to reduce isolation. Investment in and building of transport infrastructure in themselves are not youth specific interventions, but do contribute significantly to integrating young people into the labour market. Further, improving the road network often translates into a reduction of transport costs as young people go out in search of work.
The development of a housing market to ease the movement of families, which would include young people, is a strategy that has potential to counter location-related market failure. Development Finance could contribute to this strategy through the development of a low-cost housing scheme. The Department of Human Settlements has embarked on a similar programme namely; the Finance Linked Individual Subsidy Programme (FLISP). FLISP targets an income range of R3 501 to R15 000 per month supporting qualifying families with a once-off down payment provided that they have secured mortgage finance to acquire a residential property for the first time (DPME, 2014). Leveraging economies of scale for such initiatives is crucial if a real dent in youth unemployment is to be made.
8.7 Special Economic Zones
Special Economic Zones (SEZs) are commonly known as a tool to attract foreign (mostly) and domestic investment in exporting industries. The ‘special’ in SEZs can come in the form of tax incentives, free repatriation of profits, provision of infrastructure and even exemption from some elements of labour laws to the foreign firm. Developing countries, including South Africa, have latched onto the idea of SEZ and this has borne the fruit of creating jobs in clothing, textile, and light manufacturing industries. SEZs are particularly relevant for this discussion because they can lead to a fast creation of job opportunities for unskilled and particularly young people.
The state of Penang in Malaysia is one of the regions that has seen substantial employment benefit through SEZs, attracting large investments into the high-tech manufacturing industry. The number of manufacturing plants in Penang has increase from 31 in 1970 to 743 by 1997. In that period, the number of people employed has also grown from approximately 3000 to nearly 200 000 (ILO, 2006).