Rian Malan, author of the report and research fellow at the IRR, says that through such self-created employment, only a few foreigners compete with locals for formal jobs.
Tuesday March 14, 2017
By Thuso Khumalo
FILE - A man holds a poster reading "we stand against xenophobia" during a march in Johannesburg, South Africa, April 23, 2015.
JOHANNESBURG — At the height of the current xenophobic violence in South Africa, new research has shown that immigrants make substantial contributions to South Africa's economy. A report released by the South African Institute of Race Relations, or IRR, shows that instead of attacking immigrants, South Africans could learn entrepreneurial skills from them.
The report, titled "South Africa's Immigrants, Building a New Economy," reveals that most immigrants have relied on their entrepreneurial skills and hard work to survive in the country. The report says the immigrants, largely from Somalia, Ethiopia, Bangladesh and Pakistan, operate 80 percent of the backyard grocery shops at homes owned by South Africans.
For South African homeowners living in poor townships, these grocery shops provide a source of income from the rent the immigrants pay to run the businesses.
Other immigrants have combined their financial resources to start small businesses. Some of these have grown into large wholesale stores that are now competing with well-known establishments.
"Foreigners arrive here. They have no right to be here. They have no papers, et cetera. They are desperate. They have no choice. They can't go back home," Malan said. "And, against all odds, they have created a situation where their unemployment rate is half of what South Africa's unemployment rate is. By virtue of hard work and keeping their prices low and providing good service to the people, they are making inroads in the market."
The research also found that immigrants who are not able to become self-employed have opted to work in restaurants, construction and farms where they are paid very low wages. The report, however, says even in these jobs, they have improved their economic conditions, as well as the country's.
Kerwin Lebone, analyst at IRR and head of the Center for Risk Analysis, says if South Africans commit to learning from these foreigners, they will succeed despite difficult economic conditions.
"Very, very industrious also in finding opportunities," Lebone said. "There is no sense of entitlement. When there is competition they fight it economically, positively by offering lower prices rather than resorting to violence when there is encroachment of territory in terms of competition, but they are showing industriousness in response to market conditions."
In 2008, 2015 and this year, xenophobic violence erupted in South Africa with locals accusing foreigners of taking their jobs and committing crimes. Last month, numerous shops and homes were looted and burned in Pretoria, and foreign residents were attacked. Nearly 140 people were arrested.
Immigrants also come from Zimbabwe, Mozambique, Lesotho, the Democratic Republic of Congo, Malawi and Nigeria. Many Pakistanis are now competing with Somali nationals in running small grocery shops throughout the country.
Most of these immigrants have fled political instability, war and poor economic conditions in their home countries.
The report urges policymakers in South Africa to set up systems that will help citizens benefit from the immigrants who appear to have adapted so well in a country with 27 percent unemployment.