How we'll meet our 5m jobs goal - Jacob Zuma

President says at core of govt efforts will be building of developmental state

COSATU, FEDUSA AND NACTU federations at the Presidential Guest House, Pretoria, April 19 2011

Deputy President Kgalema Motlanthe,
Leadership and Representatives of Labour Federations,
Ladies and Gentlemen,

Let me extend a warm welcome to all of you to this Presidential Labour Summit on Job Creation. In the State of the Nation Address in February this year, I laid out the broad outline of government's programme of action, which places the creation of decent work as the central priority for this year.

I was pleased that the labour movement responded positively to the programme. During the reply to the State of the Nation debate, I undertook to consult with the leaders of organised labour and business regarding government's programme.

I met with the leaders of organised business in March and I am pleased that we can meet today with the leaders of the three major trade union federations in the country. I am also aware of the discussions that union and business leaders are having with the Inter-Ministerial Committee on the New Growth Path and I am advised the discussions are very positive.

These discussions are critical because South Africa faces the challenge of transforming our economy to make it more equitable, inclusive and labour-absorbing. Today we must strengthen our unity around our common goals.

We have to address mass joblessness because it is central to inequality and marginalisation. There is no sharper sign of exclusion than exclusion from the economy. For too many South Africans, this exclusion means struggling alone in poverty and dependency, and undermines human dignity.

We had no choice but to deal with this challenge head on. We had strong economic growth prior to the global economic crisis. However, even during that high-growth period, we did not meet our objectives on jobs and fighting poverty and inequality.

We have to put our heads together as partners and compatriots to find a solution.We have a good track record already of working together over many years. Recently, social dialogue has been put to the test internationally over the past three years due to the international economic crisis and the challenges that this placed on organised business and labour. 

In South Africa, the social partners responded well by formulating the National Framework Agreement (NFA) that was concluded in February 2009, to respond to the global economic meltdown. The social partners worked effectively through NEDLAC structures to implement the National Framework Agreement.

The NFA identified seven key platforms on which to drive the crisis response, which you are all familiar with. Those interventions proved to be very successful and proved what we can do together for the benefit of the country. I will mention just a few. An intensive public investment programme was launched which will continue to impact positively on the creation of decent work.

We underscored rebuilding the local industry as a key priority of industrial and trade policy. Efforts were made to cushion the effects of the crisis on families and communities, through expanding access to social grants.

Through collaboration in international fora, we agreed to ensure that global policies reflect developmental objectives more clearly, for example, at the World Trade Organisation discussion. You will recall that amongst the achievements of the partnership, South Africa introduced its first ever training lay-off scheme with R2.9 billion being made available for its implementation, to provide alternatives to retrenchments.

Through these proactive interventions at the CCMA, 4 482 jobs were saved from March to September 2009. In addition, a retrenchment action plan launched by the Manufacturing, Engineering and Related Services Sector Education and Training Authority assisted approximately 7 000 workers in a programme based on the training lay-off model.

Another key intervention included the more than R6 billion set aside by the Industrial Development Corporation as special loans for firms in distress. In addition, R2 billion was allocated by the Unemployment Insurance Fund to the IDC to be loaned to firms in distress. The IDC's approvals to distressed firms are estimated to have saved over 7 000 jobs.

We proved that working together as business, government, labour and the community sector we can indeed do more! This initiative has been commended internationally for bringing together social partners in forging a common response, and has been held up as an example of how countries can respond, through social dialogue, to difficult challenges.

We must now build on this success to tackle the more difficult challenge of job creation and reducing unemployment and its associated poverty affecting so many South Africans. We are optimistic since we are meeting during a somewhat promising period. The economy has started showing positive signs of recovery with a higher than expected fourth quarter GDP rate. 

The employment numbers have recently turned positive and the economic forecasts are also positive, both for higher economic growth and for employment creation. Nevertheless, it is likely to take longer for us to recover from the job losses of the 2009 recession and to make a real dent in the 24% unemployment rate that characterises the labour market.

Government has set an ambitious target of achieving five million new jobs by 2020.  Achieving this target would mean reducing the narrow unemployment rate by 10 to around 15%. To achieve this, we have to bring many young people into economic activity as well as many of the long-term unemployed. 

In moving forward in anticipation of an economic recovery, government will have to play a critical role. At the core of our efforts, will be the focus on building a developmental state with the strategic, political, administrative and technical capacity to give leadership to our development path.

The focus for government's efforts in the coming years will be to stimulate the country's productive capacity to boost job creation and expenditure on the social wage. This includes access to health services, education, social security, transport and municipal infrastructure. 

Our first strategic priority, however, is to speed up growth and transform the economy to create decent work and sustainable livelihoods. 

I will mention just a few key elements. We are working to maintain a stable pro-employment macro-economic environment. This includes effectively implementing our trade and industrial policy to create decent work on a large scale. We will also undertake interventions to create a more inclusive economy, by expanding opportunities for the poor to access the labour market and broadening the impact of growth.

Also in our programme of action is the strengthening of competitiveness and promotion of small and medium-sized enterprises and co-operatives. We will also ensure that the country keeps up with global technological trends and fully exploits our comparative advantages, including the usage of Information and Communication Technologies.

We are also looking at the opportunities that will arise from regional economic integration within the continent. We look forward to hosting the first ever joint summit of SADC, the East African Community and the Common Market for Eastern and Southern Africa in a few weeks' time which will be a major boost for economic integration.

We are also placing more emphasis on the African agenda and on South-South economic relations, hence our participation in forums such as BRICS and the G20 to promote an equitable world economic order. Most importantly, our policies are founded on the recognition that economic outcomes must contribute to developmental goals and a better life for women, for workers, for the rural poor and for young people.

Youth unemployment is particularly high. We are interested in hearing the views of the trade union movement on how we can increase the labour absorption rate of young people at a level that will seriously decrease youth unemployment. We want to hear your views on all these issues and see how we can build the partnership on jobs that is necessary to achieve our goals.

This will require that we set out what government must do, what business must do and also what organised labour must do. In other words, we must spell out how each of the social partners can contribute within the capacity of their constituencies. In our case as government, it means we must continue focusing on improving the implementation of our good policies and the improvement of the delivery of public services to our people.

We need a developmental state to drive transformation and employment-creation. Such a developmental state must be built on the ethos of service delivery, of providing quality services to communities in urban and rural areas. It means teachers, nurses, policemen and women, municipal employees and all public servants must work diligently to provide services, as directed by the Constitution of the Republic.

It means our officials working in the fields of trade and industry; immigration, customs, tax and the economic sector in general must be cadres for development and provide first class service to our people and potential investors and job creators. We must also talk about transformation on the shop-floor and the economy. We recognise that there are still workplaces where the legacy and practices of the past dominate.

Many of our people are denied opportunities for skills enhancement, fair promotion and decent incomes. These do not only have negative social outcomes, they are also a barrier to long-term sustainable growth and to building partnerships in the economy.

We know too that many farm workers and farm dwellers still live and work in appalling conditions. These indicate the work we must still do to expand the rights of workers to every corner of the country. We urge you as the trade union movement not to lose sight of this sector. Together we must work with them for a better life. As you are aware, we are now taking steps to implement the undertaking we made that we will address the problems of labour broking and regulate out-sourcing and contract work.

We are committed to combat labour practices which deprive workers of the rights that they are entitled to in the constitution and laws of the country. In the long term, central to long-term equity and democracy are improving education and skills. 

Only quality basic education for all our children will enable them to contribute as citizens and to participate in the economy. At the same time, we must strengthen skills development in the workplace and among school-leavers. Mass-based skills development will underpin the transformation of the workplace toward equity and openness, and sustained growth.

While it is clear that all priorities should receive urgent attention, we will have to phase them in and sequence their implementation, taking into account the availability of resources. Economic and social protection are no doubt key areas to enable our recovery and growth.

The International Labour Organisation (ILO) points out that:

"If all countries stimulate their domestic activity, primarily through employment and social protection, two direct ways to support aggregate demand, then global growth and trade will recover.  This implies a central focus on employment and social protection in short-term fiscal and monetary policies.  And macroeconomic policy should explicitly target employment and social protection objectives in order to accelerate a recovery."[1]

Our priorities are consistent with this approach. As government we are determined to implement strategic policies that will address the challenges we face and to meet these challenges with a new resolve.  

Let me emphasise that while government needs to play a central role in creating the conditions for economic growth, it is also incumbent on the social partners to move from dialogue to partnership in tackling job creation.  


We agree on many issues, from the broad employment goals to where the jobs can be created.

We recognise that it will take solidarity across the society to achieve our common goals. It will take hard work by all of us and in some areas, we must make difficult choices. It is good that we are finally having this direct discussion on jobs, jobs and jobs.

We look forward to very fruitful discussions.

I thank you.

[1] Report of the Director-General, Tackling the global jobs crisis - recovery through decent work policies. Page 13, ILO, 98th Session, Geneva, 2009.

Issued by the Presidency, April 19 2011

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