Politics of entitlement under Mzansi's slow economic growth

2015-01-06 02:19

 Very few speeches capture the task that remains at hand for us South Africans to tackle like the key note address given by Former President Thabo Mbeki at an Asian-African Business Conference in Gallagher Estates March 1996. There is no doubt that its hard to claim to be a patriotic South African without alienating a section of our society in advocacy of any ideal. However there is an attraction to the idea that the racial silos and socio-cultural factions that define us today, they are not making any favours to this great nation. The quote below rings true today as it nearly 20 years ago from the former president.

"The miracle of our transition to democracy originates from these sentiments which led our people, both black and white, to conclude that they share a common destiny and that the only guarantee of a better life for each was not the segregation of one from another, but the joining of hands by all, in a common effort to build a new society of democracy, non-racialism and non-sexism........ A critical element of that transformation is the rebuilding of our economy. "

Former South African President Thabo Mbeki, in 1996

Lamenting the slow economic growth in South Africa and the poor management of the economy continues to be an unending cry ignored by ineptitude. At a time where the most diversified economy in the continent of Africa is supposed to be leading African economic growth, SA has fallen behind. South Africa’s economy will grow by 2.3% in 2015, according to a report from Bank of America (BofA) Merrill Lynch, placing it at a low 43 of 56 emerging markets in terms of real gross domestic product (GDP) growth for the year. This is below the 2.5% growth estimate cited by ratings agency Fitch for 2015, when it maintained South Africa’s BBB credit rating two notches above junk status in its December review.

The parallel narrative is the continued growth of continental economies, albeit from a lower base. Sub-Saharan Africa continues its transformative journey from a developing continent to a hub of global growth. Six of the countries currently growing their GDP above 7% are from the region and the expected GDP growth is expected to reach 5% in this financial year for the region. According to the World Bank, almost half of Africa’s countries have attained middle-income status.

We should in introspection ask ourselves if we are capable of delivering higher economic growth or if it remains an unsubstantiated pipe dream build on hope. I have maintained the need recognised by the speech from 1996 for all South Africans to pull together in driving this country forward. This sentiment has been met with cynicism and I have been called naïve. Partly I believe because the biggest challenge of a slow growing economy is  the increased burden of poverty on the poor. Thus mentioning collaborations across racial lines or wealth lines has sounded to many as an immoral Entitlement. Where my views are purely based on a simple idea that the more South Africans participate in the economy, the better this country will become. The tax payers base will be wider and household spending as a GDP driver will be higher.

Entitlement Theory

Lack of a clear Nation Building programme has unfortunately given rise to populist rants preying on the desperation of the poor to embrace an existing philosophical claim to economic entitlement. Economic philosophy is not Scientific principle and its always criticised but theory of distributive justice and private property created by Robert Nozick explains why calls for Wealth Redistribution are heightened in this sustained low growth. According Nozick the following are three Principles of Justice:

  • Principle 1:   Justice in Acquisition, which states that individuals are entitled to acquire things that do not belong to others or do not place others in a worsen state. The use of the of the word things refers to capital goods and property only and exclude labour income.
  • Principle 2: Justice in Transfer, which says material things can be transferred from one owner to another on a voluntary basis and through trade . This includes gifts, grants, bequests or voluntary exchanges.
  • Principle 3: Rectifying of injustice in holding through the redistribution of wealth is potentially justified only if one or both of the above principles have been violated.

Thus from the Apartheid past of South Africa, it can concluded that Principle 1 and 2 were violated and thus Principle 3 is justifiable. Of course the enactment of Principle 3 also means Principle 1 and 2 will be violated again and on a different generation. This why today in South Africa, its hard to talk on transformation with out being painted in to a corner and why mistakenly transformation has been called reverse racism.

Social Contracts

Transformation is really a programme to widen economic participation for all South Africans. Incompetence aside, when 48% of the country is not employed, and most of them being the youth, the social dangers of it are daunting. I believe that our approach to opening the economy is wrong in that it assumes access to jobs and business opportunities its where transformation should begin. For all South Africans it begins, when every kids in the education system is treated with respect to be fully developed into a literate person; be allowed to dream of solving the world's problems; and  be given access to tertiary education because their nurtured talent can deliver them there.

I believe South African Education System role players, Business sector , Organised Labour  and Government should formulate a social contract developed through a concerted effort in view of growing the economy. The following flow top of mind to be included in the process:

  • A list of basic literacy levels expect of each learner at different stages of their education, and the expected performance benchmarked against world leading countries.
  • Teacher contract to learners and parents, and learner contract to teachers and parents. What is expected of each?
  • Resource requirements for a functioning school system and the contribution the Private sector can make to help. The burden for school libraries in each School is on all of us.
  • If the high school system produces a certain number of matriculants, how are they going to be absorbed into Tertiary education. Refer to my article on Knowledge production  here.
  • What is Government's researchers production target and how is it managed to ensure local tertiary institutions are properly filling the new knowledge production mill.
  • How is the Private sector going to contribute towards Infrastructure development, Job creation and poverty alleviation. Lets do it without imposing taxes and a score card but on a mutual social contract, that says this is the cost of being a corporate citizen in South Africa
  • Governments role in growing the economy, and how bureaucratic bottle necks can be unblocked to accelerate the delivery of crucial projects like power stations, roads and critical infrastructure important to economic growth.
  • What  is the expected labour productivity in the economy vs. Capital productivity and how can we go ten years without labour action strikes

That said, what do I know, I am just a patriot who wont remain silent when he can write a blog!

 Be Inspired SA

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