‘Radical transformation needs radical growth’

ECONOMIC experts have warned radical economic transformation should move beyond rhetoric to a concrete programme for it to be meaningful.

Panellists at a University of Cape Town Graduate School of Business discussion this week said while economic transformation in South Africa was long overdue, radical economic transformation needed to be clearly defined.

Senior lecturer Sean Gossel said the debate on radical economic transformation had been simmering for some time amid general public unhappiness with the government’s performance since 1994.

The term was therefore neither surprising nor a sudden development.

He warned the country risked losing the debate by emphasising radical economic transformation over radical economic growth.

“You cannot have radical economic transformation unless you have radical economic growth,” Gossel said. “The one is an outcome of the other. You cannot redistribute what isn’t there,” he said.

The concept of radical economic transformation has dominated public discourse in recent months.

But some of the panellists claimed the concept was an outcome of government policy failures which had left most people on the margins of the mainstream economy.

Black Management Forum president Mncane Mthunzi said the new debate was a result of a country which had been offered reformation instead of transformation.

Mthunzi said transformation would not happen without pain and businesses and institutions had to be more willing to change and give more black people access to the main- stream economy.

“It’s a very painful process that needs to take place... businesses and institutions have been coming with a minimalist approach as far as transformation is concerned,” he said. “Self-regulation has not helped. No wonder you hear the noise and militancy in the ruling party with regards to radical economic transformation.”

Mthunzi argued land ownership remained skewed in favour of the white minority, black representation in JSE-listed companies was low, and the household income gap between black and white families continued to widen.

“No one has defined this radical economic transformation. It’s political talk. It’s just rhetoric, you cannot touch it... we do not know when it will explode, but it will explode in our faces,” he said.

“In my view reformation is pretty much like a chameleon, it changes colours depending on the environment... it’s not transformation. “Transformation in my view is like a metamorphosis... by its very nature the outcome of transformation ought to be different prior to the implementation of that transformation.”

Gossel said South Africa needed to go back to the drawing board and address fundamental structural limitations in the economy that hampered economic growth.

He said the country needed to find ways to ensure growth would be spread across classes, races and the disadvantaged.

“You cannot have transformation in a shrinking economy, that’s just received junk status... as bad as these (economic growth) statistics are I actually suspect it will get worse and therefore the political rhetoric will get ramped up... it isn’t about the economy... no one is talking about economic growth.”