THE IMMIGRATION AMENDMENT BILL Submission to the Portfolio Committee on Home Affairs by

1. THE IMMIGRATION AMENDMENT BILL Submission to the Portfolio Committee on Home Affairs by The Centre for Development and Enterprise Parliament 26 January 2011

2. INTRODUCTION CDE’s Perspective • CDE’S research on migration • 17 reports and submissions • Scores of additional background research reports • This presentation • SA needs much more skilled immigration • Current policy achieves the opposite • Amendment Bill may exacerbate the problem • Recommendations

3. HEADLINES FROM CDE’S LATEST RESEARCH CDE’s Perspective • SA cannot achieve 7% growth target unless we have a new approach to skilled migration • SA needs to import hundreds of thousands of skilled foreigners • Migration is a source of relatively cheap human capital – paid for by other countries • Current policy is failing the country • Global war for talent: SA should stop being a victim and start competing • SA’s national interest requires a bold new migration policy • Most important migration policy issue for our future is skilled migration

4. THE CASE FOR SKILLED IMMIGRATION • In search of innovation and economic growth, many countries want skilled immigrants • Demand will increase as countries seek to grow out of the recession • Examples • United States • Foreigners responsible for: • Quarter of all global patent applications • Founded more than a quarter of all US companies (Intel, Sun Microsystems, Yahoo, Google) • Germany • Business & government seeking to recruit 500,000 skilled foreigners per year over medium-term

5. SOUTH AFRICA NEEDS A MASSIVE INFUSION OF SKILLED PEOPLE • South Africa is desperately short of skills and cannot grow at 7% per annum without them. We need: • Skills to create jobs; Skills to create skills • SA’s skills shortage probably greater than official estimates • 2008: 502,000; 2007: 949,000 • Skilled people continue to leave SA • Reform of education and training takes a long time to deliver skills • OECD, Harvard panel, New Growth Path all agree: • If we want 7% per annum growth, we need far more skilled people • Migration policy is an economic policy issue

6. CURRENT SYSTEM FAILS • The number of work permits issued each year is far, far too low to meet SA’s needs • Inconsistencies and incoherence in approach to skils quotas • Dept of Labour estimates skills shortage of 502,000, but DHA made 36,000 quota permits available for skilled foreigners • Dept of Labour says country has shortage of 5,145 ‘electrical engineering draftspersons’;  Quota system allocates 500 permits • DHA quotas do not mention doctors, accountants, engineering managers, but finds room for 800 astronomers, astrophysicists, atmospheric scientists, space scientists

7. SA’S POLICY IS BASED ON MISGUIDED IDEAS • MYTH: We need to protect skilled South Africans from competition REALITY: Graduate unemployment is very low • MYTH: State can determine skills needs in a dynamic economy REALITY: This is impossible • MYTH: People only do jobs for which they have formal qualifications REALITY: Many people work in areas not defined by their formal qualifications • MYTH: Best to let skilled people in only when they have a job offer REALITY: Skilled people can make work for themselves • MYTH: We only want entrepreneurs who have millions to invest REALITY: SA needs all the entrepreneurs it can get • MYTH: Need to impose quota system to prevent country being flooded by engineers, doctors, plumbers, astronomers REALITY: We are more likely to struggle to attract skilled foreigners Being flooded with skills would be good for the economy

8. SA MUST BECOME A PLAYER IN GLOBAL LABOUR MARKET • We need: • Open, frank debate on SA’s skills crisis and the time it will take for domestic skills production to fill the gap • A re-conception of how we think about SA’s skills shortages • Global campaign to attract skilled immigrants from developed and developing countries anywhere in the world

9. SERIOUS CONCERNS ABOUT THE IMMIGRATION BILL • Why does SA need this Bill now? • What problem is it designed to solve? • The absence of clarity increases our concern • Core issues of concern: • Delegation of policy authority is too extensive • Changes are likely to make our policies more restrictive

10. THE DELEGATION OF AUTHORITY CREATES POLICY UNCERTAINTY • Delegations are extensive: • Definition of ‘critical skills’ • Definition of ‘national interest’ for business permits • ‘Prescribed requirements’ for granting of various permits • Determination of economic sectors for corporate permits • Such extensive delegation is inconsistent with good governance • Too much policy-making authority left to Minister and D-G • Uncertainty about how authority and discretion will be applied, now and in the future • Impacts on how officials apply policy • Impacts on prospective migrants • Impacts on prospective employers of skilled foreigners

11. THE BILL IS LIKELY TO MAKE MIGRATION MORE RESTRICTIVE • Some uncertainty because of delegations • BUT it appears to be more restrictive: • ‘Critical skills’ v ‘exceptional skills’ • Case by case determination • Business permits only if ‘in the national interest’ • Restriction of sectors in which businesses can apply for corporate permits • Requirement that change of status be applied for outside SA except in exceptional circumstances

12. CDE’S RECOMMENDATIONS • ‘First prize’ • No legislative changes until appropriate policy is in place • Send Amendment Bill back • Direct the DHA to drive a policy process, culminating in a White Paper, which would: • Recognise the importance of more open migration policies in pursuit of 7% pa growth • Create a much more open skilled migration policy

13. CDE’S RECOMMENDATIONS • If this Bill must be passed, minimise the risk of increased restrictiveness: • Direct DHA to lead a process of policy formulation aimed at creating a migration policy more consistent with the aim of sustained 7% per annum growth • Redraft provisions that suggest a more restrictive approach to migration policy • Direct that the definition of desirable skills be very, very broad • All tertiary qualifications • Anyone with substantial work/business/technical experience • Provide guidance to the DHA in the interpretation of the Bill so that officials’ discretion is exercised in the national interest when drafting regulations. • SA has a deep and broad skills crisis • SA should attract and recruit as many skilled foreigners as possible

14. CONCLUDING REMARKS • The purpose of this Bill is unclear • New policy should be in place before new legislation is passed • Our current migration regime is too restrictive and prevents SA acquiring the skills we need for rapid economic growth • The Bill is likely to make this worse • The Bill delegates too much authority to the Minister/D-G

15. For more information, and access to all CDE reportsGo to the CDE website:www.cde.org.za