Bureaucratic failure

2008-02-06 00:00

Eskom’s catastrophic cock-up should serve as a flashing red warning signal to both the government and the new African National Congress leadership (I guess one should refer to them jointly and severally now) to reconsider their commitment to implementing a “developmental state” economic policy.

The idea of a developmental state is that the government should influence the direction and pace of economic development by intervening directly in the process, rather than relying on the unco-ordinated influence of market forces to allocate resources. The state assumes the role of setting key social and economic objectives, then devising policy tools to ensure that business is helped, and even coerced, into achieving them.

The system has been spectacularly successful in launching the economies of the celebrated Asian “tigers”. It was first used by Japan, then emulated by Taiwan, South Korea, Singapore, Malaysia and Thailand — and now China.

The ANC has been playing around with the idea for some time. President Thabo Mbeki punted it in a series of articles in mid-2005, when he sought to initiate a debate about it, and about Ireland’s equally successful Programme for National Recovery, as ways of boosting our growth rate to reduce unemployment.

The Irish model didn’t fly. It requires the government and trade unions to form a “social partnership”, with the unions agreeing to restrain wage demands and industrial action in return for more take-home pay through reduced personal taxation. Cosatu and the South African Communist Party were not interested; they saw it as the thin end of a wedge to achieve a more flexible set of labour laws.

But the “developmental state” idea did catch on, no doubt because the idea of central planning of the economy has a natural appeal to organisations with Marxist thinking embedded in their DNA.

So it grew in popularity until it became the one issue on which the Mbeki and Jacob Zuma camps were able to reach consensus at the ANC policy conference in Midrand last June. It went from there as a recommendation to the national conference in Polokwane, where it was adopted.

So now it is government policy.

The government has been at pains to reassure business that the policy will not be a threat to it. Instead, spokesmen say it will be in the interests of market growth, major infrastructural growth being an example.

The government has also stressed that it will not slavishly follow the Asian model, which has strong authoritarian tendencies, but will develop its own home-grown variant.

But authoritarianism is not the only worry. The main problem is that the developmental state model can succeed only if it is driven by a highly efficient state bureaucracy staffed by the nation’s brightest and best. That’s why it can be so spectacularly successful in a country like Singapore, which has perhaps the world’s highest skills level where the economic and business savvy of its ministers and top civil servants is every bit as high as those in the private sector.

As the Eskom debacle has demonstrated, we don’t have that — not by a long shot.

Indeed, I don’t recall any other event in recent history that has so shaken the confidence of ordinary South Africans in the future of this country as the incompetence revealed by the breakdown of our largest and most important state corporation. It has been a disaster of monumental proportions as far as the national morale is concerned.

No doubt this is because the rolling blackouts have coincided with the political uncertainties induced by the Mbeki-Zuma power struggle and the prospect of having an aspirant president accused of corruption, fraud and other serious misdemeanours. The two together portend a gloomy year ahead.

But most of all, what has alarmed the ordinary people of this country, as well as foreign investors, is that the Eskom crisis has highlighted not only the acute shortage of skills in the country, but even more important the lack of foresight, of any degree of strategic or organisational vision, on the part of key people on the flight deck of this supposedly modern, developing country.

It is not as though this crisis came upon us suddenly, out of the blue. It has been a long time in the making and was not only predictable but predicted — many times over.

Back in 1998, a full 10 years ago, a government White Paper warned that Eskom had insufficient capacity to keep pace with the country’s rate of development and that if nothing was done to build new power stations there would a power crisis by 2007.

Spot on. But nobody did anything about it.

We now learn that for five years Eskom urged the then Minister of Public Enterprises, Jeff Radebe, to give his approval for them to start building new generating plants to meet the looming crisis. He didn’t do so. Eskom reportedly sent him up to 10 urgent memos begging him for a decision. He didn’t respond.

There is no indication that Radebe was ever reprimanded or held accountable for this incredible dereliction of duty. He went on to become the Minister of Transport and now the Zuma-led ANC has elected him number two on its National Executive Committee.

Nor has the then Minister of Minerals and Energy Affairs, Phumzile Mlambo-Ngcuka. She went on to become deputy president of the country. At least she has apologised to the public, albeit in a curiously backhanded way by suggesting the government was “a victim of its own success” because economic growth outstripped Eskom’s ability to keep pace.

Then there were the successive CEOs and other senior executives of Eskom who knew the crisis was looming but didn’t do enough to beat down the president’s door and warn him to his face of a looming national emergency. They were rewarded with spectacular performance bonuses.

But there is little point in breast-beating and fuming with rage at the incompetence, and the tolerance of incompetence, which has caused this crisis to befall us as a nation. The important thing is to learn from it so that other and worse crises don’t cripple us in the future.

The first thing is to take on board the fact the we do have this desperate skills shortage and lack of organisational experience at the highest levels, and to adapt our policy thinking and strategic planning accordingly. The skills shortage is not the fault of the new regime. Our people were prevented by apartheid from acquiring these skills and the kind of experience of running complex organisations that take years to acquire. They are having to learn on the job and, on the whole, are doing pretty well.

The important thing is not to get ahead of ourselves, not to plan for fancy policies that we don’t have the human capacity to implement. We have to be realistic.

As it is the government is struggling with service delivery in just about every department, province and municipality in the country. We simply don’t have the bureaucratic skills to cope with what we’ve got, never mind taking on the task of the state intervening and directing the entire economy. The developmental state must be put on ice.

• Allister Sparks, a former editor of the Rand Daily Mail, is a veteran South African journalist and political commentator.

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