As if our political and social problems insufficiently kept us sick and depressed for days, Standard & Poor’s and Fitch added to our woes, relegating our country’s bonds to sub-investment grade. Moody’s, bless their souls Lord, decided to play the wait-and-see game, placing us on notice for now. Our new finance minister’s recent trip to New York to assure international investors seems to have hit a brick wall.
Our country seems fiercely divided on many issues, at least as seen through the social and mainstream media lenses. Differences include those about the approach for overcoming problems facing us. The “Madiba magic” is no more. Cry our beloved country.
But not all is lost. We somehow agree on our predicament and need to find a way out. How then do we get there when we disagree on so many issues and cannot even get traction on what we agree on? By Nimroth Gwetsa, 28 April 2017.
“It’s the economy, stupid” paraphrasing the expression attributed to James Carville, Bill Clinton’s campaign strategist in his successful 1992 presidential campaign against the then sitting president, George H. W. Bush.
Economic hardship exacerbates squabbles among people. It makes sense then that we lay bulk of the blame for our differences and strife on the slump in our economy.
I often hear people saying our economy needs more entrepreneurs so new jobs can be created. But I seldom hear about how such entrepreneurs would come about as if others are responsible for bringing them forth.
No doubt we need more entrepreneurs and funding for start-ups and small businesses. But we also don’t necessarily need more of that.
Having seen and encountered many struggling businesses, many of which do not need funding to stabilise, I realised such businesses need an opportunity to “serve” larger corporations. By serving, I am alluding to small companies lacking experience to fulfil requirements of higher corporations. Their inexperience is akin to inexperienced and unemployed undergraduates begging for internship and any other opportunities to help them gain experience to increase their employability.
Not many large corporations would be on a “recruitment” drive searching for small businesses to nurture and hopefully partner with for future opportunities. As in unemployment, how many times have we seen jobs advertised looking for candidates with minimum of three years-experience? Likewise, many opportunities promoted by large businesses readily look for small businesses with a minimum of three years of active business operations and supply experience as a prerequisite for doing business with them. The state is even the biggest culprit in this regard, yet claims to be shifting the focus on small businesses.
What start-ups are going through, is what inexperienced and unemployed graduates experience regularly. The entrepreneur’s sector, unlike labour’s, does not have such onerous regulatory requirements. One would have expected large corporations rushing to engage small businesses to supplement their capacity, yet these have chosen to ignore the sector, but lament government’s stringent labour laws and quantum of the proposed minimum wage.
Aside from other considerations, I do not think some starts-ups would really mind having ancillary functions of large corporations “outsourced” to them at a fee structure just below the minimum wage for each resource assigned. I exclude labour broking from those small businesses owing to accusations of their failure to add value to staff.
But the businesses I refer to are those by emerging entrepreneurs able to find a way of taking on such opportunities without exploiting their staff. One approach to avoid staff exploitation while accepting lower fee could be by giving staff meaningful equity in the business in exchange for taking “small” income so they, with the founder, could give business a chance to grow and afford paying higher wages in future.
In my earlier article, I wondered if a shift in interactions between big business and people engaged as sole proprieties or small businesses would not reduce our challenges. I still wonder to the efficacy of that approach.
In this climate of heightened punting of “Radical Economic Transformation”, we should be exploring this option more keenly as it could be one other way of turning people from being job seekers wanting to earn an income to job-creators paying wages.
At the heart of high unemployment and low job-creation rate, low entrepreneurship and related higher failure rate lies preventable and solvable problems many people in positions of influence largely ignore.
By incubation, nourishment and nurturing, I refer to the need to care about people without hope and prospects of being considered for serious opportunities.
A socially responsible capitalist system is likely to gain more favourable support if such interventions were to be implemented without waiting for government incentives or being forced by law or other pressures to do it.
Locally though, I’d be more than happy if radical economic transformation was aggressively focusing on incubating, handholding and nurturing job seekers and entrepreneurs ethically through programmes of work by government departments. Such interventions are good for increasing the base of income-tax contributors and sustaining democracy than having only a few enjoying those privileges.
Some Economists would say for this intervention to occur, the economy needs to grow first to fund such programmes. With our economy growing at hopelessly unacceptable levels, is such an approach viable? The decision is a chicken-and-egg argument. A farmer who does nothing waiting for a favourable climate would get nothing. But one finding other ways to adapt to the unfavourable climate would become a productive and wealthier farmer.
Let us do what we usually do in a national crisis by declaring “code red” to low growth, high unemployment and increased hopelessness. We need to do what we have to do, and do so swiftly to resolve the crisis.
I propose now that the Western Cape High Court hindered the trillion Rand nuclear energy project investment, should we not repriotise some of that budget incorruptly to incubate unemployed youth and entrepreneurs start small businesses to work with government and the private sector? Would this not yield a more inclusive growth, or radical economic transformation that can ensure our future has more people contributing to the wealth of this country?
Perhaps it is now time poverty and unemployment are declared crimes against humanity.
We can overcome. If many nonprofit organisations can be funded to implement diverse social programmes, surely some funding can be made available to programmes for creating jobs, starting and incubating businesses for sustainability.
Our economic slump may largely be owing to our apathy as we find comfort in our primary concerns being resolved and ignoring those affecting our neighbours.
Having regard to few things we may agree on, let us then rise from our comfortable situation and actively find ways we could assist struggling people.