There is no doubt that the battle for a better South Africa is intensifying, and that resistance to deficient policy and failing governance – and the politicians responsible for both – is rising.
This is encouraging to all except the ruling party, which seems more determined to cling to power, at whatever cost to the people it’s meant to serve, than to contemplate any of the meaningful reforms that are now the only way to relieve the considerable burdens on South Africans, and to open the path to a brighter future.
But there is a risk that the growing certainty about things we are ‘against’ will distract us from focusing on, talking about, and making commonplace, what it is that we are ‘for’.
Equally, many may be all but immobilised by distress, apathy, disappointment or cynicism, and might be tempted by the fatalism of assuming that they are powerless in the face of the degeneration and atrophy that can seem too far advanced.
When so much is broken, some may wonder, what hope is there of fixing it, and where could you begin and hope to make a difference?
Indeed, the challenge is great – but a good place to start is to be certain of what a better alternative would be, and how to bring it to fruition.
This task is made a great deal easier by the comprehensive report published by the IRR a little over a year ago. Growth & Recovery: A Strategy to #GetSAWorking, written by IRR CEO-elect John Endres, is striking for offering ‘simple proposals’ that ‘can be implemented at no or very little cost’.
The report offers the tantalising prospect of enabling South Africa ‘to combat unemployment, poverty and inequality, live up to its great potential, and emerge as a prosperous middle-income economy by the 2030s’.
The proposals are founded on the plain idea that growth ‘is critically important for all South Africans’ as it ‘increases income levels, expands domestic markets, boosts government revenues, and generates new jobs’.
‘Static economic pie’
It points out that, as government policy ‘is often aimed at speeding up redistribution and wealth extraction, rather than growth’, any ‘different way of dividing up a static economic pie will never be enough to meet the needs of an expanding population’.
‘By contrast, if the growth rate could be raised to 7%, as the first edition of this paper called for in 2016, the economy would double in size within ten years and average GDP per capita would soar. Achieving such an ambitious growth target would be a great deal more challenging today than it would have been four years ago. However, given the right policies, it is achievable in the medium term.’
In essence, the proposals focus on steps ‘to remove impediments to entrepreneurial initiative and individual autonomy … which – if implemented – will help society as a whole move forward’.
‘The idea underlying all the elements of this plan is that what South Africa needs, more than anything else, is economic growth. Growth offers the only way to get people working and allow them to lift themselves out of poverty.’
The report identifies four elements needed for growth:
● attracting direct investment;
● maintaining and expanding infrastructure;
● creating a climate favourable to job creation; and
● implementing a programme of widespread economic empowerment instead of elite enrichment.
But three necessary conditions ‘are indispensable’ to the success of the four policy proposals:
● a firm commitment to property rights, implying abandoning plans such as expropriation without compensation, prescribed assets and the monopolistic nationalisation of the healthcare system;
● an end to race-based policies, including Black Economic Empowerment and affirmative action, and their replacement with meritocratic and race-neutral policies like Economic Empowerment for the Disadvantaged (EED);
and
● wide-ranging liberalisation of the labour market that removes barriers to entry for young and low-skilled individuals especially.
Practical ideas
The report includes, for example, practical ideas to free up and stimulate the small-business sector. It suggests creating an enabling climate for entrepreneurship and business start-ups by:
● Exempting small and micro businesses and new start-ups from all labour regulation;
● Turning a general (and multi-year) blind eye to small entrepreneurs in the informal sector who currently fall foul of tax and other business regulations;
● Introducing a permanent amnesty and fast-track compliance process for start-ups which want to become compliant with a new set of business-friendly regulations; and
● Outsourcing more and more of the functions of the state to the private sector through effective public-private partnerships that promote competition and improve efficiency.
The focus of these and other proposals falls squarely on giving South Africans ‘the opportunities they crave: real socio-economic empowerment and sustainable progress’.
Throughout, the emphasis is on ‘removing impediments to economic activity and following the principle of subsidiarity: putting decision-making power closer to where those decisions have an impact; ideally, in the hands of individuals. For example, the proposed voucher system would put public funds in the hands of disadvantaged South Africans to spend on goods like education, housing and healthcare instead of channelling them through a vast and inefficient bureaucracy’.
The report acknowledges that these plans, ‘while financially affordable, potentially carry a high political cost’ which, at least in the short term, ‘may make them unpalatable to politicians’.
But it points out that ‘the heavy financial burden of the plans put forward by other organisations, which propose that we spend our way out of trouble, falls on ordinary South Africans in the form of higher taxes, higher debt, higher inflation or outright dispossession’.
Clarion call
Its clarion call is that ‘(it) is time for a fundamental break with the ideology that has placed South Africans in this dangerous socio-economic situation’.
The testing challenge today is that the burden of advancing this argument rests on the shoulders of ordinary South Africans who must ultimately determine the future.
And it is the quality of the arguments made in favour of an alternative to the present conditions of crisis that will make all the difference.
There is no question, the battle is far from over – but part of winning it is being certain of what the fight is for.
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