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22 September 2021 | Story Prof Francis Petersen | Photo Sonia Small (Kaleidoscope Studios)
Prof Francis Petersen is Rector and Vice-Chancellor of the University of the Free State.

Opinion article by Prof Francis Petersen, Rector and Vice-Chancellor of the University of the Free State.


South Africa is in trouble. No matter what your political or ethical persuasion – this much is abundantly clear. And if some of the opinions expressed lately by prominent economists are anything to go by, many are losing faith in whether we can still turn around a downward economic trajectory. 

 

But before we make up our minds either way, it is important to first face a truth that lies at the core of it all:  It is impossible to build a thriving economy on the back of a divided society. This makes societal reform a logical departure point for any economic relief efforts.  

And here the higher education sector has a definite and vital role to play.

On the battlefield of unexpected calamities, the South African economy can be compared to a soldier who has taken too many hits.  First, the devastating impact on so many sectors of our society caused by COVID-19 lockdowns and restrictions; followed by the question over misspent or missing pandemic support funds; and then the final agonising blow – the looting and destruction in Gauteng and KwaZulu-Natal in July, leaving a gaping hole of around 50 billion rand in damages

Equally heart-breaking and disconcerting as the physical damages and loss of life, is the damage caused to our nation’s psyche, with racist and classist fault lines reappearing, fuelled by the divisive rhetoric of unscrupulous leaders.
Looming ominously over this crowded battlefield, are the murky clouds of corruption at the highest level and of the most disturbing kind, which have been systematically and painfully laid bare by the Zondo Commission over the past three years.

We truly find ourselves at a very low point as a nation. Financially, morally, and mentally.

And, like all other sectors of society, higher education needs to ask itself what it can do – if anything – to help fix what is broken. 

Changing role of universities

Universities used to have a rather narrow focus on education and the creation of new knowledge. This role has, however, evolved considerably over the past decade or two. Their function nowadays is very much a societal one, where the focus on using skills and knowledge to make a real difference in the societies they serve and draw their students from – the engaged university.  

Let’s be clear: Higher education cannot solve poverty and inequality. That is the domain of government, which needs to ensure that appropriate policies are in place that will constructively stimulate investment and assistance from the private sector and industry.

The higher education sector needs to focus on its strengths. And that is to do research; to offer advice and come up with possible solutions; to educate and to provide skills that will help uplift individuals, families, and communities.

In short: universities need to deliver graduates who will ultimately build a better society, and through engaged scholarship change the lives of people. 

What has become abundantly clear, though, is that education alone is not enough. The corruption implications and moral dilemmas that many of our highly qualified politicians and leaders are embroiled in, prove that more is needed than just academic aptitude. 

The purpose of universities should therefore not only be to deliver good workers or thinkers. Universities need to deliver good citizens. Citizens that possess unshakeable values and ethics, enabling them to become good leaders.

During a recent 2021 University of the Free State Thought-Leader webinar titled Is South Africa falling apart – where to from here? panellists stated that the role of universities is to create a culture of active citizenry, to play a part in the holistic transformation of society, to ensure the sharing of research and discoveries, and to ensure inclusive academic excellence. These are no small feats and something higher education institutions should strive for.  

Creating a new generation of leaders

While young people spend time on university campuses, it is vital that – along with academic knowledge – universities educate them about the norms and values that form the bedrock of a healthy, thriving society. Not only teaching these values of social justice, respect, tolerance, and care – but also demonstrating how they find practical application.   
Universities should be microcosms of an ideal society, where respect for human rights and diversity, equality, and care underpin all our policies, communication, and interactions.

Universities should consistently use discourse platforms to promote these values and to speak out against things that threaten them, such as corruption, injustice, and prejudice in any form.

But once again, it goes further than that. Not only do we need to teach and encourage our students to speak out. We need to educate them on how to speak out. 

Unfortunately, so many of the student protest actions on our university campuses often fall short in this aspect, as valid concerns and demands are regularly overshadowed by disrespectful rhetoric, accompanied by unwarranted destruction of property and endangering lives. 

Recently, the University of the Free State had the opportunity to host a book launch by Helen Zille, the Federal Council Chairperson of the DA. Among the guests was EFF leader Julius Malema.

Afterwards, some Political Science students remarked how surprised they were to witness the very civil interaction between Zille and Malema – in the light of their very public political spats and differences.

And here lies an important lesson for our young South Africans: that there is a level of maturity that needs to be displayed if we want to take our country forward together. 

We can differ from someone – and passionately express our differences – but retain an atmosphere of tolerance and mutual respect. Our young leaders of tomorrow need to understand that, in the absence of such an atmosphere, reasonable negotiations become impossible, and they run the real risk of thwarting the very cause they are fighting for. 

Interconnectedness of our society

As much as higher education has a clearly defined role, it can only fulfil this role effectively if it is part of a well-functioning, larger system. |

As higher education, government, private sector, and industry, we are interconnected and unable to function properly in isolation.

Universities can, for example, teach young people the value of entrepreneurship and equip them with the necessary skills to contribute to the economy. But without an enabling environment created by government, policies, and commitment, as well as buy-in and support from industry, it all falls apart.

As much as I cannot thrive if my neighbour is suffering, we cannot rebuild our economy if we don’t acknowledge our interdependence and find new, innovative ways to collaborate to move ahead together.  

The age-old principles of ubuntu need to find a renewed, modern application in South Africa today. 

Involving our youth

Whatever form economic rescue efforts take, it must involve the young people of our country. Making decisions that will profoundly influence our youth without involving them in the process, is downright irresponsible. 

We simply cannot afford to alienate our leaders of tomorrow and then expect them to be ready to take over the baton and not repeat the mistakes of their predecessors.

At the University of the Free State, our student participation in university governance structures was at an all-time high of 70% last year. We see this as an important accomplishment – we hope to build on and expand this even further. In most of my dealings with our young leaders of tomorrow, I certainly get the impression that they are keen to make a positive contribution to our country. But they yearn for guidance, encouragement, and opportunities.  

‘Nothing about us without us’, is a slogan used widely in various contexts nowadays, with its roots tracing back to South African disability advocates in the 1980s. It is equally applicable to young people in our current South African predicament.

Our youth needs to be turned from apathy to active involvement. Without them, no economic ‘rescue efforts’ will have long-term sustainability. 

After all: it is their future that is at stake.

News Archive

Inaugural lecture: Prof. Phillipe Burger
2007-11-26

 

Attending the lecture were, from the left: Prof. Tienie Crous (Dean of the Faculty of Economic and Management Sciences at the UFS), Prof. Phillipe Burger (Departmental Chairperson of the Department of Economics at the UFS), and Prof. Frederick Fourie (Rector and Vice-Chancellor of the UFS).
Photo: Stephen Collet

 
A summary of an inaugural lecture presented by Prof. Phillipe Burger on the topic: “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

South African business cycle shows reduction in volatility

Better monetary policy and improvements in the financial sector that place less liquidity constraints on individuals is one of the main reasons for the reduction in the volatility of the South African economy. The improvement in access to the financial sector also enables individuals to manage their debt better.

These are some of the findings in an analysis on the volatility of the South African business cycle done by Prof. Philippe Burger, Departmental Chairperson of the University of the Free State’s (UFS) Department of Economics.

Prof. Burger delivered his inaugural lecture last night (22 November 2007) on the Main Campus in Bloemfontein on the topic “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

In his lecture, Prof. Burger emphasised a few key aspects of the South African business cycle and indicated how it changed during the periods 1960-1976, 1976-1994 en 1994-2006.

With the Gross Domestic Product (GDP) as an indicator of the business cycle, the analysis identified the variables that showed the highest correlation with the GDP. During the periods 1976-1994 and 1994-2006, these included durable consumption, manufacturing investment, private sector investment, as well as investment in machinery and non-residential buildings. Other variables that also show a high correlation with the GDP are imports, non-durable consumption, investment in the financial services sector, investment by general government, as well as investment in residential buildings.

Prof. Burger’s analysis also shows that changes in durable consumption, investment in the manufacturing sector, investment in the private sector, as well as investment in non-residential buildings preceded changes in the GDP. If changes in a variable such as durable consumption precede changes in the GDP, it is an indication that durable consumption is one of the drivers of the business cycle. The up or down swing of durable consumption may, in other words, just as well contribute to an up or down swing in the business cycle.

A surprising finding of the analysis is the particularly strong role durable consumption has played in the business cycle since 1994. This finding is especially surprising due to the fact that durable consumption only constitutes about 12% of the total household consumption.

A further surprising finding is the particularly small role exports have been playing since 1960 as a driver of the business cycle. In South Africa it is still generally accepted that exports are one of the most important drivers of the business cycle. It is generally accepted that, should the business cycles of South Africa’s most important trade partners show an upward phase; these partners will purchase more from South Africa. This increase in exports will contribute to the South African economy moving upward. Prof. Burger’s analyses shows, however, that exports have generally never fulfil this role.

Over and above the identification of the drivers of the South African business cycle, Prof. Burger’s analysis also investigated the volatility of the business cycle.

When the periods 1976-1994 and 1994-2006 are compared, the analysis shows that the volatility of the business cycle has reduced since 1994 with more than half. The reduction in volatility can be traced to the reduction in the volatility of household consumption (especially durables and services), as well as a reduction in the volatility of investment in machinery, non-residential buildings and transport equipment. The last three coincide with the general reduction in the volatility of investment in the manufacturing sector. Investment in sectors such as electricity and transport (not to be confused with investment in transport equipment by various sectors) which are strongly dominated by the government, did not contribute to the decrease in volatility.

In his analysis, Prof. Burger supplies reasons for the reduction in volatility. One of the explanations is the reduction in the shocks affecting the economy – especially in the South African context. Another explanation is the application of an improved monetary policy by the South African Reserve Bank since the mid 1990’s. A third explanation is the better access to liquidity and credit since the mid 1990’s, which enables the better management of household finance and the absorption of financial shocks.

A further reason which contributed to the reduction in volatility in countries such as the United States of America’s business cycle is better inventory management. While the volatility of inventory in South Africa has also reduced there is, according to Prof. Burger, little proof that better inventory management contributed to the reduction in volatility of the GDP.

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