How foreign skills can help SA grow | Fin24

How foreign skills can help SA grow

Jan 18 2016 10:49
Johan Fourie
Johan Fourie, associate professor in Economics at

Johan Fourie, associate professor in Economics at Stellenbosch University. (Picture supplied)

Last July my university advertised a tenure-track position in the Humanities. We recruited widely and, in line with our goal of positioning Stellenbosch as an internationally reputable university, appointed a US citizen with a PhD from Oxford.

Then the process of applying for a visa started. It has been more than six months since her appointment. Although she was due to start in September, she has had to return to the US, where, as I write in mid-January, she is waiting for feedback from the department of home affairs.

She is not alone. Across SA, universities and corporations are lamenting the slow speed at which visa applications are processed.

Since the amended Immigration Act was passed on 22 May 2014, it has become increasingly difficult to obtain a work visa, even for foreign spouses of SA citizens. Part of the reason is that the new process requires communication between the departments of home affairs and of labour, with the latter needed to verify whether the skills are indeed ‘scarce’.

This is all the more saddening in a country so desperately in need of all kinds of skills. Those in favour of tougher laws against skilled immigration fail to recognise the immense shortfall in skilled workers across all sectors of the economy. The rapid growth of the SA economy since 1994 has created a huge demand for skilled workers, with institutions of higher learning unable to keep up with demand.

This is clear from a look at unemployment rates. Stellenbosch University economist Hendrik van Broekhuizen calculates that the unemployment rate for South Africans with at least a bachelor’s degree is a low 5.9%.

Black graduate unemployment is slightly higher at 8.6% because black students are more likely to enrol for courses in the arts, humanities and social sciences, and attend formerly disadvantaged universities, where the quality of degrees is perceived to be lower.

But even an 8.6% unemployment rate is vastly superior to the aggregate broad unemployment rate of 41% for black South Africans.

Yet despite employers’ need for skilled workers, government seems eager to do everything in its power to isolate SA from the international labour market. According to Gary Eisenberg of law firm Eisenberg de Saude, more than half of all immigration applications have been refused since the new law was enacted.

He estimates that foreigners can wait anything between five and 12 months for a decision, and then a similar period for appeals. Those awaiting applications or appeals after their visas have expired can be declared ‘undesireable’, and prohibited from returning for five years.

If there is a country that should understand how isolation from the global talent pool is bad for growth, it is SA. Apartheid and its discriminatory education policies meant that only a sliver of the population was acquiring the skills necessary to expand the manufacturing and services sector, and grow the economy.

After democracy, the need for skills became acute as firms (and universities) had to compete for export markets in a rapidly globalised world, and for a skilled elite that was increasingly mobile.

Despite the fact that universities have trained large numbers of black graduates (there are now more black graduates in the labour market than white), the inequalities in the demand for skilled and unskilled workers have largely remained, as the unemployment figures suggest.

That’s why government’s attitude to immigrants is so baffling. Allowing skilled immigrants to work in SA – and making their application process as easy as possible – is what economists like to call low-hanging fruit: one of the easiest ways to significantly improve the prospects of the SA economy.

Of course immigrants should not simply substitute for training South Africans too. But denying skilled immigrants the opportunity to work is hurting the ability of the next generation of South Africans to acquire the skills necessary to compete in the global economy.

That’s exactly the reason why we appointed an Oxford-educated lecturer. The best university departments are those with a diverse faculty who are able to offer their students access to minds trained in the best universities in the world.

Such professionals often bring an international network through which different avenues for scholarships and new outside sources of funding can be made available to local students.

They are the ones to push their SA colleagues to the boundaries of science, and help them develop new theories, invent and innovate.

And they are the ones who will train a new generation of South Africans who can not only participate, but prosper in the economy of the future.

Johan Fourie is associate professor in Economics at Stellenbosch University.

This article originally appeared in the 21 January 2016 edition of finweek. Buy and download the magazine here.