An inclusive economy will build SA the aspired inclusive society

A man pulls a trolley as he makes his way to a recycling place next to Newtown Junction, Johannesburg. Some unemployed people survive by collecting and selling recyclable material. / Kabelo Mokoena
A man pulls a trolley as he makes his way to a recycling place next to Newtown Junction, Johannesburg. Some unemployed people survive by collecting and selling recyclable material. / Kabelo Mokoena

Exclusion is one of the biggest risks for South African society today. This exclusion is predominantly economic. However, the socioeconomic exclusion of millions of the unemployed and poor has political implications.

The indicators of exclusion are high unemployment, high inequality and poverty in a country endowed with abundant natural resources and great human potential.

For all the strides that have been made since 1994, SA is falling short of building an inclusive economy. Many remain on the margins.

President Cyril Ramaphosa has made job creation a top priority of his administration. Thus far, he has fallen short of making the difficult choices of making that happen.

As John Matisonn writes in his book, Cyril's Choices, what SA needs is 'job-creating rapid growth', it's not just about economic growth for the sake of it. The kind of growth that enriches the few at the top and puts more money into state coffers through high tax revenues as was the case during the higher growth years of the early 2000s.

Matisonn concludes that such job-creating rapid growth is the product of policy choices and not magic.

"There should be no doubt: choosing rapid growth carries a political cost. It requires the political will to make tough decisions. The people who will be aggrieved will be those with vested interest in tender contracts."

The vested interests in our society go beyond the tenderpreneurial class. It includes other elite groups that eke out some benefits in the current socioeconomic situation. This elite is both economic and political.

The reality is that the new SA is built on an elite compact. And this social compact is institutionalised in the form of Nedlac.

Who is represented in Nedlac? It is organised business, organised labour and government. These groupings represent the most privileged in our society.

Those privileged with high corporate earnings, those who are privileged enough to have jobs and the political elite deciding on the country's policy direction.

The privilege that these groups share in common is that their voices count. They are consulted regularly, and their demands and threats are taken seriously - to the extent that they can resist and stall certain policy decisions and actions.

This is the epicenter of the evident inertia on the restructuring of the economy in favour of slow incremental change. But failure to choose job-creating rapid growth also carries a political cost.

Although the official unemployment rate is 29%, the unofficial figure is more like 40%. That's almost half of the working-age population without a job. Young people aged 15-34 make up 63,4% of the official rate.

The unemployed mostly have qualifications below a matric. This means SA's potential workforce is mostly low- and semi-skilled. Yet the irony is that production in the economy is concentrated in the services sector which contributes over 60% of GDP. This is a sector driven by professional skills.

Sectors with greater labour absorbing potential such as industry (which includes mining, manufacturing, energy production and construction) and agriculture, contribute just under 30% and just under 3%, respectively.

The political implications are that the unemployed and poor are increasingly underrepresented or not represented at all.

And it's not that they are voiceless but that they're pacified with social policy measures that are not far reaching enough (such as grants) or their voices are disregarded or even muted.

There is inertia among business. And there is a worrying complacency in the political edifice, and this is not just a reference to the ANC but also the opposition which has failed to offer innovative ideas nor appeal to voters.

We cannot build an inclusive society without building an inclusive economy. Indeed, the president has difficult choices to make.

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