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President side-steps Home Affairs chief to ease skills entry
President Thabo Mbeki's promised revamp of SA's old and restrictive immigration policies has begun.
His latest moves should put an end to a dompas mindset that still dominates the bureaucracy's approach to the work force, long after influx control was abandoned in 1986 and seven years after the ANC came to power into 1994.
The new stance on immigration was signalled in Mbeki's state-of-the-nation address last month and confirmed by a recent series of bold moves.
From an economic viewpoint, it is possibly the ANC's most important ideological shift since former President Nelson Mandela opted for a market-orientated approach in 1992.
"Skilled labour is the most crucial form of foreign direct investment," says Standard Bank group economist Iraj Abedian. "When a skilled individual immigrates to the country, with him or her comes a sum of past investments, as well as a stream of future revenues."
Mbeki's most significant step so far has been to side-step Home Affairs Minister Mangosuthu Buthelezi, who has not managed to introduce efficiency into the Home Affairs Department or to overhaul migration policy and take control of the mission to attract vitally needed skills.
It will now become the task of Cabinet's investment & employment committee, which Mbeki chairs. Two lieutenants - Finance Minister Trevor Manuel and Labour Minister Membathisi Mdladlana - will lead the charge. They have been asked to carry out a skills audit to pinpoint SA's needs.
On the basis of their report, Cabinet will set out a detailed policy, which will include incentives for attracting the people the economy needs most. And officials will take recruitment roadshows to countries most likely to have people with the necessary qualifications.
Mbeki's second intervention is to put his office in charge of rewriting the legislation. It is likely that Buthelezi's Immigration Bill will not be passed in the short term, but that it will form part of the bigger rethink of immigration laws.
This includes the Aliens Control Act of 1991 (amended in 1995), which consolidated previous legislation - much of it introduced by the National Party, to keep out people who might subvert the "Christian National" ethic of its racist policies.
Also subject to review are the Labour Relations Act and certain education and trade statutes that govern migration.
Mbeki wants the skills audit and the legal review completed by October, and a skills policy and legislation ready to be tabled in parliament next February.
As things stand, SA's skills base is badly depleted. The damaging legacy of apartheid education is limiting the number of qualified South Africans available to meet the growing demand for skills required in a dynamic global economy.
At the same time, emigration is taking its toll as skilled people depart in droves - 21 200 skilled people have left SA over the past five years.
It's impossible to put a figure on GDP lost to the economy as a direct result of the lack of skills needed to start or expand operations (and to transfer skills). But the value of opportunities lost must be huge.
Surveys of leading foreign investors -- existing and prospective - show that SA's low skills base is one of the top five disincentives to investment. This probably also applies to potential domestic investors, who, as a result, either fail to invest here or channel their funds abroad. To reverse this trend, the brain drain must be turned to a net gain of managerial, accounting, IT, and maths and science teaching skills .
Until legislation is amended, Home Affairs director-general Billy Masethla, a member of Mbeki's inner circle, will make ad hoc arrangements to help foreign investors overcome problems in the short term. They face manifold problems getting work permits to import the expertise they need for local operations (see box).
While some investors, among them the American Chamber of Commerce (Amcham) in SA, say things are getting better, a survey by the British Chamber of Business last year found that easy access to foreign skills was the issue of second-greatest concern to British investors in SA. "The importance of facilitating work permits and eradicating barriers to the importation of skills was rated extremely highly by most British companies," says British Chamber of Business CEO Sandra van Lingen.
Top people for companies such as Volkswagen SA and Didata have had to cool their heels. The wait for a work permit is officially between six and eight weeks; unofficially it can take up to six months.
Masethla wants to make it possible to process an application in a week. (See APPLYING FOR A PERMIT at the end of this story.)
The experiences of a Cape Town-based company, International Business Network (IBN), raise another issue. It is not only big foreign deals that boost growth. The cumulative impact of small foreign investors can be significant. IBN has managed to attract R50m worth of business, all in relatively small sums, since it started in 1997. But MD Ralph Ertner says the value of smaller foreign investors is not always appreciated. Among IBN's clients who have been unable to get work or business permits are a guesthouse owner, an architect, a neurosurgeon and several small manufacturers.
Masethla has been given the Cabinet go-ahead to do everything possible to tackle these Home Affairs blockages.
The appointment in January of another Mbeki confidant, Charles Nqakula, as Deputy Minister of Home Affairs, will support Masethla's efforts.
To Nqakula (the chairman of the SA Communist Party) will go the job of selling the foreign skills plans to the ANC's union and communist allies, which have always been wary of imported labour. He will explain that the long-term aim is to train South Africans to fill the jobs in a New Economy. In the short term, an influx of skills will encourage business growth - and job creation.
A policy of making skilled workers feel at home will create a totally different environment. And it will attract more businesses from abroad. To arrive at that happy state of affairs, Masethla will not only look at restrictive laws but at malfunctional systems.
Amcham's Luanne Grant says what's needed is a set of regulations that predict whether a would-be immigrant qualifies for entry, rather than entrusting decisions to the discretion of officials.
Masethla is well aware of the problems. "This is an apartheid-era inheritance of bureaucratic control," he says. "I often joke that I am a Native Affairs Commissioner because the mindset I preside over is that of keeping them out'."
Grant points to even bigger resistance to granting work permits to African expatriates .
By next month, Masethla will preside over two standing teams that will deal with all work and business permits. The teams will consist of representatives of all the relevant departments and will consider the applications jointly. Masethla will beef up Home Affairs' IT; and a DG's hotline, linking Home Affairs, the DTI and Labour, will ensure that applications from priority investors - including those in motor-assembly plants and in the deep-water harbour project, Coega - are given priority.
Recruitment drives are planned to market SA to professionals from the African diaspora, and from developing and developed countries.
The sweeping range of measures is a far cry from Buthelezi's contribution to a modern immigration policy. His draft Immigration Bill has taken five years to get through the system. It follows the US model of an immigration service run as an agency of government, by a board made up of representatives of business, civil society and government.
But foreign investors are unhappy with the draft Bill because it works on a "user-pays" basis, meaning work permits would depend on firms paying a percentage of their payroll towards training local workers. Skills development legislation already imposes a 1% tax on payroll.
Buthelezi and Mbeki both want to attract skills, but have different ways of getting there. The hill they are climbing may be a watershed in SA's economic development.
The existing system for work permit applications is a red-tape nightmare.
An application must be made at the SA embassy in the applicant's country. It is then sent in the diplomatic bag via Foreign Affairs to Home Affairs in Pretoria. This takes at least two weeks and often supporting documents are lost en route. Photocopies aren't acceptable substitutes, so applicants have to start again each time a document goes astray.
Once applications reach Pretoria, they are sent to the various government departments for consideration. They are then sent back to Foreign Affairs, which checks each contract is in line with policy. It then goes to Labour, which decides whether the local labour market cannot provide someone for the job. Labour's decision tends to be arbitrary because it has no updated skills data to consult.
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