LLEWELLYN KRIEL,
HEYWENA GUEST EDITOR/BUSINESS DAY

UNEMPLOYMENT in the industrialised world will hit its highest level since the Second World War next year, surpassing the present peak. Moreover, the global economy seems likely to make only a timid recovery next year, the Organisation for Economic Cooperation and Development (OECD) said yesterday, reports South Africa's Business Day today.

This enormous number poses huge threats, especially in developing countries lagging in economic recovery, as unemployment and life-threatening addictions invariably go hand in hand, warns the SA Addiction Action Campaign. "When people are under such severe pressures, they invariably seek solace in substance abuse such as alcohol and drugs and risk what little financial resources they may still have in quick-fixes like gambling," warns the AAC's Warren Whitfield. "These behaviours, aggravated by crushing social pressures, quickly spiral into full-blown addictions, not to mention other critical anti-social behaviours such as crime, violence and suicide."

Whitfield says that already at least 1.5-million unemployed South Africans have become so desperate that they have completely given up hunting for jobs, preferring the "easy way" of depending on social grants - "and SA's social grant system is dangerously precarious at best" - and money from other sources, including illegal ones.

Joblessness among members of the OECD could jump by more than 25-million people at its peak — reaching a record rate of almost 10% next year, the Paris- based group said in a report.

This is a nearly 80% increase in the number of unemployed, compared to 45% in the recessions that started in 1973 and 1979.

"As this crisis ripples through an already weakened global economy, its effects will, as always, be most severely felt in developing countries. And most of those are in Affrica," Whitfield warns. He points out that the continent's economic super-power is South Africa, itself classed along with India as an "emerging" economy, but not yet "developed". "Already we are seeing wave after wave of desperate refugees from SADC countries - Zimbabwe, Mocambique, Zambia, Malawi and even Angola - swarming into South Africa. It stands to reason that as pressures mount on the economies of those countries, the flow of economic refugees will gather momentum.

"And that could spell catastrophe in a country ill-equipped to handle its own domestic crisis ahead of next year's FIFA Soccer World Cup when the OECD predicts on a 'timid' recovery," he says.

The global economy is showing signs of recovery from the worst slump since the Second World War. As Group of 20 leaders prepare to gather in Pittsburgh next week to consider reversing stimulus programmes, the organisation urged them to give priority to plans to reduce unemployment. "And their focus, while justifiably on their own affairs, must include the developing world'" urges the AAC.

“History says that jobs lag the recovery, and the deeper and faster the jobs were lost, the more it lags,” OECD chief Angel Gurria said. “Employment is the bottom line in the current crisis. We cannot claim victory simply because we see indicators of a recovery picking up and we should not just assume that growth will take care of this.”

OECD countries entered the current recession with their lowest collective unemployment rate since 1980 — partly as a result of labour-market liberalis ation intended to create jobs.

The result may be a quicker jump in unemployment now, because more workers have temporary or part-time contracts, with fewer benefits for those without jobs, the OECD said. "Those conditions are the most fertile for seeing an unprecedented spike in addiction, drug and alcohol abuse, irresponsible and uncontrollable gambling and the whole panoply of social ills that invariably accompany such circumstances. South Africa, for one, is unprepared and ill-equipped adequately to deal with such a national disaster," says Whitfield.

Even so, the organisation urged governments to preserve reforms and focus funds on programmes such as retraining rather than channelling money into early-retirement programmes that would shrink the size of the labour force.

“Large numbers of job losers will require income support and re-employment assistance in the short run,” the report said. “It is also important that it be provided in a way that minimises the risk of dependency on benefits.”

Unemployment rates among OECD members range from a low of 3,3% in the Netherlands to 18,1% in Spain, according to June figures. The US unemployment rate was 9,5% — above the European Union rate of 8,9%. Nearly 15-million people have joined the ranks of the jobless since the end of 2007, the OECD said.

“There is great uncertainty … but labour market conditions appear set to deteriorate further in the coming months,” the report said. It forecast “a rather muted recovery surfacing only in the first half of 2010”. With Bloomberg and Sapa-AFP

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