How does SA get back on the high road?
or many South Africans, the future is a perplexing place. The country appears to have lost its way in many respects and there are high levels of uncertainty about where the current policy direction will take us.
This is not a new feeling. The country has faced this a number of times before. The bewilderment that we are feeling now is not all that far removed from how the country felt when it became a Union in 1910, or when the National Party came to power in 1948, or most recently during the political upheaval of the early 1990s.
One way of making sense of where we are headed is through the use of scenarios. These plot different paths that the country may take depending on whether key criteria are met.
Spea k i ng a t t he I nv es t ment Managers Conference in Cape Town, the chief economist at the Old Mutual Investment Group Rian le Roux called these scenarios “road maps to the future”. They show us what to look out for so that we know which path we are on. South Africa’s first major scenarios were the Mont Fleur Scenarios that were developed in 1991 and 1992. The question they tried to answer was what SA might look like a decade and a half later.
They took into account two critical factors: whether t he t ransition to democracy would be fast or slow, and whether t he policies i mplemented thereafter would be sustainable or populist. The ‘high road’ for the country would be a situation where the transition was quick and the policies sustainable, and largely that is what took place.
“I always remind people that when the ANC government came into power in 1994 it inherited a mess,” Le Roux says. “And the first new government term they actually spent a lot of time fixing things.
“I can’t say that the Mont Fleur scenarios directly resulted in t hat occurring, but I would guess that because the likes of Trevor Manuel and Tito Mboweni were part of it, they might well have played a role in the thinking at the time. And, essentially, if you look at those scenarios we did quite well.”
However, what ha s happened since then has been less encouraging. As a country we have failed to capitalise on many of the gains we made.
This was part of the reason that a second set of scenarios was sponsored by Old Mutual i n 2008. These were t he Dinokeng Scenarios that tried to capture the challenges that SA was facing and how they needed to be met.
“Essentially what Dinokeng ar g u e d wa s that society was becoming increasingly disengaged,” Le Roux says. “They saw that it would be very difficult to make progress if a rift developed between government and the population at large.”
The Dinokeng Scenarios worked on two key factors – the level of social engagement and the effectiveness of the state. The high-road scenario was titled “walk together”, and depended on a cohesive approach from all levels of society and a government that acted as an enabler to economic growth.
“It’s difficult to argue that we are on that high road,” Le Roux says. “We are simply too polarised.”
But t hat doesn’t mean t hat we should despair. Le Roux argues that it’s important to revisit the scenarios and assess what it will take to create workable solutions to the country’s challenges.
A COHESIVE APPROACH
For a start, Le Roux says that it is obvious that there is pressure on government to reform, and this is coming from a number of different places.
“It’s clear that pressure from the ratings agencies caused the f inance minister Nhlanhla Nene to stand up last month and say we can no longer afford slippage in the fiscal situation,” he says. “Once you are downgraded it costs you even more to borrow and if interest payments continue to go up, that crowds out other things like infrastructure spend and the social wage.”
The number of ser vice deliver y protests and growing dissatisfaction with local authorities is another warning sign for the government. So is the depreciation in the value of the rand.
However, changing paths is not only up to the state. Le Roux believes that the private sector cannot claim innocence when it comes to the problems the country faces.
“We cannot sit in the private sector and point fingers at government if we don’t take responsibility,” he says. “We have to acknowledge that we are partly responsible for the lack of trust that has developed.”
He points to the number of companies that have been fined for collusion and other practices as an indication of the failures in the business sector. The South African Revenue Service also estimates that ta x evasion by high-net-worth individuals is rife and that around 9 500 South Africans owe an estimated R50bn in unpaid taxes.
These are issues that need to be addressed just as much as government needs to be held more accountable. Very little can be achieved in isolation, however. It needs a cohesive approach and an understanding that it will take time.
“It ’s not going to be a si t uation where you s ay today everything is bad and t omorrow e ver y t hing is good,” Le Roux says. “It’s a gradual process and you have to be on a lookout for a number of signposts.”
For him, the most critical of these is the relationship between government, business and labour. He believes that there has to be a compact that involves compromises from all sides.
Government needs to commit to policy certainty and instil a sense of professionalism and service delivery in the civil service. Labour has to accept less onerous labour laws and business has to agree to greater social involvement, including in education and training.
None of this is radical thinking. In fact, it already exists in the National Development Plan (NDP).
“If you look at the NDP, it essentially makes the same noises,” Le Roux says. “We need to gather everybody around a shared vision.”
So the path is already laid out and we know where it takes us. What is required is implementation and the acceptance from all stakeholders to accept that the greater good cannot be served if we only follow narrow self-interest.