ANALYSIS: The Western Cape takes the thought leadership in job creation – now all we need is action

By Osiame Molefe 27 September 2011

Monday’s landmark declaration of understanding signed by Cosatu and the chamber of commerce in the Western Cape may be the first of its kind in the country, but unless both sides take it further, the agreement will become a thin veneer covering the ideological rift between the two sides. It does, however, present a good starting point for a much-needed change in the conversation. By OSIAME MOLEFE.

The declaration is the culmination of what Cape Chamber of Commerce executive director Viola Manuel called “hard discussion” and commits both sides to collaborating to end inequality, poverty, unemployment and job losses. Manuel said, “We met with mutual distrust, but eventually, we saw commonalities and found ways to work together.”

Cosatu pulled off somewhat of a minor coup by getting business in the province to sign on to the decent work agenda, which is great for workers but effectively means that business in the Western Cape needs to look beyond labour laws for something to accuse of being a disincentive to doing business. Cosatu, for its part, has agreed to partner with them as they do so.

The first place they can start is red tape. The World Economic Forum’s 2011/12 global competitiveness report released earlier this month put inefficient government bureaucracy as the most problematic factor for doing business in South Africa, well ahead of an inadequately educated workforce and restrictive labour regulations. With an overall ranking of 34 (out of 183 economies), the World Bank also ranked South Africa poorly in its 2011 Doing Business ratings, especially in starting and closing a business, registering property, trading across borders and enforcing contracts. Only the rankings in getting credit (second), protecting investors (tenth) and paying taxes (24th) pulled the rating up.

To combat these factors, Western Cape economic development minister Alan Winde announced last month that an inter-governmental working group had been tasked with identifying and removing regulatory bottlenecks to doing business. Winde also announced that the province had established a red tape unit, which was tracking 17 small and medium start-ups to help his department better understand the regulatory impediments to doing business.

Monday’s declaration also echoes emerging global thought. As regulators and monitoring bodies worldwide grapple with questions arising from new thinking around sustainable businesses and economies, it has become more apparent that economic indicators alone do not represent the entire picture. Arguably, part of the crisis in global economy is that long-term sustainability has historically never been priced into the economic value chain, resulting in massive over-valuations of businesses and economies. However, as resources and cheap labour become less abundant, the market is now making a sudden and dramatic correction.

The World Economic Forum, for example, has begun research into integrating social and environmental factors into its competitiveness rankings. This year’s rankings included a paper on assessing sustainable competitiveness, which saw new factors like social cohesion being factored into measuring competitiveness. While the precise measures of social cohesion are still being assessed, many of the things that Cosatu and the Cape Chamber of Commerce agreed to uphold – like protecting workers’ rights and ending inequality – are likely to contribute positively to the measure.

With the declaration, the Western Cape now stands as a thought leader in the country in the conversation around business, labour and job creation. The two sides agreed that no longer would their relationship be adversarial, where one’s gain is the other’s loss. However, as suggested by economic development minister Ebrahim Patel, the proof of this will have to trickle down into the workplace, quickly. DM

Read more:

  • Declaration of the Jobs Summit on 26 September 2011, on BusinessLIVE.




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"Why would Kim Jong-un insult me by calling me 'old' when I would never call him 'short and fat?' Oh well I try so hard to be his friend - and maybe someday that will happen!" ~ Donald J Trump