Sobering news. The National Income Dynamics Study (NIDS), out of the University of Cape Town but backed by the government and financed by private sector donors as well, has just made a first assessment of the impact of Covid-19 and the government’s response to it in the NIDS-CRAM (Corona Virus Rapid Mobile) survey. It is not pretty reading.
NIDS-CRAM reckons ( I am relying on Neil Coleman of the Institute for Economic Justice for a summary of its finding) that 3-million people lost their jobs during the hard lockdown in March and April. That’s 3,000,000. Assume, conservatively, three dependents for each job, that becomes 9,000,000 more people with little or nothing to live off. Typically, the poor, women and black people fared the worst.
The result is useful but already old and will not have improved much with the opening of the economy from June 1. The reclosure of the alcohol and related industries with immediate effect last Sunday will have much wider consequences than imagined by the cabinet when it decided to ban alcohol sales as well as introduce a night-time curfew. A company like glassmaker Consol, for instance, has just lost more than half its business. It cannot survive on jam jars.
The ANC struggles with manufacturing, which is what the making of alcohol, or glass, or anything three dimensional, is. It assumes it can be switched off and on at will. If you approach it from the perspective, I suppose, of the ANC’s main constituency, labour, you can sort of see why. The factory is where you go in the morning and leave at night. It is always there.
But up on the fourth floor life can be desperate. A marketing team struggles with export clients as the rand gyrates wildly from hour to hour. A finance team has the bank on the line twice a day and is constantly fielding calls from equities analysts and fund managers, worried about their investments. The CEO is overseas trying to reassure institutions that they should stay invested even though he cannot tell them what government policy is on the licences his business depends on.
Everything in SA is precarious. It always has been. White people have been sleeping with one eye open from the day they first arrived here nearly 400 years ago. They know what they’ve done. African people, too, have had to live with the vicissitudes of “traditional” rule for centuries, and that has imposed a string of societal issues we still deal with today. And the way we create and distribute wealth is simply unsustainable, obsolete and cruel.
But our other problem is that while the ANC has proven itself incapable of settling the country, let alone dealing with Covid, we have to live with the near certainty that it will govern for decades. None of its opponents comes even close. The DA is struggling. So is the EFF. Herman Mashaba is trying to form a black-led centre-right party with populist takes on immigrants and crime and litter. But apartheid handed the ANC a legitimacy it will struggle to lose no matter how corrupt or incompetent it is. You either live with it or you leave. Choose.
To survive, anywhere, you have to deal with what is in front of you. Here, for instance, is the latest ANC economic policy document, the Reconstruction, Growth and Transformation: Building A New, Inclusive Economy paper, just released.
Covid, it says, presents “an opportunity for SA to look inward by strengthening the agenda for localisation, in particular for local manufacturing and local procurement”. Sadly, that is not true. Countries come out of wars armed and ready to manufacture anything. Countries come of out plagues weak and debilitated, unable to blow up a balloon, let alone their GDP.
Our manufacturing capacity decreases with every meeting of the coronavirus command council, or whatever it is the cabinet calls itself when it makes Covid regulations. We should either stop dreaming about worker-filled factories and understand that services are our future or we should undertake a massive programme to encourage the immigration into SA of skilled foreigners capable of creating jobs and making things we can export.
Emigration has lost us about 1-million skilled people. They cannot be replaced organically. Anyone who creates five sustainable jobs here should get quick citizenship. Employers create jobs. Dreaming doesn’t. Skilled foreigners, properly incentivised, can fix our broken towns. Problem is, the ANC is wary of foreigners, even though it depended on them for its three decades in exile.
I look at the document and weep. Under the heading “Health-care” it says: “Pharmaceuticals, personal protective equipment and medical equipment (eg ventilators)”. This is to be a new manufacturing opportunity industry, except that by the time the virus is done with us the world will be swamped with personal protective equipment and ventilators. To whom will we sell ours? What are our networks? Africa?
SA elites live in fairyland. Those 3-million people who lost their jobs in two months earlier this year don’t. Nor do the people struggling to breathe now in broken hospitals as the virus surges through their arteries. How do you help both? If you’re in government, you do your job, as much as is humanly possible, properly.
• Bruce is a former editor of Business Day and the Financial Mail.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.