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Addressing deep-rooted challenges urgently

It takes time to solve embedded issues such as poverty, but SA is in need of some quick wins that only collective work on shared goals can achieve.

For many South Africans, having political power doesn’t mean having a better life, more altruistic leaders, or less brutal or abusive government. While it is a fact that social grants have had a positive impact on beneficiaries, it is hardly enough to lift them out of generational poverty or improve the upward mobility of the children receiving it.

Grants are like putting a Band-Aid on a deep cut that needs stitches. For half of the South African adult population living below the poverty line – 49.2% according to Stats SA’s ‘Five facts about poverty in South Africa’ – it means power merely changed name and shape. They are part of the 6.8 million unemployed.

For these people – the youth and those who have completely given up looking for work and finding a way out of poverty – the aphorism ‘A rising tide lifts all boats’ is a falsehood. It’s a narrative only mentioned by economists and politicians in their policies and speeches about poverty under the current world financial systems.

Now you might want to interject and point out that so many things are going wrong in this country – but remember, the poverty crisis is not unique to South Africa. It is so widespread that four years ago the United Nations, in defining the 17 global Sustainable Development Goals (SDGs), set the target of eradicating extreme poverty from the world by 2030.

Fragility

The UK’s Commission on State Fragility, Growth and Development – a joint endeavour by the London School of Economics and Political Science and the Blavatnik School of Government at the University of Oxford – notes in its 2018 ‘Escaping the Fragility Trap’ report that: “Nearly a third of the way towards that deadline, almost 900 million people are still living on less than two dollars a day and, in too many of the world’s poorest countries, progress is completely stuck.”

While South Africa can’t be categorised as one of the world poor countries, its inequality is alarmingly growing and continues to occupy the number one spot in the world.

Since the country is part of the international community, it means something has to be done in the remaining 11 years before the 2030 deadline.

Earlier I suggested that democracy doesn’t automatically translate into better lives. Similarly, a government of the people does not mean leaders who care about the well-being of the people. Evidence of this is made clear by the violent way government treats its most vulnerable who are locked out of the economy and have no chance of getting in. The state brutality against those who protest countrywide for basic service delivery affirms its unwillingness to (a) listen to poor people and (b) bring them into the economy.

Policies such as the Expanded Public Works Programme are short-term and often never quite address the bigger picture. This links to the social grant point I made earlier – you can give poor people monthly grants and even increase that money, as was the case in one or two state of the nation addresses (Sonas). For beneficiaries, however, the standard of living doesn’t necessarily change nor does their quality of life.

Money vs the means to make money

It’s time to stop using money as a well-being ‘fix’ and start looking at other measures that will put the poor and excluded in a better position to actually improve their lives – such as access to opportunity, food, water, sanitation, healthcare, education; the type of support that will lead to a greater ability to make life choices. Would such a shift not be better?

Well-being determined by earned income rather than social-grant income is infinitely preferable for both the recipients and the economy.

Any solution to the alleviation of poverty must therefore be focused on income generation, employment and jobs rather than grants.

I have previously suggested lessons that South Africa could learn from Japan, but maybe I was being short-sighted. Instead of attempting to copy, alter and apply approaches or paths used by successful countries and assuming they will work, is it possible to develop a South African solution?

Government and President Cyril Ramaphosa, as outlined in his state of the nation address in June 2019, has set seven priorities that the new administration will focus on, five fundamental goals for the next decade, and 10 years in “which government will make progress in tackling poverty, inequality and unemployment”.

After mulling over what can be done about poverty and the wider problems plaguing the county, I would like to suggest the following.

First, for the state to actively promote one main plan by creating and ensuring an environment conducive to collective action.

Defining a shared common goal about what kind of economy government, business and labour want collectively, with the emphasis on collective work, should be a steady process.

While state priorities and goals are imperative, it would be a mistake for government to think it alone can drive them. Business, labour and citizens must buy into what government is selling. Finding the right balance between aspiration and reality is therefore crucial. For example, in order for investment to materialise, the private sector (locally and internationally) needs to have an atmosphere where conditions for doing business are favourable. This means fewer bureaucratic constraints such as onerous labour laws, rent-seeking practices and unrealistic political promises by government that ignore economic realism.

Second, and this is an urgent one, focus on urban infrastructure development.

The Johannesburg and Pretoria CBDs are examples of how fast urbanisation is happening. The two also illustrate the difficulties that arise when buildings are allowed to decay then trying to solve that issue while addressing inner-city housing problems. I suggest a private-public partnership that incentivises a return to the city of the private sector that integrates and offers urban working and living for young professionals who are first-time employees and potential property buyers.

This will only be possible if safety, security and services such as water, electricity, sanitation, transportation, as well as roads into and out of the cities, are assured. If this done, it will be a step towards dealing with urbanisation not just by solving problems but as part of the rebuilding of the economy.

Since economic growth happens in the city, a revived, well-run city that is freed from political interference or contestations can be the much-needed kickstart to replicable programmes in other provinces.

Third, ultimately it is the actions of leaders in all levels of public office that will determine whether state policies and plans for inclusive growth materialise.

It would serve Ramaphosa well to build legitimacy by demonstrating his executive powers in disassociating his administration from the many leaders who are implicated in corrupt – and corrupting – practices. Yes, it would mean overhauling his cabinet. And while that may shock the markets for a moment and affect the rand, the long-term effects will far outweigh the short-term discomfort. Crucially, it would also mean inculcating within his cabinet a culture of listening to what ordinary South Africans want while balancing this with the reality of what government can feasibly deliver. Protests that are happening nationally show the gap between expectations, reality and unmet promises – and the resultant frustration. Easy and short-term programmes that yield quick and tangible results are more likely to win over unhappy citizens than long-term plans that are just words.

Read: Africa’s only way out of poverty is to industrialise

Taken together, the urgent priorities and goals for Ramaphosa and government seem rooted in doing things that, for poor people who are locked out of the economy, will make a significant difference in their immediate lives. To achieve this or even come close requires a government that has policies that are short term and easy to implement in a way that delivers results that are visible to the citizenry.

If done right, these short-term actions can enable government to tackle poverty, deal with unemployment and generally assuage the frustrations of many South Africans. This may also give government the breathing space it needs to carry on with the long-term strategy. After all, it is not built on nothing – it is a gradual process that is made up of short and medium-term strategies.

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You could make prescriptions on how to eradicate poverty as many have for the last 25 years.. but then you run up against reality:

The poor remain h€llbent and content on voting in an administration who keeps them poor.

And the rich and skilled young are fleeing in terror from these shores

South Africa, along with many other global economies, is in a state of collapse.

To get out, we need lots of cheap energy – cheap electricity, cheap petrol, cheap labour.

This needs to be combined with a meritocracy, pragmatism, and honesty.

Sadly, these 6 ingredients look like 6 bridges too far. Impossible really.

Instead we’ll look for scapegoats, radical solutions, and the old favourite, third forces. These will probably emerge as soon as Cyril’s dream crashes and he is replaced by the looting left.

Probably our best hope is for the IMF to run the country, but like Zimbabwe, I think we would rather crash to zero before we alienate our God given right to destroy the economy.

The relentless implementation of ANC policies has eroded the basis of the economy to the point where there remain only 2 driving forces, one is the ability for individuals to take on more debt and the other is the social grant. The socialist policies of BEE, EE, The Mining Charter, the nationalization of mineral rights, low- and zero tariffs for subsidized imports, unaffordable administered costs and the redistributive municipal tax regime practically shut down and decimated the primary industries like manufacturing, agriculture and mining.

The rest of the economy depends on consumer spending. The consumer is over-indebted and the purchasing power of the social grant is crashing. We have reached the stage where no government-invented plan or policy can save the country from total anarchy and collapse. The government itself has to change. This governing party delivered us at this critical situation and this same party is definitely not able to get us out of this calamity.

Only the free market policies of Baroness Margaret Thatcher can save us now. We need to replace the socialist foundation of our economy with a free market, capitalist foundation. The odds of this happening? Considering the amount of support for the party with truly free market policies, it is clear that the odds for success is about 3 to 100.

Suprisingly consumer debt levels have dropped significantly in the past few years – although I suspect that may be more due to caution on the part of lenders

Social grants are quickly dismissed in this article although in the short term (1-3 years) there is a very real likelihood that even those grants (and/or the level of state employment) will need to be reduced due to lack of funding.
Agree with the obvious first point about urgently creating a business friendly environment. Not sure it is achievable though – there are a lot of political interests to navigate in making even the smallest improvement. For example, we are still struggling to implement the promised visa reforms for tourists which would appear to be an almost trivial excercise. Some strong approaches to vested political interests are needed – perhaps picking them off area by areas. In the short-term I would suggest the number one target be education and more specifcially SADTU. By world standards we have a very long school year (number of total school days) and yet still have awful results. How about a once-off trade with SADTU – 3 weeks more holiday (and perhaps a later start to the school day which is associated with better school outcomes) in return for a massive shift to independent performance contracting and enormous private sector involvemnet in the education sector.

Again reads like a Xmas list to Santa.
Here’s mine…
Please Santa can you please give me the industrial sized jar of political will concentrate.
Love.
Soutie.

You can have the best plans in the world but if 90% of the bureaucrats in a country have absolutely no values and are always looking for a way to make a quick buck on the side, then progress will never happen. In the USA/Western European countries leaders build their societies. In Africa leaders build their personal bank bank balances. Therein lies the difference.

Nothing keeps inequality growing like corruption and therefore the quickest win for trying to solve embedded issues such as poverty in SA is to stop the ANC from stealing the poor’s money and hope.

BEE is not a shared goal but an incorrectly applied mechanism for corrupt ANC cadres to steal.

Yes ….

“It’s time to stop using money as a well-being ‘fix’ and start looking at other measures that will put the poor and excluded in a better position to actually improve their lives – such as access to opportunity, food, water, sanitation, healthcare, education; the type of support that will lead to a greater ability to make life choices.”

But isn’t that what the ANC political party promised in 1994? So to correct this, get rid of the ANC because they have had 25 years to carry out this mandate and they have failed miserably.

And although “While state priorities and goals are imperative, it would be a mistake for government to think it alone can drive them.” But the ANC will stubbornly NOT understand this. Perhaps because then they would lose control over corruption which has made them rich?

No matter how we turn this problem around and around there are basic facts:

* Money stolen by corruption/inefficiency amounts to an estimated trillion rands which, if it had been used correctly would have put the country into an entirely different sphere by now.

* The ANC does not have ANY qualified management who ANYONE can rely on to do the work of a government department even vaguely resembling the First world.

* They refuse to accept their incompetence and ask for help out of pride.

* There is no quick fix in upgrading the education of millions upon millions of young people.

* There is no quick fix in giving land invaders free infrastructure and so they will become even more violent, destroying confidence in to economy even further.

* It will be a long haul to become a functioning economy and the new normal is exactly what you see in the news and on your travels to work every day. Violence, failed transport systems, erratic supplies of electricity and water, degrading roads, increasing shacklands and living in a state of insidious, invasive stress.

* The result is more likely to be what you see in Zimbabwe, Angola, Mozambique, Zambia, the DRC and the rest of Sub-Saharan Africa.

*This is who we are, a struggling constantly failing nation that destroys the greatest riches nature could bestow on a country.

I am afraid that it is too late to save the place. Population is growing with an- at best- flat economic growth-in short we all get poorer.

Disturbingly rich people and young skilled people are racing for the doors to exit the country. With staggering crime, corruption, NHI, EWC, SOEs bankrupt, Eskom, water crises, top young doctors fleeing, education in a mess, daily protest action, the Courts failing etc. there is little to keep people who can leave here.

What will happen is that the middle class will get smaller and a LOT poorer, the poor will get poorer and the rich that stay a lot richer.

The author has good suggestions but the politicians are short on integrity. Integrity is the cement that holds everything together.

His context is lacking – there is no inequality if you compare apples with apples. The SA African population is not worse off than their peer group in surrounding countries.

Population growth has made a mockery of all the best plans for SA so far.

3 Million people (of SA’s 55m) produces taxes – 52 million people produces babies (across all races) = who is going to win.

Or, when is the 52 million going to start contributing to the taxes.

The SA economy cannot wait a few hundred years for the ANC to mature to a level where it isn’t corrupt or where it has development the management ability.

It does not matter what advise is given, the ANC does not have the will nor the the ability to make things right to get South Africa out of its mess, they fail daily!!! Neither have any of the other leading political parties (DA/EFF/Vreiheidsfront+) the ability, they are anyway worse than the ANC. Ever imagined what it will be like if any of them have to govern (not rule) this country???

At Johnnie Kotze – the DA has run the Western Cape and the municipalities under their control quite well, with their “good governance” approach, that is why the people are streaming south.

The DA will be a good, common sense government.

Ideally the “good” part of the ANC should break away and team up with the DA, to form a government. Then only can we get away from the current, debilitating economic policy stagnation.

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