Urgent political and economic change is needed if South Africa is to alter its course, avoid an IMF bail out and retain its sovereignty.
“We are teetering on the brink and need to act,” former Deputy Finance Minister of South Africa, Mcebisi Jonas told a recent GIBS Forum. Time is of the essence and the window of opportunity for all South Africans to work together is narrowing.
A sense of urgency
There are no new ideas or big ideas about the country’s future, Jonas said, while the range of issues confronting us as a country are common across the globe.
“We need to start building optimism about South Africa,” he said. At the moment, it seems that only populists are able to conjure up hope, and “it is a false hope and an oversimplification,” he added.
While Jonas admitted that his book After Dawn, Hope After State Capture presents a bleak picture of the country, this is not to be confused with despair. The book, “presents the bleakest picture, so that we can understand the problems that we face.”
After Dawn analyses the crisis at the heart of our current system, that of placing politics at the centre of policymaking and implementation at the expense of growth.
The central premise of the book is that the 1994 social consensus that allowed a peaceful transition to democracy was based on the assumption of sustained growth and a strong, efficient state, which has unraveled in the past 15 years.
An IMF bailout “is not very far off if you consider the fiscal numbers,” Jonas said. “It is the worst thing that could happen as we would lose our sovereignty.” The real fiscal problem is growth, as growth would enable the country to service its debt. However, “there are no signs that we are taking the growth issue seriously,” he added.
“We live in a very noisy time, when it is easy to get caught up in the news cycle,” Songezo Zibi, Head of Communications and Corporate Relations for the Absa Group Limited said. There are serious divisions of race and income and the social fabric of society is fraying. “Can we move forward without a broad consensus? And what do we do to get the country into a different place?” he asked.
“We are clearly a polarised nation,” Bishop M. Malusi Mpumlwana, General Secretary of the South African Council of Churches said. “We need a clear signal that things are going to be done differently. We must think differently and do something that has not been done before, as time is not on our side.”
Bishop Mpumlwana said an urgent conversation needed to take place among all South Africans, at a broader level than just government: “We have not heeded the injunctions of our Constitution to create a democratic nation. It is hard work. The basic moral fabric and public values of society are of serious concern, but all is not lost, it can be done.”
Public participation is absolutely essential for democracy to hold, he continued and needs strong communities and institutions: “It is the responsibility of citizens to drive democracy,” he said.
Jonas said the concept of the ruling party as a ‘liberation movement’ had outlived its usefulness, as it gives the ruling party false moral authority.
“How do you question your liberator? It soils anything that seeks to challenge the powers that be. We need political realignment and new thinking.”
The threat of destructive disruption remains if there is a continuation of the policy of ‘muddling through,’ Jonas warned. However, constructive disruption could ensure that fundamental economic reforms are put in place to set the country on a path to growth and fiscal consolidation.
An agenda to encourage reform must include:
- Placing jobs at the centre of economic policy through subsidies and incentives;
- A preoccupation with economic growth. Jonas argued that the government’s growth narrative remained weak and that the country needed a set of measures to contain the fiscal crisis and address constraints around investment;
- Expansion of new technological capacity; and
- A functioning education system to shift the country to higher productivity.
All these are anchored in developing a corruption-free, capable state: “The State is about mediating between different sectors of society, but to do so requires some credibility,” Jonas said.
A new set of trade-offs was necessary to generate an economic inclusion: “We cannot drive growth with a government that continues to overregulate,” he said. “The political noise today is taking us away from these fundamental issues.”
In order to achieve growth, “government must realise it needs to loosen its grip on regulation in certain sectors to encourage investment and grow the economy. The level of regulation in our economy is stifling.”
The labour relations framework was also in need of revision. “While our labour framework is anchored on labour rights, which are important, we have compromised labour participation in a big way and must promote increasing labour participation in certain sectors.”
Finally, Jonas argued that problems in the education system are largely political and that the “stranglehold of bureaucrats, politicians and unions on education” must be broken.
“If we pull ourselves together we will be able to confront some of these challenges. But first, we must realise that things must change,” he concluded.