Thank you cde Buti for a lively contribution. Indeed, such policy intervention is a good step in the right direction for the NYDA to drive implementation of youth and economic development programmes in terms of advancing the National Youth Service projects. It will also make a meaningful contribution to the NYDA to meet its constitutional mandates and primary obligation of addressing high levels of youth unemployment - majority of which are poor, live in rural areas and denied access to education or financially excluded. What we need now is context-dependent leadership - cadre development to be precise - to co-ordinate all activities of the NYDA to ensure that it delivers on its objectives of increasing the level of economic development for youth through self employment opportunities and income generating programmes, and contribute towards achieving a better life for all. The greatest challenge is to close ranks and deploy cadres with infinite understanding of youth participation in the economy for the success of the fund disbursement - that is investing in effective programmes that give young people opportunities to create their own sustainable livelihoods. Now is the time to invest in young people, not only tender-dependent capitalist class but future entrepreneurs who will contribute towards building a critical mass of skills and enhance innovation and productivity initiatives set out in the Industrial Policy Action Plan.
Remain, Morgan Phaahla Ekurhuleni "Sometimes, if you wear suits for too long, it changes your ideology." - Joe Slovo --- On Fri, 3/26/10, Gugu Ndima <[email protected]> wrote: From: Gugu Ndima <[email protected]> Subject: [YCLSA Discussion] BOTTOMLINE: Issue 6, Vol 7: 25 March 2010 To: [email protected] Date: Friday, March 26, 2010, 1:31 AM Issue 6, Vol 7: 25 March 2010 In this issue: Five Percent from Pension Funds will support Youth and Economic Development Five Percent from Pension Funds will support Youth and Economic Development The call for a discussion by the Minister of Economic Development, Ebrahim Patel, for creating a fund by redirecting 5% of pension funds investments into social spending should be supported for a whole range of reasons. It is estimated that more than R800bn will be generated through this policy decision which will be invested into the economy and help our country steer through the storm of the global economic recession, some of it created by the same financial services institutions. We will come back to these points later. However, it is not surprising that those who continue to profit from these financial service institutions have come out to condemn Minister Patel, alleging that his is a left-wing plot to "introduce more tax" and to divert attention from government’s responsibility of financing social spending. This is obviously not true as a larger portion of government spending is focused on social security through allocation into health, education, social grants and rural development. They have cried foul that Patel wants to redirect their profits into dormant investment adventures, and that through weak governance and lack of capacity by the state to manage such investments, pension funds will be lost into a black hole of financial mismanagement and lack of accountability. This is obviously a trick by the profiteers to scare pension fund contributors to fight against government’s intentions by appealing to their interests; whilst in reality, they are protecting their cash-cow. Let us do a reality check. Pension funds account for billions if not trillions of rands (with the Public Investment Corporation accounting for more than 700bn in pension funds investments). The boards of these companies determine where the investments will be made, and are sometimes not to the direct or immediate benefit of workers in whose name the money is invested. Many of these pension funds have financed shopping malls throughout the country which are today white elephants, and have contributed nothing towards the productive side of the economy and have merely reinforced the culture of consumerism, which has pushed many into revolving debt and has resulted into the current global economic crises. Sometimes these funds, as was the case with the PIC, became private bank accounts of individuals who determined which projects to finance on the basis of who runs such projects and how much kick-backs they will get and had absolutely no interest in the livelihood or benefit for the pension fund contributor. This has led, in some instances, to corporate theft where billions of rands in investments where written off without proper procedures being followed and workers loosing on these investments. The measure used to determine whether the pension funds are indeed performing their corporate social responsibility only comes in the form of how much, and not what the sustainable impact all of these had on the economy and for the workers who have invested their money. Many of these companies invest in the money market, basically selling money to other financial institutions in order to generate more money, and this money is in turn sold as debt and creates a web of debt that has led to the current financial crises. It is true that government should finance its social spending priorities. But government has policies in this regard. Let’s take, for instance, housing; many of the public servants do not qualify to get a government RDP house precisely because they earn more, but also do not qualify from getting a loan because they earn less. They therefore fall within the cracks and remain homeless. This should be one of the functions of pension funds in investing in sustainable livelihoods instead of housing shares and selling risk for the Elephant Consortium. Pension funds should be providing the needed resources through public-private partnerships in the healthcare centre, where the returns for their funds will be full-proof, whilst they are ensuring that we build a better health system in our country. They should be financing such PPP’s in universities to build student accommodation, or refurbishing university infrastructure, or providing affordable education loans directly to their children whilst the state is in the process of providing quality public higher education. All of these have guaranteed returns for the investment of their members, whilst they also will provide sustainable livelihoods for the very same members in the immediate. These could be some direct interventions on the livelihoods of members of the pension funds or their dependents. There are also major projects that pension funds can invest into which are of equal significance and will definitely generate revenue and returns for the pensioners. The recent financial needs of Eskom to build new power stations could have easily been financed by the pension funds instead of government going cap in hand all over the world looking for the financing of these new power stations and acceding to the most of ridiculous conditions. A lot of municipalities are hard pressed for finance to invest in local economic development in housing and roads infrastructure, which these institutions can finance. The need, for instance, of investing into food security through agriculture is one of the government priorities that pension funds can look into. The recently launched Industrial Policy Action Plan by the Minister of Trade and Industry will require private sector capital in order to ensure that it succeeds. If we are to support innovation and productivity, and create a strong industrial economy, we will need pension funds to play a role. The list of investments goes on. The reality is that if pension funds continue to look into sponsoring consumerism and supporting the services sector, we are unlikely to build a strong and sustainable economy. We need a commitment from these institutions to ensure that they support government initiatives to rid unemployment, poverty and disease. This can only be done through government policy that forces these institutions to invest directly into the productive sectors, creating more jobs, increasing the state’s fiscus through increased tax base and thus contributing towards social security, whilst making profits in the process. The time for a new economic growth path has dawned, and this constitutes the first step. That's the Bottomline, Cos the YCL said so... Buti Manamela National Secretary -- Gugu Ndima +27 76 783 1516 -- You are subscribed. 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