SA’s national debates are stuck on how the past affects the future, while Asian countries have thrown off the past by creating value
Horrific education outcomes limit growth prospects, yet this encourages the poor to support the governing party as their reliance on the government deepens. More surprisingly, the high end of our national debates also accommodates unaffordable delusions that suit the ANC.
Education results can’t quickly change, whereas SA’s national dialogue can be urgently upgraded, either as a response to a full-blown crisis or, preferably, to avoid one.
None of SA’s public or private sector leaders is offering a credible growth plan, while a fractured and largely corrupt governing party, which shows scant capacity to right itself, is about to be freshly mandated by voters. The core impediment blocking progress is tolerance for politically expedient misconceptions.
The policies of wealthy and high-growth economies are constantly influenced by competing with, and often emulating, the best policies of neighbouring countries. SA lacks such influences. Rather, the less tainted among the ANC’s policymakers religiously delude themselves and others that their party’s policies can advance the interests of the marginalised masses. But they can’t.
Instead of considering what has succeeded elsewhere, these top decision-makers still see themselves sitting upon a post-apartheid morality perch. Electoral successes further embed a misguided sense of righteousness. Delusions inspire more delusions.
Leading critics lambaste corruption and education failures but they are deterred from unpacking the deeper economic disconnects by the persistence of today’s synonym for apartheid’s legacy: inequality. Until inequality’s policy hegemony is toppled, the effectiveness of SA’s national dialogue will be subverted by false beliefs.
Inequality has been plummeting globally as many hundreds of millions of previously poor people in underdeveloped countries have escaped poverty by adding value to products and services sold to affluent consumers in developed countries. However, media organisations prefer to highlight that inequality has been rising at the national level, within rich and poor countries. Yet such developments have little bearing on SA’s stark inequality.
SA is among the world’s most unequal countries because apartheid was followed by policies certain to entrench massive destitution. In this age of plunging global poverty, no-one knows how to tame it through focusing on inequality. Conversely, competent governments that focus on defeating poverty are nearly assured of success. It is not acceptable that this crucial insight is foreign to SA.
Famine and extreme poverty have been nearly extinguished. As reflected in analyses by World Bank professionals and economists elsewhere, within 10 years nearly 90% of the world’s extreme poverty will be in sub-Saharan Africa. This region’s extreme underperformance is mostly explained by patronage politics combined with a lack of integration into the global economy.
Contrary to serving as a regional role model, our political elites have imported, and expanded upon, this neighbourhood’s worst patronage and isolationist instincts — which are, of course, related. But it is not as if SA’s long-affluent have responded effectively. That the national dialogue is devoid of solutions reflects criticisms of the government focusing on symptoms with the root causes receiving little attention.
Tackling corruption and incompetence are necessary but insufficient. To produce a workable plan core misconceptions must be purged. In the absence of a coherent plan, ongoing stagnation will trigger populist upheaval followed by an accelerated decline.
Since bottoming out almost a decade ago at 60%, SA’s poverty has been ratcheting upward as we are now midway in what is likely to be back-to-back decades of per capita income stagnation. The more skilled have eked out minimal gains while the government’s redistribution reflexes have been overindulged, thus crimping long-term prospects.
The current trajectory is unsustainable politically and economically. Government and household debt levels are too high to fund domestic-led growth or to expand income transfer programmes. SA has no choice but to mimic the path that has slashed poverty across so many emerging economies: prioritising value-added exporting.
It used to be that isolated, patronage-captured countries could be sustainable if they had massive natural resource endowments. The core trends reshaping the global economy have eliminated this option while offering high-volume upliftment escalators for poor countries that are well governed and globally integrated. SA’s resource wealth is, in effect, fully mortgaged to support the nation’s 30-million poor people, while the world economy is downgrading its reliance on extractive activities.
The war on poverty has been won elsewhere through developing countries having a significant portion of their workers adding value to products and services destined for affluent consumers. This is incompatible with structuring a national patronage machine. That President Cyril Ramaphosa emphasised increasing exports in his state of the nation address earlier in the year reflects how the current path has ceased to be viable.
If SA was somehow situated in, say, Southeast Asia, the governing party’s ability to distort the national dialogue would be greatly constrained. Success breeds success, whereas this region lacks a globally relevant role model.
The apartheid-to-Mandela narrative was potent for Hollywood scripting and political depictions. However, from an Asian perspective SA’s black-white, good-evil dichotomies are simplistic and dismissive of broader historical insights. Apartheid was abhorrent, but does it rank among the top 100 atrocities of the 20th century?
Dozens of countries endured extraordinary injustices during the last century and they then learned from each other how to move on. Many of today’s most robust economies were once colonies. Recent history reiterates that it is not their pasts that limit people or countries. Our national dialogue is devoid of such messaging. Instead, isolation aids politicians who exploit the country’s difficult history.
The extent to which SA’s national dialogue is out of sync with global norms around economic development can be demonstrated with two words. The world’s top economists have no use for the term “beneficiation” as the concept was contrived from magical thinking. That the location of raw materials should be the determining factor for where production is situated is, in most cases, silly.
Conversely, “diffusion” of knowledge and ideas is central to economic development with formal education being just one avenue. Some of SA’s teachers are incredible, while most fall well short. The environment for most students is horrible. Some companies are great at training, while most aren’t. Blame mostly sits with the government, but the national dialogue rarely acknowledges that the 21st century has reinvented and accelerated how skills, knowledge and ideas are diffused.
SA’s national dialogue is broadly out of sync with how economies today develop. It is as if a country was being ravaged by a deadly virus and all its doctors were surgeons. Nearly all of SA’s many talented economists are narrowly focused, with capital markets featuring prominently. An isolated country that rejects global success norms needs the equivalent of a general practitioner to tackle false beliefs while co-ordinating insights from specialists. Commercial-minded development economists can act as GPs, but SA’s nearest equivalents mostly focus on redistribution programmes, not growth paths.
Even if the ANC’s infighting is favourably resolved after the election, the ANC is not going to reinvent itself to embrace a workable, high-growth plan prior to the national dialogue being upgraded. Sometimes countries, like families, can’t move forward without having difficult, reality-grounded discussions.