South Africa needs to capitalise on this insurrection to create its positive inflection.
The rule of law was attacked. Riots, a violent attack sought to disrupt and undermine a government and a country as purported supporters of a former president rampaged through the streets. The initial response from law enforcement was inadequate and resulted in tragic and unnecessary loss of life.
You would be forgiven for thinking that I was writing about the recent riots in South Africa. Instead, go back and read again. These were the exact descriptors of the January 2021 civil unrest and attack on the US Capitol. And that is the point.
Insurrections, civil strife, and unrest are not exclusive to emerging markets. They are a manifestation of deep seeded societal fractures.
While many tend to be myopic around issues like these, when applying a global lens, we can see that societal fractures abound. According to the Carnegie Foundation for international peace, globally, there have been over 42 protests since the start of this year. Of these, 11 were violent and 10 are still active.
Among the global protest movements, some are peaceful and short lived while others smoulder and erupt. There were over 31 protests with over 100 000 people. This signifies considerable anger and discontent. While there is a narrative about monopolists in South Africa, clearly when it comes to societal fractures, South Africa does not have exclusive license.
But this does not and should not detract from the depth and complexity of South Africa’s challenges. This piece does not seek to address those details but rather to zoom out and look at the chain of causality driving these issues and pressure points globally.
There is a treasure trove of empirical research by think tanks, the IMF and various global institutions unpacking linkages between socio-political instability and economic growth. From the 1992 NBER working paper citing Roubini and others, to the 2009 paper on the Misery index by Tang and Lean through to the 2011 IMF working paper by Aisen and Viega on political instability’s impact on growth, productivity and capital, there is a lot to dig into. Most of the research uses a global subset of data, so its inferences are in no way South Africa specific. However, it requires a mosaic approach to help unpack the linkages in South Africa’s current conundrum.
We will start from the proximate issue of political instability. This status quo is a direct result of a systemic deterioration in the rule of law and government capacity. Causal relationships indicate that this systemic deterioration coupled with poor social conditions manifests itself in rising corruption which becomes endemic and increasingly harder to root out of the system.
To address the Afro-pessimists out there, for comparison, South Africa ranks at around number 69 among 179 nations in terms of the Corruption perceptions index (the lower the number the better). It ranks behind other African nations like Senegal (67), Namibia (57), Mauritius (52), Rwanda (49), Botswana (35) and the Seychelles (27) all of which have shown stable and lower levels of perceived corruption than even some developed economies. However, South Africa’s performance is sub-par to say the least.
Stemming from the above, once the spectre of political and social instability rears its head, it catalyses a negative feedback loop of lower productivity through decreasing or depleting human and physical capital which in turn feeds lower economic growth and higher unemployment.
It is easy to see looting of infrastructure and destruction of property as depleting physical capital. It is the depletion of human capital which is more insidious. Such imagery and societal conditions weigh on the hearts and minds of South Africans and this flows into issues like a brain drain or even just lower motivation and commensurate productivity.
The attendant depletion of capital impacting growth and investment, results in chronic high unemployment which incidentally is the largest contributor to increases in the global misery index. The research on the Misery index indicates that higher misery translates into a rise in crime levels in countries observed with a lag of about one year. Higher crime, in turn completes the negative feedback loop by resulting in deteriorating rule of law and poor social conditions thus bringing us full circle.
The recent eruption of discontent, engineered or not, is a symptom rather than the cause. As such, if focusing on first principles, we would be wise to note that while the symptoms of South Africa’s failures are chronic high unemployment, inequality, and social unrest, that its grass roots cause stem from the foundational building blocks of solidifying rule of law and accountability.
This flows from the impoverished (or not so impoverished) looter in recent riots to the highest echelons of power. Accountability and rule of law is key if South Africa is to hold up hope of arresting its own demise. South Africa needs to capitalise on this insurrection to create its positive inflection.