Can SA rise from ashes? ranjeni munusamy

2016-06-21 06:00

IT was a great relief that our sovereign credit ratings were not downgraded to junk status. After a period of political and economic turbulence, South Africa was viewed as a risky destination for foreign investors.

The government, business and labour worked together to reassure the three international ratings agencies, Moody’s, S&P Global and Fitch, that South Africa has turned the corner and will focus on economic growth and fiscal targets.

Now that we have jumped the hurdle, there is a danger that it will be business as usual until the ratings agencies look our way again in December.

Finance Minister Pravin Gordhan says there should be greater cohesion in our society around building the economy and more positive narratives to talk our economy up. Speaking at The Gathering hosted by the Daily Maverick last week, Gordhan said there is a need for greater co-operation from all sectors of society, and even between the government and the opposition, to turn around the negative trend. “Confidence plays a big part in whether we get investments going and business activity going in our country,” Gordhan said. “Confidence is also about building trust and building understanding, and having a shared idea of where we want to take this country.”

I was thinking about this while travelling by train between Bonn and Berlin in Germany this week. Instead of enjoying the idyllic countryside whooshing by, I was fascinated by the fast and efficient rail system that allows people to travel around the country cheaply and comfortably, and without much effort.

In the cities, there are so many transport options to get around, including cycling. I kept thinking how difficult life is in South Africa, with just the commute to work being challenging and very often frustrating.

Post World War 2, Germany embarked on a process of rapid economic development, turning the country into the largest individual economy in the European Union. Among other things, Germany adopted a pro-growth policy and used the education system to create a more productive workforce.

The reunification of Germany also led to increased development and better economic performance. Germany is known for its efficiency and innovation, but has also become a global political heavyweight. Why does South Africa struggle so much to get things right?

We keep lurching from crisis to crisis, while our politics becomes murkier and our economy remains on the decline.

Gordhan is right that there should be a national consensus around building the economy, so that jobs are created and the cycle of poverty is reversed.

Instead, alliance tensions, ANC factional interests and the lack of political will inhibited the implementation of numerous policies and plans developed over the years. The ANC missed its window to implement its development plans aggressively and unchallenged, and must now compete with growing opposition influence and an increasingly disillusioned society. There really should not be conflicts over certain issues — education, health care, transportation and water and electricity management. Other issues are more complex, such as land and mining, but if we do not get the basics right, what chance do we have of tackling the others?

With resources going to waste through inefficiency, poor management and corruption, it is difficult just to keep the wheels turning. The situation is made even worse when there are factional battles at play and the government system is used to serve certain groups’ interests rather than the citizenry.

Our country clearly needs strong leadership to marshal support from all sectors, across political and class divides, to revive the economy, create jobs and match skills development with market needs. There cannot be a once-off show for the ratings agencies and then a return to complacency and self-interest. Sustainable growth needs a sustained effort to get the country working.

Germany is a good example of how a country can rise from the ashes to optimum performance. It takes political will, strong leadership and a society that pulls together.

• Ranjeni Munusamy is a political journalist and commentator for the Daily Maverick. ranjeni.munusamy@gmail.com

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