Vol.5 No.17, 30 August 2005
On Holiday With Echoes of Home
South Africans can take heart from knowing our struggles are not unique. A visit to Britain and trips to France and Italy engender much déjà vu. There are beggars and homelessness in all the cities; and ordinary citizens talk of insecurity over employment, ghost towns in the countryside and young people having to leave to find employment somewhere else.
Meanwhile at the top, as in South Africa, big business people and government talk up the economy, pointing to low inflation and interest rates, high street shopping statistics, housing market revivals. They make much of the areas where their own country is doing better than the rest of Europe – a comparison that is irrelevant if you live at the bottom. The view from the top seeks overall trends rather than current reality, and the comforting reflection that the poor are always with us has become common in the way it was not three decades ago.
For indeed the poor are with us – as they were not three decades ago in western Europe. The terrible London transport bombings have produced some admirable self-reflection. For instance, there is a new real attempt – at least in the quality media – to understand what it is like to be Moslem in the UK. Muslim thinkers and writers are being listened to, illustrating, of course, the wide variety of views within the community.
In that process, poverty is revealed. Only 43% of Britons from Pakistan and Bangladesh are employed, and 69% live below the government’s poverty line. Just as revealing are the equivalent figures for White British people, of whom only 76% are employed and 20% live in poverty.
So how does this square with official unemployment rates, varying but well below 10%, which we are given for Britain and other parts of Europe? The answer is that much of what is called employment – in Europe as in the US and South Africa – is in what South Africans call the second economy. Most does not give you a decent living. It produces what the Americans now officially call the ‘working poor’.
These jobs comprise small trading, or casualised jobs in catering, tourism and other ‘hospitality’ arenas. Their rates of pay are possible only because so many people have no other source of income. They are the product of the ‘flexible labour’ economies. That they are counted as officially employed is one source of the gnashing of teeth in trade union circles.
But there is one aspect of Europe that decidedly does not remind one of South Africa. It is the countryside where small and medium-sized farmers inhabit an idyll that is enchanting to experience, even as an outsider. Farms are diverse and versatile, producing often very localised produce. Every inch of earth is used, in complementary ways; and tourist facilities are dovetailed to that production. Small market villages are radiant with fresh variety and a sense of abundance. Dancing breaks out in the evenings.
OK, so I romanticise. They say much of France and Italy is farmed by huge single-crop agribusinesses, like virtually all of America, Britain and South Africa. The point is that none of this remaining delightful rural prosperity would be possible without the subsidies that go with the EU’s Common Agricultural Policy (CAP). The subsidies keep a lot of small people living well on the land. In places it even pays farmers to keep the land out of use for conservation and leisure walking.
The CAP is howled down by nearly everyone. It contradicts the ideology that only the free market should decide prices. It keeps taxes higher than they might be. And it protects European food products from competition from others like us. But it is very popular in the farming communities. For that reason it is here to stay: no politician will risk their political career to end the CAP.
Pascal Lamy, French former EU Commissioner, and now Director of the IMF, knows quite well he will get nothing but minor concessions on the CAP; but no doubt he will continue to pretend progress on that front, in order to get poorer countries to open our markets to competition. We should not hold our breath while he unravels the CAP.
The EU, in the person of former UK Minister Mandelson, now EU Trade Commissioner, has also shown its muscle in relation to cheap Chinese clothing imports. As I write 17 million pairs of trousers and 60 million jumpers clog European ports, because they are over the quota limit that Mandelson set for imports of Chinese clothing.
No one in South Africa will be surprised to hear that opening an economy to Chinese clothing heralds the end of the local clothing industry – in this case European. It matters not that ten years’ warning was given to enable adaptation. Adaptation is impossible at anything like reasonable conditions for clothing workers.
In the end South Africa will also have to impose quotas or tariffs to protect our economy. There is a new global understanding that the market is not infallible. It produces absurdities – like the Chinese jumpers and people starving while farmers fail to plant food because they cannot make a living if they do.
Free trade must give way to fair trade at all levels.
© South African New Economics Network 2006. Page generated at 17:23; 24 September 2006