To Address South Africa’s Economic Crisis, We Need a Marshall Plan

Every South African citizen wants to see our country succeed, and our people prosper, despite the depths of our national depression. 

For us to fix South Africa, we need a Marshall Plan! Not in the sense of copying post-World War Two efforts, but to put a clear plan in place that will give South Africans their marching orders, and to rebuild our collective attitudes toward rebuilding our country.

To that end, we must reimagine our social contract, our politics, and, by extension our economy. 

All South Africans must agree to cooperate toward achieving our collective good.

I think all of us, honest South Africans, know that our country is in crisis. 

Those who deny it, are those who selfishly profit from the crisis. 

In the first instance, our national socio-economic crisis is a direct result of our politics.

In short, there are no thick lines demarcating neat boundaries between the three components of South Africa’s monumental crisis. 

Yet it is possible, even necessary to characterise the components distinctly. 

Failure to do so, would make the bigger crisis appear dauntingly complex, and therefore insurmountable. However, today I focus on the Economy.

Instead of rallying all citizens to work together, the South African economy inspires national discontent. 

The grim iterations of the economic crisis have manifested into violent demonstrations of social dissatisfaction. With the unemployment rate currently standing at about 46.6% fast climbing towards the 50s, and the youth bearing the most brunt at about 74%, it follows that we can a sharp rise in violent protests and xenophobic violence. 

Before I get the hairs on your back to stand sharply upright and give you the expected chills…let me once more address my stance on Xenophobia, because I am continuously counted among xenophobic South Africans.

My utterances on the issue of immigration have always been clear and consistent, just that sometimes our society suffers from deliberate selective hearing. 

I maintain that personally, and I think all South Africans, agree that our country, as with many other countries around the world, was built on the back of migrants, however when it comes to illegal migrants or immigrants, the real question here has little to do with human rights, but rather more with legality. 

Therefore, people of the world including, and perhaps more importantly, those fleeing from unjust political regimes, seeking socio-political and even economic asylum, must come to our country legally and when here, must obey our laws. 

Surely this is not an unreasonable requirement, otherwise how else are we to sustain them when they are here, as well as our own citizens who hare buckling under the pressures of high poverty, unemployment, and the widening inequality gap?

These realities are both results of history and an outcome of contemporary failures. 

On the one hand, there are those who want us to believe that the past has little to do with South Africa’s current economic woes. 

And, on the other side of the subjective divide, where others point fingers at yesteryears as if those who have been leading South Africa since 1994 have played no major role in arresting economic progress. 

The truth, though, is that both the past and the present are guilty of undermining South Africa’s economic potential. 

The idea behind the grand schemes of colonialism and apartheid was simple: building and maintaining an economic system in which whites (in particular males) are the owners of the means of production and black people the workers. 

This was facilitated by a state machinery designed essentially to develop the economic capacities of whites and stunt the intellectual and technical development of black people. 

Whiteness was a ticket to better educational and economic opportunities, and blackness guaranteed condemnation to a life of servitude. 

The current concentration of skills among whites and their predominance in the economy cannot be explained outside the context of our racialised past. 

The traces of our ugly past cannot be erased by the sensitivities and discomforts of contemporary society. 

However, while it is true that three decades are not enough to correct the damage caused by more than three centuries of institutionalised racism, this truth must not blind us to the fact that the successions of our post-apartheid governments have failed to lay the foundations of a transformed economic structure. 

The emergence of a small stratum of super-rich black, particularly those individuals who are well-politically connected, nevertheless, the old framework that sustains racialised patterns of economic ownership largely remains intact. 

Black Economic Empowerment (BEE) schemes, despite their aspirational intent, have not succeeded in redefining the role of black people in the economy as largely unskilled workers. 

And so, while the black middle class has since 1994 expanded, members of this stratum of the population are generally not engaged in growth-propelling activities in the productive sectors of the South African economy. 

Taken as a whole, the post-1994 era has failed to do two very important things: (1) modernise and (2) grow the South African economy. While the services sector (particularly finance) has grown in the past two decades, manufacturing has lagged. 

There is also a failure of innovation and entrepreneurial-driven growth that could take the country beyond South Africa’s exhausted mineral-and-energy-industrial complex. 

Other developing countries – particularly those in the Far East, such as Singapore, China, and South Korea for example – are galloping ahead in the revolutionary field of artificial intelligence, which seems poised to dominate the future. 

Manufactured products from that region are fast saturating our domestic markets. 

For many years, South Africa’s so-called Department of Science and Technology has served only to pay the salaries of pampered bureaucrats and political fat cats. 

Outside their airconditioned offices, there is nothing to show that South Africa is on the road to becoming a serious and globally competitive player in science and technology. 

Furthermore, the South African economic quagmire is compounded by pervasive skills deficiencies. 

Essentially, the post-apartheid economy has been evolving like a tired old car that is expected to load more and more passengers without adequate service. 

The engine (that has so far been the mining sector) has been falling apart; the body (the manufacturing sector) has been dropping broken parts on the road; and the passengers the car has been picking up along the way (unskilled workers) cannot walk due to broken limbs (rising unemployment). 

Worse still, our dysfunctional public education system almost singlehandedly contributes to the high youth unemployment rate as school leavers are largely unemployable. 

We need to be unpolitic about bringing back School Inspectors in our schools to ensure Principals, appointed by the Department of Education, not SADTU, are held accountable to producing quality education appropriate for growing our economy.  

Finally, but certainly not an exhaustive list of factors that have contributed to why we find ourselves where we are: The “energy” part of the old industrial complex has literally come to a near-halt. 

Under crippling mismanagement and grand-scale corruption, Eskom has regressed from its former glory as a reliable source of relatively affordable electricity to becoming our country’s biggest economic liability. 

Electricity supply has become so erratic that investors cannot be assured of its reliability. 

Regrettably, even promises of renewal have produced nothing in tangible by way of viable policy reforms toward sustainable economic growth. Instead, all manner of explanations, including the Covid-19 pandemic, have been cited to justify inaction.

So, what are we to do? 

As stated at the outset of this speech, for us to fix South Africa, we need a Marshall Plan. All our hands must be on deck! 

Inspired by the Singaporean example of adhering to what is known as the MPH Formula (Meritocracy, Pragmatism and Honesty), our Marshall Plan must be preceded by undertaking two key steps:

First, we must reimagine and renegotiate our social contract. 

We need all South Africans to agree on a proposed way forward. We must also agree that not everyone will be satisfied in the immediate short-term because the nature of our crisis is also a complex one. To achieve such agreement will not be an easy feat, given that our people have been let down over the last 28 years. But we need their buy-in otherwise whatever other grand plans we may have will not succeed. 

When they understand and buy into that Plan, then they must demand results and not be satisfied with excuses. In other words, they must begin to be clear about what it means to be South African. 

Put simply, our beloved Constitution must begin to manifest in their lived experiences and take on a more human face.

How will we achieve this you may ask? Well, we all have to get down to doing the hard work of painting a vivid picture of what South Africans can expect at the other end of the Plan. 

Second. We must restore the rule of law in our country. This is an important ingredient in building a successful democracy. People must feel safe in our country. Women, children, and people from all walks of life must see and feel that there is social order in South Africa. 

Only then, would we have set the scene to be able to implement the Plan and rebuild our economy. 

Now Tier-1 of the Marshall Plan: Create an Enabling Environment for the Economy to thrive by doing the following:

Meritocracy: We must ensure that we hire the best people to run our country, regardless of race or gender. We must place strict emphasis on ethical, evidence-based, and long-term orientated political leadership. 

We must reach consensus that politics and self-centred politicians must get out of the way. If public officials are not going to demonstrate that they too are committed carrying out the Plan, then South Africans must act decisively against them. 

Tier 2: Pragmatism: Once in office, they must commit to making tough and necessary economic policy decisions based on the best available economic evidence and wisdom, even if such decisions may be unpopular. For example:

  • Decrease government’s regulatory role in the economy by reforming labour legislation, reduce trade restrictions, no labour unions to have a veto right on our policies, reject protectionary measures, and provide the regulatory environment necessary for the entrepreneurship and the private sector to thrive.
  • We must promote public-private partnerships by amending the prohibitive and overly complex legislative framework regulating such partnerships.
  • Strengthen and increase the independence of primary economic institutions, such as the Competition Commission, National Treasury, the Financial and Fiscal Commission, South African Revenue Services and Statistics South Africa, by depoliticising.
  • Reform state expenditure through the overhaul of the state’s procurement mechanisms. Market-related prices, quality and delivery are key tenets for doing business with the state. Service providers must be held accountable if they fail to meet contractual requirements.
  • Allow the establishment of public-benefit corporations that may pursue societal goals in addition to maximising shareholder-profit.
  • Incentivise long-term planning through tax incentives and to allow shareholders to hold the boards of companies liable if they make decisions driven by short-term profit at the cost of the long-term sustainability of the company and by extension jeopardise our national economic output.
  • Even more importantly in our immediate reality, we must stabilise South Africa’s electricity supply by drafting policies and regulatory frameworks that encourage independent power producers to generate, transmit and distribute renewable energy.

To be clear, to act pragmatically simply means that we do what is best for the country irrespective of our differing ideological leanings but does not mean that we completely ignore the principles of those ideologies that are upheld by our Constitution.

And finally, Honesty: We must take a zero-tolerance stance on corruption. Our society has normalised systemic corrupt behaviour at the expense of the poorest people in our country. Corruption steals from the poor and deprives them of living a good quality of live, thereby undermining their dignity. 

Examples must be made of senior public officials who are found wanting and guilty of corrupt acts. They must be publicly held accountable. To do so would serve to deter those under them from following suit. 

We need, as a matter of urgency, re-establish the Scorpions, with more powers outside political interference. There has to be consequences for wrong doing regardless of your personal status.   

Colleagues, I know you were probably waiting for me to respond to this question in a different way and tell you we need to simply change policy X or Y and the like, however our issues are bigger than just one policy framework or incoherent political or economic decisions. Our crisis is complex and requires a whole-societal overhaul that will set up on the path to a more positive economic outlook.

Once South Africans can demonstrate to the world that their investments would be safe in our country without fear of endless social unrests to threaten their return on investment, we will be in good stead to attract more and more investment to our shores. 

Otherwise, I am afraid colleagues, the future of our country looks bleak!

I was asked by the host to address my view on the death penalty. Let me also be clear on this dividing subject. The views I am expressing are my personal views, with respect, appreciation and respect of our current Constitution. 3 categories of crime I believe deserve the Death Penalty – 1st Degree murderers, Rapists and Drug pins responsible for destroying not just the users, but families. If I have my way, I will lobby Parliament to give serious consideration to this necessary matter.     

Thank you.

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