Friday, April 07, 2006
Since South Africa reached democracy, it has embarked on a great national project for growth with the aim of alleviating poverty, creating jobs and growth. But honestly speaking, there has been very few jobs created. While in some economical sector the country is doing well, it is still lagging behind developed countries as the growth is too slow to lessen poverty and unemployment.I read somewhere on the internet that according to economist, this country should grow by at least 5% – 6% a year to absorb job seekers. It is believed that this economic growth will stimulate investment and make it worthwhile for companies to employ people.
I believe that in the beginning the country did well when it launched programmes that address the poor people's needs. As a sequel the economy turned up well and many foreigners started pumping money into the economy. But the problem with these investors is that they have a short-term effect in South Africa. They only want to market their products and seldom buy South Africa's bonds. In terms of long- term goal, they are very careful when it comes to transferring technology and employing people. Another problem is that social programmes are paid for by productive workers, but in South Africa most people are not working. Thus it is not easy for the economy to support the social programmes. The wage structure is also contributing negatively. Because unskilled workers are priced out off the job market, this causes some of the households to receive very little income. Crime is also hitting negatively on social programmes. Crime imposes directly on financial and emotional costs and indirectly on tourism and investment attraction.
There are areas that require urgent attention in order to have effective growth programme in South Africa. South Africa needs to restructure their investment and privatisation programme for foreign investment. The country still needs to deal with the level of crime and the discrepancies in wage structure. Lastly, more effort should be structured in enhancing skills in South Africa.