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It’s been 25 years since democracy dawned in South Africa. But apartheid’s legacies still scar the country. Poverty remains high; inequality remains extreme – and both follow racial lines.

The same is true for unemployment. By conservative official standards, it stands at a staggering 27,6%, and it disproportionately affects black South Africans.

Effective policies to combat South Africa’s plight require good ideas, resources and political will. They also, however, need to build on a solid understanding of the problem in the first place. How can defects in the labour market be tackled if we don’t know what’s actually going on there? Good and relevant statistics are central to effective policies.

Unfortunately, there are limits to how well South Africa’s statistics can capture the situation in the country.

The international gold standard for employment figures comes from the International Labour Organisation in Geneva. According to its template, you count as unemployed if you (a) don’t work (a lot) for money, (b) are available for work, and (c) are actively looking for a job.

This definition originated in the 1920s. It was clearly built on the image of white, male factory workers in Europe and North America. If these men lost their jobs, that spelt social and political trouble. Unemployment statistics functioned as a thermometer for how well such factory economies hummed along.

Immediately after apartheid ended, South Africa’s statisticians tried to move away from the traditional definition of unemployment. For instance, they experimented with various more extended definitions of unemployment that would capture what they now call the “discouraged work seekers”.

But, as our recent research found, the country’s appetite for statistical creativity has slowly waned. It has increasingly embraced the ill-fitting international standard. But this global standard risks creating a skewed image of South Africa’s labour market woes. Complacency and poorly crafted policies may be the result.

Waning appetite for creativity

There are a number of problems with sticking to narrow, global definitions of “unemployment”, “job searching” or “industry” in the South African context.

For instance, the spatial legacies of apartheid mean that for many South Africans, industrial jobs are hundreds of miles removed from where they live. Many people don’t actively look for jobs because they know all too well there are none to be found anywhere near. For all intents and purposes, they are unemployed, and in a particularly hopeless situation. But they would not pass the official International Labour Organisation definition – and so they drop out of the stats.

In rural areas, many people – and women in particular – labour on the land to grow their own food. They might greatly prefer a salaried job to escape poverty. But their hand-to-mouth existence may prohibit the luxury of an extensive “job search”. They, too, would fail the statistical litmus test.

Simply put, international unemployment standards would ignore a big part of South Africa’s labour market problems. This would do an injustice to women and the black population, in particular.

The other problem with existing definitions is that nuance tends to fall by the wayside. Take “discouraged work seeker”. It’s an ambiguous category. Whether you qualify depends on your own judgement: maybe you don’t look for a job actively, but would you like one. Not everyone answering “no” is voluntarily jobless. And people might answer “yes” even though they indeed lack personal effort to find work.

Such vagaries are at odds, however, with the exactness that’s expected from statistics. Statistics privilege easy-to-quantify indicators, and important nuances disappear.

Bold creativity needed

This tendency to ignore soft, hard-to-measure issues is amplified by politicians who happily pounce on statistics that displease them.

Statistics South Africa has over the years often been criticised – unfairly, we think – for unemployment figures that tried to paint a more realistic picture. Yet less than rock-solid statistics have invited the charge that Stats SA would inflate the numbers intentionally, or otherwise manipulate them.

Once Stats SA narrowed the definition, criticism came from the other side – in this case the political opposition. To safeguard its credibility, the agency had little other option than to seek refuge in an international definition that would withstand local criticism, even if it fails to do local circumstances justice.

South Africa faces a genuine dilemma in its statistics. It is impossible to capture the complex ills of its economy and society in single headline figures. Such numbers, and the colourful graphs they generate, ready to be tweeted, are tempting. But all too often, embracing this strategy biases the numbers against people who fall between the cracks.

Our research suggests that the country’s statisticians should be bold and paint a picture that does justice to the colourful quilt that is the “rainbow nation”. And politicians have a duty to respect these efforts if they are genuinely committed to effective policies.

When the new South Africa was born in the mid-1990s, it was carried by a spirit of daring and breaking the mould. May that spirit – even in a field as boring as statistics – prevail in the future, as well.

The Conversation

Daniel Mügge, Professor of Political Arithmetic, University of Amsterdam and Juliette Alenda-Demoutiez, Postdoctoral Researcher at the UvA's Department of Political Science, University of Amsterdam

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Telecoms

When Emmerson Mnangagwa took over the leadership of Zimbabwe from Robert Mugabe in November 2017, he promised to revive the moribund economy and adopted a mantra he’s repeated regularly ever since - “Zimbabwe is open for business.”

Mnangagwa, always wearing a scarf in the colours of the Zimbabwean flag, quickly set about traversing the globe to woo investment needed to revive the heavily indebted economy. By March, he’d been on at least 30 foreign visits, including trips to the US, Russia, China, the Middle East and the World Economic Forum in Davos.

Together with the enthusiastic support of state media, Mnangagwa and his officials have announced more than $27bn of planned investment ranging from new platinum mines to steel mills and hydropower dams.

Eighteen months into his rule, he has little to show for it.

Economic Contraction

The economy is in its most dire state since 2008, when inflation surged to an estimated 500 billion percent.

Medicines, fuel and foreign currency are in short supply, prices of basic goods such as bread are surging and the International Monetary Fund has forecast the first economic contraction in 11 years. And many of the investment projects announced by the government haven’t progressed beyond the memorandum of understanding or feasibility stage.

“We are still very confident that the bulk of the investments and expressions of interest will materialize,” said Nick Mangwana, the government spokesperson. “Of course there will be those that fail to get finances to invest in Zimbabwe because of the blight of sanctions, and there will be those who also delay whilst they monitor the success of our current reforms, but in the whole we are very optimistic.”

Zimbabwe has plenty to offer, with a cornucopia of minerals including the world’s third-biggest platinum-group-metal reserves, and some of the best transport infrastructure in the region. Local ownership rules have been relaxed, as has a currency regime that hindered access to dollars.

The RTGS, a quasi-currency that isn’t used outside Zimbabwe, fell 30% on the three-month-old interbank market today to 4.55 per dollar, bringing it closer to the black market rate of 6.10. On May 18, the government said it had secured a $500m loan that it would use to boost liquidity in the interbank market.

Still, a disputed 2018 election, in which Mnangagwa retained power, and the violent suppression of protests earlier this year have underscored the country’s instability.

Risk Appetite

Few companies with a “rational level of risk appetite” will invest in the country in its current state, said Jee-A van der Linde, an economist at NKC African Economics.

The African Development Bank estimated foreign direct investment last year at $470m, about a third of the $1.1bn attracted by northern neighbour Zambia and a fraction of the $2.3bn that flowed into Mozambique, which lies to the east.

For some Zimbabweans, the investment pledges evoke memories of Mugabe, who was prone to announcing mega-deals that didn’t materialise. For example, in September 2017 Mugabe announced plans to revive Zimbabwe Iron & Steel Works, once the second-largest steelmaker in sub-Saharan Africa. The project never got off the ground.

“Mega-deals may be mega-deals, they may be mega-nonsense,” said Joe Chabikwa, who sells potted plants to passing motorists in the capital, Harare. “These days you believe what you see with your own eyes.”

 

Published in Business
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