Task team proposes to curb ‘cheap imports’

A JOINT government, business and labour task team is proposing a clampdown on “cheap imports" into SA as part of a raft of measures aimed at helping local companies retain jobs and stay afloat through the global economic slowdown.

Although aiming to stay within World Trade Organisation rules on free trade, the restriction on cheap imports may hurt consumers who have enjoyed cheaper goods from Asia, principally China, in clothing and electronics.

It echoes a shift to protectionism around the world as governments seek to shield their industries and jobs to limit the political fallout of skyrocketing unemployment.

Measures proposed by the task team of the National Economic Development and Labour Council (Nedlac) include:

• That business pledge to do everything in its power to avoid retrenchments;
• Retraining people who face retrenchment;
• Creation of 2-million full-time jobs through the Expanded Public Works Programme;
• Using the Nedlac forum to lobby the Reserve Bank to discuss the interest-rate regime and ways of lowering the cost of capital; and
• Emergency food relief.

A draft plan, to be submitted to President Kgalema Motlanthe this week, is intended to minimise expected job losses and ensure that the poor do not bear the brunt of the financial crisis. SA’s retrenchment estimates range between 35000 and 250000.

The plan outlined in draft 58, dated January 29 and seen by Business Day, will also enforce stricter competition measures and encourage discussions on monetary policy.

The parties have committed to a jobs strategy that would respond to any contemplated large retrenchments — more than 50 employees — through a mix of support from the trade and industry department and other government agencies.

The report also deals with sectors where there are early signs of job losses and distress, such as electrical and electronics, engineering and building materials.

According to the document, phase two of the programme will target 1-million unemployed youngsters and women and focus on public employment programmes such as home-based care, school cleaning and renovation, tree planting and school feeding. In an attempt to create stable employment, the government will be discouraged from outsourcing and using casual labour.

A special national jobs initiative is also planned, bringing together development finance institutions such as the Industrial Development Corporation and government departments. It will co-ordinate and fast-track financing of industrial and special employment and social measures to avoid job losses.

Employers will have to commit to retraining workers who would otherwise be retrenched, to keep them employed and afford them the opportunity to be employable when the economy improves. A targeted emergency food relief programme will enhance food accessibility and affordability.

Lungisa Fuzile, head of asset and liability management at the Treasury, yesterday detailed some of the official support for the Development Bank of Southern Africa (DBSA) and Land Bank, to help them ramp up their lending.

The Treasury was ready to boost the “callable capital" of the DBSA — which works like a guarantee — from R4,8bn to help it to reach the R38bn limit which its balance sheet allows. “They can go for a while without support, but we are looking at stepping in sooner," Fuzile told Business Day.

Most of the increased lending provided by the DBSA would go to municipalities, which are not part of the official R787bn infrastructure lending programme. Fuzile said the Treasury was likely to provide the Land Bank with a capital injection of “at least" R1,3bn by year-end.

Karima Brown and Amy Musgrave. With Mariam Isa

www.businessday.co.za

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