Speech by Minister Mdladlana at the SADC Ministers Meeting

On the Meeting of the Committee of SADC Ministers of Employment and Labour and Social Partners

30th March to 3rd April 2009

Lagoon Beach Hotel

Cape Town, South Africa

Employment Creation for Poverty Alleviation

Programme Director

Permanent Secretaries / Directors-General

Representatives of Organised Labour

Representatives of Organised Business

Distinguished Guests

Ladies and Gentlemen

It is my honour and privilege to address the SADC Employment and Labour Sector meeting which takes place at a crucial time when the entire globe is faced with serious economic challenges, the international economic crisis manifested in recession in some countries and unprecedented slow growth rates experienced in decades by other countries. Of course our region is not immune from these challenges as we have increasingly become part of the global world. Difficult as these conditions might be, we should however continue to strive to achieve the goals we set ourselves as SADC member states.

As part of the developing world, the global economic crisis will no doubt have debilitating effects on us. We are faced with the effects of increased debt burden which is forcing us to spend more on servicing debt, accompanied by the unfavourable and further deteriorating terms of trade. Indeed the never-ending Doha Round of negotiations under the World Trade Organization (WTO) is threatening to divide us, as countries individually scramble for a share of the small pie in world trade. What we are left with is poverty that is continuing to ravage our societies. As if prophesised, the 1999 Eastern and Southern Africa follow-up Conference to the World Social Summit correctly predicted that ‘employment creation and poverty challenges will continue to be the most pressing development challenges in the 1990s and beyond’. This poverty is threatening to destroy the core of our social fibre.

As captured by the Director General of the International Labour Organization (ILO) in his report entitled Working out of Poverty in the 91st International Labour Conference in 2003,

“For individuals, poverty is a nightmare. It is a vicious circle of poor health, reduced working capacity, low productivity and shortened life expectancy…. For families, poverty is a trap. It leads to inadequate schooling, low skills, insecure income, early parenthood, ill health and an early death… For societies, poverty is a curse. It hinders growth, fuels instability, and keeps poor countries from advancing on the path to sustainable development. For all of us – and for all these reasons – the cost of poverty in shattered human lives is far too high”.

At least we have an agreement about the effects of poverty. We also have an agreement that we committed ourselves to eradicate poverty. But we lack the commitment to implement that commitment. At the AU Extraordinary Summit on Employment and Poverty Alleviation in Africa held in Ouagadougou, Burkina Faso in 2004, African Heads of States adopted a Declaration, Plan of Action and Follow-up Mechanisms, calling for commitment by Member states to achieve the objectives of the Constitutive Act of the African Union and its NEPAD programme, that member states should place employment at the centre of economic and social policies. However today we cannot say with certainty what is progress we have achieved. We have hardly as SADC reviewed the progress we have achieved thus far.

This calls for the strengthening of the institutional capacity of SADC. Since we have been continually monitoring the impact of our legislation and its programmes in South Africa, we have learnt that at times the problems do not necessarily lie with the laws we put in place, but rather with the weakness of the institutions tasked with implementing these legislations and policies.

Ladies and Gentlemen

In order for us to identify where the problem lies, we need to be honest in the assessment of our achievements. As it is today, many societies including SADC, still battle with one of the central economic questions of wealth distribution. How cruel capitalism can be, that while many countries have experienced sizeable economic growth, we still have the majority of people living in abject poverty while only a small minority reap the benefits of growth. According to the ILO Global Employment Trends (2008),

“Over 2000-06, Sub-Saharan Africa’s GDP grew at 4.7% per annum, virtually doubling its growth rate over the 1990-2000 when it was 2.5% per annum. Over the last two years, Sub-Saharan African growth has picked up further, to 5.3% in 2006, and 5.8% in 2007”

Despite these growth levels, we have not made a dent on poverty levels. Apart from further dampening the potential for increased employment creation, the current economic downturn only helps to exacerbate the situation. The current situation calls on us all to make a concerted effort to carry out the commitments we have made in numerous declarations that we have signed. We need to embark on a collective campaign to fight the scourge of poverty in the region. The capitalist mode of accumulation has proved to us that we cannot leave the well-being of the people in the hands of the market. 

We call on member states to play an active role in economic growth and development, and to ensure that growth is shared equitably. The disintegration of the current dominant regime of capitalist mode of accumulation in the form of the global economic crisis has added an additional burden on governments to channel resources towards rescuing their respective economies. Governments across the world are now doing what private enterprises are traditionally doing; developing strategies to boost their growth potential. In fact others are just concerned about surviving. South Africa has just finalised a framework to respond to the international economic crisis, and this framework represents a broad stimulus package that not only focus on the economy, but also has a strong social component.

The South African response to the international economic crisis reaffirms our commitment to addressing the plight of the poor. The broad principles governing the response among others, is that “our approach to the downturn is that low income workers, the unemployed and the vulnerable groups can lose much through even a relatively brief economic shock, and the risk of unfairly placing the burden of the downturn on the poor and the vulnerable must be avoided. The potential of economic shocks to destabilise the welfare of the vulnerable, including their jobs, health and education, and to increase inequality and poverty, is widely recognised, is our first concern and will require active steps to ensure these outcomes are avoided”.

This principle would effectively ensure that we are not deterred to continue with our programme to improve the living conditions of our people.

You might be aware that this term of government is coming to an end in South Africa. As we continually do, we have assessed the impact of our intervention programmes on poverty to determine whether we carried out that which we set ourselves to do. I am proud to indicate that in some instances we even exceeded our targets. We have put in place a plethora of job creation programmes aimed at alleviating poverty among our poor people. One of the most successful programmes in this fight against poverty is the Expanded Public Works Programmes (EPWP).

This programme has over a period of three years created over 950 000 temporary work opportunities absorbing, 48% of female and 37% young people. As we all know SADC has a chronic challenge of high unemployment among our youth. One of the crucial sectors in this EPWP is the social sector which has the potential to employ large numbers of people in areas of home-based care and early childhood development.

Due to this intervention and many others, the Development Indicators 2008 show that we are making inroads in improving the lives of our people.

“Between 2000/01 and 2006/07 there has been a significant decrease in the proportion of people in lower Living Standards Measures (LSM)  1 to 3 and an increase in the size of the middle bands (LSM 4 to 6). This improvement in people’s lives could be attributed to economic growth and expanding employment as well as government’s poverty alleviation initiatives, among others, provision of basic services to indigent households, social assistance support and better housing”. 

We have initiated many programmes as part of our onslaught on poverty, among others the anti-poverty strategy. The strategy is a commitment from the state to take a lead in building the capacity of the poor to participate in the labour market. This strategy is also aimed at expanding employment opportunities, removing stumbling blocks to employment and to focus strongly on building capacity in programmes on health, education and skills training.

This global economic crisis presents an opportunity for us to reflect on the path we have travelled thus far especially in looking closely at our economic interventions. It is clear that to date we have been placing too much emphasis on individual forms of ownership in our economy. It is time that we begin to tirelessly champion collective forms of ownership in our economies in order to maximise the impact of our interventions.

We need legislation and policies that promote support for the development and sustenance on cooperatives, including worker cooperatives. We need to build a strong cooperative movement in SADC, based on International Conventions and Declarations and best practices. This can also be a crucial instrument in fostering solidarity and building a collective identity among our people.

I would like to conclude by urging that as SADC member states we need to move with speed in developing and implementing our Decent Work Country Programmes. This is one of the most practical approaches to attacking poverty and underdevelopment. We need to move with more speed in developing our social and economic policies as the only sustainable way to reduce poverty. Employment and labour market performance must be at the centre of these policies and it is only us who have the ability to ensure that this happens.

In welcoming you to South Africa, I wish you a pleasant stay and fruitful deliberations during these few days of your meeting.  It is my sincere hope that you travelled well and you’ll wish to extend your stay in Cape Town.  We will welcome that as we need to boost and strengthen our tourism sector.

Programme director, I now have the honour of officially declaring the meeting open.

I thank you.