FOREIGN EXPERIENCE IN AFRICA

A Foreign Experience:
Violence, crime and xenophobia
during South Africa's transition

by

Kasule Muhammad

Acknowledgments

Thank you to all who participated in this research project for sharing your stories and experiences. Thank you also to the following people:

Brandon Hamber and Piers Pigou for their supervision of the project. Craig Higson-Smith, Barbara English of Wordsmiths, and Brandon Hamber for editing the report. To the refugee facilitators for translating and transcribing the interviews, particularly Venancio Simoa, Mohammed Guillied, Aime Ndyisaba, Venancio Simoa and Sileshi Tegegne. CSVR staff, particularly Marivic Garcia, Frances Spencer, Mary Robertson, Graeme Simpson, Carnita Ernest, Lauren Segal, Sasha Gear, Nokuthula Skhosana, Tebogo Mafokoane, Goodwill Ditlhage, Bea Abrahams, Helen Hajiyiannis, and the Research Committee for all of their support, advice and assistance throughout this project. David McDonald and Anne Mitchell of the South African Migration Project for running a keyword search on the SAMP media data-base. Derek Hook, Wardie Leppan of the International Development Research Centre (IDRC) for his ongoing support of the Violence and Transition Project. A number of people have generously shared their knowledge about the 'foreigner field'. These include: Uli Albrecht, Florencia Belvedere, Abeda Bhamjee, Deborah Ho, Nicola Johnstone, Jonathan Klaaren, Ann Kirkman, Jody Kollapen, Zonke Majodina, Jennifer Parsley, Sally-Ann Peberdy, Jaya Ramji, Andrew Rens, Pumla Rulashe, Sally Sealy, Bertus Swanevelder, Joyce Tlou, AnaisTuepkar, Jacob van Garderen and Nicola Woodin.

This booklet was funded by International Development Research Centre (IDRC).

The Violence and Transition Series is a product of an extensive research project conducted by the Centre for the Study of Violence and Reconciliation (CSVR) into the nature and extent of violence during South Africa’s transition from apartheid rule to democracy. This series comprises a set of self-contained, but interrelated reports, which explore violence across the period 1980 to 2000 within key social loci and areas, including:

·         Revenge Violence and Vigilantism;

·         Foreigners (immigrants and refugees);

·         Hostels and Hostel Residents;

·         Ex-combatants;

·         State Security Forces (police and military), and

·         Taxi violence.

While each report grapples with the dynamics of violence and transition in relation to its particular constituency all are underpinned by the broad objectives of the series, namely:

·         To analyse the causes, extent and forms of violence in South Africa across a timeframe that starts before the political transition and moves through the period characterised by political transformation and reconciliation to the present;

·         To assess the legacy of a violent past and the impact of formal democratisation and transition on the contemporary nature of violence by researching continuities and changes in its form and targets;

·         To investigate the role of perpetrators and victims of violence across this timeframe;

·         To evaluate reconciliation strategies and institutions, such as the Truth and Reconciliation Commission, established to ameliorate future violence in South Africa;

·         To develop a macro-theory for understanding violence in countries moving from authoritarian to democratic rule, i.e. 'countries in transition', and

·         To contribute to local and international debates about reconciliation and justice for perpetrators and victims of gross violations of human rights.

Through these objectives, the Violence and Transition Series aims to inform and benefit policy analysts, government officials and departments, non-governmental and civic organisations, and researchers working in the fields of:

·         Violence prevention;

·         Transitional criminal justice;

·         Victim empowerment;

·         Truth commissions;

·         Reconciliation;

·         Human rights, and

·         Crime prevention.

As a country emerging from a past characterised by violence and repression South Africa faces new challenges with the slow maturation of democracy. Violence today is complex, dynamic and creative in form shaped by both apartheid and the mechanisms of transition itself. In order to understand - and prevent - violence during transition in South Africa and abroad an ongoing action-research agenda is required. Through this series the Centre for the Study of Violence and Reconciliation offers an initial and exploratory, yet detailed, contribution to this process.

SOLUTIONS TO UNEMPLOYEMENT

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What's the Solution to Unemployment?:

The solution for unemployment is, obviously, to create new jobs. Usually, a healthy economic growth rate of 2-3% is enough to create the 150,000 new jobs needed to keep unemployment from rising. When unemployment creeps above 6-7% and stays there, it means the economy isn't strong enough to create sufficient new jobs without help. That's when the government is expected to step in and provide solutions.

Monetary Policy:

The solution used first to address sustained high unemployment is monetary stimulus from the Federal Reserve. Expansive monetary policy is powerful, quick and usually effective. Lower interest rates allow families to borrow more cheaply to buy what they need, like cars, homes and consumer electronics. This stimulates enough demand to put the economy back on track. Low interest rates also allow businesses to borrow for less, giving them the capital to hire new workers to meet rising demand.

Fiscal Policy:

However, when monetary policy doesn't work, then fiscal policy is usually demanded. This means the government must either cut taxes or increase spending to stimulate the economy. Fiscal policy is usually slower to get started, since Congress and the President must agree on what should be done. However, it can be more effective once executed. It also provides much-needed confidence that the government will stimulate the economy and things will get better. Confidence is a crucial ingredient in convincing people to spend now for a better future.

Cutting taxes has a similar, but even more direct, effect as lower interest rates. It gives consumers more money to spend, increasing demand. It also cuts costs for businesses, which can use the cash to invest in their business and hire more workers. Government spending usually takes the form of jobs programs, where the government hires workers and businesses directly to build things or provide services. This acts like a tax cut, by providing consumers the cash they need to buy more products.

What's the Most Cost Effective Unemployment Solution?:

However, not all fiscal policy solutions are created equal. Dollar for dollar, what's the best investment that creates the most jobs? Several research studies show that the most cost effective solution is providing construction jobs for, of all things, mass transit. The next most cost effective is unemployment benefits, and the third best jobs provider is funding education. Tax cuts, whether payroll or across-the-board income tax, are less effective. What's the least effective jobs producer? Defense spending. Here's why.

Tax Cuts:

According to a U Mass/Amherst study, the most popular fiscal stimulus, across the board income tax cuts, is not the most cost effective. One billion dollars in cuts created 10,779 jobs, because only half the money ($505 million) workers received was spent. The rest was saved or used to pay down debts. (Source: UMass/Amherst, Robert Pollin and Heidi Garrett-Peltier, Department of Economics and Political Economy Research Institute, The Employment Effects of Military and Domestic Spending Priorities, October 2007)

It's more cost effective to provide businesses payroll tax cuts. A study by th-->

What's the Solution to Unemployment?:

The solution for unemployment is, obviously, to create new jobs. Usually, a healthy economic growth rate of 2-3% is enough to create the 150,000 new jobs needed to keep unemployment from rising. When unemployment creeps above 6-7% and stays there, it means the economy isn't strong enough to create sufficient new jobs without help. That's when the government is expected to step in and provide solutions.

Monetary Policy:

The solution used first to address sustained high unemployment is monetary stimulus from the Federal Reserve. Expansive monetary policy is powerful, quick and usually effective. Lower interest rates allow families to borrow more cheaply to buy what they need, like cars, homes and consumer electronics. This stimulates enough demand to put the economy back on track. Low interest rates also allow businesses to borrow for less, giving them the capital to hire new workers to meet rising demand.

Fiscal Policy:

However, when monetary policy doesn't work, then fiscal policy is usually demanded. This means the government must either cut taxes or increase spending to stimulate the economy. Fiscal policy is usually slower to get started, since Congress and the President must agree on what should be done. However, it can be more effective once executed. It also provides much-needed confidence that the government will stimulate the economy and things will get better. Confidence is a crucial ingredient in convincing people to spend now for a better future.

Cutting taxes has a similar, but even more direct, effect as lower interest rates. It gives consumers more money to spend, increasing demand. It also cuts costs for businesses, which can use the cash to invest in their business and hire more workers. Government spending usually takes the form of jobs programs, where the government hires workers and businesses directly to build things or provide services. This acts like a tax cut, by providing consumers the cash they need to buy more products.

What's the Most Cost Effective Unemployment Solution?:

However, not all fiscal policy solutions are created equal. Dollar for dollar, what's the best investment that creates the most jobs? Several research studies show that the most cost effective solution is providing construction jobs for, of all things, mass transit. The next most cost effective is unemployment benefits, and the third best jobs provider is funding education. Tax cuts, whether payroll or across-the-board income tax, are less effective. What's the least effective jobs producer? Defense spending. Here's why.

Tax Cuts:

According to a U Mass/Amherst study, the most popular fiscal stimulus, across the board income tax cuts, is not the most cost effective. One billion dollars in cuts created 10,779 jobs, because only half the money ($505 million) workers received was spent. The rest was saved or used to pay down debts. (Source: UMass/Amherst, Robert Pollin and Heidi Garrett-Peltier, Department of Economics and Political Economy Research Institute, The Employment Effects of Military and Domestic Spending Priorities, October 2007)

It's more cost effective to provide businesses payroll tax cuts. A study by the Congressional Budget Office (CBO) found that every $1 billion in payroll tax relief created 13,000 new jobs. The best place to give business tax relief is with small businesses, which are the key driver for 65% of all new jobs. (Source: CBO, "The Economic Outlook and Fiscal Policy Choices," September 28, 2010)

Spending Solutions:

The U Mass/Amherst researchers found that funding mass transit gives the most bang for the buck. One billion dollars spent creates 19,795 construction jobs. Another cost effective solution is spending on education. One billion spent hiring teachers creates 17,687 jobs. It has the additional benefit of adding an additional $1.3 billion into the economy, as more highly educated people get better jobs on their own, and are able to buy more things with the higher wages they earn. 

-->

What's the Solution to Unemployment?:

The solution for unemployment is, obviously, to create new jobs. Usually, a healthy economic growth rate of 2-3% is enough to create the 150,000 new jobs needed to keep unemployment from rising. When unemployment creeps above 6-7% and stays there, it means the economy isn't strong enough to create sufficient new jobs without help. That's when the government is expected to step in and provide solutions.

Monetary Policy:

The solution used first to address sustained high unemployment is monetary stimulus from the Federal Reserve. Expansive monetary policy is powerful, quick and usually effective. Lower interest rates allow families to borrow more cheaply to buy what they need, like cars, homes and consumer electronics. This stimulates enough demand to put the economy back on track. Low interest rates also allow businesses to borrow for less, giving them the capital to hire new workers to meet rising demand.

Fiscal Policy:

However, when monetary policy doesn't work, then fiscal policy is usually demanded. This means the government must either cut taxes or increase spending to stimulate the economy. Fiscal policy is usually slower to get started, since Congress and the President must agree on what should be done. However, it can be more effective once executed. It also provides much-needed confidence that the government will stimulate the economy and things will get better. Confidence is a crucial ingredient in convincing people to spend now for a better future.

Cutting taxes has a similar, but even more direct, effect as lower interest rates. It gives consumers more money to spend, increasing demand. It also cuts costs for businesses, which can use the cash to invest in their business and hire more workers. Government spending usually takes the form of jobs programs, where the government hires workers and businesses directly to build things or provide services. This acts like a tax cut, by providing consumers the cash they need to buy more products.

What's the Most Cost Effective Unemployment Solution?:

However, not all fiscal policy solutions are created equal. Dollar for dollar, what's the best investment that creates the most jobs? Several research studies show that the most cost effective solution is providing construction jobs for, of all things, mass transit. The next most cost effective is unemployment benefits, and the third best jobs provider is funding education. Tax cuts, whether payroll or across-the-board income tax, are less effective. What's the least effective jobs producer? Defense spending. Here's why.

Tax Cuts:

According to a U Mass/Amherst study, the most popular fiscal stimulus, across the board income tax cuts, is not the most cost effective. One billion dollars in cuts created 10,779 jobs, because only half the money ($505 million) workers received was spent. The rest was saved or used to pay down debts. (Source: UMass/Amherst, Robert Pollin and Heidi Garrett-Peltier, Department of Economics and Political Economy Research Institute, The Employment Effects of Military and Domestic Spending Priorities, October 2007)

It's more cost effective to provide businesses payroll tax cuts. A study by th-->

What's the Solution to Unemployment?:

The solution for unemployment is, obviously, to create new jobs. Usually, a healthy economic growth rate of 2-3% is enough to create the 150,000 new jobs needed to keep unemployment from rising. When unemployment creeps above 6-7% and stays there, it means the economy isn't strong enough to create sufficient new jobs without help. That's when the government is expected to step in and provide solutions.

Monetary Policy:

The solution used first to address sustained high unemployment is monetary stimulus from the Federal Reserve. Expansive monetary policy is powerful, quick and usually effective. Lower interest rates allow families to borrow more cheaply to buy what they need, like cars, homes and consumer electronics. This stimulates enough demand to put the economy back on track. Low interest rates also allow businesses to borrow for less, giving them the capital to hire new workers to meet rising demand.

Fiscal Policy:

However, when monetary policy doesn't work, then fiscal policy is usually demanded. This means the government must either cut taxes or increase spending to stimulate the economy. Fiscal policy is usually slower to get started, since Congress and the President must agree on what should be done. However, it can be more effective once executed. It also provides much-needed confidence that the government will stimulate the economy and things will get better. Confidence is a crucial ingredient in convincing people to spend now for a better future.

Cutting taxes has a similar, but even more direct, effect as lower interest rates. It gives consumers more money to spend, increasing demand. It also cuts costs for businesses, which can use the cash to invest in their business and hire more workers. Government spending usually takes the form of jobs programs, where the government hires workers and businesses directly to build things or provide services. This acts like a tax cut, by providing consumers the cash they need to buy more products.

What's the Most Cost Effective Unemployment Solution?:

However, not all fiscal policy solutions are created equal. Dollar for dollar, what's the best investment that creates the most jobs? Several research studies show that the most cost effective solution is providing construction jobs for, of all things, mass transit. The next most cost effective is unemployment benefits, and the third best jobs provider is funding education. Tax cuts, whether payroll or across-the-board income tax, are less effective. What's the least effective jobs producer? Defense spending. Here's why.

Tax Cuts:

According to a U Mass/Amherst study, the most popular fiscal stimulus, across the board income tax cuts, is not the most cost effective. One billion dollars in cuts created 10,779 jobs, because only half the money ($505 million) workers received was spent. The rest was saved or used to pay down debts. (Source: UMass/Amherst, Robert Pollin and Heidi Garrett-Peltier, Department of Economics and Political Economy Research Institute, The Employment Effects of Military and Domestic Spending Priorities, October 2007)

It's more cost effective to provide businesses payroll tax cuts. A study by the Congressional Budget Office (CBO) found that every $1 billion in payroll tax relief created 13,000 new jobs. The best place to give business tax relief is with small businesses, which are the key driver for 65% of all new jobs. (Source: CBO, "The Economic Outlook and Fiscal Policy Choices," September 28, 2010)

Spending Solutions:

The U Mass/Amherst researchers found that funding mass transit gives the most bang for the buck. One billion dollars spent creates 19,795 construction jobs. Another cost effective solution is spending on education. One billion spent hiring teachers creates 17,687 jobs. It has the additional benefit of adding an additional $1.3 billion into the economy, as more highly educated people get better jobs on their own, and are able to buy more things with the higher wages they earn. 

e Congressional Budget Office (CBO) found that every $1 billion in payroll tax relief created 13,000 new jobs. The best place to give business tax relief is with small businesses, which are the key driver for 65% of all new jobs. (Source: CBO, "The Economic Outlook and Fiscal Policy Choices," September 28, 2010)

Spending Solutions:

The U Mass/Amherst researchers found that funding mass transit gives the most bang for the buck. One billion dollars spent creates 19,795 construction jobs. Another cost effective solution is spending on education. One billion spent hiring teachers creates 17,687 jobs. It has the additional benefit of adding an additional $1.3 billion into the economy, as more highly educated people get better jobs on their own, and are able to buy more things with the higher wages they earn. 

e Congressional Budget Office (CBO) found that every $1 billion in payroll tax relief created 13,000 new jobs. The best place to give business tax relief is with small businesses, which are the key driver for 65% of all new jobs. (Source: CBO, "The Economic Outlook and Fiscal Policy Choices," September 28, 2010)

Spending Solutions:

The U Mass/Amherst researchers found that funding mass transit gives the most bang for the buck. One billion dollars spent creates 19,795 construction jobs. Another cost effective solution is spending on education. One billion spent hiring teachers creates 17,687 jobs. It has the additional benefit of adding an additional $1.3 billion into the economy, as more highly educated people get better jobs on their own, and are able to buy more things with the higher wages they earn. 

TYPES OF UNEMPLOYEMENT

Classical unemployment

Classical or real-wage unemployment occurs when real wages for a job are set above the market-clearing level, causing the number of job-seekers to exceed the number of vacancies.

Many economists have argued that unemployment increases the more the government intervenes into the economy to try to improve the conditions of those without jobs. For example, minimum wage laws raise the cost of laborers with few skills to above the market equilibrium, resulting in people who wish to work at the going rate but cannot as wage enforced is greater than their value as workers becoming unemployed^.Laws restricting layoffs made businesses less likely to hire in the first place, as hiring becomes more risky, leaving many young people unemployed and unable to find work

However, this argument is criticized for ignoring numerous external factors and overly simplifying the relationship between wage rates and unemployment — in other words, that other factors may also affect unemployment.Some, such as Murray Rothbard. suggest that even social taboos can prevent wages from falling to the market clearing level.

In Out of Work: Unemployment and Government in the Twentieth-Century America, economists Richard Vedder and Lowell Gallaway argue that the empirical record of wages rates, productivity, and unemployment in American validates the classical unemployment theory. Their data shows a strong correlation between the adjusted real wage and unemployment in the United States from 1900 to 1990. However, they maintain that their data does not take into account exogenous events.

Cyclical unemployment

Cyclical or Keynesian unemployment, also known as deficient-demand unemployment, occurs when there is not enough aggregate demand in the economy to provide jobs for everyone who wants to work. Demand for most goods and services falls, less production is needed and consequently fewer workers are needed, wages are sticky and do not fall to meet the equilibrium level, and mass unemployment results^.Its name is derived from the frequent shifts in the business cycle although unemployment can also be persistent as occurred during the Great Depression of the 1930s. With cyclical unemployment, the number of unemployed workers exceeds the number of job vacancies, so that even if full employment were attained and all open jobs were filled, some workers would still remain unemployed. Some associate cyclical unemployment with frictional unemployment because the factors that cause the friction are partially caused by cyclical variables. For example, a surprise decrease in the money supply may shock rational economic factors and suddenly inhibit aggregate demand.

Keynesian economists on the other hand see the lack of demand for jobs as potentially resolvable by government intervention. One suggested interventions involves deficit spending to boost employment and demand. Another intervention involves an expansionary monetary policy that increases the demand of money which should reduce interest rates which should lead to an increase in non-governmental spending.

Frictional Unemployment:

This is unemployment caused by people moving in between jobs, e.g. graduates or people changing jobs. There will always be some frictional unemployment.

Also high benefits may encourage people to stay on benefits rather than get work this is sometimes known as "voluntary unemployment"

Structural Unemployment

This occurs due to a mismatch of skills in the labour market it can be caused by:
a) Occupational immobility's. This refers to the difficulties in learning new skills applicable to a new industry, and technological change.

b) geographical Immobility's. This refers to the difficulty in moving regions to get a job.

c) Technological Change. If there is the developments of labour saving technology in some industries there will be a fall in demand for labour.

d) Structural change in the economy. The decline of the coal mines due to a lack of competitiveness meant that many coal miners were unemployed and they may find it more difficult to get jobs in new industries such as computers

Seasonal Unemployment

Unemployment tends to be higher during certain times of the year, either in summer or winter depending on the country. The UK government actually produce a seasonally adjusted unemployment figure to take this into account.