generation.
Since that time, the cabinet Inter-Ministerial Committee on the Jobs Summit has been meeting on a regular basis to ensure government meets its obligations regarding the agreements reached at the Summit. Chaired by the Minister of Labour, this Committee is made up of the Ministers of Finance, Trade and Industry, Environmental Affairs and Tourism, Agriculture and Land Affairs, Transport, Water Affairs and Forestry, Housing, Public Works, and Provincial and Local Government as well as the Deputy Minister of Trade and Industry. A number of other cabinet ministers are also involved in ensuring the implementation of various agreements.
The Jobs Summit Supervisory Structure consisting of representatives of government, organised business, labour and the community constituency has been meeting regularly to monitor and review progress in implementing the Summit's agreements.
There are labour market measures that actively support job creation or job security and that support those affected by restructuring and job loss.
The Jobs Summit set in motion initiatives that hold the promise of demonstrating this very concretely. Take for example the case of the Integrated Provincial Projects that were a key innovation of the Summit. These projects, driven by the Department of Trade and Industry, are bringing together government departments responsible for infrastructure development (roads, ports, telecommunications and the like) with private sector investors and the community. The Department of Labour is involved in helping to manage the process of registering and advising workseekers and helping them to enhance their skills to meet those required by the new opportunities.
Take the Eastern Cape's Coega project for example. There are going to be major new investments - R500 million for a new casino and R700 million for a new South African Breweries plant. Some 15000 people will be employed in the construction phase. The Department of Labour has dedicated staff to work with this project on both a full-time and part-time basis. We are also in discussion with a number of Industry Boards. They are identifying the skills required by the investors and ensuring the quality of the learning programmes to which local people will be directed for training.
At Lubombo in northern KwaZulu/Natal a similar set of support measures are being put in place, although on a smaller scale. Again staff members are being dedicated to the project and funds are being allocated for training and development of local people. Discussions are underway with the Hospitality Industry Training Board to design learning interventions that support the tourism strategy of the area.
This alignment of labour market policies with industry policies is an example of precisely what the Jobs Summit set out to achieve. But perhaps a more dramatic example of the same alignment is that involving the business sector in Tourism Sector. You will remember that the business community undertook, at the Jobs Summit, to set up a Business Trust to fund work in the education sector as well as work in support of growth in the tourism sector. The Trust has been established and is finalising contracts with agencies to implement programmes in their identified priority areas. Again the Department of Labour is most heavily involved in providing human and financial support to the planned 6000 learnerships over the next three years in tourism. The programme aims to ensure that at least 70 per cent are placed in employment and at least 600 start their own small enterprises. Waiters, food preparers, tour guides, receptionists, housekeepers and the like will be prepared not only to do their jobs competently, but also to promote "Ubuntu - a service culture". This initiative aims to make tourists not only welcome - but to want to come back!
Also stimulated by the Jobs Summit was the Job Creation Trust sponsored by the trade union movement. The Fund's coffers currently stand at about R20 million. A technical committee has been set up to investigate specific criteria for project funding. Projects funded by the Trust are expected to be launched early next year.
The bold tourism initiative is built on the experience of 250 learners in KwaZulu/Natal who successfully completed learnerships in the hospitality and building industries. Somewhat less dramatically, other learnerships in other industries are also being pioneered. The plastics industry has increased its training effort with dramatic results - and learnerships are well on the way in the textile, building and electrical industries to name but three. In the year 2000 it will become possible to report on the exact numbers of the learnerships as they will be formally registered with the Department of Labour. To date a discussion document has been prepared and circulated by officials in the Department in partnership with national constituency stakeholders to stimulate interest in this concept and to clarify some of the implementation details.
The Jobs Summit also resulted in the Social Plan Agreement. In the light of the restructuring that is currently underway in our society this agreement is about to be tested. The Social Plan Agreement notes that
"Growth and job creation are urgent priorities, (and) the social plan approach aims to avoid job losses and employment decline wherever possible. There would nevertheless be instances where large job losses are unavoidable. In such cases the social plan approach will seek to actively manage retrenchments and to ameliorate their effects on individuals and local economies."
A range of steps have been taken to implement the Social Plan. This includes the establishment of the Social Plan Technical Support Facility aimed at exploring alternatives to employment, as well as the establishment of Retrenchment Response Teams and other services provided in line with the Jobs Summit agreement in cases where jobs cannot be saved.
The Social Plan also envisages support for communities that have suffered a large-scale retrenchment, a process spearheaded by the Ministry for Provincial and Local Government in line with the Jobs Summit agreement on local economic regeneration. One such community is Mooi River, where a large number of workers were retrenched. The local authority, together with the Department of Provincial and Local Government, the Department of Labour and the provincial economic council are working together to identify new opportunities for income generation. The Department of Labour will be assisting with the skills audit of the community as well as providing training to support identified areas of economic activity.
Another example where training was provided to a community after retrenchment was in Welkom, Klerksdorp and Carletonville, where retrenches are receiving training in courses such as pig-farming, plastering, welding, computer skills, etc.
A national steering committee consisting of national government departments, provincial task teams, relevant parastatals, organised business and organised labour has been set up to undertake this critical task and the Department of Provincial and Local Government is dedicating capacity to ensure the management and administration of this programme. The Social Plan Fund will provide R50 000 to municipalities to undertake local economic regeneration studies which will identify potential employment generating projects at local level. Already a variety of local economic development projects with potential for job creation and development have been identified.
The Jobs Summit Agreement identified that "training and the constant upgrading of South Africa's skills base is a fundamental requirement for a modern economy". The social partners called on government to "expeditiously pass the Skills Development Levies Bill" to provide additional resources to the task. In February 1999, the Bill was passed and the new levy is to be introduced next year to support expanded effort in this area. Government has committed R50 million to the National Skills Fund and this money is being used to support training.
A co-ordinating and monitoring mechanism will be established within the Department of Labour to follow up on the implementation of the Jobs Summit agreements. This will contribute to improved coordination within government and between government and social partners, and between different tiers of government.
Government's efforts towards job creation will no doubt be further strengthened by the emphasis on the clustering of Ministries and Departments to ensure accelerated and integrated delivery.
Apart from important progress in the Integrated Provincial Projects, the Department of Trade and Industry has also completed groundwork in implementing the Jobs Summit agreements related to the Buy South Africa campaign, the strengthening of customs and excise and in the area of tariffs. A number of initiatives related to the promotion of small, medium and micro enterprises, a crucial vehicle for job creation and growth, have also been implemented, including in the areas of access to finance, the establishment of a National Mentorship Scheme and the provision of a range of services through a network of business service centres. Many of these services have specifically targeted rural women, youth and disabled entrepreneurs.
The Jobs Summit initiated a partnership between government and business to realise the tourism sector's great potential for growth and job creation. This partnership has been cemented over the past period, with the signing of a formal agreement announced by the Ministry at the Tourism Summit in December 1998, the establishmentof institutional arrangements, funding mechanisms and the development of business plans which will see a tremendous boost in the marketing of our tourism industry.
Housing: A National Presidential Lead Project
Arising from the Summit agreement to establish a National Presidential Lead Project to pilot sustainable and affordable mass housing delivery, including rental stock, the Department of Housing selected a first group of three mass housing projects in Coega in the Eastern Cape, in Newtown, Gauteng and in Witbank, Mpumalanga.
Government has conducted an audit of the existing social security system and a Task Team under the auspices Nedlac have finalised a draft conceptual framework which will be further discussed by the social partners.
Education and Training
The Department of Education and Lasbour and the Business Trust have begun to operationalise the Jobs Submit commitment to building of human capacity development and interventions in schooling to improve the efficiency of the schooling system through reducing repetition rates, improving quality management in schools and enhancing the effectiveness of schooling.
Special Groups: Youth
The partnership between the National Youth Commission and the Departments of Education and Labour has led to a range of youth initiatives involving the establishment of Youth Brigades, counselling and career guidance, a satellite programme for the rehabilitation of youth in prisons, as well as piloting learnerships in tourism in different provinces. The aim of the Youth Brigades is to provide a bridging mechanism to facilitate youth access to income generating opportunities through skills development and exposure to work experience and as a means to involve young people in public and community service. A proposal on the piloting of Youth Brigade projects in eight sites involving at least 2000 young people is currently under discussion.
Special Groups: Women
A range of programmes and projects have targeted measures to support the employment of women, including the Department of Welfare's Flagship programme for unemployed women with children under five and the Department of Water Affairs and Forestry's Water Supply and Sanitation and Working for Water projects.
The Department of Labour has initiated the development of a project on domestic workers involving stakeholders such as the domestic workers' union, the National Women's Coalition and industry training boards. The project, which has been approved by the National Skills Authority, deals with the location of domestic workers within an appropriate Sector Education and Training Authority and the development of a skills programme and career pathing for domestic workers in line with the National Qualifications Framework. The project also aims to facilitate the growth of SMMEs involving women in specific skills areas within the sector.
Commitments to the promotion and training of women in different sectors of the economy are being pursued in line with the implementation of the Skills Development Act and the Employment Equity Acts.
Special Groups: People with Disabilities
Government has pledged R20 million for mainstreaming people with disabilities in employment, education and training and entrepreneurship and a number of projects have been implemented to ensure people with disabilities have greater access to employment.
The president announced in his state of the nation address in June an initiative of the Department of Public Works, the National Youth Commission and the disabled to enhance access to and use of public buildings by people with disabilities.
The Department of Labour is involved in a number of skills development initiatives involving people with disabilities and is in the process of developing a long-term strategy to support initiatives that enhance human resource development, job creation and vocational rehabilitation as a mechanism to facilitate entry and adjustment of people with disabilities in income generating activities.
The Department of Welfare has also pledged significant resources to establish a programme to economically empower people with disabilities through enhanced access to jobs, entrepreneurship and education and training. Partnerships with bodies representing people with disabilities are being forged, including through a formal agreement with the SA Federal Council for Disability.
Special Employment Programmes
Government's special employment programmes, the Consolidated
Municipal Infrastructure Programme (CMIP), Working for Water, Community-based Public Works Programmes, Clean and Green Living Campaign and the Land Care Campaign are proceeding apace. These are providing short-term jobs linked to infrastructural development many of them with a particular focus on women, youth and people with disabilities, and providing participants with training to access further employment. The special employment programmes are building partnerships across government and with social partners and in some cases linked to SDIs and local development initiatives aimed at creating sustainable job opportunities.
Matters on financing
Government has earmarked funds from the Poverty Relief Fund amounting to R1 billion for the year 1999/2000 as well as specific funds to line departments to implement government's commitments arising from the Jobs Summit declaration. Poverty Relief fund business plans have been appraised and recommendations forwarded to the Minister of Finance for approval and consideration by the Minister's Committee on the budget. The Minister of Finance made an announcement in this connection on additional allocations from the Poverty Relief Fund.
The Umsobomvu Fund has been provisionally registered as a Section 21 company, its purpose being to provide monetary grants for skills development or job creation projects of a national character. The process of appointing a Board of Directors is currently underway.
A proposal on the Government Employees Pension fund (GEPF) is being considered in the context of a comprehensive pension review and remuneration policy, as well as the results of an actuarial valuation currently underway.
Chairperson, this is a broad summary of the progress in implementing
the wide array of projects and programmes arising from the Jobs
Summit. Much of the work that has occupied government and our social partners over the past period has related to putting in place the concept proposals, business plans, institutional arrangements and capacity that is essential to ensuring that these are implemented in an accountable, transparent and effective manner. This has laid the basis for the road that lies ahead which is still a long and arduous one.
However, as the President stated in his address at the opening of parliament on 25 June, job creation and the opening up of opportunities for all our people to earn an honest living remain matters of critical concern to government. We have both the will and the commitment to ensure that we move along this road in an accelerated manner, both through meeting the obligations to which all social partners committed themselves as well as through the other means at our disposal in ensuring that job creation remains central to government's programme.
SUMMARY OF JOBS SUMMIT DECLARATION
The constituencies in NEDLAC have engaged intensely over the last months and resolved to act in concert to create jobs, stable and fair industrial relations, respect for worker rights and sustainable growth and development. A wide range of views have been heard through public submissions and hearings, and these have been taken into account as far as possible.
The outcome of the hearings on poverty earlier this year provided a detailed insight into the current plight of the poor and unemployed, and the release of the 1996 Census once again highlighted the severity of income inequalities and the extent and depth of poverty. These inequalities still coincide, in the main, with the race and gender of our citizens.
In the early years of our transition we face the real threat of a deep global crisis, which reconfirms the need for us to continue on our path of restructuring and strengthening our economy to promote growth, investment and sustainable development.
Our intended actions range from the macro economy to national programmes to very detailed pilot projects. We have agreed on processes, programmes and specific projects where many parties will act in concert, co-operate or contribute to the common purpose. In some cases we have indicated our intent and our hopes. Taken together we have declared our will to act for job creation.
We harbour no illusions about the difficulties ahead of us as we strive to succeed in this collective endeavour. Each and every one of us must be part of this work. It is not the work of the government or any one social partner alone. Through a commitment to work; dedication to learning and the acquiring of skills; spending and saving wisely; using our imagination; exhibiting entrepeneurship and by our disciplined consideration of the greater good; each of us can make our personal and collective contribution to the building of this new vibrant economy.
The hardship, pain and suffering of those unemployed and in poverty are and indictment on our society. The human rights we have enshrined in our Constitution must be translated into the same human dignity of each one of us as economic citizens. Special steps are required to alleviate the plight of those trapped in poverty.
The road to creating jobs and fighting poverty will not be paved with false promises, but with the determination of our vision and the sweat of our collective endeavour. At the heart of this process is growing the economy to create much-needed jobs, sustain employment, alleviate poverty and reduce inequalities.
Macroeconomic Policy and Employment Creation
The primary objective of economic policy is to promote growth and development in order to create jobs, sustain employment, alleviate poverty and reduce inequality. In doing this we seek to provide a better life, with improvement over time, for all our people. In pursuing these objectives government has to develop and implement a wide range of economic and social programmes. These basic programmes are set
out in the Reconstruction and Development Programme (RDP), which is a product of the democratic decisions of the South African people. The success of the RDP requires that we are able to carry out a wide range of structural reforms in both the economic and social dimensions of our economy. Most of the reforms outlined in the RDP are underway.
The government's aim in introducing the Growth, Employment and Redistribution (GEAR) programme was to achieve macroeronomic stability through a range of structural changes in the economy. However, there have been real differences over the question of macroeconomic policy and its potential effects.
The GEAR strategy has been a matter of contention. In preparing for the Jobs Summit there were open, frank and detailed discussions on this issue between the NEDLAC parties and within the political arena. The approach taken in these discussions has been to focus on how to go forward rather than to achieve endorsement of GEAR by all parties. We sought, through discussion, to reach agreement on how we could achieve real growth, development, redistribution and employment creation.
The parties are in agreement on the conditions needed to establish the underlying credibility of a policy programme, the appropriate outcomes of macroeconomic policy and the areas that they will now work on together to establish necessary and required adjustments in the light of the current circumstances.
The credibility of macroeconomic policy is enhanced if it is sustainable, stable and successful and enjoys a broad support in society. No group in our society can be allowed to perceive, or in fact experience, that they carry the full burden of the costs and enjoy none of the benefits of this reform.
The basic structural objectives of the RDP remain critical for the successful transformation of the economy. Structural changes already achieved have clearly strengthened the economy and made it more resilient in the face of external pressures. However, evaluation and carefully considered adjustment are essential especially as we may be facing a particularly serious international crisis.
It is agreed that the GEAR projections on growth, interest rates and employment will not be met in the time frames that were set out. Adjustments to address this are necessary, and detailed work will be done to address these changed circumstances, whilst retaining the coherence and strength of our policy.
The agreements, commitments and statements of intent that follow relate to areas other than the macro economy along, but they constitute the first major steps to effect these corrective adjustments to address the current situation. They include:
Â· Agreements on industrial policy measures and programmes to directly address unemployment and increased investment.
Â· A detailed agreement to enhance the delivery of housing and to increase the amount of rental stock available.
Â· A number of agreements that deal with human resource development in the form of training, education and targeted programmes for youth, women and the disabled.
Â· Agreements in regard to the operation of the labour market.
Â· The government has set out the Special Employment Programmes that are being implemented and the new programmes that are proposed. Many of the agreements are then applied in a range of special employment programmes and integrated regional projects.
Â· A range of processes and actions that will deal with financial resource mobiIisation and specific financing mechanisms. The purpose of this interaction is to inject additional resources into accelerated delivery mechanisms that will have a direct job creating effect.
Â· The government is undertaking a review of our regulatory framework in order to facilitate higher levels of saving and investment in the economy. Government will continue to consult with NEDLAC constituencies.
Â· The parties agree to interact with developmental institutions such as the IDC, DBSA and CSIR in pursuit of programmes and policies agreed at the Jobs Summit.
In combination these programmes have a macroeconomic effect in that they constitute a positive counter cyclical package that is designed to compensate for the effects of lower growth and the current international crisis. In this sense the outcome of the Jobs Summit will be to enhance the employment creating capacity of the economy as it recovers its growth path.
2. JOB CREATION IN SECTORS OF THE ECONOMY
A. Sector Summits
It is agreed that in some sectors or clusters of industry, particularly those with high potential to create or lose jobs, sector strategic processes should be encouraged. These should facilitate the development of industrial strategies for stakeholders, designed to expand output and create or save jobs. A key consideration will be to avoid retrenchments while improving productivity.
Government will make available financial support in the form of a Sector Partnership Fund (SPF) up to R27.5-million between April 1998 an:~ March 2001 as allocated in the Medium Term Expenditure Framework. An upfront grant of R10 000 to enable a sectoral group to develop a full proposal.
B. Buy South Africa
It is agreed that the NEDLAC parties will embark on a Buy South Africa campaign as soon as possible after the Jobs Summit. The aim of the campaign will be to promote demand for South African products and services that embody high standards of quality. A key component of this initiative will be the establishment of a new label for qualifying products and services. The Department of Trade and Industry will lead an interaction between the South African Bureau of Standards, the South African National Accreditation System and the NEDLAC parties to develop and implement the label and its accreditation.
C. Strengthening Customs and Excise
All NEDLAC parties agree that the capacity to stem the flow of illegal imported goods into South Africa will contribute to job creation and good governance in the economy
The Customs Transformation Programme (CTP) consists of:
Â· The rollout of techniques and best practices currently being investigated will improve the technical resources at the ports of entry;
Â· The Botswana-Lesotho-Namibia-Swaziland border control project currently in progress will address issues around the number of places of entry within South Africa and the proposal of 17 border posts; and
Â· Identified projects to speed up computerisation of the customs functions.
The NEDLAC constituencies believe that:
Â· Implementation of the CTP should enhance the capability of Customs to check sensitive sectors, and
Â· Automating some administrative functions would release staff for inspections.
Government has allocated R734.7-million for the CTP over a five-year period.
Trade policy reform is a key instrument for restructuring the economy, but it needs to be accompanied by a range of industrial support measures. South Africa has been negotiating a wide range of trade agreements, which are likely to be completed in 1999 and will have an important effect on the level of tariffs and trade and investment prospects. As part of a strategy to reduce job loss and increase employment, government will initiate a comprehensive process with the NEDLAC parties to develop the next round of trade policy programmes and prepare for the next World Trade Organisation round. Job loss and job creation in industries affected by tariff reform needs to be prioritised, and specific attention will be paid to those industries that have experienced significant job losses over the past 36 months
E. Small Business Promotion
The small, medium and micro sector has faced excessive obstacles in the past, and government has developed many new programmes targeting small business - as one of the most important vehicles for creating jobs and wealth in any country.
To this end, a national Mentorship Scheme will be established, costed at about R5-. million per annum over an initial three-year period. It will be a public-private partnership between Ntsika, Khula Enterprise Finance Limited and other private sector partners such as the National Business Initiative (NBI)/South Africa Foundation, the Banking Council and the Black Business Council. Target sectors include tourism, arts and crafts, information technology, and automobile and metal manufacturing.
Access to finance
Khula will launch several new lending programmes and expand the existing scheme. These include:
Â· a Fisheries Fund for historically disadvantaged entrepreneurs and communities
Â· the Small Contractor Industry programme
Â· a Tourism Sector Financing scheme, targeting historically disadvantaged entrepreneurs
Â· a Nations Trust Youth Enterprise project for entrepreneurs between the ages of 18 and 35
Â· small medium business projects within the Spatial Development Initiatives beginning with a focus on the Integrated Provincial Projects
Â· pilot projects to establish micro-credit outlets in rural areas targeting women. (See Document on Proposals on SMME and Job Creation for details)
The Banking Council of South Africa, and at least three banks will shortly launch a scheme to provide finance to micro.
It is agreed to establish a set of 28 new service centres before April 2000 at a total cost of about R30-million. In the first year the cost will be shared between government, donors and the private sector.
Business incubation centres provide a nurturing environment for SMMEs. They may include support services such as on-site technical assistance and training, public procurement and business linkages and opportunities for market access. A target of 11 pilot business incubation projects (at least one in each province) should be achieved by the end of 1999. Each should accommodate about 20 businesses.
In recognition of the great potential of the South African tourism industry for sustainable job creation over a relatively short period of time, business and government have agreed to:
Â· A partnership to aggressively market South Africa as a prominent tourist destination. A public-private marketing fund will be established as a Section 21 Company to preside over the initiative, and it will have a budget of R180-million, with contributions by government and the private sector.
A Tourism Enterprise Programme
To promote the entry of SMMEs into the tourism sector:
Â· Twenty to 40 towns throughout the country will be identified as pilot development areas. These would be towns with demonstrable tourism demand and underdeveloped potential;
Â· A core of tourism "pathfinders" will mobilise the selected communities and local entrepeneurs to identify tourism opportunities;
Â· A dedicated tourism financing mechanism will fund new ventures; and
Â· A tourism capacity building programme will be established, where local business will 'mentor' emerging entrepreneurs.
Khula has committed wholesale finance to the programme, and a retail finance facility will be established to support emerging entrepreneurs.
G. Housing: A National Presidential Lead Project
The National Presidential Lead Project aims to pilot affordable mass housing delivery. Seventy five percent would be rental stock, while the rest would be ownership. It should lead to mass housing delivery and demonstrate "best practice" to achieve sustainable delivery and management of affordable housing. The use of labour intensive construction methods will be encouraged in the award of tenders.
A minimum of 50 000 and a maximum of 150 000 housing units for low-income families should be built through the NPLP. In the first phase 50 000 units would be financed jointly by the private sector and the government. The NPLP will be managed by a government-appointed agency, which is yet to be determined.
3 THE LABOUR MARKET AND HUMAN RESOURCE DEVELOPMENT FOR JOB CREATION
A. Social Plan
A framework for a Social Plan approach has been agreed to, between delegates from the Trade and Industry and Labour Market chambers after two years of negotiation. The Social Plan approach aims to avoid job losses and employment decline wherever possible. In cases where large job losses are unavoidable, it would seek to actively manage retrenchments and ameliorate their effects on individuals and local economies.
Under the auspices of the National Productivity Institute, the Department of Labour will establish a Social Plan Technical Support Facility. It is proposed that representative forums be established at industry or enterprise level, to look ahead to problems, challenges and possible solutions. Details of proposed strategies can be found within the agreement.
B. Social Security
Parties to the Jobs Summit commit themselves to implementing a comprehensive social security system, aimed especially at those living in poverty and the unemployed. A basic income grant may be considered as part of such a system. The process to reach agreement on the elements of such a system should begin with an investigation.
C. Education and Training
Parties are committed to the progressive building of South Africa's human capacity at all educational levels. A number of initiatives have been agreed to, which support government's education policy. The main players are the Business Trust, the Department of Education, the National Business Initiative, the Joint Education Trust, and the READ organisation. Programmes will be aimed at improving School Quality Management, Schooling Efficiency and Schooling Effectiveness.
A learnership is a work-based route of learning, and is one of the initiatives proposed in the Skills Development Bill. All parties are fully committed to learnerships, an example of which is the partnership between business and government in Tourism and Hospitality to support 6 000 learnerships.
E. Special Groups: Youth
A Youth Brigade programme will be established as a means to involve youth in public and community service and to facilitate their access to income generating opportunities. There will be three lead programmes, viz. Working for Water, The Clean and Green Cities Campaign, and the Community Based Public Works Programme. Participants in a youth brigade would provide public works and/or community service, receive accredited education and training, as well as an allowance. A Youth Brigades Steering Committee will co-ordinate the process nationally. A campaign against HIV/Aids would be launched by Aids Brigades.
Student Community Service
Government - through the Departments of Education and Labour would explore with a range of stakeholders opportunities for community service for students.
F. Special Groups: Women
It is recognised that women have been greatly hindered from participation in the labour market by the "gender division of labour" and exclusion from mainstream economic activities: statistics show that almost one-half of African women are unemployed as compared to about one-third of African men. This requires a dynamic approach, and a number of initiatives have been proposed:
Special Employment Programmes
Special Employment Programmes would target women, especially those who head their households, with consideration to their support needs such as child care and flexitime. Where possible, the target will also be applied to procurement opportunities and associated jobs.
Women in Non-traditional Occupations
To address the crowding of women into few insecure and low-paid occupations (such as nursing, domestic work and teaching), a campaign will be launched to:
Â· consider school curricula and career guidance
Â· actively promote women entrepeneurs through mentorships and financial support
Â· consider special incentives to encourage women into training, and
Â· encourage the promotion and training of women in all economic sectors in line with the Employment Equity Bill.
Education and Training
It is recoanised that only 12% of African women have matriculated, while 20% have had no formal schooling at all. Specific consideration should be given to the training of women and their participation in learnership programmes in all SETAs.
To ensure that SMME programmes reach women entrepeneurs, a target has been set to aim at least 50% of all mentorships and 50% of space in business incubation projects at women by the year 2005, In recognition that the majority of women entrepeneurs are in the survivalist and micro sector, the DTI will support a campaign to target the promotion, support, access to training and finance to women in this sector.
All parties will actively promote the Sexual Harassment Code of Good Practice.
The Department of Welfare will co-ordinate a national early childhood education and care for ages up to six. The DTI has committed itself to supporting this initiative.
The Office on the Status of Women, the Commission on Gender Equality and the Women's National Coalition will monitor the progress.
G. Special Groups: People with Disabilities
People with disabilities face a unique set of barriers to economic self-reliance. Most importantly, these include fears, myths and stereotypes about the inabilities of disabled people which compound their lack of access to routine supports and resources of daily life. An Integrated National Disability Strategy has been approved by Cabinet. The Jobs Summit has provided a framewok and opportunity for
developing concrete intersectoral strategies for the economic empowerment of the estimated 10% of South Africans with disabilities.
Guideline targets include:
Â· Five percent of economic development investments by public sector SMME promotion, training, micro- and industrial credit resources be targeted to people with disabilities
Â· Two percent of the public and private sector workfoces will consist of people with disabilities
Â· Five percent of public sector procurement will go to businesses owned or controlled by people with disabilities, or to private sector enterprises with at least five percent of people with disabilities in their workforce, and Employment Equity regulations will be reviewed to ensure the reduction of discrimination and that attention is paid to remedy victims' losses.
4. SPECIAL EMPLOYMENT PROGRAMMES
A. A Dynamic Approach for Special Employment Programmes
Government's Infrastructural and Special Employment Programmes enable quick job creation, particularly for the most vulnerable groups in the labour market. The package of Programmes already on offer will be dramatically expanded over the next few years, with greater attention paid to the finance stream, improved coordination of activities, sustainability, training and the contribution to local economic activity. It is estimated that about R5-billion is currently allocated from the budget to labour-intensive infrastructure programmes such as Working for Water, the Land Care Campaign, Rural Water Supply, the community-Based Public Works Programmes, Consolidated Municipal lnfrastructure Programme, Housing and select Welfare programmes. In order, Housing (R3.2-billion) and CMIP (about R700-million) constitute the bulk of this funding.
A more dynamic and integrated approach to implementation includes a commitment to expanding programmes that have investment promotion or 'natural resourcereleasing' impact; maximising synergies between infrastructure and services; and promoting labour-intensive methods in construction.
B. Overview of the Central Programmes
Clean and Green Cities Campaign
The Clean and Green Cities Campaign aims to promote a sense of pride in our cities and make them more attractive for visitors, and to kick-start waste management systems in previously unserviced areas. The Campaign will implement municipal waste collection in poorly and unserviced areas, linking into small recycling operations to facilitate the sustainability of the programme. Currently there are an estimated 15 000 employees in the waste management industry, but there is potential for much greater job creation as over 50% of South Africans do not have access to waste collection systems. The Campaign was established as a one-year pilot programme in 1996 by the Community-Based Public Works Programme, in partnership with South African Breweries and the Keep South Africa Beautiful Association.
Working for Water
About 38 000 direct short-term jobs have been created through the Working for Water project - at least half of these are rural women in KwaZulu Natal, Eastern Cape, Western Cape, Northern Province and Mpumalanga.
The project is an inexpensive short-term job creation and conservation project, which aims to clear invasive alien vegetation. One direct or indirect job is created for every R10 000 spent per year, and the wage component accounts for over 60% of costs. Last year 220 000 hectares of alien vegetation were cleared.
Land Care Campaign
The Land Care campaign is a community-based partnership which focuses on the rehabilitation and conservation of natural resources through sustainable utilisation and the creation of a conservation ethic through education and awareness. It will be kick-started through an initial budget allocation of R25~million, and aims to raise R250-million through donor support. It will reinforce the Working for Water project by eradicating invader plants and declared weeds which are degrading the agricultural potential of wider catchment areas away from waterways.
It is estimated that government's low-income housing programme generated 109 445 direct and 164 168 indirect employment opportunities in 1997, with an expenditure of about R2-billion on the subsidy programme. These are not sustainable jobs, but do make an important contribution. Mechanisms are being put into place to improve the quality of housing delivery by addressing non-payment for services, protecting against poor workmanship, normalising relationships with lenders, offering a national housing subsidy scheme and improving access to credit to low-income housing through Project Gateway.
Consolidated Municipal Infrastructure Programme
The Consolidated Municipal Infrastructure Programme channels capital subsidies to investment in basic service infrastructure for low income households and towards the rehabilitation of collapsed infrastructure in previously disadvantaged areas. The Department of Constitutional Affairs estimates that in 1997/8, the equivalent of 10 565 temporary full-time jobs were created. Since its inception, the Programme has provided contracts to 1 569 SMMEs, and training for about 94 300 people. Funding is expected to increase substantially from the existing R630-million, and it is estimated that this could create about 20 000 jobs.
Rural Water Supply and Sanitation
In total, R950-million was spent in 1997/8 to deliver water and sanitation services to well over one million people not previously served. This programme created the equivalent of temporary jobs, equivalent to 41 480 full-time jobs in 1997/8, mainly in the poorest provinces, employing mainly women and youth.
Government aims to redirect spending away from programmes that promote dependency to those that are more developmental. Based on poverty profiles of provinces, the Department of Welfare has designed a social development programme with a R203-million budget in the 1998/9 fiscal year. This includes as its targets unemployed women with children under five.
Community Based Public Works Programmes (CBPWP)
The CBPWP is aimed at poverty alleviation through job creation, primarily focusing on rural areas. It is implemented through provinces and NGOs. Since its inception, over 900 projects have been implemented, mainly in rural areas, creating the equivalent of about temporary jobs, equivalent to 41 650 full-time jobs. The programme will focus on the strengthening of Integrated Development Planning, Local Economic Development and Land Development Objectives.
C. Linking Special Employment Programmes into Sustainable Jobs
A critical component of the special employment programmes will be to link the provision of basic infrastructure and waste management into viable sustainable industries.
Improved Infrastructural Targeting
Government is committed to improving the co-ordination of infrastructural provision to underpin and encourage private sector investment. The social partners have agreed that pilot projects will be run in the three provincial lead projects to demonstrate how improved co-ordination could improve delivery. So, for example, by improving the financial attractiveness of a hotel project that is made accessible by a new road, such investments improve the chance that such projects will materialise and create permanent jobs.
Creating Commercial Demand for Waste Product
Government is committed to creating sustainable jobs which would in themselves help to underpin the sustainability of waste clearing programmes. Some secondary industry possibilities are outlined below from the Working for Water and Clean and Green Living programmes. Some of these ideas have already come to fruition; others require further business plan development
Clean and Green Living Campaign and Sustainable Job Creation
The following agreements have been reached between the Ministry of Envinonmental Affairs and Tourism since October 1998:
Enviroserve: Aims to employ additional permanent staff and extend their current system that involves support for entrepeneurs and employment of local people.
Sappi: Sappi will finance feasibility studies for partnership pilot projects in the collection and transportation of waste paper
Nampak: Will work with government to develop emerging entrepeneurs in crushed glass activities and to identify business recycling opportunities in metals, plastics and glass waste.
Spoornet: Spoornet has agreed to work with government to launch and expand "waste-by-rail" activities, with the establishment of waste transfer stations along its rail infrastructure.
Further discussions are being held with PGF and Consol Glass, Eskom and the SA Tyre Recycling Manufacturing Companies.
Working for Water links into Sustainable Job Creation
The Working for Water project has identified and scoped opportunities for developing secondary industry out of the resources that are created as a result of its operations. The Department of Trade and industry and the Industrial Development Corporation will explore ways in which further opportunities can be created. Already 14 industry niches have been identified, including nurseries for traditional medicines, horticulture and plant rehabilitation; ecotourism; furniture production; crafts and vegetable farming.
Financing the Promotion of Sustainable Jobs from SEPs
The Industrial Development Corporation (IDC) will support the feasibility assessment and packaging of sustainable projects related to the Clean and Green Living campaign and the Working for Water programme. Where possible, it will assist with mobilising finance so that projects are realised.
Franchising will be considered as a means of extending these initiatives.
D. Promoting Labour-Based Construction Methods
The Department of Public Works is committed to promoting labour intensive
practices in the construction industry. The Green Paper Creating and Enabling Environment for Reconstruction, Growth and Development of the Construction Industry sets the agenda for the transformation of public sector fixed investment and its capacity to influence the growth and development of the industry. To maximise the job creation potential of the construction industry, a Task Team - comprising major stakeholders - will produce guidelines on:
Â· Community involvement in projects
Â· Project design to maximise employment potential
Â· Procurement practices
5. JOB CREATION IN THE INTEGRATED PROVINCIAL PROJECTS
A. Why Integrated Provincial Projects?
Government has taken the lead to focus efforts on areas of high social need and high economic potential, as models for job creation throughout South Africa. Three areas have been selected as integrated provincial projects:
Â· Greater St Lucia in KwaZulu Natal,
Â· The Wild Coast-Emonti, and
Â· The Greater Algoa Bay region.
Four factors have shaped this selection:
A legacy of poverty and neglect. Unemployment is a staggering 73% in the Wild Coast, 43% in St Lucia and 36% in Algoa Bay.
Â· Each of these areas possesses huge potential to attain prosperity, either through tourism and agriculture or, in the case of Algoa through the automotive sector and export-oriented metal processing projects.
Â· These areas are an application of government's economic development approach to neglected areas by identifying key projects with substantial long-term growth prospects and creating conditions for private sector investment in specifis spatial locations. These projects will create jobs directly and many more through the ripple effect of opportunities for local entrepeneurs, small businesses, suppliers and customers.
Â· By building upon the synergies generated in implementing agreements of the employment strategy in these areas the approach can be replicated in the rest of the country
Within the integrated provincial projects the focus on establishing conditions for sustainable job creation will facilitate the rapid implementation of all the applicable agreements of the employment strategy.
B. Greater St Lucia Integrated Provincial Project
The Greater St Lucia project covers an area with a unique combination of natural beauty, natural resources and cultural wealth. However, it has poor infrastructure for supporting economic growth.
The lead job creation project is through large-scale tourism with associated local development opportunities. The centre piece is the creation of a St Lucia Wetland Park authority to manage the area in line with international best practice and prepare for its declaration as a World Heritage Site.
For the projects now being proposed to investor approximately 2 100 potential jobs would be directly created in the first phase, but this would in turn stimulate additional employment several times that figure. Highlights of the proposed project are:
Â· Mobilising a first wave of private sector investment to the tune of R680-million;
Â· Supporting communities to enter into community-private partnerships;
Â· Developing approximately 5 500 additional tourist beds and 15 development nodes over a 10 year period;
Â· Providing an efficient framework for the consolidation of 280 000 ha of state-owned conservation and marine estate, and
Â· Generating an estimated gross revenue of R800-miIlion per annum at maturity
Government is unlocking the potential of the area through building key infrastructure and stimulating local economic development. A new coastal road will join Hluhluwe and Maputo.
Extensive community consultation and mobilisation has been under way in the area since the Lubombo SDI was initiated in 1997, and the broader objective is to stimulate regional job creation through unlocking the development potential of the whole Maputoland region embracing Mozambique, South Africa and Swaziland.
C. The Wild Coast -Emonti Integrated ProvinciaI Project
The Wild Coast-Emonti project covers a corridor 280km long at the northern end of the Eastern Cape coast between the Mtamvuna River in the north and the Great Kei in the south. It is one of the few remaining undeveloped stretches of coastline in South Africa, with superb natural assets that have been vastly under-utilised. The population of over a million people lives in amongst least developed areas in the country.
The lead job creation projects in the Wild Coast are tourism, forestry and agriculture, focusing on four nodes along the coast. These are the Mkambati nature reserve and forests; Port St Johns, Coffee Bay plus Hole in the Wall holiday resorts; and the combined Dwesa/Cwebe nature reserve. Through the integrated provincial project interventions are being made to upgrade road and water infrastructure and to transfer skills to communities to empower them to enter into successful community-private partnerships.
Key features of the job creation projects being promoted to private investors include:
Â· A combination of projects in Port St Johns including construction of a new hotel, golf course and camp site at First Beach, and redevelopment of existing facilities. Government will fund the development of infrastructure in the town.
Â· Proposals to build a new hotel at Coffee Bay have been made.
Â· Plans to redevelop and upgrade the Dwesa/Cwebe nature reserve.
Â· Plans to commercialise the Mkambati nature reserve and provide 150-200 tourist beds
Â· Three major forestry projects to establish new commercial forests on community land and build a wood fibre processing plant. Extensions to this project are for a furniture manufacturing facility.
Â· Employment intensive agriculture has been proposed for the Port St Johns area and the Magwa tea estate is being prepared to invite a joint venture with private sector partner.
D. The Greater Algoa Bay Integrated Provincial Project
This region is best understood as the "hinterland" of Port Elizabeth. The city of Port Elizabeth is the metropolitan hub with established industry but estimates suggest that as much as 60 % of the black potential labour force is unemployed.
Five lead project clusters have been selected. These are:
Â· automobiles and components;
Â· a greenfields metals processing complex and new port;
Â· tourism centred on an enlarged Greater Addo Elephant National Park;
Â· support for SMME development, and
Â· high value agriculture for small farmers.
Key features include:
Â· Sharpening the competitive capability of the automobile assembly and motor component manufacturing sector into a world class export sector;
Â· Establishment of a dedicated metals processing cluster and proposed new deep-water harbour at Coega.
Â· Extending the Addo Elephant National Park to boost tourism in the region. Additional tourism projects involve waterfront development for Port Elizabeth.
Â· Assessing the feasibility of irrigated farming for small farmers in the lower Sundays valley.
Â· Supporting small, medium and micro enterprises able to exploit the opportunities created in other project clusters.
Government will extend the approach adopted in the integrated provincial projects to stimulating job creation in other provinces of the country through partnerships with business, labour and communities in the delivery of infrastructure and services to stimulate economic development.
6. MATTERS ON FINANCING
Jointly, Government, Business and Labour have pledged resources towards the financing of short, medium- to long-term job creating activities.
One Day's Output
Organised labour will call on its 2.5 million members, non-members and all
employers in South Africa, to participate in a "one day's output for jobs programme".
This is a call for the people of South Africa to contribute the value of their one day's output to fund employment and development programs in line with the Jobs Summit. Both white and blue collar workers, politicians, artists and all other workers are called upon to contribute towards realisation of this initiative.
Government will contribute resources through the Umsobomvu Fund, to be set up from proceeds of the demutualisation proceeds. These resources will be focused towards job creation, training and youth employment oriented programmes. More resources will be made available through the Budget process.
Other initiatives will include the investigation of more financing options such as the prescription of assets and the restructuring of the public sector pension fund, proposed by Labour. A task force will be set up to investigate these proposed initiatives.
To enhance the employability of South Africa's labour force, funding for training will be leveraged through the implementation of the training levy.
Development Finance Institutions and Donors
The Land Bank
The Land Bank Board has begun to launch the first of a range of new products designed to benefit everyone in the agricultural sector, even those with small plots of land and including the lives of hundreds of thousands of farm worker families. Among the products are the following:
Â· new procedures to secure preferential access to "brought in" properties for historically disadvantaged persons;
Â· the step-up micro lending scheme;
Â· wider access to credit through changed collateral requirements;
Â· differentiated pricing policy;
Â· a 115% bond for first time buyers of agricultural land; and
Â· encouragement of black firms through procurement policies.
Several more new polices are also in the pipeline which are indicated in greater
detail in the framework document.
Khula Enterprise Finance
Khula schemes that support Jobs Summit include:
Â· Credit Guarantee Schemes
Â· Loans and equity investments
Â· New venture capital and seed loans
Khula will also administer the Department of Land Affairs' Reform Facility
The Development Bank of South Africa
The DBSA contributes directly towards the creation of employment through its investment programmes which entail the mobilisation and investment of resources in the construction and upgrading of water, sanitation, transport, energy and telecommunication, social and institutional services across the spectrum of bulk and, connector and internal infrastructure. An estimated 62,000 workers were directly involved in the implementation of the 570 projects implemented at an investment cost of R250 million. Most of the participants were employed in the form of unskilled labourers with half of the investment constituting wages and one out of three receiving accredited skills training.
Industrial Development Corporation (IDC)
The IDC has identified two main themes to improve the targeting of its work:
1 improving the current DC operations:
Â· Streamlining and simplifying procedures in processing applications especially in industrial financing and entrepreneurial development divisions
Â· Extending its reach, especially to emerging entrepreneurs and specifically:
the scheme to facilitate take-overs and acquisitions
the wholesale finance scheme
low interest rate empowerment scheme
consortiums finance scheme
fishing finance scheme
Â· Supplementing existing financing products
Â· Taking pro-active steps to encourage midi-projects and strengthen the competitiveness of industry clusters
Projects being considered include:
Â· Agri-industries development
Â· Large resource based projects
2. Special projects to be supported by DC include:
Â· Administration of some government job creation schemes
Â· Promoting sustainable economic activities linked to Seeps
Â· Forging partnerships with private sector in special jobs schemes
The Independent Development Trust
lDT supports the following programmes:
Â· Capacity building and enhancement of local authorities, NGOs and CBOs
Â· Local economic planning and development initiatives
Â· Programme management for community based programmes
Â· Programmes and initiatives that are aimed at increasing the participation of women, youth, and disabled
Â· Programs aimed at rural communities
Â· Programmes directed at SMME support
Â· Programmes promoting community-private partnerships
7. FOLLOWING UP ON THE JOBS SUMMIT
A Cabinet Employment Cluster Committee will be established to ensure the effective implementation of Jobs Summit commitments. This committee would be responsible for ensuring that government's Employment Strategy commitments are met.
The agreements reached at the Jobs Summit require careful monitoring, to ensure that implementation receives priority, and to overcome any obstacles which may retard the creation of jobs as envisaged in the individual programmes. A range of other potentially useful ideas and proposals were received from constituencies, and
the public which could not be processed in time. Some of these are now the subject of further consultation or investigation.
The work to improve the alignment of policy to ensure the most effective contribution to employment creation, will continue.
The current supervisory committee will meet after the Summit and finalise the working structure under the auspices of NEDLAC, to undertake the above. This structure will make recommendations to the President on the convening of the next Summit.