How about we ask them?

2013-10-04 00:00

WHAT can we take from the recent experiences of inclusive economic development initiatives?

Inclusive economic development remains the biggest challenge in South Africa. Policy makers want to see bridges that can be crossed between informal and established businesses.

To some, partnerships have been seen as panacea for the challenges facing economic development, but formal economic players are concerned with inconsistencies in the informal sector. Bread-and-butter issues are top priority for the majority of poor and vulnerable households. Although a host of pro-poor economic development programmes have been initiated, the returns on this investment remain daunting. We should be asking different questions. Do we really understand the pro-poor economic development space?

Should we be talking about pro-poor economic development in the first place? We need to hand the baton over to the vulnerable populations so they can contribute and give meaning to the dialogue of economic inclusion.

The era of political transition requires a specific set of development approaches, but political transitions are more concerned with mobilising the citizens to embrace the politics and priorities of a new democratic state. This demands a leadership that is capable of managing a fragile transition project and the conflicting expectations of citizens.

It also requires a type of leadership that is able to engage with inconsistencies within the transition, especially the reactionary behaviour of some leaders.

South Africa may be doing well in the democratic and public-dialogue space; however, it is struggling to discourage the reactionary and predatory behaviour of some economic players, which is becoming a serious liability to the state.

We need to ask a few question. Can we say that there is common understanding about the transition project and what it expects from citizens? Should we focus more on social-development priorities and less on economic issues?

How should we start an initiative that will inform citizens that a political project is not only about receiving state support, and that it requires sacrifice, forward planning, patience, compromise and other responsible behaviour associated with the ideals of common good?

At least three arguments can be made from these questions.

Firstly, the predatory culture may appear to be a conduit to a better life.

Many calls for economic transformation, particularly from the key economic sectors, have been made. The banking and broader financial-services industry is one of the sectors that is least transformed. There are few black industrialists. The list goes on, but are we ready to swim in these unchartered waters?

Consequently, the biggest losers in the preferential-procurement system and economic development have been the small and micro entrepreneurs. What message does this send about the state’s ability to improve the income of poor and vulnerable households?

The second is associated with the macroeconomic development agenda. The state is battling to give clear direction with regards to survivalists and social entrepreneurship. The pro-poor economic development agenda may be frustrated by contradictory policy. However, the political will to build bridges that link the informal to the formal sector is there. The main challenge has been implemention. This risks sending signals that the state is unable to support the vulnerable population’s wish to play a meaningful role in the economy.

Lastly, there is a risk that citizens are unable to appreciate the successes of a liberation project. This can be due to failures of alignment, with regards to legislation designed to support inclusive economic-development agendas. It may be argued that most development initiatives are battling to achieve the participation of the youth. Key activities, such as effective and transparent monitoring and evaluation instruments, can support economic development and the transition project. The tax regime is starved of incentives that will grow the state’s ability to further development programmes. The small and micro enterprise development strategy remains the most difficult. The challenges are endless and it will become harder to get vulnerable populations to support development plans. The administrative requirements remain complicated for small businesses and access to capital remains the biggest barrier. Structured mentorship programmes for the poor are virtually non-existent. It can, therefore, be concluded that without drastic changes in economic ownership and development, the country will be trapped in economic disappointments. A pro-poor economic development space is a different animal and a fresh approach that hands responsiblity to vulnerable populations has become urgent.

• Nqe Dlamini is a rural development consultant.

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