Delivery is govt’s greatest challenge

2009-04-28 00:00

Zumanomics is about the challenges facing the new leadership in South Africa. Many people have not seen the benefits of liberation and there is disillusionment at many levels. Leadership is found wanting in so many departments with service delivery failures and corruption. The government has made commitments to deliver on promises of a better life for all, but the African National Congress’s performance record is rather weak.

Money does not seem to be the problem. As Auditor Generals’ reports over the years indicate, government departments seem not to have the capacity to spend on viable projects. Much of the underperformance seems to result from the weak capacity of the state. In a recent Sunday Times article, Mamphela Ramphele stated that appointments of incompetent people in the name of affirmative action does a disservice to black people, and many municipalities serving the poor are dysfunctional with little accountability by those meant to represent the residents. She indicated that what is missing in our democracy is leadership, management and empathetic civil servants. Similarly, Iraj Abedian and Tanja Ajam argue in Zumanomics: “Managerial ineptitude, misapplication of public resources, and corruption are rife across the three spheres of government”, while the imperative for black economic empowerment (BEE) has deepened the politicisation of the public service. Carel van Aardt adds that removing labour market rigidities and revamping the education system are critical for job creation. Believing in competition and plurality, Adam Habib suggests that effective competition for political power is necessary for human-orientated development, ensuring that political members become more accountable to the electorate, and serve the needs of people rather than their personal greed.

There are thus real challenges awaiting the new government under the leadership of Zuma. From here, where do we go, what kind of policies do we follow or should the new government follow? Everybody wants prosperity and a better life in South Africa.

Zumanomics identifies certain critical socioeconomic and political issues that the post-Mbeki government should engage itself with in 2009 and beyond. These are pragmatically covered in a readable selection of 11 wide-ranging essays by eminent economic and political analysts. The topics range from South Africa’s economic policy and performance, through inflation targeting, industrial competition, health and fiscal policies, to crime, poverty, education, HIV/Aids and unemployment, as well as human-oriented development. These essays provide valuable insights into the economic and political road map that South Africa currently needs in its quest for a better tomorrow with shared prosperity for all citizens.

It is likely that there may be some policy changes under the new administration, with some possible leanings towards a developmental state, like the East Asian countries, with greater government involvement in resource allocation decisions and economic activities. However, we do not have an army of top-quality manpower and competent civil servants of the Confucian type, like in Singapore or South Korea. Abedian and Ajam warn us against the dangers of an expanding state sector underpinned by a populist fiscal policy. At best, this may have a short-term political gain, but its socioeconomic effects are destructive and may take decades to rectify. Thus, “We must not create a populist, welfare fiscal framework that is detrimental to the sustainable upliftment of the poor and inimical to economic performance.” There cannot be enhanced prosperity for all unless we have a flourishing entrepreneurship, high levels of investment and shared economic growth accompanied by employment creation of unskilled and skilled labour — all mentioned in strategies such as those of the Reconstruction and Development Programmes (RDP), Growth, Employment and Redistribution (Gear), Accelerated and Shared Growth Initiative for South Africa (AsgiSA), Harvard Group and the Organisation for Economic Co-operation and Development (OECD) reports.

What needs to be done is well known, but the problem, according to Raymond Parsons, the editor, is implementation — a failure of delivery. Evidently, this is linked to a lack of capacity; some people with innovative talents cannot get suitable jobs partly because of affirmative action and emigration have depleted the country’s pool of skills. Accordingly, it is the time to walk the economic growth talk.

In the concluding chapter, Parsons argues that there are no soft options; tough decisions await the new government in 2009. He adds that policy makers should ask what the proper role of the state is, what it should do and not do, and what mechanisms it should put in place to ensure delivery. Too many rules restrict the economy to a low-growth trap. And when there is non-delivery, there must be accountability and disciplinary action.

He further suggests that South Africa needs to take a long-term view of its economic prospects, with increased use of public-private sector partnerships, a more competition-friendly regulatory framework, social dialogue, capacity building and an appropriate degree of decentralisation in the three tiers of government.

Given South Africa’s experience to date with “statism”, argues Parsons, those who wish to extend state involvement in the economy should prove beyond doubt that it will produce superior outcomes. In short, a delivery culture needs to be embedded in our public sector that should go beyond crisis management. What South Africa needs is not an expanding state, but a delivery state. Hopefully, we will reach this soon, otherwise populist expressions or expectations may turn into citizens’ frustrations.

Zumanomics is distinct from Shenomics or Freakonomics. Its approach is contextual. This is a timely book, comprehensive, insightful and recommended reading for individuals interested in understanding the challenges for the new government and the way forward towards unlocking the growth potential with a shared prosperity for all in South Africa.

• Darma Mahadea is a professor at the School of Economics and Finance, University of KwaZulu-Natal, Pietermaritzburg.

• Zumanomics: Which Way to Shared Prosperity in South Africa? Challenges for a New Government is edited by Raymond Parsons and published by Jacana.

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