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21 July 2021 | Story Prof Philippe Burger | Photo Sonia Small (Kaleidoscope Studios)
Prof Philippe Burger is Pro-Vice-Chancellor (Pro-VC): Poverty, Inequality and Economic Development at the University of the Free State.

Government needs to see the private sector as a true partner, whose expertise and capital can leverage its plans

Opinion article by Prof Philippe Burger, Pro-Vice-Chancellor (Pro-VC): Poverty, Inequality and Economic Development, University of the Free State

Many South Africans watched in disbelief last week as KwaZulu-Natal and Gauteng descended into looting, chaos, and destruction after Jacob Zuma’s imprisonment. Though probably instigated by disgruntled pro-Zuma supporters, it is clear that the protests very quickly spun out of control.

In newspapers, the question was repeatedly asked: did we see the hungry poor looting for food, or the opportunistic middle-class turning up in cars and bakkies to grab big-screen TVs and fridges? While images and videos clearly show that the latter were present in large numbers, the sight of other people – including gogos – ransacking supermarkets and running off on foot with loaves of bread and bags of maize meal, point to the former. In short, if people had jobs and hope that their lives would improve, I doubt we would have seen such anarchy.

Only a matter of time before protests and unrest occurred

With official unemployment above 30% and the broad unemployment rate – which includes discouraged work-seekers – in excess of 40%, it was only a matter of time before protests and unrest occurred. Zuma’s imprisonment was surely incidental. If it hadn’t been that, something else would have triggered the chaos.

COVID-19 also aggravated the situation, with 1,4 million people losing their jobs as a result of lockdown measures. In addition, the R350 COVID-relief grant expired at the end of April, leaving many with less food on the table.

A number of people argue that, in light of what has happened, we should bring back the relief grant; government may not have much choice now, given the lingering effect of 16 months of COVID restrictions on levels of unemployment and poverty. It will simply have to rearrange its budget to do so. However, we can’t stop at grants.

Even though a grant puts a bit of food in your stomach, it does not give you hope that the future will look better than today. It’s that bleak-looking future, that sense of nothing to lose, that fuels the looting and gives unsavoury politicians leverage for their selfish interests. Contrast this behaviour with that of taxi drivers, who came out to protect malls and chase away looters. They did so because they have something to lose, a stake in the economy to protect.

Every South African has a stake in the economy

We need to ensure that every South African has a stake in the economy. That way, people will have a sense of belonging, they will have options and agency, and they will have resources to improve their lives. They will have hope that the future will look better than the present. A person with a stake in the system is unlikely to break that system. 

We therefore need to seriously reconsider our policies, speed up much-needed change, and start building a believable message of hope – hope stemming from real concern for the plight of the poor, and serious implementation of policy. To help the poor, we need to create jobs, and for that we need investment.

Analysis of economic data shows that for every percentage point rise in private investment as percentage of GDP, we lift GDP growth by a third of a percentage point. And, on average, for every percentage point that GDP grows, employment increases by 1%. In recent years, private investment has averaged a mere 12% of GDP. If we can lift it to 15%, or even to 18%, GDP can grow by an extra one or two percentage points. It might not sound much, but after a decade or two it makes a big difference.

However, for this to happen, the government will have to see the private sector as a true partner whose expertise and capital can leverage the state’s plans. With such an approach, for instance, it would not be necessary for government to own and run an airline – a private operator will fill the gap in the market with its own capital, saving government billions of rands. And the government could long ago have let the private sector play a key role in the generation of electricity, instead of resisting change and only belatedly agreeing to lift the cap on private generation capacity from 1 MW to 100 MW.

Build communities where people escape poverty and have hope

The type and location of investment is also important. Data from the Council for Scientific and Industrial Research shows that SA’s urban population will have increased to between 50 million and 52 million by 2035. This is an increase of 12 million to 14 million compared to 2018.

We must use the opportunity to build green industries. It will save money and build a better environment. In short, as a growth strategy, we need a green, urban-driven investment strategy that caters for SA’s burgeoning urban population.

That way, we can build communities where people have a stake in the economy, where they have jobs and businesses, escape poverty, and have hope that their future and that of their children will improve.

• The article was first published in Business Day


News Archive

SA cannot sustain momentum - Boesak
2010-09-02

Photo: Stephen Collett

South Africa finds it increasingly difficult to live up to the challenges facing it as a nation because of its failure to meet its democratic ideals and possibilities, peace and lack of self-belief.

This was according to renowned cleric and former political activist, Dr Allan Boesak, who recently delivered the CR Swart Memorial Lecture, the oldest memorial lecture at the University of the Free State (UFS). His lecture was on the topic Creating moments, sustaining momentum.

He said South Africa had plenty of opportunities to show the whole world what was possible if all the people of this country joined hands and worked together to build a truly united society. However, he said, the country somehow invariably contrived to find its way out of these wonderful possibilities.

He cited events of historical significance like Codesa, the inauguration of Nelson Mandela as the first democratic president of South Africa, the assassination of South African Communist Party leader, Chris Hani; and the rugby and soccer world cups.
To drive his point home about this dismal failure of the country to “sustain momentum”, he alluded to the current public servants’ strike that is gradually crippling public service.

“The public servants’ strike was neither unexpected nor is it completely unjustifiable. Most of us have understanding for the frustration of teachers and health workers. Their demands resonate with most of us, and I think that it is scandalous of SACP fat cats to tell workers to “stop crying like babies,” he said.

He also added to the criticism of the much-maligned decision of the government to spend billions of taxpayers’ money to purchase weapons when there was “no discernible military threat” to the country. He said the greatest threat to the security of the country was poverty, inequality and social cohesion.

“As for the argument that arms sales bring in foreign exchange – how can we be instrumental in killing the poor elsewhere with the intention of feeding our poor, and then our ill-gained profits feed only the already well-fed?” he asked.
“Can we see the hopeless contradiction, the total impossibility of being both the apostle of peace and a merchant of death?”

He also lambasted the Black Economic Empowerment (BEE) policy of the government which he said benefited only those connected to the political aristocracy.

“It couples with the unashamed, in-your-face display of wealth by the privileged elite in this country, the crass materialism of the so-called “bling generation”, and the casual carelessness with which promises to the poor are given and treated. It is only the public symptom of the deep-seated scorn our political elites feel for the poor,” he said.

He said the government’s disdain to the poor was “setting fire to our future”.

“The anger of people on the ground can no longer be denied or ignored, and little by little, the leadership articulating and directing this anger is being estranged from politically elected leadership, and even more disturbing, from our democratic processes,” he said.

He concluded that the country’s difficulty in dealing with race and racism was putting the reconciliation process kick-started by Mandela just over a decade ago, under a threat.
 

 

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