SA business, the government, labour and community organisations have devised a plan to rescue struggling sectors of the economy and reduce the estimated loss of 250,000 jobs this year.
A report of a task team of the National Economic Development and Labour Council (Nedlac) on rescue measures is expected to suggest extending assistance outside of the budget to targeted sectors. This would be in addition to the economic stimulus provided through governments three-year R787bn infrastructure programme and the R96bn budget deficit for 2009-10.
The funding for distressed sectors is likely to come from state-owned financial agencies such as the Industrial Development Corporation and the Development Bank of Southern Africa. Struggling sectors are understood to include motor, mining and textiles.
Also, intense talks are under way in the mining industry to limit retrenchments with measures such as shorter working hours and extended leave. Busas economic policy committee chairman, Roger Baxter, highlighted the need to differentiate between essentially unviable businesses and those simply stressed by the global economic crunch.
He told Parliaments finance committee during a public hearing on the budget that the different sectors had been encouraged to come up with their own rescue proposals.
In addition to addressing issues of consumer and business confidence, the Nedlac report is also expected to deal with longer-term, macroeconomic policy goals such as how to enhance the competitiveness of the economy and lift the constraints to growth.
Two economists, Macquarie First South Securities Nazmeera Moola and Sanlam group economist Jac Laubscher, estimate job losses this year at 270,000 and 250,000 respectively, or about 2% of the total labour force. Moola expects a loss of 80,000 mining jobs (about 20% of the total) this year and thousands in manufacturing, financial services and retail.
Source: Linda Ensor, Task team proposes aid for struggling sectors, Business Day, February 17, 2009.
For text: http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A941060
For more on labour: http://www.freemarketfoundation.com/issues.asp?id=33
FMF Policy Bulletin/ 24 February 2009
