What we can do to stop SA catch­ing fire

CityPress - - Voices - Joel Net­shiten­zhe voices@city­press.co.za

Com­mon sense dic­tates that in­equal­ity is bad for so­cial co­he­sion, plus it is morally rep­re­hen­si­ble. But be­yond sense and sen­si­bil­ity, so­ci­etal well­be­ing, in terms of drug use, men­tal ill­ness, life ex­pectancy, teenage births, vi­o­lence and prison pop­u­la­tion, is worse in more un­equal so­ci­eties – af­fect­ing rich and poor coun­tries alike. It is an equal-op­por­tu­nity dis­ease.

In­equal­ity also af­fects the length of eco­nomic growth spells. Ac­cord­ing to an In­ter­na­tional Mon­e­tary Fund dis­cus­sion note, what sep­a­rates growth mir­a­cles from lag­gards is the abil­ity to sus­tain growth. Longer growth spells are ro­bustly as­so­ci­ated with more equal­ity in in­come dis­tri­bu­tion. What have been some of the trends in South Africa since 1994? In­come poverty has been de­clin­ing since the ad­vent of democ­racy. Func­tional dis­tri­bu­tion of na­tional in­come has wors­ened, and with it, in­come in­equal­ity.

The change in the share of na­tional in­come has not favoured the mid­dle class, even though their pro­por­tion of the pop­u­la­tion has in­creased.

Be­ing em­ployed does not, on its own, guar­an­tee an es­cape from poverty.

The in­equal­ity mea­sures show a de­clin­ing trend be­tween races, while it has shown a ris­ing trend within races – par­tic­u­larly among black peo­ple.

In­equal­ity has had im­pli­ca­tions for so­cial co­he­sion.

The first in­ter­ven­tion re­quired to deal with in­equal­ity is pro-poor growth and pro-growth poverty re­duc­tion. This must fo­cus on sec­tors with com­par­a­tive ad­van­tages and fis­cal mea­sures for young peo­ple and women. The rich are bet­ter able to take ad­van­tage of growth and also ben­e­fit from im­prov­ing value of ex­ist­ing as­sets. In the years of high growth (2003 to 2008), the un­em­ploy­ment rate was re­duced from 31% to 23%, but in­equal­ity still in­creased.

Ed­u­ca­tion and skills train­ing need to be cou­pled with growth strate­gies, oth­er­wise we will end up liv­ing with the ed­u­cated poor. Ad­di­tional mea­sures to the in­come pol­icy and min­i­mum wage must be con­sid­ered to limit wage dif­fer­en­tials.

Share-own­er­ship plans and profit-shar­ing schemes should be em­pha­sised, but must go along with ap­pro­pri­ate rep­re­sen­ta­tion, fi­nan­cial ed­u­ca­tion and trust-build­ing. There must also be a re­duc­tion in the cost of liv­ing for the poor – tar­get­ing the price of ba­sic ne­ces­si­ties, spa­tial plan­ning and bet­ter so­cial se­cu­rity.

What has also emerged from stud­ies is that pro­vi­sion of ser­vices can lose its value in the eyes of re­cip­i­ents if the in­come is­sue is not ad­dressed. For in­stance, un­em­ployed re­cip­i­ents of elec­tric­ity only use it for light­ing and even then they can­not af­ford the bills. Some ben­e­fi­cia­ries of sub­sidised houses rent them out and go back to liv­ing in shacks. You can have a sit­u­a­tion in which poor wa­ter pro­vi­sion, for in­stance, per­pet­u­ates poverty and in­equal­ity in the form of dis­eases – thus dis­count­ing the im­proved in­come.

The South African polity is es­sen­tially a sta­ble one, with the Con­sti­tu­tion ac­cepted across the board as the broad frame­work for the reg­u­la­tion of so­ciopo­lit­i­cal re­la­tions.

The over­rid­ing trend aris­ing from the 2014 elec­tions is that about 93% of those who voted sup­ported par­ties that em­brace the Na­tional De­vel­op­ment Plan (NDP).

Even though there has been progress in ad­dress­ing poverty and pro­vid­ing ba­sic so­cial ser­vices, in­equal­ity has not de­clined. The re­al­ity aris­ing from this is that, since 1994, South Africa has been in a del­i­cate bal­anc­ing act of pre­vent­ing the flammable so­cial tin­der of poverty and in­equal­ity from catch­ing fire. Be­sides so­cial de­liv­ery and the base ef­fects of move­ment of many black peo­ple into the mid­dle strata, hope was the stock-in-trade.

Poor state per­for­mance and cor­rup­tion are de­stroy­ing that hope. It is un­avoid­able that when there is a sense of repet­i­tive poor man­age­ment of al­le­ga­tions of cor­rup­tion within high lead­er­ship ech­e­lons, the le­git­i­macy of the state and the polity gets un­der­mined. Com­bined with weak ca­pac­ity of state in­sti­tu­tions, th­ese de­vel­op­ments can re­sult in a sit­u­a­tion in which the state as a whole starts pro­gres­sively to lose the con­fi­dence of the peo­ple. The hope that pre­vents South Africa’s so­cial tin­der from catch­ing fire can thus dis­si­pate.

If South Africa has to pre­vent the so­cial tin­der from catch­ing fire, it needs a turn­around in terms of in­clu­sive eco­nomic growth, ef­fi­ciency and ef­fec­tive­ness of “so­cial de­liv­ery”, and mat­ters of ethics in govern­ment and across so­ci­ety.

We need to avoid a re­duc­tion­ist ap­proach in re­la­tion to the dy­namic be­tween so­cial co­he­sion and so­cial com­pact­ing on the one hand, and at­tend­ing to the ma­te­rial is­sues fac­ing so­ci­ety on the other.

We can’t wait for ma­te­rial is­sues to be ad­dressed be­fore the coun­try at­tains so­cial co­he­sion. We need a min­i­mal level of so­cial co­he­sion to com­pact and move to­wards the NDP’s Vi­sion 2030.

Per­haps, in the midst of the dark cloud at­tached to shenani­gans in the po­lit­i­cal arena and the threat of rat­ings down­grades, there is a sil­ver lin­ing re­flected in co­op­er­a­tion be­tween govern­ment, busi­ness and labour: from min­i­mum wage to strike bal­lot­ing to agree­ments in busi­ness work­ing group. This may be the be­gin­ning of some­thing sig­nif­i­cant: the ac­ti­va­tion of com­bined so­cial agency. This is Net­shiten­zhe’s edited speech as part of the Ma­pun­gubwe In­sti­tute for Strate­gic Re­flec­tion de­liv­ered at the So­cial Co­he­sion Pol­icy Di­a­logue in

part­ner­ship with the De­part­ment of Plan­ning, Mon­i­tor­ing and Eval­u­a­tion

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