When conflicting messages about the state of the economy are broadcast in the public domain, there is bound to be unmitigated confusion. The cautious forecasts of economists in themselves are neither helpful nor a surprise. We live in times of volatility and what were once boom times can become busted in a relatively short space of time. Think of the boom of the 1920’s followed by the Great Depression as a classical example. Here in South Africa economic growth within the 3-6% target zone has been elusive for a while now and nothing in the current plans of government or private sector sentiments suggest we are close to achieving this target. On the contrary, we have instead seen downward adjustments.
But is it really all gloom and doom? It really depends on your perspective. A resilient people looks on the bright side. Although economic growth is set at 1.5% and inflation close to 6% and the Rand in cataclysmic decline the past number of months with no sign of reprieve, the fact is there are people out there who are not defeated and struck down by these seminal events. A mass psychology of uncertainty may in fact give rise to negative economic behaviours and the only way out of this conundrum is to command a positive orientation and invest in those quintessentials for economic growth and economic development.
The focus of this article is the latter, i.e. economic development which refers to sustained actions and policies that promote quality of life. Its focal point is people development and that perennial truism that to remain globally competitive and grow the economy, we need government and business to invest in developing a skilled workforce. It is globally acknowledged that skills development as a means of economic development will facilitate economic growth. Government needs to play a dual role: as an enabler for business to thrive and as investor through affordable spending on public works to stimulate job growth and consequently employment. This Keynesian notion hold that government fiscal policy would be instrumental in managing aggregate demand and as a consequence ensure full employment. It follows therefore that job growth and employment would increase spending power.
The Nelson Mandela Bay region, variously and severally condemned as the ghost on the coast, is poised for a dramatic turnaround if the latest developments is anything to go by. There are upticks of regeneration and resurrection, almost like the phoenix rising from the ashes ready for growth, phenomenal growth. The good news for the Bay in the past few weeks suggests we are alive with possibility and opportunity. The revival in automotive sector, long regarded as the pulse of economic growth in the region, is strongly suggested by the recent announcements by three major players who have their manufacturing base in Nelson Mandela Bay viz. Goodyear’s R670m investment to increase production at its Uitenhage plant, Ford Motor Corporation’s investment in the Struandale plant for the manufacturing of their new engine and VWSA’s announcement of a R4.5 billion investment to build new cars at its Uitenhage plant. This private sector investment will not only boost confidence, but will lead to jobs growth and full employment which marginally should impact positively on the local economy. But more is needed. Nelson Mandela Bay needs more investor confidence in the region to further increase the employment uptake. In addition, government must plays its role as an enabler, investor and initiator in building the necessary infrastructure that business needs if it is to thrive.
It is thus incumbent that training for the unemployed and youth receives the urgent attention of government. Forming partnerships with all training providers is an important and bold step to be taken if government is serious about creating an enabling environment for further investment. We should see more government funded skills development and training projects in technical fields that support the manufacturing and construction sectors of the economy. Preparing a skilled workforce for the future needs of the region is crucial and it is hoped that the provisioning of a skilled workforce will attract more investments for Nelson Mandela Bay.
– Randall Jonas, CEO