NOMPU SIZIBA: The Applied Development Research Solutions [ADRS] agency has released a report on alternative policy options the country could look at to address the economic crisis prevailing in the country.
It launched the report entitled ‘Covid-19 and South Africa’s economic outlook’ during discussions held today with the Indlulamithi South Africa Scenarios 2030 and the Gibs [Gordon Institute of Business Science] Centre for Leadership and Dialogue.
The report, with its six-pillar policy framework proposal, is looking at short- to medium- to long-term strategies to deal with the Covid-19 fallout, as well as the country’s underlying socioeconomic scourges of unemployment, poverty and inequality.
Well, to discuss these matters further, I’m joined on the line by Dr Pali Lehohla. He’s a member of the Indlulamithi executive committee, and of course he is our former statistician-general. Thank you very much, Ntate, for joining us. Now, before we get into the ADRS report, just give us a sense of the work that you guys are doing at Indlulamithi.
Dr PALI LEHOHLA: At Indlulamithi we are looking at work that seeks to resolve the problems in which South Africa is deeply immersed.
Around 2016 a team of people started thinking about building scenarios, and this is where the Indlulamithi scenario building comes from. In 2018 we had these scenarios where we developed a new dawn and [various other plans but have not yet] made a walk which is actually South Africa on the move. And why we did them then was to try and quantify these scenarios so that they become mutual scenarios.
Scenarios are scenarios, and until we have quantified them and group-tested them, in terms of that foresight, they have not become real scenarios, and they have [not] been road-tested for foresight.
NOMPU SIZIBA: So in terms of the Applied Development Research Solutions agency’s report, which they released today, what is their new six-pillar policy framework about? And what makes it so much better than the current policy framework?
Dr PALI LEHOHLA: Well, I’m not sure what current policy framework we have in South Africa.
If you thought about it, you really cannot actually put flesh to it, because it’s everything to everybody, whereas the six-pillar policy framework discusses matters macroeconomic, it talks about microeconomic, it talks about industrialisation, it speaks about policies, the role of policies in development, policies at the moment, industrial strategies actually controlled by national [government], policies relegated to dealing with social grants as well as education – and never actually involving the centre of affairs where they have to talk about industrial policy.
And then you can look at it budget-wise. Policies have very little by way of budgeting for [such things]. So the six-pillar approach makes a distinct intervention. And then it integrates from the national [level] through the province [level], through the districts, and then the municipalities. So it is a coherent set of actions that capture the motions, the laws of motion, of the country. That’s the key difference.
NOMPU SIZIBA: So, Ntate, I don’t know how many experts I’ve spoken to who have said that South Africa has great policy plans, but is useless in terms of follow-through. in terms of policy follow-through. Surely, even if the latest proposals that you’re talking about were to be taken into account by government, because it’s them who have to activate it, because it would have little bearing without that culture of implementation.
Dr PALI LEHOHLA: I think the diagnosis is wrong. It’s not policy follow-through. It’s actually the design of policies that is weak, because you cannot follow through on a weak thing. So everybody can be tired of planning. They are not planning 16 things of South Africa that one can talk respectively about. Just take, for instance, the National Planning Commission [NPC] review of the NDP: they never had an instrument [that would allow the] NPC to move that NDP from the shelf into action.
So if you say implementation is wrong – what implementation? When there was never a plan to implement.
And you need a policy framework, a policy road map that is measurable, that is quantified, that has line of sight. Without foresight you cannot do these things.
So we’ll talk until the cattle come home if we don’t have a policy framework and a policy foresight that is anchored in numbers.
NOMPU SIZIBA: We’re led to believe that we have a national planning and monitoring capability in the presidency. What’s your feeling about –
Dr PALI LEHOHLA: No, no, no – there’s nothing there, there’s nothing there. When I was statistician-general, I actually took it upon myself to take stuff from DPME [Department of Planning, Monitoring and Evaluation] and stuff from Stats SA to go and look at these tools. And it was upon the return of Statistics South Africa’s stuff that they reported that the nine-point plan is empty. And I reported this to our executives. I said, guys, we’ve done analysis on this. This nine-point plan is not going to deliver anything.
Where are we now? Ask: ‘What has happened to the nine-point plan?’
So this thing of talk and people protecting their jobs and the like, and putting files together, one on top of the other, and you say that’s planning.
That’s not planning at all.
You need a sophisticated instrument that brings things together, and this policy framework and alternative policy shows that – for instance, this policy framework that’s applied in Gauteng, [the] Growing Gauteng Together [Plan]. The feeling of Gauteng? In the Sopa [State of the Province Address] [it was] said: “This is how I see Gauteng using these tools and looking at the scenarios and taking the ‘major walk’ path, [and] based on that foresight, Gauteng can produce 3.1 million jobs.”
Now, the systems that we have that pass for planning are short-term. Systems like the CGE (Computable General Equilibrium), which actually just looks at that as countercyclical moves of two to three years. And when you think about long-term planning, you have to think about somebody else, and then [these things must be] broken down.
We don’t have that kind of thing. So we are trapped by the CGE/Treasury’s system that can’t actually have line of sight on the thinking of the mind, on the opening of a farm, that is funded, opening of a factory, and how does that thing live through its life of about 20 to 30 years. That is what we’re complaining of.
NOMPU SIZIBA: Ntate, you’ve said a lot, but now where to next because, like you say, we have a lot of policies and plans and nothing’s coming together and everyone is frustrated?
Dr PALI LEHOHLA: No, no, no. We have a lot of useless policies that have not been brought together in a systematic way. Business put 1 000 project proposal.
Those proposals didn’t go into the system of government. Why? Because we don’t have receptacles for those kinds of things and processing them.
So these are the serious technocratic fault lines that stay up. And then of course we are told that is an economic recovery, [one] that has left out those inputs from business. So what kind of economic plan do you have?
NOMPU SIZIBA: You use the word – I can’t pronounce it now. What institution, what body needs to be that receptacle or whatever you just said, what body needs to do that in order for things to happen? Otherwise we keep going back to square one.
Dr PALI LEHOHLA: You have the Department of Planning, Monitoring and Evaluation [DPME]. All they can say is they monitor [and] evaluate.
We can’t say they plan, because if they said that, which is their responsibility, you would ask where the plan is, and you will not find it.
That’s the problem. Therefore, at the technical level there are defects and South Africa is burning.
NOMPU SIZIBA: It is burning, and there are a lot of socioeconomic problems. In your capacity at Indlulamithi as the Indlulamithi executive committee, what actions are you making in terms of talking to government, because you do have access to these people? You’ve worked at a very high level at certain government institutions. What have you done in terms of communicating with government and trying to get them on board to your way of thinking?
Dr PALI LEHOHLA: That’s a very serious presumption – that I have access. I don’t.
NOMPU SIZIBA: You don’t? That’s a pity.
Dr PALI LEHOHLA: No, no, no, I don’t want to impose access. What I do is to share with the public the knowledge bases, so that they are available to everybody.
What we also did, of course, so that we don’t have people monopolising this knowledge, we also presented it to the different [stakeholders], the private sector, Anglo American, Remgro and all others, and the ETC, the Economic Transformation Committee of the ANC – and then nothing came out of that.
But these days people are quite keen to hear that it is possible to grow South Africa by 6% – and they said, how do you get it?
And then we said, here are the instruments of foresight. You can use them and see where you will get. What we lack are those instruments of foresight to test ideas, to see which policy best suits the South Africa. In the absence of those tools that can bring complexity together. And we have the NDP and the NPC with small projects – one project, one project – without any integrating system. You will not have line of sight. In the end, what we have been told now is let’s go at 3%, and the NDP says 6%, the RDP says 6%; the DF said lower than 6% [and] South Africa will not go anywhere.
Now, how can we at this point in time accept a 3% [growth rate]. It is the poverty of thinking and poverty of policy. That’s the poverty that we are suffering as South Africa at the moment, a poverty of ideas.
NOMPU SIZIBA: Indeed. What is the alternative –
Dr PALI LEHOHLA: So what we are doing is to say government, go through and look at these tools. Sit with them and do policy analysis and policy work. They will enable you to see what the best path possible is available in line of foresight. They’ll not resolve everything, but at least they will be exhaustive in as far as macroeconomic policy, microeconomic policies, your provinces, and then [their ability to] integrate everything.
What is unacceptable and I see is for South Africa to say it’s macro policy is sound.
When they exclude variables of macroeconomic policy such as employment, poverty and inequality, how can you have sound macroeconomic policies when you have 30% unemployment. And they don’t even mention it in the plan. There will be very little in the State of the Nation Address or even in the budget about what we are doing about employment, and what are our targets, and what are the programmes that will deal with that target in an integrated fashion across space and time. So when we speak about space and time, you don’t need the lousy talk, and of course we don’t need back-of-the-envelope calculations.
NOMPU SIZIBA: Ntate, let me ask you this. What do you see the National Development Plan [NDP] as being? Is it a destination and not a plan? And things like the Economic Reconstruction and Recovery Plan would be a vehicle towards getting there, because the National Development Plan does have targets around employment. It does have targets around skills and so on and so forth. It does speak to all the things that you’re speaking about but, like you say, there isn’t an instrument to help us get there.
Dr PALI LEHOHLA: There isn’t an instrument that will set out those targets. That’s a lofty document that says when South Africa is ‘doing this’ – that’s what scenarios also do. Unless you quantify that document and say how do we achieve that – and that’s what we did with the scenarios. We have quantified and said if we go the route we have gone, we will end up finding a new dawn.
If we go [with the] trickle-down effect we’ll end up in 10 years with a high unemployment rate, and 3% [growth] will end up at a 27, 30% unemployment rate.
So who will be waiting for 10 years to be unemployed, whereas with 6% growth you can actually reduce unemployment in the next 10 years, generate hope. What is needed, and what is needed in South Africa is a technocracy that makes sure that politically things are politically mobilised and can be followed, things can be socially desirable and economically they are fitting. That’s what we lack.
NOMPU SIZIBA: Ntate, you know what? We do need to talk further on this subject and give you more time, some breathing room and so on. But I think the frustration is that at the end of the day these instruments that you’re talking about need to be given to bodies and institutions that can make them work. Currently it just doesn’t seem as though that can happen and we’re going to be toing and froing and talking about these things.
Dr PALI LEHOHLA: They have to belong to the public. They have to belong to the government. If they are in the government, they can be killed very easily. We used to have scenarios in government from 2000, and then they were killed by 2008. You cannot trust these things to government alone.
NOMPU SIZIBA: Yes, absolutely. Dr Pali Lehohla, we’re going to leave it there. Thank you so much for your time, Dr Pali Lehohla is a member of the Indlulamithi Executive Committee and of course our former statistician-general.