By This past weekend, I attended the Kgalema Motlanthe Foundation (KMF) Inclusive Growth Forum in the Drakensberg, and boy, was it filled with excellent inputs from across the spectrum.
The overall theme of the gathering, which meets every year, was “dialogue among equals”. The point of the dialogue is to see whether a cross-section of South Africans can not only identify the various challenges faced by society but, more importantly, whether we can coalesce around effective solutions.
Needless to say, much of our concentration over the next few days was located squarely on the economy. “Get that right, and all else will follow,” as the old adage goes, but a few participants also drew our attention to other equally important matters.
Constant scenario planning
Former statistician general Pali Lehohla, for instance, told us constant scenario planning was critical, not only to check in as to where we were as a society but also once we knew which scenario was relevant, we could more appropriately and factually make policy choices.
Another participant informed us to be wary of the “sovereigns dilemma”, in reference to Chinese scholar Yuhua Wang.
Essentially, the theory holds that strong states have short life spans and weak states have longer life spans. You might ask why?
Wang argues strong presidents with a strong central government that can dominate regional and local governments or elites tend to build strong central governments and this inevitably leads to growth and prosperity. But it comes at a high political cost because those regional and local elites resist the central state. They do their best to emphasise regional autonomy and to facilitate regional growth and prosperity. As a result, strong states are short-lived because regional and local elites resist.
On the contrary, weak states are where power devolves down to regional and local elites so that growth and prosperity do not only reside at the central level.
I found it interesting because in the South African context, one can argue the Mbeki administration was much like the strong central state, and institutions such as the Presidency, SARS, SA Reserve Bank (SARB) and National Treasury, among others, were made to be strong indeed.
The speaker then tells us that, in his opinion, Polokwane was a massive strike back at this centralisation of power from regional and local elites. Now, if this theory holds true in our context, then according to the speaker, perhaps what we need to consider devolving more and more powers to regional and local elites.
Five myths
Perhaps the mandates of energy, water, law and order, health and education, to mention but a few, should shift to regional and local governments and perhaps then we might see better progress in the future. Continuing on the current trajectory in wanting to build a capable, centrally powerful state will lead to more resistance and possibly civil unrest.
Let’s try something different and find our way out of this “sovereign dilemma”.
When it came to the turn of the governor of the SARB, Lesetja Kganyago to speak, he simply wanted to debunk five myths.
- First, there are no costless trade-offs. He indicated, somehow, South Africa is special because we can have more of everything, and it does not matter whether the resources are there or not. We want, we get, and constraints do not matter.
- Second, the post-apartheid macroeconomic reform has been a neo-liberal programme.
- Third, we can borrow our way out of poverty.
- Fourth, there is a trade-off between having a stable macroeconomic framework and making progress with respect to development in the long term. He states he cannot think of any country that has successfully developed in an environment of macroeconomic instability.
- Fifth, if we have problems, we must just break certain institutions. Currently, we see many pointing at the SARB and National Treasury as the problem. It’s as if we haven’t learned anything these past few years about destroying institutions.
In other words, Kganyago reminds us of decisive action is worth short-term costs. There are no such thing as costless trade-offs.
So, declining living standards and growth levels well below the global average is today the norm. What to do about it?
The governor then reminds us that if we do not have a growth agenda then we will not reform and create jobs. He equally debunked the myth of a so-called neo-liberal agenda in the mid-1990s.
Very little privatisation took place. State-owned enterprises in fact remain in state hands and lots and lots of money have been pumped into them.
He also said there is a huge expansionary social welfare system for the poor, and yet, the government has meted out tough policies on our poor.
Furthermore, because of state capture, there was more spent but far less impact. He concluded the bank must be more active in addressing these challenges. His main message, however, was that strong institutions matter, and stronger institutions matter more. Hands off our institutions, especially those that work well.
The delegates then concerned themselves with pertinent matters around local government and municipalities, local economies and town planning as well as finding new pathways in education and skills development.
A much-talked-about research paper was one that was compiled by Michael Sachs from the Southern Centre for Inequality Studies at Wits.
Shrinking teacher numbers
Among many things, one of the most concerning findings was that our teachers’ numbers are shrinking, which means larger pupil to teacher ratios in the future and less and less spending on Early Childhood Development going forward. This begs the question; how do we fix this, and can we afford free higher education?
We then concerned ourselves with how to “future proof”. I floated the idea that for as long as we have a dual system in South Africa, one that is private and the other that is public, can we really future proof? Because for as long as the middle class have an “opt out” option, will we really fix the public sector challenges in earnest?
The gathering concluded with youth and democracy.
Former deputy finance minister Mcebisi Jonas had earlier asked the question of how and what must be renewed, which I would like to reflect on.
According to author Sizwe Mpofu-Walsh, new means new. Not breathing new life into the old or the dead. Not renew either but something new. A new republic! A second republic, if you will.
Mpofu-Walsh holds the last 30 years was a good experiment, but it has failed. It did not deliver the desired outcome of a better life for all, and so we need a new and fresh approach. And yes, since we are talking genuinely of new, that does mean also revisiting the Constitution, private property rights, the land question, electoral reform, and governance structures to mention but a few. All must be on the table; there can be no “no go” areas.
Mpofu-Walsh reminds us France has gone through numerous Republics over the last 200 years, and so too have Brazil and China. The list is endless. They underwent these fundamental changes because they had to, because the existing system did not deliver what was required for their people.
Remember, the well-known saying, Mzansi, often misattributed to Einstein that insanity is doing the same thing over and over and expecting different results. Let’s take a leaf from the Inclusive Growth Forum and its many inputs. Let’s also take stock of the many recommendations from the state capture report calling for many reforms and for new ways of doing things.
We must hit the reset button, and we must do it fairly quickly, or else we will perish as a nation.
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