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Economic transformation is about building a prosperous SA

It’s an imperative that can’t be ignored.

The term ‘radical economic transformation’ has entered the South African lexicon over the last few months. It has become something of a rallying call within the ANC.

While there is some element of political expediency about its sudden rise to prominence, it would be a mistake to think that that means it can be ignored. A recent round table discussion hosted by the UCT Graduate School of Business made it clear that economic transformation in South Africa is an imperative that has to be properly debated and clarified.

The president of the Black Management Forum (BMF) Mncane Mthunzi said that as a starting point the country needs to appreciate the difference between reformation and transformation.

“For the past 23 years we’ve been fed reformation disguised as transformation,” Mthunzi said. “But these are two different things. Reformation is about improvement and betterment, but its not transformation. Transformation is a metamorphosis.”

He said that true transformation means that the environment must become something completely different to what it was before.

“Anything else is not transformation,” he said. “It has to be a complete change, and it cannot happen without pain.”

Mthunzi argued that South Africa has to meet the challenge of building a truly inclusive economy that will address the injustices of the past. Already the political rhetoric in the country and the growing militancy of the youth are signs of bigger problems that will emerge if this isn’t addressed.

“We are facing the consequences of skirting around the need for social change,” he said. “We are sitting on a time bomb as a nation. Business and institutions have only adopted a minimalist approach. It has never been transformation.”

Dr Sean Gossel, senior lecturer at the GSB agreed that South Africa has failed to successfully deal with its economic challenges.

“What we are experiencing now is not surprising,” he said. “It’s not a sudden explosion of discontent. It’s the result of policy failure over many years.”

Gossel argued that any attempts to reform the country’s economy since 1994 have only dealt with surface problems. The real issues, however, are the economy’s inherited structural limitations.

“We have the cart before the horse,” he said. “We can’t have radical economic transformation if we don’t have radical economic growth. You can’t redistribute what isn’t there. So we have to deal with the structural limitations in our economy that are hampering economic growth.”

In addition, much of the focus of transformation has been on the urban middle class. However, where change is most badly needed is amongst the rural poor who remain completely excluded from economic activity.

“We can’t have these levels of disparity continuing,” said Gossel. “No economy in history has had these levels of disparity and survived.”

This sentiment was echoed by United Democratic Movement chief whip Nqabayomzi Kwankwa, who said that South Africa has to have a “courageous conversation” about how we address the imbalances of the past. The alternative is growing anger and conflict.

He suggested that land ownership is one of the primary issues that has to be dealt with.

“The land question must be addressed, because it is indeed a ticking time bomb,” Kwankwa said. “But we must also ask ourselves why we are giving people RDP houses but we are not giving them the title deeds? Is it not counter productive to give someone a house but not entrust them with the ownership?”

He pointed out that many people end up selling their houses on the black market below their value or renting them out to generate some sort of income. However, this is not the most productive use of this asset.

He also questioned the way that the land redistribution programme has been handled.

“It takes land from a farmer, gives it to a claimant, but then fails to provide them with full settlement support,” Kwankwa said. “And what you find is that people don’t have the skills, the capacity or the resources to work that land. Even where there is support, most of those programmes are underfunded.”

The result is that people struggle to make a living from the land and it again becomes an underperforming asset.

Ultimately, all of these issues have to be resolved in order to build an inclusive economy. Doing so is not in the interests of one particular group or another, but the country as a whole.

“We are one of the few countries in the world that has adopted policies to affirm the majority,” Kwankwa pointed out. “Usually its the opposite, with minorities needing protection. But whether we like it or not, whether you think black people are competent or incompetent, is a non issue. It is our collective responsibility to build a South Africa that will be prosperous tomorrow.”

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“inclusive economy that will address the injustices of the past”, The whole Apartheid system was based on separateness, separate development, it was unethical but the negative effects are totally overrated by the media.Totally different from the current racial laws which primarily aims to empower certain racial groups economically, apartheid laws were aimed at separating races and cultures but also then to protect the cultures. If all apartheid laws were to be reversed and whites would receive a homeland, schools and universities build with black tax money, I think whites would be very happy, even if they can’t buy land in black areas and receive less state funds for schools (which they already do). Blacks do not want to be separated from whites (not 50 years ago, not now), that means whites as a collective group is an asset to SA. The sooner whites are embraced as part of the solution and not the problem in SA the sooner we can move forward. Equal opportunities will never lead to equal outcomes. People have different strengths and talents.

For a journalist Patrick Cairns is offering nothing here. He is stating what we already know. When people are not making money; then the blame game starts.

If the ANC was less corrupt and not as inept at governing the country life could have been a lot better for the poor who have seen little in terms of better standards of education and job creation. Corruption has diverted funds which could have been used to improve standards of living for all and especially the poor, whose “discontent” is now being used by the ANC to convince us that they now, all of a sudden, care about them.

The ANC has had 23 years to transform South Africa and they have FAILED miserably. All the talking and shouting is not going to solve any problems, we need honest and caring leaders who have the will to make a difference.

As an aside, can you believe that with a population of +/- 54 million every citizen could have been handed R 2 million rands totalling R 108 million which would have been more than covered by the funds lost due to corruption?

Your arithmetic is a bit wobbly! It would cost a mere R108 million if you handed everyone R2 each. To give a total of R2 million to each you would need 108000000 * 2000000 which is 2.16e+14 (engineering /scientific notation). Or if you prefer a string of zeroes, 216,000,000,000,000 (216 trillion in decimal format).
Of course you may well argue that this just as valid amount lost to corruption!!!

Math still not right, it will cost R108 trillion to give every citizen R2m.

I’ll take R200 notes, unmarked. Thanks.

@Moneychief – sorry – I was concentrating on the number of zeroes rather than the factors. Please go to Nkandla and wait in the queue like everyone else! 🙂

I think “radical economic transformation” and “land redistribution”, like “white monopoly capital”, are just weasel words, primarily designed to dupe the voters into believing they will somehow benefit. Or, of course, that someone else is to blame for their poor situation and hide the incompetence and corruption rife in the ruling party. Without any sign of a coherent plan being followed, the true intention of such weasel phrases in the African context is that the ruling elite will benefit. Let’s not hide from the facts here.

Do you want South Africa to grow? Then that requires the majority to be lifted out of poverty. Globalisation has made it very difficult now because we have to compete against far stronger competitors.

Perhaps African Governments can funnel funds into beneficiation rather than exporting raw materials, but we need global demand to pick up again first unfortunately.

The majority must lift themselves. They can start by abandoning the kulture that got Them into the poo in the first place.

They have had enough handouts via cololialism and have never used them.

The majority must stop producng themselves and then become a minority that can be viably helped without ‘pain

Preposterous to think that a minority that started with nothing have to again work to lift an ungrateful ‘majority’ over and over again.

BEE and social grants are where the problems start.We only want to divide the economy the whites created but we have not allowed blacks to create their own economy.There is enough money to fund black business.The policy the ANC is advocating will lead to ruin.
If the ANC is serious about transforming the agriculture sector they must see what blacks are studying at university a lot of agriculture graduates will be required.We must remember farming is a way of life with a lot of risks.

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