News | Inequality / Social Struggles - Analysis of Capitalism - Gender Relations - Africa - Southern Africa - Corona Crisis South Africa Needs a “People-and-Womxn-First” Economic Stimulus Package

Otherwise, COVID-19 will push millions further into poverty


South African citizens placed under COVID-19 quarantine at The Ranch Resort in Limpopo Province, South Africa. CC BY-ND 2.0, Flickr / GovernmentZA.

The South African government has taken an exclusionary approach to millions of impoverished South Africans in its preparation to fight the economic impact of COVID-19. These economic measures are necessary for economic and food security of households to encourage social distancing. COVID-19, more commonly known as the coronavirus, will further expose low-income households to vulnerabilities by race, gender, and immigration status. In a context of high unemployment, inequality, and precarious health care institutions, as a post-COVID-19 global recession looms African economies face a greater economic threat—and South Africa is no exception.

Sikho Luthango works as a Programme Manager for Labour Relations and Economy at the Rosa-Luxemburg-Stiftung’s Southern Africa Regional Office, and holds a Masters in Philosophy in Public Policy and Administration from the University of Cape Town. This article first appeared in The Daily Maverick and is republished with permission.

Economies across the world are currently experiencing increased state intervention to fight the economic impact of COVID-19 in what can be described as “economic stimulus packages”. They are designed to prevent and mitigate excessive economic disruption, guarantee the functioning of essential sectors, and provide enough resources for vulnerable people who will lose their jobs and those who will be directly and indirectly affected. The latter, being the most neglected element in the South African context, potentially leaves millions questioning how they will survive this period, certainly presenting itself as a disincentive to follow the government’s “21-Day Shutdown” and its guidelines.

Better Than Nothing, But Not Enough

The economic stimulus package is a commendable initiative by the South African government to mitigate the economic risks of the coronavirus, and can be placed within a broader global context where other governments including the US, UK, Denmark, Germany, and Kenya have taken similar initiatives. Many countries are revisiting their national budgets and have dedicated roughly 1 to 5 percent of their GDPs to stabilizing the economy in the next three months.

South Africa’s current economic stimulus package is aimed at both wage protection and avoiding potential job losses as a consequence of largescale retrenchments as potential tax revenue—which also funds unemployment benefits—is threatened. It is imperative to ensure that workers retain their income and do not lose connections with their employers in an effort to delay the impact of the coronavirus on the economy. Although varying in degree and resources, COVID-19 economic interventions must be centred around protecting people and womxn. In the words of Grant Robertson, New Zealand’s Minister of Finance, the economic stimulus package should be about “putting people first”.

Putting people first means that above and beyond wage subsidies, funded sick leave (also known as “self-isolation leave”) should form part of current government economic initiatives and target all employed people. Ireland and Denmark recently announced that they would be giving workers paid sick leave to ensure that people can self-isolate without losing their income. Paid sick-leave is important to ensure that people comply with the 21-day shutdown, as for many people earning money for food and household essentials is a priority.

Furthermore, in prioritizing wage subsidies, the current economic interventions exclude informal sector workers like street vendors, domestic workers, sex workers, the childcare sector, caregivers, gig-economy employees, construction workers, and contract employees. These are jobs that cannot be performed remotely, and following health advice to self-isolate may be difficult. It is thus no surprise that the government opted to revisit social distancing regulations on 2 April 2020—about a week into the lockdown—and, among other things, allowed street vendors to trade once again. Making such an allowance not only puts the vendors at increased health risk, but also does not inspire confidence about the messaging around COVID-19 and social distancing. This is why the government should consider a stimulus package targeting the informal sector, to incentivize informal sector workers to self-isolate by qualifying them for unemployment benefits.

With an unemployment rate reaching 29 percent in the first quarter of 2020 and a youth unemployment rate above 50 percent, creating jobs for and stimulating the development of the youth should be considered an important task for the government. The pandemic may present opportunities for “shovel-ready projects”, which will allow people to work immediately. As the health and administrative system expands to meet the demands posed by the pandemic, the government should tap into its reservoirs of young, educated, and unemployed people beyond existing community healthcare workers, and train them to respond effectively and efficiently to the crisis.

Additionally, a reduction in VAT should also be tabled for consideration to increase household liquidity. Taken together, these measures are important, especially since the government—disappointingly—did not announce an increase in social grants. With schools closed and the National School Nutrition Programme suspended, children will look to their immediate families for nutritional needs, and the government should consider an urgent increase in the child-support grant.

No Womxn Left Behind

Beyond a “people-first” stimulus package, a gender-sensitive economic stimulus package is also necessary to protect marginalized people such as sex workers. The government should urgently heed the call by the Sex Workers Education and Advocacy Taskforce (SWEAT) and Sisonke, the national movement of sex workers, to be included in the government’s temporary relief scheme. This will require decriminalization and de-stigmatization of sex work if the government is to achieve an effective shutdown.

Sex workers not only face income loss, but must now also deal with an increased risk of violence from soldiers and police, and will be left without recourse due to the criminalization of sex work. They also face heightened health risks should they continue to operate in the shadows. The Ministry of Women, Youth, and Persons with Disabilities should take a lead in key government initiatives that affect womxn, although unfortunately this has not been the case so far. This department should be playing a key coordinating role in ensuring that womxn’s rights are represented across all departments and COVID-19 economic programmes.

International experience has shown that it is not an easy task to enforce a shutdown. For social distancing to be effective in South Africa, it must be centred around ensuring the safety and survival of the most vulnerable and marginalized social groups both economically and health-wise. Additional fiscal and administrative resources will need to be democratically and transparently mobilized in consultation with key stakeholders to prevent what could possibly become a humanitarian and economic crisis in the country. The social distancing discourse should be strengthened and lockdown guidelines should not be abandoned. However, if the government fails to take a holistic approach rooted in an understanding of the South African reality, enforcing a lockdown will become increasingly difficult and the virus will continue to spread.