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22 December 2023 | Story Dr Harlan Cloete | Photo Supplied
Dr Harlan Cloete
Dr Harlan Cloete is a research fellow in the Department of Public Administration and Management at the University of the Free State.


Opinion article by Dr Harlan Cloete, Department of Public Administration and Management, University of the Free State (UFS)


This week my Great Governance ZA podcast reached the 100-episode milestone. About a year ago I interviewed Prof Jaap de Visser on the platform and he argued that coalition governments are a natural consequence of our South African electoral system and that we must get used to this reality. On the 5 December we marked the passing of Nelson Mandela who led the first coalition government in South Africa, called the government of national unity. That coalition did not last beyond two years with the National Party walking out in 1996 because the ANC would not agree to extend the government of national unity beyond 1999, as well as a failure to reach consensus on key economic choices and policies. And so since 1996 the ANC has the sole mandate to ensure economic justice.

Today there is no greater failure than the failure of our economic policies. The fact the World Bank declared South Africa the most unequal country in the world is a direct consequence of our economic policy choices over a period of 30 years. We are faced with deep-rooted structural inequality, persistent generational poverty and rising youth unemployment. These problems will persist due to deteriorating state capacity and inappropriate policy management. How long will state indifference last? No one knows. The National Development Plan (NDP) review concludes that instead of a capable state, we have an increasingly corrupt state. And let me remind you that this corruption did not start in 1994, it is so deeply entrenched in our DNA – both the private and public sectors. This country was built on this political economic collusion resulting in centuries of economic and political injustice.

Fought for freedom and all we got was democracy

The NDP states that instead of a seamless planning system, we have a disjointed planning system that is poorly implemented and misaligned to the strategic goals of the NDP. Instead of a more inclusive and equitable economy, we have economic policies that do not seem to be achieving the transformation that is required. Social cohesion has fallen off the government priority list and is articulated superficially (Stronger Together – four rugby world cups and more divided than ever). South Africans experience some of the highest levels of violent interpersonal crime globally, especially violence against women.

And so we continue to be brilliant at identifying what is wrong but weak in implementing what must be done. I conclude that the constitution is not working, as summed up by a colleague: we fought for freedom and all we got was democracy. And so there is this deep sense of cynicism with our current politicians and the political system that continues to condemn people to misery and making them slaves to new forms of slavery, alcohol abuse being but one. South Africa has some of the highest rates of youth binge-drinking. The reality is that this democracy is working for the elites not the poor. The statistics show that we have about 62 million people, of which 45 million are eligible to vote, with close to 27 million people on the voters’ roll. In the 2019 election only 19 million people voted (42%) and in our COVID election in 2021 only 12 million voted (27%).

The reality is that we have more than 100 registered parties and more parties joining the ballot paper, the latest is the Activist and Citizens Forum calling for Dr Allan Boesak to lead. This leads me to conclude that people either form political parties because they see politics as entry into the middle class (given our high unemployment rate) and or they are genuinely disillusioned with the status quo and feel this to be the only way to express their dissatisfaction.

But there is opportunity in the crises. We now know what good leadership looks like, it is not what people say, it’s what they do. So what does a desired future look like? The NDP concludes that leadership and active citizenry will get us out of this deep hole. The reality is that the bar for political leadership is so low. Ours is a system of representative and participatory democracy. There is a total disconnect between the politicians and the people – social distance. The goodwill of the people is simply not matched by administrative and political will. That government is not prepared to meet people halfway, instead the system is designed to make you dependent (grants) in a disempowerment model. South African must decide. Are we active or passive citizens? In the broad sense (business, academia and civil society formations). Active citizens are involved, helping to shape society as expressed in a grassroots governance course spearheaded by colleague Ina Gouws at the University of the Free State (UFS). This requires hard work and deep commitment to build institutions. This is not elitist. In this, new knowledge and models are developed that serve to liberate people. Active citizenship irritates and keeps producing evidence demanding excellence and redistribution of wealth.

Citizen Coalition

If we think coalition government is the answer, we are making a big mistake. Such a government maybe even be more complex given the different egos demanding to be fed.  Rather a Citizen Coalition (social solidarity) is needed, where citizens lead and government follows. Unless we make that transition in our heads, we will forever be at the mercy of politicians trapped in a system that rewards only them. We cannot talk of a coalition government if we do not talk about citizen coalition – where we put your purpose together. Affluent well-resourced schools will continue to flourish unless we collaborate and share wealth. Such a citizen coalition is built on five principles viz namely, leadership behaviours that are based not on rent-seeking, economic inclusion, equal access to health care (dignity), equal access to education (a means to an end) and accountability systems.

The October 2022 report from Good Governance Africa suggests that excellence in municipal performance to a lesser extent is the consequence of which political party is in charge and more linked with governance, population, and provincial dynamics. However, what the study also showed is when you have ethical and competent leadership steering the ship to ensure that municipalities are properly governed in terms of Administration, Planning and Monitoring, and Service Delivery then there is a greater chance of success.

In October I was invited by the municipal council of the Theewaterskloof municipality to facilitate a three-day strategic conversation using my Governance 5iQ model as point of departure. This model asks five questions. Why we do what we do (vision)? How is it being done (mission)? How will we know at any given time we are on track (M&E)? If we are not on track, what are we doing about it (consequence management)? And finally, how we lead and learn (knowledge management). I believe the Governance 5iQ could be applied in conversation around the viability of a Citizen Coaltion.

The desired state is inclusive coalition governance not coalition government that is achieved through building coalition governance competence on all levels of society. The cornerstone of this coalition governance is a partnership between civil society, the private sector, government, and academia, as concluded in the NDP review. Where we co-create a desired future. And this must be youth led. It can be done, we owe it to the youth who rightfully question the motives of those who are trying to fix problems they themselves created over the past three decades. This is hard work. But there is no better time than the present.

Dr Harlan Cloete is a research fellow at the UFS. His main research interest is exploring evidence-based HRD governance systems in the public sector, with a keen interest in local governance. He is the founder of the Great Governance ZA Podcast https://anchor.fm/harlan-ca-cloete

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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