It was remarkable to be in South Africa in early December and hear the details of the government's New Growth Path and its target of creating five million new jobs over the next 10 years. The figures are incredibly ambitious but if achieved, they will begin a process of transforming the country.
The commitment to help the very poorest and marginalised, in this very unequal society, has been a long time coming. The deal that finally brought apartheid to an end in 1994 was predicated not on an immediate revolution, involving massive land and economic redistribution, but assumed that gradually the economy would expand sufficiently to absorb the young people entering the job market, and also the historically unemployed and marginalised under the disaster of apartheid. To achieve both of these outcomes, economic growth of at least 5% was needed.
The reality has fallen far short of this. Over the last 16 years, despite enduring the longest period of uninterrupted growth, the South African economy has seen only an average growth of 3.5%.
On top of this, there has also been a massive influx of new migrants (due primarily to the crisis in Zimbabwe, but also because of migration from the rest of Africa). The economy has also suffered structural problems and other bottlenecks inherited from the apartheid era. For example, during the apartheid years, industry focused on capital- and energy-intensive inputs which relied highly on skilled labour, in the recent recession caused by the worldwide credit crunch, over 800,000 people lost their jobs, although some of this loss was countered by the jobs created ahead of the 2010 Fifa World Cup.
The upshot is that unlike most middle-income countries where working age employment is about 60%, in South Africa the figure for working age employment is only 40%. Such high levels of unemployment in any country would be the basis of a social crisis. In South Africa, this crisis has mainly been expressed as a crime problem over the last 16 years, but two years ago it expressed itself in the widespread xenophobic attacks against Zimbabweans and other Africans. The attacks alarmed the government, which fears that such massive dissatisfaction might in the long term lead to the loss of voter confidence, and...