Youth subsidy – Bringing education into the picture

The debate on youth subsidy has gathered pace. The arguments for a youth subsidy consist of two major arguments.
First, the high rates of unemployment amongst youth are exceedingly worrying. As shown in a previous chart on Zapreneur. The key features of the unemployment data by age, show that:
The key features of the data include that:

  • The biggest proportion of unemployed are concentrated in the age groups 15-24 years (29.5%) and 25-34 years (42.8%).
  • Unemployment for those 34 years old and younger accounts for 72,3% of unemployed South Africans.

Youth unemployment thus is a serious challenge, and perhaps the defining challenge that we face.

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Discipline Malema, Just do not think redistributive pressures will be disciplined

The African National Congress Youth League (ANCYL)responded late last night to the charges being laid against its President, Julius Sello Malema, and a member of its National Executive Committee, Floyd Shivambu. Over the weekend, the ANCYL President shored up support within the youth league  at a special meeting of its national executive committee, which dutifully provided support to it’s President, and indicated that a “political issues” needed to be discussed with the leadership of the African National Congress (ANC). In an indication of the proposed mobilisation strategy to support the President, the ANCYL concluded its statement with the following:
The Special NEC re-affirmed the determination to fight tirelessly
and fearlessly for economic freedom in our lifetime, particularly
nationalisation of Mines, expropriation without compensation and provision
of free quality education for all.
The strategic intent, from within Malema’s camp,  is clearly to recast the disciplinary process, as trying to silence the radical programme of economic transformation being proposed by the ANCYL. Those opposed to Malema, are suggesting that brute strength will subdue an increasingly visible and vociferous Malema. It will be an intriguing political contest, and unfortunately will have implications for how the agenda on tackling inequality will shape up. There are three major reasons why the process and outcome of the disciplinary hearing will have on  matters  the public policy agenda on inequality and redistribution.

First, as argued by Sipho Hlongwane, it is important for our society to keep the eye on the allegations of corruption against Malema. The evidence in the media is at best circumstantial, however even at this early stage there remains a case to answer to. There is a case building against the business practices of Malema, and it requires significant focus. Ultimately, there needs to be a process for Malema to face whatever charges he may face, which is fair to him, and will offer the South African public with an exact picture of the business dealings of an important leader in our society. Importantly, as reported by the City Press, the Hawks have confirmed a probe into the business dealings of Julius Malema.
The point is that Malema is being presented the poster child for the term “tenderpreneur”, and as such the investigation has huge symbolic significance . The outcome of  any investigation will provide an insight into corruption in government, but will also provide South Africans with enough evidence to judge whether Malema is simply a crook, or whether his radical stances has made him a target.
Second, the theater of a trial provides Malema with exactly the platform he needs.  It is a skill he demonstrated in shoring up support for President Jacob Zuma, in the trials he faced before becoming South Africa’s president . Jane Duncan, writing in SACSIS,  interprets this skill at mobilisation as being ideologically expedient. She writes that:

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Nationalise! Expropriate! The Pillars for Economic Transformation according to the ANCYL

As the African National Congress Youth League (ANCYL) starts its 24th National Congress, the focus will be on the elections, especially since everyone in South Africa has a view on Julius  Malema. The policy debates will be reduced to the background, but potentially have a bigger impact on public policy in South Africa, than the outcome of elections. This article summarises the discussion document titled A clarion call to economic freedom fighters: Programme of action for economic freedom in our lifetime.This article seeks to understand the argument, an important first step to debating the issues at a later stage. The proposals focused on youth are contained in a separate document.The discussion document can be downloaded at the ANCYL website.

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The Little Guy and the National Planning Commission

Cover of the diagnostic report by the NPC. Will the “little guy” find the links?
A problem well-defined is a problem half solved. The expectations from the diagnostic report of the National Planning Commission (NPC) are that it would  define the problems facing our society in a way that stimulates discussion, and through a process unites us in defining the problem and the plan to resolve them. In that spirit,I am arguing that the section on enterprise development in the Diagnostic Report will require a recognition of realities of uneven market power in South Africa as a foundation to define the problem and develop solutions. At the core is that the NPC must take a stance to back the “little guy” in the economy, and all people excluded from the economy. It should do this initially through defining the problem, however it has not yet embedded in the way the NPC approaches the definition of the problems we face.
The NPC provides a useful way of describing the surface manifestations of low levels of entrepreneurial activity in South Africa. It notes in this regard that:

  • Small business contributes 40% of GDP and employs 60% of workers in South Africa
  • Notes that only 2% of adult population are involved in start-up activity
  • Highlights that South Africa has relatively low levels of entrepreneurial activity

It then summarises the policy response as follows:
Factors that hinder the development of  Small, medium and micro enterprises (SMMEs) include inappropriate regulation, lack of access to finance and external factors such as crime. Furthermore, because they have supply chains across the country, large firms are able to sell their products at prices smaller companies cannot match. A strategy to promote SMMEs cannot take hold without addressing the challenge of accessing established supply chains.
 

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Treasury launches Jobs Fund

 

The Jobs Fund - National Treasury funds, DBSA implements

Minister Pravin Gordhan has launched the Jobs Fund, first mooted in President Jacob Zuma’s State of the Nation Address. The fund  targets 150 000 jobs I three years and  has three unique characteristics:
 

  1. Co-finance projects with the potential of job creation, supporting both existing and new programmes.  The fund thus seeks to gear additional funding into the programme
  2. Grants instead of loans – Importantly, the funds provide grants for projects, signalling a shift in government to directly fund projects through grants and supporting venture capital. There will be no repayment or financial return sought, although funds that  are  not spent for the  purpose for which they were allocated,  or  are misappropriated, will be reclaimed by  the  National Treasury.
  3. Supporting existing and new programmes – The fund is designed to provide for a range of different partnerships, including for existing government programmes and new programmes.

Details on the application forms and criteria can be found at http://www.jobsfund.org.za/
The fund has a wide ambit, covering four areas:

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Book Launch – Poor economics by Abhijit Banerjee and Esther Duflo

Banner from the Poor Economics Website
 
“Revolutions need love” argued Minister Trevor Manuel in his introduction to Professor Abhijit Banerjee. Minister Manuel passionate reference to the link between love and revolution was as a reference of reverence to Albertina Sisulu – an outstanding and passionate leader of the South African revolution. In fact, the setting of Constitutional Hill – an old women’s prison – in a room decorated with powerful images of the female freedom fighters incarcerated at the jail providing a powerful backdrop to  the South Africa  launch of a book called “Poor Economics: A radical rethinking of the way to fight global poverty”.  Professor Banerjee, the speaker for the evening, is co-author with Esther Duflo of a hotly debated book. It has become a major talking point in the online channels focussed on development, especially as it challenges other mainstream attempts to make development issues real and popular.
I am hoping to have time to read and write a review of the book. The launch lecture however was exceptionally interesting, demanding and humbling. One description of the book given by Minister Manuel was that it was like learning to understand how the internal combustion engine works before learning to drive. Minister Manuel opinion was that the book told us that about how the engine of public policy worked, and through in turn the drivers of public policy became better drivers.  In a telling admission Minister Manuel indicated that there many issues that went beyond the econometric modelling that guided the frontend of public policy.  The Minister would have been more accurate to argue that the book tells policy makers not only why the engine is broken, but also questions if econometric modelling is the appropriate engine!
Banerjee highlighted four areas in development policy where slogans and ideology have driven policy choices. The book he argued was a reaction to this overly ideological context that informs anti-poverty policy. He argued that this focus on ideological solutions was a rhetorical stance, but more worryingly that public policy failures could be explained through the powerful; imposing their solutions on poor communities. The examples covered health, education, health, hunger and microcredit.
The details for each of these areas is different, but the storyline  is remarkably the same across the different areas discussed. Policy development is initiated by government officials; often on the advice of multilateral institutions; to solve a particular problem. The solution is praised as an innovative approach to the problem, but often reflects a particular stance on a problem, with a premade solution. The solution is often unlikely to work because:

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