What are the costs of cadre deployment, BEE and skilled people leaving SA?

What are the costs of cadre deployment, BEE and skilled people leaving SA?

- Over the past decade, the cadre deployment, BEE and skilled people emigrating have had major impacts on the economy

- Finance Minister Tito Mboweni recently called for fresh ideas to grow the economy and he enlisted the advice of Harvard economist Ricardo Hausmann

- However, Hausmann's advice on productive knowledge has been ignored by the ruling party since he sat on an international panel summoned by Mbeki

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Tito Mboweni urged the government to 'think out of the box' about economic growth, but, experts meant that ship has sailed a long time ago.

South Africa is experiencing difficult economic times with a higher unemployment rate, low job creation and the unimpressive economic growth in 2018 which led to a technical recession.

According to an opinion piece by Johannes Wessels in The Citizen, for the past decade cadre deployment, BEE and skilled people leaving the country cost the economy dearly.

Wessels added Mboweni's idea to enlist the help of Harvard economist Ricardo Hausmann as an adviser might be futile, especially since the ruling party disregarded his advice on productive knowledge since 2008.

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Hausmann, cabinet minister from Venezuela, chaired a panel made up of international experts by former SA president Thabo Mbeki to offer advise on the Accelerated and Shared Growth Initiative of SA (Asgisa).

Needless to say, Mbeki faced a lot of backlash and he was heavily criticised by Cosatu, ANC Youth League and the SA Communist Party.

Briefly.co.za decided to take a closer look at the three factors that contributed to the ailing economy.

1. Loss of qualified South Africans

According to Wessels, since 1990 to 2003, seven percent of the country's professional individuals emigrated- most of which were high-skilled white people.

There was a brief stability in the high growth years under Thabo Mbeki's reign, but, emigration spiked again as the government that focused on the radical transformation of SOEs and other departments.

2 Cadre Deployment

The SAPS, SAA, Transnet, the NPA are some of the examples where cadre deployment topped knowledge.

Wessels pointed out cadre deployment cost South Africa on three levels: Township, professional and investment.

At township level: dissatisfied South Africans turned to protests over service delivery.

At professional level: Qualified South Africans opt to emigrate to other countries, resulting in a shortage of skilled workers in SA.

According to the government's White Paper on Migration in 2017, for every "one professional immigrating to South Africa, eight are emigrating."

At investor level: The fixed investment by South Africans overseas is said to exceed fixed investments in SA, Wessels pointed out.

3. BEE

BEE rightfully aims to empower those previously disadvantages. However, the Hausmann panel pointed out that the model was not growth-compatible.

According to the panel, BEE caused several issues such as it complicated firm creation and it upped the amount of regulatory burdens, to name only a few.

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Source: Briefly.co.za

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