Dr Iraj Abedian, chief economist for Pan-African Investment and Research Services, recently shared his views on the state of the economy during a three-day lecture at the University of Cape Town’s 2019 Summer School.
In a post on UCT’s website, Abedian discussed his short, medium and long-term approach for economic growth in the country and highlighted key interventions to help steer South Africa back on course.
As South Africans prepare to head to the polls in just a few months, Abedian reflected on the country’s 25 years of democracy, but painted a grim picture of the state of the nation.
He said it remains one of the most unequal societies in the world, with a disproportionate gap between rich and poor.
But, he said, there are ways of turning things around.
Step 1: Cut the fat right now
The first step should be for the government to reconfigure the ministerial cabinet and radically revise the ministerial handbook, he said.
He said that this handbook entitles ministers to privileges no one understands, and they cost the taxpayer billions of rands, including for unimportant status symbols like bodyguards, blue-light entourages and ministers’ drivers.
“There is something wrong here. We should not be footing the bill for all of this. If it doesn’t make sense, cut it out. If it’s not ethical, nor economically sensible nor politically sensible, cut it out,” he said.
Step 2: Medium-term goals, and a change in thinking
The second step is for government to focus on goals that can be managed in the medium-term, which requires a shift in the way we think and what we prioritise.
Here, government should look at upgrading schools and centres of higher learning, including universities, technikons and further education and training (FET) colleges.
Failure to do so will lead to South Africa being left behind, Abedian said.
While subjects like maths and science are critical and have an important part to play when it comes to skills development, Abedian said languages and the arts are critical too, and should receive equal attention.
He believes that aspiring to see black school pupils and university students enjoy the same opportunities that white children had during apartheid is ‘going backwards’, and rather encouraged a shift in thinking.
“This discourse has to change; 25 years post-democracy we can no longer talk about black schools and white schools. We need to talk about relevant schools and irrelevant schools.”
Speaking on health, Abedian said that forward thinking is essential to optimise sectors while adhering to the demands of the Fourth Industrial Revolution.
Currently, public healthcare facilities are “managed backwards” and Abedian advised the adoption of a more technocentric approach to streamline and improve service.
For land, his opinion is that far too many people still live in houses that are owned by the government, including 80% of Sowetan residents.
To empower the economically marginalised, this requires an urgent intervention. More also needs to be done about the tracts and tracts of land owned by municipalities to help address the country’s housing crisis.
“And if there’s land belonging to someone who’s sitting in Australia and they don’t know what to do with it and their children don’t know what to do with it, I say take it away and give it to people who can make use of it. It will place tens of thousands of people in humane living conditions.”
Step 3: Long-term projects and planning ahead
The third step is look into the future, and plan ahead for the society we want to build – while handling long-term objectives like clean energy and water issues.
Addressing poverty, unemployment and inequality is a long-term project that requires ongoing open discussions on the ethical reform of the country, Abedian said.
In the energy sector for example, despite the production of white papers and integrated resources, South Africa still lacks access to sustainable and clean energy. He advised the government to focus less on saving Eskom and more on investing in sustainable energy resources.
Investing in water infrastructure is also critical and fundamental.
“As a result of corruption and poor governance, the country is lagging behind and must make better use of technology to manage water resources. South Africa should also look to neighbouring African states where precious commodities are in abundance, and ask for help.
“But the plan needs to pass three simple tests – objectivity, inclusivity and people-centricity. We need to think differently and approach challenges differently. Change is not a pipe dream, it’s possible,” he said.