South Africa and Spain have more in common than meets the eye.

Both countries are blessed with striking coastlines, are endowed with natural beauty and have a vibrant tourism trade. Add to that an abundance of sunshine which draws hundreds of thousands of visitors to their shores.

Beyond the surface-level commonalities, South Africa and Spain share something far more insidious: a high level of youth unemployment. It is a tragedy that cannot be masked by the picturesque settings in which it is unfolding. 

During and after the global financial meltdown of 2008, the youth suffered acutely. The devastating fallout was brought to bear on young people who came of age in the immediate aftermath of the worldwide financial collapse. The aftershocks on the world economy ran so deep and for so long that there was talk of a lost generation.

What compounded this existential crisis for the youth was the fact that members of the lost generation were armed to the teeth with qualifications and filled with expectations that they would make their mark on the world. But these hopes were lost and aspirations dashed in the smouldering flames of economic ruin.

As the grim reality of the parlous state of the global economy set in, the youth of the lost generation were locked out of employment and other economic opportunities for extended periods. As their advanced degrees collected dust, their chances of gainful employment diminished. In some of the more severe cases, the youth never graduated into the ranks of the employed. 

Martin Boehm, the dean of the IE Business School in Madrid, has sounded a timely reminder about the possibility of history repeating itself against the backdrop of the Covid-19 crisis.

Boehm and Massmart chairperson Kuseni Dlamini shared their perspectives as educator and employer respectively during a Deloitte Digital Dialogue on Thursday (7 May) about inclusive growth in a post-Covid-19 world.

There is little doubt that economic pain will be an inevitable outcome of the coronavirus outbreak. But the scale and the depth remain unknown. What is clear, though, is there are similarities between 2008 and what is now happening and how it will affect the youth.

Those who swelled the ranks of the lost generation were stuck. They sat at home as a consequence of the dramatic shrinkage of the global economy. But “if you do that for one, two or three years, it means [what] you can contribute and offer to a potential employer is not improving. It is deteriorating”, cautions Boehm.

Now, think about the youth in high school and those who are at university.

They will be matriculating and graduating when the South African economy is in the chokehold of an economic recession and the Covid-19 crisis. Boehm notes that this group of young people is most likely better prepared academically than those who came out of the schooling system as recently as three years ago.

Furthermore, they will be eager to dip their toes into the job market. However, this segment of the real economy is in freefall at present and showing little signs of resilience. The conditions are ripe for the youth to remain in limbo and to recreate another lost generation.

In the current context, when the Covid-19 dust settles, “graduates won’t be able to find jobs. [They] … might be stuck in unemployment for years and, even, for the rest of their lives,” warns Boehm. 

Dlamini concurs that “the issue of jobs in general and youth unemployment in particular will loom large as one of the major challenges out of this crisis”.

It will grip business, policymakers and governments in equal measure. Make no mistake, too, that the nature of work will be disrupted.

The Massmart chairperson concedes that some jobs will be lost, and are being lost, amid the Covid-19 pandemic. New ones might also emerge from the ashes of the crisis.

In a post-coronavirus scenario, “we can’t have an inclusive economy without young people being employed, women being employed, local entrepreneurs being part of the value chains and Africa being a mainstream player in the global economy,” says Dlamini.

As governments around the world prepare all measure of stimulus and relief packages to salvage their economies, they can do more to factor in the youth, says Boehm. This rings especially true for South Africa and its peers on the continent.

The country cannot afford to miss out on the benefits of its demographic dividend. The viability and long-term sustainability of its economy depend on this. BM