Introduction

South Africa held its first democratic election in April 1994. From this vantage point it is possible to look both back and forward. Looking back does not just mean looking at the apartheid heritage, but at shifts which have occurred since 1994. It is therefore possible to begin to evaluate the short-term impact of the new government's interventions. Looking forward reveals the imperative to prioritize and plan optimum-impact implementation measures against a daunting range of challenges is all too clear.

This paper starts by providing an overview of the labour market and the position of young people within it. The analysis does not provide a highly textured understanding of the social position of young people, but even an overview is not complete without some consideration of the effects of HIV/AIDS and poverty. The paper then describes the education and training system and outlines the ways it is being moulded to support economic and employment growth and social development in the country.

Against this backdrop, the conclusion provides some reflection on policy implementation challenges which lie ahead and some of the ideas under discussion.

1. Unemployment and recession

South Africa faces a massive unemployment crisis, arguably one of the worst in the world "perhaps the highest in the world if compared with rates in countries of similar or larger population size"²⁵. It is a country of some 40 million people, of which 13,785,493 are economically active. Using the strict definition²⁶, 22.9 per cent were unemployed, and using the expanded definition²⁷, 37.6 per cent were unemployed in 1997. Of those in employment under 50 per cent are employed in the formal sector - formal-sector employment has declined from 5,697,559 in 1990 to 4,904,027 in 1997 - and the trend shows little respite. Of the unemployed, 35 per cent are below 25 and 72 per cent are below 35. These figures are national averages, the level of unemployment is much worse for the African population - for example, 61 per cent of young Africans between the ages of 16 and 25 are unemployed! Across all groups unemployment for women in the same age cohort is 54 per cent and for rural people, 56 per cent.

²⁵ Fallon, Peter and Lucas, Robert: South Africa labour markets adjustment and inequality, The World Bank Southern Africa Department, Discussion Paper 12, 1998.

²⁶ Strict definition: those people who are willing to accept a 'suitable' job if offered and have actively sought employment in the previous month (definition in Census).

²⁷ Expanded definition: those who did not work at the time of the census but were looking for work.

Poor economic growth is at the heart of this problem. Economic stagflation contributed to the decline of apartheid and since its demise, economic growth had not risen much above 3 per cent in the mid-90s and is hovering just above 0 per cent at present. Although there has been a net increase in foreign direct investment since 1994, these increases have not been able to offset the net foreign direct investment outflows. The Asian crisis has certainly exacerbated the problem.

Mr Elliot Riordan, an economist in the Development Economics Vice-Presidency at the World Bank, recently noted that 'The outlook remains somewhat gloomy for developing economies, with most of the slowdown in world economic growth in 1998-2000 being felt in developing countries. Those countries that have weak export markets or rely heavily on primary commodities for export will be particularly negatively affected by the financial crisis"²⁸. This is bad news for South Africa, with its exports still dominantly gold and coal.

²⁸ Quoted in Trade and Industry Monitor, March 1999, Volume 9, South Africa, page 21.

The poor labour absorption of the economy is aggravated by the abundant labour supply. Bhorat and Hodge have attributed this to a complex interaction of four key factors - (lack of) economic growth, multi-factor productivity growth, production method changes and, finally, structural (intersectoral) change linked to rapid trade liberalization. The net effect of these factors has been a lower demand for workers at the bottom end of the occupational ladder and increase in the demand for more skilled workers in the formal economy. The racial manifestation of this is that the group that has benefited the least from these shifts in labour demand has been African workers who, because of past discrimination in education and labour market policies, are concentrated in elementary occupations. These factors have behaved in this way due to historic bias of government incentives towards capital-intensive investments and a strongly monopolistic pattern of productive assets ownership - monopolistic practices overlaid with racist barriers to competition.

Since 1990, and more markedly from 1994, trade liberalization has had an increasing effect. The ILO South Africa Country Report on the 'Social Impact of Globalization'²⁹ found that traditionally strong sectors - such as the commodity exporting sectors - have been able to take advantage of the new trading environment. However, productivity increases have been achieved by labour shedding more than technological innovation. In mining, for instance, there has been the loss of 57,600 jobs (9.5 per cent) since 1994 and manufacturing has lost 94,900 (6 per cent). More labour-intensive sectors have tended to face increased competition on the domestic market and have also shed labour, although less markedly than the commodity exporting sectors. Only the trade and services sectors have seen any employment increase, but these have not been large enough to offset the losses in the primary and secondary sectors. Overall, South Africa has experienced a massive decline in agricultural (3.9 per cent) and mining (2.8 per cent) sector employment and an increase in financial (6.1 per cent) and other services (3.8 per cent)³⁰. These shifts have taken place in a context where absolute employment levels have increased by a meagre 13.8 per cent in 25 years.

²⁹ South Africa: Studies on the social dimensions of globalisation. Task Force on Country Studies on Globalization, ILO, Geneva. 1999.

³⁰ Bhorat, H. and Hodge, J. Decomposing shifts in labour demand in South Africa, 'People and Work' paper for Human Sciences Research Council, 1998.

Counter-intuitively, wages have risen for those in employment in line with productivity improvements. More traditional analysts argue that the rise in incomes for those in the formal sector has contributed to the low labour absorption rate of the South African labour market. These analysts blame labour legislation, which they believe introduces inefficiencies in the labour market. Others, notably the trade union movement, argue that macroeconomic policies and rapid trade liberalization together with productive asset concentration and monopolistic practices, are stronger determinants³¹. World Bank analysts have argued that extreme income inequalities in the labour market, caused by apartheid policies, are working their way out of the system and rising African wages are correcting artificially low wages for Africans brought about by apartheid influx control.

³¹ Heintz, James: Labour demand and job creation in South Africa, National Labour and Economic Development Institute, June 1998.

Whatever the causes, all agree that there is an employment crisis in South Africa. Unless economic growth associated with high levels of labour absorption can be achieved, the prospect of significant numbers of young people finding employment in the formal sector is extremely limited -irrespective of the active labour market or skill development strategies adopted.

What of the informal sector? South Africa has fewer people active in the informal sector than unemployed people - a profile which is unlike that of any other developing countries³², largely due to apartheid policies which suppressed entrepreneurial activity of the African majority for nearly 50 years. The ILO South Africa Country Study reported that for African men, white men and white women the rate of self-employment is approximately 10 per cent, and for African women is 18.4 per cent. The majority of some 2,664,554 'survivalist' and 'informal' activities occur in agriculture (781,193 or 29 per cent), construction (112,124 or 4 percent), trade, catering and accommodation (455,554 or 17 per cent) and community and social services (925,859 or 34.7 per cent)³³. Of all informal-sector activity, only 23 per cent of black people worked in production or trading activities. Subsistence agriculture is underdeveloped because of past land policies. Perhaps the fastest growing sector has been the taxi industry - where some 300,000 have become taxi drivers or owners.

³² Fallon, Peter and Lucas, Robert: South Africa labour markets adjustment and inequality, The World Bank Southern Africa Department, Discussion Paper 12, 1998.

³³ Adelzadeh, A.; Alvillar, C.; Mather; C. "Poverty elimination, employment creation and sustainable livelihoods in South Africa", A NIEP Report for UNDP, 1998, Table 13, p. 39.

So how do the poor survive, beyond dependence on limited social pensions? In general, poor families depend on income from the wage of a family member. Where there is no such income earner extreme poverty results.

In a recent study of one of South Africa's four main urban centres, Durban, it was found that three types of economic activity had increased since 1994 following the lifting of influx control:

· Firstly, new hunter-gatherer-type societies among the urban poor have emerged that are based on new networks and accumulate anything that can be accumulated from waste products like metal, copper wire, gas tanks, cardboard, synthetic materials, fuel, to whatever gadgets they can lay their hands on, steal, beg or borrow; these they sell for their survival. These micro-communities, many of whom are homeless, are expanding; the report provides the following example: the paper and pulp industry has outsourced to agencies the collection of waste-paper - labour in these, mostly black-owned agencies, is temporary and casual and concentrates on areas where bulk collection occurs. They themselves have women recyclers on the streets who collect paper and cardboard and get paid by the kilogram. None of these processes have expanded formal employment; the only expansion is in terms of the survivalist side of the trade as poor women and their children scour the streets for scrap.

· Also, new forms of servitude, of dependent labour are growing. If casual labour refers to occasional labour activity to execute formal jobs, these activities are subcasual and are at the beck and call of individuals who demand chores, duties, sexual favours and services. It appears that some of the most exploitative relationships are within extended family networks.

· The most visible form of work relates to the growth of street traders and hawkers, selling basic needs-related commodities to the black poor, trinkets and memorabilia to tourists, and food below formal shop-prices to urban workers³⁴.

³⁴ Sitas, A. "From people's skills to people's jobs- job creation and training in the Greater Durban area", research done for the Metro's Economic Development Department and the Job Creation Network, 1999, p. 13, emphasis added.

The same report makes the sobering assertion that incomes from these various activities range between R50 to R200 per month. It further asserts that raising these income levels cannot be achieved through internal resources alone. Indeed "the only occupations available that could radically boost income are illegal (high-jacking and drugs for the young men, prostitution and sex work for the women)"³⁵.

³⁵ Ibid, p. 45.

These incomes are substantially lower than those earned in the formal sector, as can be deduced from Table 1 showing the distribution of income levels³⁶ (in %).

³⁶ 1996 October Household Survey, Statistics South Africa. Exchange rate approximately R6 to 1 US dollar. So 26 per cent earn below $83 a month, and 62 per cent earn below $250 a month.

Table 1. Distribution of income level by group of population

	Men				Women				Total
	African	Coloured	Indian	White	African	Coloured	Indian	White
Above R3,501	6.0	11.6	29.7	64.7	5.2	7.1	16.7	35.4	16.2
R1,501 - R3,500	20.1	27.6	38.4	22.5	13.3	21.5	32.4	40.4	21.7
R1,001 - R1,500	23.8	21.0	18.3	5.7	12.5	21.9	26.0	10.4	17.4
R501 - R1,000	24.4	20.4	8.8	3.2	21.4	19.5	16.0	6.2	18.6
R0 to R500	25.7	19.4	4.8	3.9	47.6	30.0	8.9	7.6	26.1
Total	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0	100.0

The report concludes: "Nevertheless what is happening despite us, is a shift away from a system of high and stable wages to one with unregulated flexibility and subcontracting, despite trade union protests. At the same time, project-based development projects, pioneered by NGOs for absorbing and training young, black people, are beginning to compete and take over the jobs of the formal sector with incomes far below union rates. The difference between them and employers is their altruistic and community-conscious intention. Whichever way, by omission or commission, the city cannot afford any further deterioration of stable incomes, or the effects on the poor will be devastating"³⁷. It concludes that there is a need for all levels of government to link to community-level productive networks and to promote the production of new things, new commodities and services, of moving towards new specializations based on new technologies; it suggests that the search for alternatives, no matter whom it involves, has to be facilitated at local government level and has to include the contribution of productive networks that produce "a people's plan" that turns unemployment into employment and vulnerability into security.

³⁷ Ibid, p. 49.

How widespread is outsourcing and subcontracting? In the Labour Market Flexibility Survey conducted in 1995 and 1996 it was found that some 85.5 per cent of firms reported that they had made use of temporary/casual workers and 43.5 per cent had used contract labour. For those that argue that the South African labour market is over-regulated, it should be noted that these arrangements have taken place within the framework of the existing labour legislation - and the accusation of too much 'rigidity' seems exaggerated.

2. Social dimensions of unemployment

The ILO Country Study reports poverty rates amongst Africans of 54 per cent³⁸, 25 per cent amongst Coloureds, 8 per cent amongst Indians and 0.5 per cent amongst whites. And a recent UNDP Study finds that the strongest contributor to poverty is unemployment. The study also finds that "South Africa's income inequality is considered to be one of the highest in the world. A recent CSS survey shows that more than 65 per cent of all household income is at the disposal of the richest 20 per cent of households, while only 3 per cent goes to the poorest 20 per cent. African, female-headed households represent the poorest group in the country, followed by African, male headed households. At the opposite end, white, male headed households are the most affluent"³⁹.

³⁸ The poverty rate is based on an absolute poverty line according to per capita income. ILO South Africa Country Study, Table 4, p. 79.

³⁹ Adelzadeh, A.; Alvillar, C.; Mather, C. "Poverty elimination, employment creation and sustainable livelihoods in South Africa", A NIEP Report for UNDP, 1998, p. 44.

The HIV/AIDS virus has reached epidemic proportions. The national infection rate, as measured by the number of women testing positive in anti-natal clinics, has risen from 10.4 per cent in 1995, to 22.8 per cent in 1998⁴⁰. Within this figure, the highest infection rate has been measured amongst those between 15 and 24 years old, where the rate is about one in four.

⁴⁰ Department of Health, Annual Anti-Natal Survey, 1998.

It is hardly surprising that these manifold problems are a nightmare for young people in South Africa. Some of these are:

· 'No hope for the future'. Fatalism is widespread. It is associated with passivity and dependency.

· 'Poor social interaction'. Unemployed youngsters, especially in communities where unemployment is high, have few positive role models. An increasing number live in homes where their parent/s or guardians have never worked. Many feel deserted by the society and government. There is an increasing alienation between the 'have's' and the 'have-nots'. This class divide is experienced from both sides.

· 'No source of income'. This is a consequence of unemployment. Self-employment is not generally perceived to be a viable alternative, and there are still too few successful entrepreneurial role models in African communities. Apartheid prevented access of African entrepreneurs to the market and small business people who were successful became identified as 'collaborators with apartheid'.

In this context, sexual and substance abuse are widespread and the incidence of crime constitutes a national crisis.

There is a reciprocal perception by employers. The ILO Country Review conducted in tandem with the Presidential Labour Market Commission⁴¹ in 1996, found that when employers were asked to indicate the preferred age of new recruits, "42.8 per cent had no preference and 17.9 per cent said 'any age under 45'. In an interesting contrast with the experience of other countries, the most likely age group was 26-35, considerably older than was typical in the Philippines and Malaysia, for example." The authors of this report asked the question: "Why do manufacturing firms tend to prefer to recruit production workers at an older age than in other countries?" Many believe that the reason is linked to poor schooling and social problems linked to disrupted family life under apartheid and in the struggle to effect its overthrow. Employers prefer to wait for poverty to domesticate young people! This is evidenced by Table 2 showing the distribution of unemployment across age groups.

⁴¹ Standing, G.; Sender, J.; Weeks, J. "Restructuring the labour market: the South African challenge". An ILO Country Review, Geneva, 1996, p. 340.

Table 2. Distribution of unemployment across age groups

	16-25	26-35	36-45	46-55	56-65	Total
Number	1 361 591	1 436 665	687 363	322 323	6 476	3 872 707
Percentage	35.16	37.10	17.75	8.32	1.67	100.00

3. Government responses to unemployment

Over and above its legislative programme, in October 1998 the government, together with organized business, labour and community interests, convened the country's first-ever Jobs Summit. This event was preceded by months of negotiations under the National Economic Development and Labour Council (NEDLAC)⁴². These negotiations could not resolve differences on macroeconomic or labour market policy, but parties agreed to disagree and went on to focus on a wide range of specific interventions to address job loss and job creation. In many instances the programmes discussed were not new, but were integrated into a more coherent framework supported by social agreements. Some of the measures included:

· Focus on a number of integrated provincial projects - impoverished areas with the potential for industrial or service-sector growth in which co-ordinated efforts would be taken to promote private-sector investment.

· A major initiative to promote mentorship of SME's by established business.

· Job creation schemes to be funded by government. These are to link to the preservation, reclamation or production of community assets -schemes such as 'Clean and Green Cities Campaign', 'Working for Water' (rooting out exotic trees which are using scarce water) and 'Community-Based Public Works Programmes' (such as labour-intensive construction of tertiary roads, clinics and schools).

⁴² NEDLAC is a quadripartite national body established by the new government to promote national stakeholder participation in governance. NEDLAC reviews labour legislation before it is tabled to parliament.

Youth were specifically targeted in the Jobs Summit. The social partners agreed to the introduction of a Youth Brigade Scheme that is to give special access to young people to the job creation schemes of government, and to incorporate life as well as vocational skills. Young people also sought special access to new jobs created in the construction of new infrastructure in integrated provincial projects. Initial projects have begun.

Significantly, both organized employers and organized trade unions rose to the challenge put by government to contribute to job creation. The employers announced a new Business Trust to be funded by a voluntary turnover contribution by their members. The Trust is to focus on the promotion of the South African tourism industry and includes a major education (primary education literacy and numeracy upgrading) and training component. The trade unions announced a new job creation fund to be resourced by a voluntary contribution of one day's pay by all their membership; 3 March, 1999 was the day on which the contributions were collected.

However, the greater challenge is to find agreement on underlying macroeconomic, industry and labour market policies. Particularly urgent for young people will be agreement on issues such as youth wages, probation periods and organized work experience within the collective bargaining realm.

4. School and skill issues for young people

Educational level contributes to employment and income inequality. Statistics South Africa noted in 1998 that the relationship between education and unemployment was 'curvilinear', i.e. unemployment was highest (25 per cent) for those with an intermediate amount of education, and lower for those with none (19 per cent) or with 12 years of schooling or more (18 per cent)⁴³. The level falls dramatically at higher levels of education. Lucas and Fallen found that the probability of an African with 14 years of education being unemployed was around 1 per cent, as compared to about 30 per cent for those with 10 years of education⁴⁴. For a person aged 25, the wage differentials accruing per year of education for those with 14 years of education compared with those with no education were 17.1, 15.7 and 18.8 per cent for Africans, whites and other groups respectively - high returns by international standards.

⁴³ 1998 Statistics South Africa, Unemployment and Employment in South Africa, Table 9, page 60.

⁴⁴ Fallon and Lucas, Figure 4, p. 14 and p. 29.

It is difficult to prove that skill shortages inhibit high economic growth. But the dramatic fall-off of unemployment for those with high-level skills, and the wage premium that is earned at these levels relative to intermediate levels, appears to support this contention.

The fact that apartheid denied black South Africans a good quality general education has been widely documented. This was one of the first areas of intervention of the new democratic government. One measure of the change is the different age profile of school leavers. In 1993, only 18 per cent of African students writing their school leaving examinations were under 18 and 82 per cent were 19 or older, signally high repeater rates. In 1995 the figure of those under 18 had risen to 43 per cent and consequentially 56 per cent for those over 19⁴⁵. The reason for the continued, although improved, level of learner repetition rates is to be found in poor-quality learning and teaching opportunities, which persist in many schools. (Government is incrementally tackling problems but, given the scale, they could not be resolved overnight). But the poor prospects of finding work after school also contribute - young people remain at school in an attempt to attain the tertiary-level entry qualification as a hedge against unemployment. In the age cohort 20-24, some 16 per cent enrolled for tertiary education in recent years. There is pressure for these institutions to accept more learners, but financial constraints are limiting access - and student-support schemes are unable to afford to meet the demand.

⁴⁵ 1997 South African Science and Technology Data Overview, Foundation for Research Development, Figure 1.1.

Those students who leave school without a 'matriculation exemption' entitling them to proceed to tertiary-level learning have few other options -and have a high chance of remaining unemployed. There has been an 80 per cent decline in the number of apprenticeships from the mid-1970s, with an absolute level of about 5,000 new contracts signed in 1995. There is an intermediate college sector which provides occupationally oriented courses to students, but these students are often less likely to be employed than people with work experience⁴⁶.

⁴⁶ Standing, G. et al., p. 340. The Report indicates that when recruiting production workers, 51.4 per cent of employers stated work experience was the most important characteristic, followed by 11.1 per cent who sought training and 9.6 per cent cited schooling. For employees, 58.4 per cent stated work experience was most important, followed by 14.4 per cent training and 7.3 per cent schooling.

The trend of different occupational groups (see Table 3) is indicative of where such people are finding employment.

Table 3. Employment of occupational groups, 1970-1995⁴⁷

⁴⁷ Bhorat and Hodge, Table 5, p. 8.

	Professional	Manager	Clerical	Service	Farming	Production	Labour	Transport	Unspecified	Total
Employment
1970	356 402	115 058	732 635	1 243 348	2 522 471	1 679 794	587 884	286 389	18 137	7 542 118
1995	1 300 700	425 400	1 690 200	1 165 800	1 155 800	1 556 100	610 400	644 100	36 700	8 585 200
% change	+265.0	+269.7	+130.7	-6.2	-54.2	-7.4	+3.8	+124.9	+1013	+13.8
Share
1970	4.7	1.5	9.7	16.5	33.4	22.3	7.8	3.8	0.2	100.0
1995	15.2	5.0	19.7	13.6	13.4	18.1	7.1	7.5	0.4	100.0
Change	+10.4	+3.4	+10.0	-19	-20.0	4.1	-0.7	+3.7	+0.2	0.0

The low educational levels of the unemployed are circumscribing the type of informal-sector activity, and the value added of that activity.

5. Government responses - education and training

The new South African government has made a number of important interventions in the education and training arena. The most important of these are the following:

5.1 Quality and access

The quality of learning opportunities across the country is low for the majority of South Africans. To address this problem, the Ministers of Education and Labour joined forces to introduce a National Qualification Framework through the South African Qualifications Authority Act (SAQA Act) in 1995. This Act provides for an outcomes-based system where there is an explicit focus on what has been learned, as measured against socially agreed standards.

The National Qualification Framework (NQF) provides for the registration of general education as well as occupationally oriented education and training standards at general, further and higher levels of learning. It is made up of eight agreed national levels and a range of learning progression routes. Agreement on standards to be registered is recommended by 12 National Standards bodies made up of employers, trades unionists, government officials, professional bodies and education and training providers. This wide social partnership will enhance labour market as well as formal currency of qualifications.

Once standards and qualifications are registered, the quality assurance of the standards is ensured by a second set of established and new institutions. They register assessors and keep a record of learner achievements. They also formally accredit providers as competent to train. Quality assurance bodies will be established across the general preparatory learning system (schools and universities) as well as to oversee industry-based learning. The Sector Education and Training Authorities, to be described later, perform this function for firms in their sector, in partnership with professional bodies who carry out quality assurance at the tertiary levels.

The model was proposed to enable both young and older learners to have their current learning recognized through a process of Recognition of Prior Learning, and then have the opportunity to progress further in learning, be it in full-time or part-time contexts. The Authority has been accepted by tertiary institutions as well as industry and is slowly moving to a situation where standards can be registered and quality of learning providers and programmes can be assured nationally across the board.

5.2 Schooling

Within the limitations of this presentation it is not appropriate to describe the wide range of initiatives taken by the government to improve access to schooling and the quality of that schooling. It must be noted that a Schools Act has been passed by the Minister of Education, which aims to effect a holistic transformation of schools. It introduced more autonomous school governing councils, a culture of learning and teaching, improvements in the quality of all educational inputs including curriculum (based on SAQA-type outcomes-based learning models), teacher upgrading and improved teacher/pupil ratios in the country.

The most radical transformation effected by the government is the elimination of all racial restrictions on access. All children are now required to attend school and schools are not permitted to turn away a child on the grounds of race. There has been a massive movement of black students into previously white schools in urban areas as these are perceived by many to offer a better-quality education. Schooling is now compulsory for all children for ten years, including a preparatory year.

5.3 School-to-work initiatives

The Ministers of Education and Labour have launched complementary initiatives to improve the range of learning opportunities available to learners in the post-compulsory learning phase and to enhance the responsiveness of the learning to the labour market.

The Minister of Education has passed the Further Education and Training Act. This legislation is focused on years 10, 11 and 12 in the schooling system and equivalent learning opportunities available in technical and community colleges. The Act puts in place a system of funding that guarantees 80 per cent of funds from the state to state-funded institutions. However, colleges are given 5 per cent incentives to focus on learning outcomes (NQF) as well as support to the most vulnerable students. But it does require colleges and other institutions of further education to find 10 per cent of their own funding. This is intended to improve responsiveness to community and industry needs for social development and economic growth. Innovation has already begun - colleges are introducing hives for those moving towards self-employment, and are beginning to seek to meet the needs of industry and find income-earning opportunities.

The Minister has also passed the Higher Education Act. This Act seeks to improve the access of previously disadvantaged groups to higher education, on the one hand, and to improve the responsiveness of learning to the needs of the society. The Further Education and Training Act as well as the Higher Education Act envisage that learning institutions should prepare three-year rolling plans, composed of a new focus on learning programmes. State funds will increasingly be weighted towards those programmes which are perceived as vital to underpin reconstruction and development of the society -mathematics, science and technology and the like. Both Acts introduce advisory bodies to the Minister of Education regarding policy and allocation of resources.

5.4 Learning for work, learning at work

The Minister of Labour has introduced two pieces of legislation: the Skills Development Act and the Skills Development Levies Act. These seek to improve the quantity and quality of learning for those already in work (be it self-employment or formal-sector activity) and those seeking to enter the labour market. The Skills Development Act establishes the National Skills Authority - NSA - that will advise the Minister on a national skills development strategy and means for its implementation.

A central vehicle for implementation will be about 30 Sector Education and Training Authorities (SETAs) to be established across the economy, e.g. Transport, Tourism, Banking, Construction and the like. These are employer-trade union-government bodies, charged with the responsibility of promoting skills development in their sector. SETAs have been designed to improve the quality of demand-side information on skill needs and priorities. SETAs will be required to prepare Skills Plans on an annual basis - and these plans will have to identify skill targets and priorities for productivity and employment growth. Each SETA will be required to attend to the skill needs of both large and small employers in the sector. SETAs also provide an opportunity to diffuse the work of research agencies into industry.

The Skills Development Act also introduces a new framework for combining structured learning and work experience. Learnerships are being introduced to promote 'apprenticeship-like' qualifications, but at any level of the National Qualification Framework and in any field of occupational learning. SETAs will be responsible for their development and implementation. It is intended that they will identify areas of employment opportunity or constraint and then design learnerships to meet the need. These opportunities may be in the formal or informal segments of industry. Already 217 learners have completed the first four pilot learnerships in construction and tourism. Learnerships provide an ideal vehicle for a new and dynamic partnership between initiatives of the Department of Education and Labour - responsive institutions will provide the structured learning and SETAs will assist in finding placements for learners. Learning institutions will be able to secure additional funds from SETAs for this work.

SETAs are required to serve both large, small and emerging firms in the sector - for example, the Transport SETA will assist taxi drivers to upgrade as well as large railway companies. It is, however, recognized that SETAs will tend to be dominated by large firms. Hence the NSA has agreed to establish a standing sub-committee on SME promotion, on which all SETAs will be represented. This is what is envisaged. However, the NSA will need to link with multiple initiatives driven from outside its current area of responsibility. Some of these include initiatives launched by the National Youth Commission, an agency setup by legislation⁴⁸. These programmes include such initiatives as: the Youth Employment Clearing House, that provides specialized employment information; Youth Employment Strategy that seeks to generate synergies across government departments at national and provincial level; Youth Enterprise Strategy for self-employment; and Research on Youth Economic Participation and Awareness.

⁴⁸ National Youth Commission Act, 19 of 1996.

The Skills Development Levies Act is designed to put in place 'user charge-type' incentives and thereby to complement the Skills Development Act. It introduces a 1 per cent private-sector payroll levy. All firms will pay the levy, but will be able to claim grants for training done from their SETA, provided the training meets basic quality criteria. The training will increasingly need to align with the National Qualification Framework, to ensure quality. Enterprise-wide training plans will leverage block grants back to firms - but these plans and their implementation will also be quality assured. Firms will either deliver their own programmes or purchase training from training providers.

SETAs are expected to grow into a major resource for firms. SETAs may use a prescribed percentage of their levy revenue to assist with the development of sector skill plans, the design of learnerships, assistance to firms to develop enterprise skill plans and quality assurance of training. The standards on the National Qualification Framework will be used for all training plans. Funds may also be used to support research into trends and shifts locally and abroad in the sector.

The public sector is also included in all of these initiatives. Government departments will join the SETA most relevant to their area of work so, for example, the Department of Transport will join the Transport SETA. Government departments will also have to develop training plans. However, they will not pay a levy in the same way - and instead will have to budget 1 per cent of personnel costs. The public service will also have to conform to training standards registered on the National Qualification Framework. Only two public-sector-only SETAs will be established - one for Local Government, and one for the Public Service.

Implementation of these policies will commence in earnest during the second term of office of the new democratic government. Already extensive plans have been laid.

5.5. Learning in the context of job creation projects

Various government departments have launched job creation schemes -and these were confirmed and extended at the Job Summit. For young people the key concern has been securing access to these schemes and ensuring that some learning takes place within these programmes - including life skills.

The Department of Labour's Employment Services local offices are increasingly positioning themselves to act as a selection and referral agency for these schemes. What proportion of which group - young/female/local/person with disability - is a matter for a local community accord.

In general, programmes such as Youth Brigades or Youth Service schemes are more geared towards reintegrating young people back into productive society, and are less focused on the delivery of hard skills. By contrast, learnerships are strongly focused on occupational skills and aim to gain a reputation for high-quality training.

6. What does this all mean from the perspective of a young person?

A young person will have a number of increasingly clear options when contemplating entry into the labour market once South Africa's policies are fully implemented:

(a) Improved information and guidance about the labour market when making career choices - both from the learning institution as well as the employment services local office. SETAs will play an important part in preparing up-to-date information on trends.

(b) Placement in a formal-sector job, if one is available and the young person is qualified.

(c) Return to full-time learning with a view to acquiring occupational skills that appear to be needed.

(d) Entry to a learnership - with structured learning and work experience in an occupational area - with work experience facilitated by a SETA or college.

(e) Placement on a job creation scheme if the young person needs to be 'oriented to the labour market'. Youth brigades and Youth Service Schemes are envisaged.

(f) Preparation to commence their own business, either alone or in partnership with others, with support available from various agencies.

(g) Work experience, linked to probation periods and life skills could fill the gap between youth brigades and learnerships.

(h) Young people already in work, either in the formal sector or in self-employment, should be able to access upgrading opportunities. Employment equity legislation should assist those who have previously suffered from discrimination.

(i) Support for those with substance abuse problems, victims from sexual abuse or violence and psychological problems will require special support.

Improved government co-ordination will be needed at the local level to make these choices real for young people across a broad scale. A commitment in this regard has been secured already and collaborative work has begun. The National Youth Commission is making an important contribution to this work.

Conclusion

In conclusion, some reflections are provided on the five themes of this round-table discussion from a South African perspective:

i. Youth at risk in developing middle-income countries. Targeted policies for youth at risk, whether preventative or curative, will remain marginal in a wider sea of critical unemployment. Difficult choices have to be made about the allocation of scarce resources, although these choices have to be situated in the context of the social cost of not prioritizing this group.

ii. Youth training schemes are being introduced in the South African context as a way of dealing with the extremely high incidence of unemployment amongst school leavers. Evidence, even at this early stage, suggests that post-qualification placement in formal or self-employment will remain the greatest challenge. And placement is at its most severely difficult where there is no practical work experience.

iii. Training for the informal sector is a relatively new area for South Africans and there is a great need to further explore it. However, even at this early stage, the current experience seems to be in line with lessons elsewhere, that this training:

· Needs to be rooted into the social context and productive networks of the learners and their communities;

· Needs to be linked to other interventions such as credit assistance and marketing and technology advice. The most successful examples have been linked to 'hives' where integrated support has been provided.

Even at the survivalist end of the spectrum, success has been achieved when additional services, such as bulk-buying arrangements, are in place.

However, failure rates across the board remain high and reasons need to be analyzed more carefully. It is, furthermore, a concern that there is evidence of displacement of formal for informal-sector activity.

iv. Links to work: the South African formal apprenticeship system has failed to rise to the challenge of providing a bridge for young people to enter the labour market.

The newly proposed 'learnership' system is an attempt to remedy this problem. It provides for structured learning and work experience and culminates in an occupational qualification. Recent experience suggests that this framework is promising, but extensive support is still needed to bridge from the learnership to placement and self-employment. In addition, firms require real financial incentives to participate in the scheme. It is hoped that the levy-grant scheme will help to provide these incentives and encourage firms to both provide opportunities for work experience and then facilitate post-training placement.

There is, at present, a problem on the side of training providers, and it is expected that the programmes of the Department of Education will enhance the capacity of providers to support learnerships in a more flexible way.

v. Partnership frameworks. South Africa certainly enjoys a very dense institutional environment. It is also a new environment - so it is too early for evaluation. However, the South African Government, led by the Ministers of Labour and Education and the Office of the Deputy President, is taking measures to ensure that the various interventions add up to a coherent people-development strategy at the end of the day.

But a coherent people-development strategy only makes sense if it can complement and strengthen a broader growth and development strategy. Building a skill base responsive to existing demand is one challenge, but laying the basis for new demand is even more vital in a society like South Africa, where there is simply inadequate demand at the moment. And if the South African economy is to rise above the status of a commodity-exporting nation, it needs to aim at greater value adding across the spectrum of survival, micro-enterprises, import-competing and exporting firms. These niches are, after all, interconnected components of the economy, not islands, as the women and children scouring for paper on the streets of Durban understand only too well.