SA is avoiding the real issues

PLANNING COMMISSION: ADDRESS FUNDAMENTALS FIRST

Commissioner says if governance is not right, everything else is going to fail.

South Africa has blinkers on and does not want to deal with the real issues, part-time commissioner of the National Planning Commission Elias Masilela says.

Masilela, executive chairperson of DNA Economics and former CEO of the Public Investment Corporation, told investors this week unemployment, poverty and inequality were mere symptoms of fundamental problems elsewhere in the economy.

Knuckle-down time

“We need to knuckle down as a society and think about the sources of these problems. How do we resolve them, together?”

It wasn’t only up to the state to resolve the problems, Masilela told Ashburton Investments and the Principles for Responsible Investment Association. Households, corporates and pension funds had to take collective responsibility.

Politicians and business people had suggested the emphasis of the presidential CEO group last year was to avoid a downgrade. Therein lay the problem, he argued. The best brains in the country came together to discuss a symptom and didn’t ask how SA got to this point.

The question that should have been asked in these meetings was why SA had digressed, he said.

Masilela said evidence clearly showed a correlation between good governance and good economic performance.

“What is the likely outcome for SA for the next five to 10 years given the governance environment we are faced with?”

If SA followed the example of Nordic countries, which were global leaders in governance, then mere tweaking of policies was not enough. “It has to be the fundamentals first. The rest of the policies sit on your governance structures. If governance is not right, everything else is going to fail.”

Masilela said the common thread across all the determinants of inequality was education. “If you resolve education as a country, you have resolved a significant part of the inequality conundrum that we are faced with.”

Nedlac failure

The social compact was at the heart of the National Development Plan, he said. One of the major objectives of Nedlac, set up in 1995, was to develop a social compact for SA. “To this day we don’t have a social compact ... That means as a country we have failed in delivering the fundamental objective we set for ourselves.”