26 June 2006
Employment creation and poverty eradication could not be exclusively limited
to the labour market and therefore deserves dedicated attention and
intervention by all stake holders, Labour Minister Membathisi Mdladlana said
today (Monday).
In his opening address of the constituency meeting of the labour market on
small business development and poverty alleviation in Johannesburg, Minister
Mdladlana said the challenges facing the countryâs labour market were immense
and required a holistic approach of all those concerned.
âThe question at this point is how the key three drivers of employment
creation and poverty alleviation, macro economic stability, trade
liberalisation, and the labour market can jointly contribute to resolving these
challenges,â he said.
Although South Africa had successfully managed to reduce the deficit to
Gross Domestic Products (GDP) since 1996 from 5,1% to its current levels of
around 1,4%, economic growth had, however been modest around three and four
percent.
This made it insufficient to generate the type of employment creation and
poverty eradication projects expected, and the situation was being compounded
by the low levels of both domestic and foreign investment ratio.
âWhilst investment alone does not lead to increased economic growth, it
however remains one of the key determinants towards growth, employment
creation, and poverty alleviation.â
Referring to the cost of capital as being the reason often cited by foreign
investors as being high and deterrent to investing in South Africa, the
Minister said one of such cost was that of banking whose margins are believed
to be double that of international markets.
Telecommunications and its perceived high cost had also often been seen as
inhibiting local economic growth.
Minister Mdladlana said these concerns were related to delays around the
approval of the second operator.
The same applied to the countryâs transport infrastructure that includes
road, rail, air, and maritime, which had become even more critical not only for
growth prospects but also for the hosting of the 2010 world cup.
The gathering a follow-up to last monthâs first round of debates by
government, labour, business and communities cantered around the impact of
labour laws on job creation and small business development, and what steps to
be taken.
Enquiries:
Mokgadi Pela
Cell: 082 808 2168
Issued by: Department of Labour
26 June 2006
