No action yet on plan to help ailing sectors
May 21, 2009
By SAMANTHA ENSLIN-PAYNE
A government plan to help ailing sectors of the economy weather the global financial crisis has failed to deliver concrete action, while the ANC recovers from its election hangover.
The urgency of South Africa's predicament was underlined earlier this month when Statistics SA reported that the official unemployment rate increased to 23.5 percent in the first quarter from 21.9 percent in the last quarter of 2008. This is the highest unemployment rate of 62 countries tracked by Bloomberg.
When The Framework for South Africa's Response to the International Economic Crisis was released on February 19, task teams - including representatives of the government, business and labour - were set up.
They were to work on rescue plans for vulnerable sectors, such as clothing, textiles and footwear, mining, capital equipment and the motor industry.
Alan Hirsch, the deputy head in the presidency policy unit, said he was unable to divulge the proposal details. The stakeholder forum had not yet met to finalise the report before submitting it to the president.
It was reported at the time sector-specific strategies would include the use of a combination of trade, industrial and social policy measures to prevent job losses and to regain jobs and productive capacity.
The task teams' work was described as urgent and they were given four weeks to report to the presidency.
But three months later the government has not yet developed a co-ordinated approach to deal with the financial crisis.
Nedlac chief executive Herbert Mkhize said: "The elections put a spanner in the works. New ministers and ministries have added some complexities."
Cosatu spokesman Patrick Craven said: "Labour has pushed strongly to get the report finalised."
Hirsch said the difficulty in finalising the stakeholder report was that people's positions and responsibilities had changed after the elections.
It was hoped the report would be finalised within a few weeks. Once it had been presented to the president, it could be made public.
Without a co-ordinated approach to help distressed sectors, ministers are taking matters into their hands. They may set a dangerous precedent for the government by bailing out individual companies.
Trade and Industry Minister Rob Davies and Economic Development Minister Ebrahim Patel have intervened in a Southern African Clothing and Textile Workers' Union (Sactwu) request to bail out Frame Textiles. It had planned to close certain divisions and retrench 1 400 people.
The DA said government efforts to save jobs should be made in an even-handed and sustainable manner.
The proposed government bailout of Frame could set a potentially dangerous precedent, which could see other companies looking for hand-outs.
It also posed a serious conflict of interest, since the plan was being driven by Patel, who had strong ties to Sactwu, the DA said.
The government should develop a coherent, consistent and transparent policy on the criteria used to award bailouts to struggling companies.
"It will be financially unsustainable simply to allocate bailouts on an ad hoc basis."
|
|
