Retributive model of radical socio-economic transformation will cost SA dearly

2017-02-10 15:16

Economic crises erupt when a country has two problems at once, financial weakness and political weakness.

Consequently, the model of retributive radical socio-economic transformation as envisioned by the governing party will because of these problems and the lack of political will to solve it, cost South Africa dearly.

Rather than dealing with fundamental issues such as an underperforming economy, the constraints that inhibit growth, job losses, corruption, institutional weaknesses, limited accountability, as well as parliament’s failure to perform its oversight function, shifting blame and populist rhetoric have now become the norm.

To spew all kinds of rhetoric about radical socio-economic transformation is one thing, translating it into pragmatic and innovative plans is something else! In this respect, very good state driven development plans were developed, but sadly though the follow-through which is so critical, is in most instances not there.

According to a report by the IJR titled 'Breaking the Mould, Prospects for radical socio-economic transformation', radical socio-economic transformation in the South African context supposedly implies 'an end to the iniquities of the past, a substantial eradication of poverty, a lifting of education standards, a dramatic increase in productive and decent work at elevated income levels, a major expansion and change in appearance of urban centres for the better, an overall improvement in living standards, a productive rather than wasteful state machinery, a lessening of the ‘us-and-them’ mind-set, and an improvement in general well-being.'

Needless to say, these outcomes are all captured in our state driven development plans, but it struggles to realise these outcomes due to sheer incompetence, corruption and lack of accountability especially at implementation level.

The intended radical socio-economic transformation will therefore be of very little help, not only due to fragmented state intervention strategies, policy uncertainty and corruption, but more so it singles out law-abiding, tax paying and innovative entrepreneurs based on ethnicity as the culprits.

In effect what retributive radical socio-economic transformation in practice boils down is indeed very scary and downright unconstitutional. Whilst the state opens its right hand to receive everyone’s taxes regardless of ethnicity, it now wants to impose even more stringent and discriminatory measures when it dishes out public money with the left hand.

Such narrow-mindedness seeking to penalise those who are still prepared to invest money, build businesses and create jobs as opposed to incentivising them, will only lead to greater capital flight and the most talented leaving South Africa for greener pastures somewhere else.

Instead of our government encouraging and incentivising the most talented regardless of whether they're are black or white to come up with innovative ideas and promote economic growth through innovation, all kinds of legislative constraints are dreamt up which in turn drive racial polarisation instead of social cohesion.

Ideas and more so innovative ideas matter in today's highly advanced, globalised and competitive economic world. Retribution in the form of taking away from those who drive economic activity and enriching the politically connected few, will create even greater economic hardship in South Africa. Nothing drives poverty as much as unemployment. Driving out innovative entrepreneurs will consequently exacerbate unemployment and the many socials ills permeating all levels of society.

Why not aggressively reaching out to our current crop of entrepreneurs and international investors regardless of whether they're black or white and lay the basis for win-win partnerships between them and new entrepreneurs? Driving a wedge between fellow South Africans based on race and populist rhetoric, will only result in a win-lose scenario and take South Africa backwards.

Where is the master plan to bring about an innovation-driven, network and partnership oriented, value added and globally competitive economy?  This will enhance ownership, management and control of economic activities. Radical economic transformation that only focuses on retribution instead of creating wealth will take us on a slippery slope of economic stagnation and decline!

Albert Einstein once said that the only justifiable purpose for the existence of political institutions is to ensure the unhindered development of all people in society. This in essence should be the sole goal of our government. Put all of our people first regardless of ethnicity and connect them all to the benefits of economic growth. This is now more important than ever! In the absence of such growth, disillusion and hopelessness set in and the poorest of the poor are the first to suffer!

For the poor and unemployed it really doesn’t matter whether the proverbial cat that catches the mouse is white or black? As long as it catches it all of South Africa stands to benefit. Our current state of economic and political weakness will be further weakened as a result of race-based and exclusionary policy interventions.

True radical socio-economic transformation though deals with these weaknesses first whilst simultaneously opening up the economy for everyone. Fresh and innovative business ideas that flourish in an uninhibiting environment, are what we now need. Not more state intervention based on race and more bureaucratisation of the business environment!

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