Why is South Africa afraid of skilled immigrants when they are essential for enhancing economic growth?
One of the defining features of democratic South Africa has been the much more visible presence of foreigners in different parts of the country. Traders from West Africa and Zaire, hairdressers from Ghana, poor peasants from Mozambique, high school graduates from Zimbabwe, academics from all over, drug dealers from Nigeria. The whole question of immigration to South Africa – by both skilled and unskilled people – has emerged as a new and important area of controversy. But the country’s focus on illegal migrants has diverted attention from the real crisis issue: the deepening shortage of managerial, professional, and entrepreneurial skills which will undermine the country’s potential for sustained economic growth.
If South Africa wants to become a competitive economy in the global system, consideration must be given to the relationship between opening our borders to trade, industry, culture, communications and capital, and the movement of people which must inevitably follow. Immigrants generally have entrepreneurial talent and ambition, are prepared to take risks and possess the necessary drive to survive and succeed in a foreign country. The benefits of skilled immigrants have long been understood by developed countries which entice foreign highly skilled doctors, academics, engineers, and many others to their shores. For example, Singapore, Germany, Ireland, South Korea, the United States and United Kingdom have all sent ‘poaching’ expeditions to India to try and recruit information technology engineers to make good an increasingly alarming shortage in information technology skills back home. The United Kingdom has a special programme to attract South African nurses.
In the global economy today, economic growth and competitiveness is increasingly determined by high level skills inputs, the value added by innovations in management, production systems and technological innovation and by the levels of entrepreneurship and new risk ventures. Against this background, South Africa’s white paper on international migration and the government’s response to it becomes a test case of the coherence of government thinking on economic development.
Since 1996 the department of home affairs has wrestled with the complex question of a new migration policy. Progress has undoubtedly been made. Unfortunately the 1999 white paper on international migration and the draft legislation on migration this year reflect a deeply ambiguous and unresolved approach to this critical national issue.
The draft legislation and the white paper contain important provisions that very seriously contradict the sound general principles that underlie the government’s approach to economic policy and that are accepted in the same white paper. These contradictions undermine the capacity of the proposed legislation to meaningfully address an emerging crisis in South Africa. South Africa is experiencing a deep and growing skills crisis. Newspaper reports reflect the dimensions of the crisis: ‘more than 300 specialist nurses are leaving South Africa every month’; ‘soon there could be more South African doctors in California than Cape Town’; ‘the accounting profession claims it is losing seven out of ten new graduates in brain drain to Britain’.
No one should be under any illusions. The facts are clear:
- According to the minister of education, ‘there is a crisis at every level of the education system’. As a result, there are declining numbers of matriculants in 1999, and fewer entrants to universities in 2000.
- Research by ING-Barings estimates that 12,1 per cent of highly skilled workers, 21 per cent of skilled workers and 29,4 per cent of semi-and unskilled workers will be hiv-positive by 2005. The report points out that the ‘cost of supporting and replacing a highly skilled workers with hiv/aids will be substantially above those for semi- and unskilled workers’.
- The country is experiencing an average net loss of more than 4 000 largely skilled people a year. The magnitude of South Africa’s ‘brain drain’ is disguised by serious data deficiencies. For example, according to The Indian Ocean Newsletter, while 5 500 South Africans told authorities that they had emigrated to South Africa, Australian authorities said that 9 000 arrivals from South Africa had been registered during that period. Official figures are widely agreed to be underestimates by a factor of 2 to 3 times.
- Employers in practically every sector of the economy are complaining of the shortage of skilled managers and experienced professionals.
In this context, it is hard to understand a number of provisions in the draft legislation:
- the implication contained in certain clauses that the country’s needs for specific skills can be determined and calculated by state agencies. This is simply not possible in the current global economy in which skills needs are fluid and subject to rapid change. The injunctions in the bill for consultation by the department of home affairs with other departments and official agencies in order to set quotas and targets in respect of skills are bound to distort market forces, hamper economic growth, and prejudice business and investor confidence;
- the imposition of a training levy on employers for every skilled foreigner hired. Employers will already be paying a premium for expensive and scarce skills, hence this additional tax will constitute a double burden that will hamper growth;
- the failure to provide for participation by organized business and the department of finance on the immigration board; and
- a number of other important provisions (for example, clause 12 on work permits, clause 15 on intra-company transfer permits) that will retain tight controls and significant administrative and professional costs in respect of the employment of foreigners.
The reputation of the department of home affairs has suffered badly because of difficulties encountered by important investors in South Africa in securing necessary production, managerial, and professional skills. This suggests that much firmer ministerial intervention than has hitherto been exercised will be required to provide the persuasive reassurances on which confidence can be rebuilt. If the cabinet is serious about our economic recovery and sustained growth, it will ensure that the minister has full backing in turning immigration policy into an instrument of economic progress.
What are we afraid of? South Africa is hardly the most attractive destination for the more highly skilled personnel, successful entrepreneurs, and managers from the rest of the world. There is absolutely no danger whatsoever that South Africa will be ‘swamped’ by the kind of people its economy so desperately needs. While giving the appearance of sensible restraints and checks on the inflow of skilled immigrants, the limitations of the bill are in fact an additional tax on the economy. This legislation if implemented will act as a ‘man-made’ ceiling on South Africa’s much needed economic growth. Why are we doing this?
Many specific recommendations in the draft bill and the white paper seem to be based on the assumption that skilled immigrants are a threat to the interests of formerly disadvantaged South Africans, and that they are taking jobs away from South Africans.
This assumption is simply wrong in the light of the facts:
- more skilled people will increase the capacity of the South African economy to expand and provide more job opportunities for all residents;
- more skilled people are necessary to expand the capacity of the country to train and educate all its citizens to world class standards; and
- more skilled people will play a part in lowering the income gap between highly skilled and unskilled in the country.
Government’s immigration policy should be much more effectively positioned as a facilitator of national economic growth. The president should publicly acknowledge the depth of the skills crisis and its negative consequences for all South Africans.
This crisis has four consequences for migration policy:
- the doors of the country must be opened to as many skilled professionals and entrepreneurs as we can attract to come here;
- it is a fallacy to think that there is a contradiction between equal opportunities for all South Africans irrespective of colour and the active participation of employers in the global marketplace for skilled personnel. In fact the opposite is the case. All those who argue against opening our doors to as many skilled people we can attract are denying South Africans without jobs or skills all the new opportunities that will inevitably arise from a new wave of skilled immigrants across our borders;
- authoritative national research on the socio-economic impact migrants have on the country – both positive, negative and unintended – is required as a matter of urgency. This will ensure that the public debate is about facts rather than rumours, myths or speculation unsupported by evidence; and
- the international experience is clear. Governments in countries that are losing skilled migrants – as we are – need to consider whether they are doing enough to keep such skills in the country.
Skilled immigrants needed
Confidence is one of the characteristics of success in the international economy. We must not be frightened by competition but embrace it. South Africans are as good as anyone in the world given the opportunities to prove it. We need skilled immigrants to create more opportunities for everyone and especially those who are unemployed and unskilled now. Skills and experience that
have been acquired at a cost to governments elsewhere in the world are a most important form of foreign direct investment, even more valuable than its monetary equivalents. The white paper and the draft legislation on international migration is ‘not good enough’. Business leaders need to impress on the president, the minister and the cabinet as a whole the importance of demonstrating their resolute commitment to our basically sound economic policies by:
- recognising the deepening skills crisis that faces South Africa;
- adopting a clear-cut and unambiguous new migration policy that encourages and welcomes the foreign investment which skilled immigration implies;
- opening the door to any skilled, entrepreneurial and honest person who wants to come to South Africa;
- implementing an effective communication strategy to inform and educate South Africans about the benefits for all of such immigration;
- by so doing counteract the fearful and insecure ‘insider-outsider’ concerns which are an undercurrent in policy thinking both inside and outside of parliament; and
- insisting on effective and transparent implementing machinery .
Such a new immigration policy will impose a great burden of leadership but leadership is the one resource with which South Africa is well endowed. Strong political leadership is crucial to the new policy’s success. Political leaders must:
- differentiate clearly in public communication between skilled and unskilled migration, and also legal and illegal migration into South Africa;
- adopt the CDE’s recommended approach to skilled migration as this is essential for economic growth. As a part of successfully selling and implementing the policy, leaders must:
- inform the public about how the country can benefit from skilled newcomers;
- underscore and stress the need for migration to stimulate economic growth;
- assure the public that skilled migrants do not take jobs from South Africans as we have yet to produce sufficient skilled people for all our economic, training and educational needs;
- reassure citizens of the government’s commitment to effective education and training for all South Africans;
- explain that migrants will have to obey the laws, support themselves and pay taxes;
- educate South Africans about the inevitability of increased migration in a world of more porous borders;
- ensure through authoritative research, that the public debate is about facts rather than rumours, myths or speculation unsupported by evidence; and
- assess whether the government as a whole is doing enough to keep skilled people in the country.
What South Africa requires now is a clear-cut and unambiguous policy, supported by strongly reasoned arguments which are backed by all members of the Cabinet. We need to remove all restrictions on skilled people from anywhere in the world moving to South Africa and simultaneously mount a determined campaign to attract skilled foreigners to the country. The president needs to back the minister of home affairs in adopting a positive attitude on this critically important issue.
Whose interests are being served by this ambiguity, hesitation, and delay?
– Ann Bernstein, Acumen