From the word go, the Covid-19 crisis was always going to be about the future, if only because its biggest impact – the economic one – would outlast and far exceed the health threat.
The main reason is that the crisis brought on by the pandemic came on top of South Africa’s pre-existing economic crisis of almost nil economic growth, high and rising unemployment, growing government debt, and a stubborn attachment to policies guaranteed to exacerbate all of the above.
But a third crisis-in-the making now looms: that South Africa’s recovery will depend on a weakened state – which is both ideologically hostile to the market and incapable of running essential services, from electricity supply and commuter transport to schooling and municipal utilities – playing a bigger role in the economy.
For many, perversely enough, this makes absolute sense. If, as is true, the private sector has suffered a body blow, they ask, who but the state can marshal a national recovery that serves a common rather than just a ‘commercial’ interest?
This reasoning is aligned with and perhaps wells from the sentiment expressed most forcefully in the early weeks of the lockdown (though perhaps less so more recently – as the humanitarian impact of the lockdown has become unignorable) that ‘lives matter more than money’. Arguing otherwise was guaranteed to attract accusations of being heartless and uncaring.
Yet, the case made by the Institute of Race Relations – and, indeed, even President Cyril Ramaphosa – for seeing ‘lives and livelihoods’ as an indivisible proposition is today less controversial in the face of growing evidence of the gathering humanitarian disaster, and the tragic human costs in a failing, fragile economy. This failure can reasonably be predicted to be lasting.
We have only to consult the open letter to President Ramaphosa by academic and former Public Protector Thuli Madonsela, to acknowledge what she describes as ‘questions about whether the draconian restrictions, which devastated the economy and social wellbeing, were the best options the government had’.
Madonsela writes: ‘How long will the cry of the young people in villages and townships – whose self-employment has ground to a halt, their unregistered businesses ineligible for loans and salary relief – go unheard? While the R350 basic income grant for the unemployed is fantastic, how long will it take to reach the poverty hotspots?
‘Instead, we read of food parcels being delivered randomly in a process tainted by corruption.
‘Cold comfort’
‘And if that R350 does arrive, it is cold comfort for Moses the parking attendant and Meko the part-time gardener or others doing casualised labour who still make twice the amount the Unemployment Insurance Fund would pay out — even if they were registered as employees.’
Similarly, the detailed assessment of emergency food provision by Professor Jeremy Seekings, director of the Centre for Social Science Research at the University of Cape Town, makes for sobering reading.
He begins: ‘The national government comprehensively failed to feed poor people during the lockdown imposed on them. Parliament has done nothing to hold the government to account. It has been left to civil society – individuals and organisations, as donors and as volunteers – to fill the gap, with some assistance from provincial and local governments. National government should be ashamed. Civil society deserves much, much praise.’
Seekings concludes: ‘It is difficult to avoid the conclusion that the national government had no plan, shut down its massive school feeding programme and impeded its regular food parcel scheme, has failed to provide much funding for food parcels and has played almost no part in delivering them to poor people.’
As the weeks pass, however, the more critical question is what comes after, and to whom the country might turn to deliver a recovery.
If not the state, who else?
The possibly unlikely advice of the Financial Times in the first week of April was that state intervention was not only likely but desirable.
It said in an editorial: ‘Radical reforms – reversing the prevailing policy direction of the last four decades – will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.’
Jarring
Writing elsewhere, I suggested that at a time in world history when more people are free from autocracy, and free from want because they live in societies in which the power of the state to make choices for them has been rolled back, the FT’s prescription was jarring.
But should it be? Why should democratically elected governments that are held to account not be effective in delivering the goods, or be trusted to be able to overcome vulnerability and inequality?
In fact, I argued, the real test of the good society, one that is at once free and fair, is its reliability, its trustworthiness and its capacity to perform consistently well.
Reliable societies, I wrote, ‘are not immune to catastrophe or error, to injustice or failure, but their underlying if unwritten contract is the best demonstrable antidote: openness, dynamism, capacity to adjust, freedom to choose and change, and, importantly, a lively, voluntary commitment to the common interest of preserving and using these things well’.
Just this week, the Financial Times reported the unexpected gain of 2.5 million jobs in the United States (lowering the unemployment rate to 13.3%) in an economy that suffered no fewer than 20 million lay-offs in April. The germinal growth of the first week of May came as ‘some of the hardest-hit industries began hiring workers again, including in leisure and hospitality, construction, education and healthcare, and retailing’.
It is possible that these developments cannot sensibly be separated from the United States’ mammoth state stimulus.
But could we imagine the same happening in South Africa?
‘Political brains’
There’s a hint of an answer in the comment this week by columnist John Dludlu: ‘To his credit, Ramaphosa openly recognises that the SA state — especially the professional cadre — is far from effective and efficient. Through smart partnerships with the private sector this problem can be resolved, as has been done with the disbursement of unemployment benefits. But what he rarely talks about is whether he has the best political brains in his executive. For, if this were the case, the public schools would be producing children who can read, write and think, and the high-demand spectrum would long have been released.’
What is missing – and the effects will be exacerbated should the African National Congress’s statist economic thinking become yet more entrenched – is the reliability that wells from the dynamism of social, political and economic freedom.
It has to be chosen, and it is South Africa’s fundamental choice today.
[Picture: Vek Labs]
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