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06 March 2023 | Story Prof Francis Petersen | Photo Sonia Small
Prof Francis Petersen
Prof Francis Petersen.

Opinion article by Prof Francis Petersen, Rector and Vice-Chancellor of the University of the Free State.
Amid the various threats currently faced by our beleaguered country, there is one that many people seem oblivious to – but which has the potential to speedily and decisively send us over the precipice: civil society’s attitude of accepting rampant corruption, crime, and economic degradation as if it is something inevitable and unavoidable. This current culture needs to be urgently exposed and addressed. And higher education institutions have a definite role to play in preventing its destructive potential, says Prof Francis Petersen.

References to a ‘culture of acceptance’ most often conjure up a positive connotation – especially in our South African context with its unfortunate history of ‘non-acceptance’, prejudice, and discrimination. The term usually refers to an attitude of embracing a diversity of views, backgrounds, and opinions, and accommodating differences along political, cultural, gender, and religious lines. But there is a new, much more ominous ‘culture of acceptance’ taking root in our society: that of adopting an attitude of indifference and even complacency when it comes to those phenomena that are eroding our future prospects as a nation. 

Challenges to our state 

There can be little disagreement about the general state of decay we are currently experiencing in our various structures of governance on nearly all levels. This includes government departments that are not functioning properly, as well as state-owned enterprises such as Eskom, SAA, Prasa, and Transnet, which are either crumbling away or have virtually collapsed. Some of these structures have been systematically eroded through corruption, inefficiency, and cadre deployment over a sustained period of time. On top of that, we have escalating crime, ranging in manifestation from gender-based violence to mafia-style organised crime syndicates that are infiltrating and effectively paralysing some of our most important sectors, such as the construction, mining, and agriculture industries. All of these contribute to a sagging economy, preventing the economic growth that our country so desperately needs in order to move forward. South Africa’s recent greylisting by the Financial Action Task Force (FATF) as a result of insufficient mechanisms to monitor and combat money laundering and terrorist financing activities, further compounds an already dire situation, as it places severe strain on our financial services sector and negatively affects our ability to attract investment.  Last minute efforts to amend legislation and prevent greylisting were evidently insufficient and much too late. Our current disconcerting national financial status is clearly the result of not only poor government performance, but also a totally deficient policy environment – the combined effect of which serves as a definite deterrent to investors. 

Indifferent response of civil society creating inflated risk 

What is also a growing cause for concern though, is civil society’s prevailing response to these calamities. One of the things that the COVID-19 pandemic has illuminated, is how quickly society can adapt to a ‘new normal’. Things that were altogether unthinkable and outside the frame of reference for most – such as a national lockdown, social distancing, and mandatory public mask wearing – quickly became acceptable and commonplace after it was introduced. Regrettably, the same trend is visible when it comes to our response to the government’s non-performance, rampant crime, and economic pressures that we are currently experiencing. The difference is that there is no greater common good that should make us summarily accept the current status quo. We get frustrated and angry when we hear that products cannot get to ports or markets; we shake our heads when we hear about yet another corruption scandal or another murder; we get irritated when power blackouts increase. But instead of speaking out or voicing our concerns in some constructive way, we tend to quickly and quietly find individual ways of working around obstacles such as load-shedding schedules, rather opting for making alternative arrangements and putting up with all the ramifications caused. 

While on some level it is admirable that ordinary South Africans are showing resilience and innovation and increasingly choosing to do things for themselves amid government failures, it is, however, also indicative of an alarming downgrading of our societal values. Things that would create a public uproar in a developed state, and almost automatically lead to picketing and a widely publicised calling to book of the responsible office holders, seem to hardly get a second glance in our battle-weary South African society. We have lowered the bar of what is seen as acceptable. And from there, it can be an alarmingly fast downhill slope to becoming a truly failed state. The fact that government often goes the route of not responding to public objection, should add fuel to the fire of outcries and protests. But unfortunately, it often has the opposite effect, where government silence is met with public silence and a growing sense of national resignation. 

What needs to be done 

The question is: has our current situation created a society that has simply accepted its fate? Or has it created a society that has become more innovative and creative, actively navigating current challenges, and finding new solutions to societal issues independent of government?  And what should be our reaction to the challenges we currently face? 

As with many things, I believe the truth lies somewhere in the middle. While it is vital that ordinary South Africans and the private sector find ways of working around government shortcomings, it is just as important that they remain vocal, pointing out government failures and questioning the conduct and decisions of our elected leaders. Public reaction should, however, not stay with objections alone, but evolve into physical action. There should also be a willingness to work with struggling government institutions and incorporate other role players in order to find real solutions together. As a responsible citizenry, simply being quiet and complacent is our worst option. 

Role of higher education sector 

As vital vehicles in the shaping of our next generation of citizens, universities and other higher education institutions have an important role to play in the current government versus civil society impasse. I believe this role is twofold: on the one hand, we need to educate and encourage young citizens to stand up and make their voices heard against injustice and non-delivery in the public sector. On the other hand, we are also cultivating a next generation of leaders. While they are gracing our campuses, we need to contribute towards instilling ethical values in our leaders of tomorrow and equipping them with a vision that is much broader than just individual needs and wants, but that encompasses the needs of our society as a whole. Our education efforts should always have this all-important developmental focus, where graduate attributes such as critical thinking, community engagement, ethical reasoning, and an entrepreneurial spirit are nurtured and employed in order to build a better country. We should also impress on our youth the importance of forming partnerships and collaborating with various role players from different areas of expertise and sectors of society to work together to reach this common goal.

How do we do this?

I believe an important and obvious basic building block that institutions of higher learning are already providing – and should increasingly be enabled to do – is the creation and expansion of competency through teaching, research, and engagement. By equipping our students with knowledge and skills, we empower them to play an active role in taking our country forward. This should be complemented by social justice competencies, where curricular and co-curricular programmes and activities are used to grow a sense of social justice in our leaders and citizens of tomorrow. These social justice initiatives should also be coupled with the creation of robust platforms for dialogue on topical issues of national interest, where government voices are invited, incorporated, and challenged, but in a constructive, mutually respectful context. Universities should finally also employ their research capacities in various fields to come up with real, practical, and sustainable solutions to societal issues, presenting government with new, innovative, and effective ways of addressing our current national dilemmas. 

It is vital that our leaders – and followers – of tomorrow are sensitised to an important fact: as much as South Africa needs competent, ethical leadership, it also needs an alert, active, involved citizenry to keep those leaders in check. Because a government that is dysfunctional and a society that simply accepts it, makes for a very dangerous combination.

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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