In the news

By Samantha Enslin-Payne

13 January 2010, Business Report - Job creation in South Africa is likely to be an elusive goal this year, unless the government's efforts to protect existing jobs and provide incentives for new employment are doubled.

A recent report by the research arm of the International Labour Organisation (ILO) warns that the job crisis is far from over and could even worsen unless adequate action is taken and support measures remain in place.

Loane Sharp, a labour market analyst at Adcorp, said yesterday the ILO had been too cautious on its international outlook for job creation. The green shoots seen in the international financial services sector and international trade - the two sectors that were worst hit by the global economic crisis - were incontrovertible.

But the South African situation was less optimistic. As monetary policy tightened for a long time into the crisis and aggravated the slump, the South African job market was likely to be depressed for longer.

"We have not yet turned the corner and are about six to nine months behind international recovery trends. Apart from public works-related investment in construction and electrification, we are going to find negative surprises on the jobs front," Sharp said.

Jobs data due out next month are expected to show that about 1 million jobs were lost last year in South Africa. In the first nine months of the year 959 000 jobs were shed.

John Botha, the chief operating officer of the Confederation of Associations in the Private Employment Sector, said the employment situation for temporary staff appeared to have stabilised. But overall the outlook for jobs was not good, with 1.5 percent growth forecast for South Africa this year.

Jaco Kleynhans, the spokesman for trade union Solidarity, said the job market should stabilise over the next six months, but quality jobs would not be created until the second half of the year, although the World Cup would skew data, as temporary work would be available.

The ILO said stimulus packages had limited job losses, based on analysis of previous crises. But 20 million people have lost their jobs since October 2008 and a further 5 million people remain vulnerable to retrenchment if government support is withdrawn, or if the economic recovery is not strong enough, meaning a real recovery will materialise only when employment recovers.

Job losses have continued this month, with Japan Airlines retrenching 15 600 people. In South Africa retrenchments are still under way in the agriculture sector.

Based on the latest International Monetary Fund growth estimate of 3 percent, the ILO calculates that employment in countries with high gross domestic products per capita may not return to pre-crisis levels before 2013, unless more decisive measures are taken to stimulate job creation. In developing countries employment levels could start recovering this year, but may not reach pre-crisis levels before 2011.

Patrick Craven, the Cosatu spokesman, said yesterday: "I am confident the government is still moving in the right direction, but we urgently need to see words turned into deeds."

He said the government's response to the economic crisis, which had first been launched in February last year, had not yet been fully implemented.

A progress report to the president on the implementation of South Africa's response to the international crisis said: "Some areas have been strongly implemented while other areas have not been concluded with the necessary urgency."

Zubeida Jaffer, the spokeswoman for Minister of Economic Development Ebrahim Patel, said the government would push ahead with the further implementation of the framework agreement on its response to the international economic crisis.

Priority would be given to speeding up the training lay-off scheme and intensifying the crackdown on customs fraud, as well as supporting distressed companies, she said.

Source: Business Report. View original here