South Africa is a country that it running out of ‘big ideas’, says former deputy finance minister Mcebisi Jonas.
Presenting at UCT’s Graduate School of Business (GSB) on Tuesday (10 September), Jonas said that that this lack of ideas meant that populists are filling the vacuum with ideas that are often ‘simplistic, narrow and shallow’.
However, this is just one of the issues facing the country. Jonas said that South Africa also has to address:
- An ‘under-theorised and over-personalised transition’;
- Failure to understand and confront structural and systemic problems;
- A frustrated historic white elite and nascent black elite
- Difficulty in sustaining traditional wage increases and social grants;
- Deterioration in public health services;
- A faltering education system;
- Rising unemployment and deepening inequality.
“It is then clear the stage is set for disruption because this is not workable,” he said. “Should South Africa continue on its path unchecked, the country is likely to land up in what he called ‘destructive disruption’.
How to fix it
Mcebisi believes that it is possible to steer the country towards ‘constructive disruption’.
“If we do everything in our power, focusing on the pertinent issues and big ideas, the country can be steered toward constructive disruption.”
Below, he suggested seven areas which should be focused on:
The first is that jobs must be placed at the centre of economic policy. Unemployment in South Africa is largely in the area of unskilled and low-skilled labour.
“As a country and economy, South Africa is uncompetitive when it comes to labour-intensive industries. If we are to solve the problem immediately, it is very important that we address the problem of raising the levels of competitiveness in the low-skilled jobs,” said Jonas.
He suggested that, for 10 years, the government create a targeted and incentivised programme that kickstarts and stimulates labour-intensive industry in the country.
Inclusive economic growth
There must be a realisation that there cannot be growth if there is no investment and if the country is uncompetitive.
“What permeates what we argue is that growth is non-negotiable. If we can’t crack growth as a country, we are going nowhere,” he said.
Jonas stressed that the constraints to competitiveness and the blockages to investment need to be removed. Thus, policy certainty and deregulation are key elements here.
Increasing South Africa’s technological capability
In the same way, that labour-intensive industry needs a stimulus, there must be a parallel push for competitiveness in the skills and jobs required for the Fourth Industrial Revolution.
Lack of competitiveness here is partly due to the countryʼs inadequate education system but also because the innovation system is poorly developed.
“We need to invest more in our innovation capabilities in the country and support innovation in a more structured way than we have done before,” Jonas said.
While conceding that there was a lot more to say on this topic, he stressed that the country’s dual education system requires urgent attention.
He explained that attending a village school often translates into a ‘village education’ and a ‘village job’.
“This dualism needs to be dealt with. Our schools must function and they must function very, very well.”
Jonas added that if trade-offs are needed to achieve change and better outcomes in education, this must be done.
“Education is fundamentally important. It cascades and permeates every aspect of life.”
Increasing the black share of wealth in the economy
Jonas said he often encounters two related arguments: one is that when an economy grows, transformation will follow.
The other is that an economy must transform before there is growth. Both of these arguments, he said, are nonsensical and problematic.
“We must understand the interconnection between the imperative for growth and the imperative for transformation. Increase black share of ownership. That’s inclusion,” he said.
To deal with corruption, equal effort must be applied to strengthening the capacity of the state and to improving the efficiency of levers within the state.
The last area relates to changing the nature of South African politics.
“Your political context can either constrain growth, development and transformation, or it can actually help. Politics matters in the economy,” said Jonas, adding that it appeared that South Africaʼs political parties have, by and large, become self-serving and internally focused.
Only after this are citizens considered, he said.
“As civil society (we need to) come to the fore and entrench accountability through mobilisation and organisation. We need to shift this and really, as civil society, come to the fore and entrench accountability through mobilisation and organisation.”