As South Africans fret about a declining economy, we should be careful not to be inward looking. South Africa is still economically dominant in the southern African region. It will remain so for the foreseeable future.
Our economic woes and successes directly affect the region as a whole. Policy makers must accept that there is no clearly delineated South African labour market where only South Africans look for work. It exists in theory. In reality, we have a regional labour market that has two large job-creating provinces: Gauteng and the Western Cape.
The regional labour market is so integrated that a job seeker from Soweto is in direct competition with another one from Bulawayo or Maseru or Xai Xai for a job in Sandton. This is partly the reason why, with all President Cyril Ramaphosa’s good intentions, a minimum wage for low-skill workers will more likely be difficult to achieve for poor working South Africans.
You can’t achieve minimum wage when job seekers from neighbouring countries are prepared to work for a tip in Johannesburg and Cape Town restaurants. As active participants in the labour market (many refuse to join the ranks of so-called “discouraged job seekers”), they unwittingly suppress wages.
Many South Africans from the extremely impoverished parts of our country are learning to compete the hard way in this dog-eat-dog labour market. Poor workers with entrepreneurial skills have escaped the abuse and are reasonably wealthy as they hustle for businesses.
The dog-eat-dog competition in labour market has been extended in the entrepreneurial space where the battle for spaza shop market share is extremely intense. In the labour market, established businesses take advantage of job seekers, paying our highly educated neighbours peanuts to lower their operational costs and boost their margins. Peanuts in wages in Sandton means life when remitted to struggling Zimbabwe.
Robert Mugabe was referring to the reality that Zimbabweans are amenable to low paying jobs when he said they were “literally running South Africa”. Having lost all sense of shame for bringing his country to its knees, forcing fellow citizens to scavenge around the globe, Mugabe could say this without any hint of irony because he lives and will die in luxury.
So, what can be done? The solution is not only a South Africa-centric economic stimulus. We need a coordinated regional economic stimulus. Many of our neighbouring countries are struggling. They don’t have the luxury of borrowing billions of rands, only to throw them down the drain of a loss-making airline. The idea of social grants, free RDP houses and free education is completely unthinkable for them. To a certain extent our crisis is a picnic to some our neighbouring countries.
A region-wide stimulus would acknowledge that we are an integrated region and we either swim and sink together. South Africa needs developing neighbours it can do business with; not increasingly poorer neighbouring countries whose citizens come to search for jobs and are tragically regarded by some xenophobic-minded locals as an irritation.
A region-wide economic stimulus should be top priority for our leaders in the region. In fact, our politicians in South Africa should be developing ideas on how best to get regional industrialisation and job creation going instead of spending time mulling how best to shut down the borders.
The Democratic Alliance, which seeks to make immigration a big national election issue in 2019, is showing symptoms of running out of ideas. Yes, illegal immigration is a problem. But you cannot solve it without regional economic development. Similarly, you can’t raise minimum wage administratively when the regional market forces are dragging wage levels down. Only a developing region would make immigration more manageable and a minimum wage enforceable.
The idea of tight management of our borders is no doubt appealing to many. But if people in the north of our continent are prepared to risk their lives crossing the sea on dodgy boats to reach Europe, what could stop our neighbours from walking to Johannesburg?
The starting point for a regional economic stimulus is that the South African government, business people and trade unions must campaign for the lifting of sanctions against Zimbabwe. South Africa has always been opposed to the sanctions and must now campaign loudly for their lifting.
It does not make sense for the European Union and the United States to keep sanctions intact after the recent elections in Zimbabwe and the ongoing reforms President Emmerson Mnangagwa is implementing. Zimbabwe’s economic recovery would be in the best interest of South Africa and the region. South Africa is Zimbabwe’s largest trading partner. A revived Zimbabwe would buy more of our goods. Our businesses, some of which have global links, could bring much-needed capital to Zimbabwe.
South Africa should take keen interests in the economies of Swaziland and Lesotho. Swaziland is a famine waiting to explode. Mozambique’s progressive reforms were hampered by corrupt officials who were implicated in a VBS-like scandal when they played games with government-backed loans. That country’s potential is terrific.
The battle for government resources in Lesotho makes the political conflict between factions there a more or less a permanent political feature. With a well-coordinated regional economic growth plan, in which South Africa is a joint leader, some of these challenges could be turned around.
The good story in the region in terms of economic reforms and bringing back good governance is Angola. President João Lourenço and Ramaphosa are demonstrating within their national economies appetite to clean the mess left by their predecessors – and their families. Lourenço and Ramaphosa could lead the economic recovery efforts in the region.
Mnangagwa has committed to do the same but continued sanctions mean he is severely disadvantaged. But a resurgent Zimbabwe would be key to southern Africa’s growth.
- Mkhabela is a political analyst with the Department of Political Sciences at the University of South Africa