Risk and Opportunity 2008: Transformation Audit

Institute For Justice And Reconciliation

Description

On the eve of its fourth general elections, South Africa finds itself in the midst of a rearrangement of its political landscape after a decade and a half of governance by a unified African National Congress. This political realignment is occurring at the same time as economic gloom spreads around the globe in the wake of the American subprime crisis. South Africa’s response to this confluence of circumstances may very well become a test of its resilience, as two relatively constant variables in recent years, political and economic stability, come under pressure. Times of uncertainty and volatility pose significant risks, which need to be understood; at the same time, they should not blind us to the opportunities for innovation when tested policy and strategy fail to measure up to the challenges of the day. This is the perspective that the 2008 Transformation Audit wishes to employ in its four traditional focal areas – the economy, the labour market, skills and education, and poverty and inequality.

Sujets

• Politique

Informations

• Publié par: African Minds
• Date de parution: 19 mars 2012
• Nombre de lectures: 1
• EAN13: 9781920299101
• Langue: English
• Poids de l'ouvrage: 5 Mo

Extrait

Risk and opportunity Edîted by Jan Hofmeyr

Transformation Audit www.transformationaudit.org.za

Institute for Justice and Reconciliation www.ijr.org.za

2008 Transformation Audit www.transformationaudit.org.za

Published by the Institute for Justice and Reconciliation Wynberg Mews, 10 Brodie Road, Wynberg 7800, Cape Town, South Africa www.ijr.org.za

Text © Institute for Justice and Reconciliation Images on page 18 © Gautrain and on page 101 © Jan Hofmeyr; all other images © Avusa Syndication.

All rights reserved ISBN: 978-1-920299-10-1

Copy-edited by Laurie Rose-Innes Scorecard calculations by Servaas van der Berg and Ingrid Woolard Designed and produced by Greymatter & Finch www.greymatterfinch.com

Orders to be placed with either Blue Weaver Marketing and Distribution Tel: [phone] Fax:[phone] E-mail: [e-mail] or the IJR Tel: [phone] E-mail: [e-mail]

contents

List of tables and figures

Contributors

Preface Fanie du Toit

Introduction Jan Hofmeyr

Acronyms and abbreviations

CHAPTER 1

Scorecard:

Research Review

CHAPTER 2

Scorecard:

Review Briefing Analysis

Governance and the economy

Economic performance

Achievements, failures and lessons of the South African macroeconomic experience, 1994–2008 Iraj Abedian The global context of uncertainty: Risks and opportunities for South Africa Mills Soko

The labour market

Labour market performance

Recent developments in the South African labour market Ingrid Woolard and Chris Woolard Demography and the labour market: Risks and opportunities JP Landman The visible hand of development: Industrial policy and implications for job creation Oupa Bodibe

2008 Transformation Audit

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CONTENTS

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CHAPTER 3

Scorecard:

Research Research Analysis

CHAPTER 4

Scorecard: Scorecard:

Review Research Analysis

References

Education and skills

Education and skills development

Meaningful access to education in South Africa Shireen Motala Strengthening the foundation: Expansion of early childhood development services Linda Biersteker Social capital and school education in South Africa Russell Wildeman

Poverty and inequality

Income poverty and inequality Access poverty

Responding to challenging times: The role of social security in South Africa Sumayya Goga and Kalie Pauw How well is the South African public health care system serving its people? Ronelle Burger and Servaas van der Berg Housingininformalsettlements:Adisjuncturebetweenpolicyandimplementation Marie Huchzermeyer

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CONTENTS

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LIST OF TABLES AND FIGURES

TABLES

Table 1.1.1: Inequality shifts by race (Gini coefficients for 1995 & 2005) 7 Table 1.2.1: Projected GDPs of Leading National Economies, 2000–2030 (in 2003 US$ billions) 12 Table 1.2.2: Travelling cargo pants: locations of suppliers in network 14 Table 2.1.1. Participation, employment and unemployment rates using the official (narrow) and broad definition, 16–64-year-olds 22 Table 2.1.2: Participation, employment and unemployment rates using the official definition, 16–64-year-olds, by gender 23 Table 2.1.3: Participation rates, unemployment and employment by age, 1995 and 2007 25 Table 2.1.4: Labour market characteristics by quintile 26 Table 2.1.5: Labour market connections of unemployed individuals (’000s), 1996 and 2006 27 Table 2.1.6: The distribution of the unemployed by the labour market linkages of other household members 27 Table 2.1.7: Households reporting grants as their main source of income and those reporting any income from grants, by quintile 28 Table 2.2.1: Employment and size of the economy, 1995 and 2008 30 Table 2.2.2: Employment absorption rate, 1995 and 2008 32 Table 2.2.3: Employment forecast for 2014 33 Table 3.1.1: Zones of exclusion in South African school education 46 Table 3.2.1: National enrolment in Grade R, 2001–2007 56 Table 3.2.2: ECD budgets by provincial education department, 2006/07–2010/11 57 Table 3.2.3: Numbers of registered, subsidised ECD sites and children supported, 2004/05–2006/07 59 Table 3.3.1: Effects of changing levels of relational trust on improvements in reading and mathematics productivity, 1991–1996 63 Table 3.3.2: Parameter estimates for the input model 65 Table 3.3.3: Parameter estimates for the final model 66 Table 4.1.1: Social grant beneficiary numbers by type of grant 77 Table 4.1.2: Nominal values of grants in rands by type of grant 78 Table 4.2.1: Comparison of health indicators for a selection of African countries, 1990–2006 85 Table 4.2.2: Ratios of medical practitioners in the public sector per 100 000 uninsured population across provinces, 2005–2007 86 Table 4.2.3: Affordability ratio by income group, 1993–2000 87 Table 4.2.4: Percentage of the ill/injured who reported consulting a health worker by income group 87 Table 4.2.5: Percentage of each household income group with high travel time to clinics and hospitals, 1993 and 2003 87 Table 4.2.6: Percentage of health care utilisation provided by private suppliers 88 Table 4.2.7: Proportion of posts vacant in the public health sector across provinces, 2007 89 Table 4.2.8: Percentage of health visits that provide access to a doctor, by income group 90

FIGURES

Figure 1.1.1: South Africa’s sovereign risk declines considerably Figure 1.1.2: Corporate bond issues in South Africa by calendar year Figure 1.1.3: GDP per capita by calendar year, 2010 forecast Figure 1.1.4: Volatility of emerging markets’ GDP growth, 1994–2007 (standard deviation) Figure 1.1.5: Ratio of current account balance to GDP Figure 1.2.1: Mainland China trade surplus with the US, 1996–2003 Figure 2.1.1: Participation, employment and unemployment by race Figure 2.1.2: Average formal sector monthly earnings in constant 2000 prices by race, 1995–2005 Figure 2.1.3: Average formal sector monthly earnings in constant 2000 prices by skills level, 1995–2005 Figure 3.1.1: Zones of exclusion in South African schools, 2004 Figure 3.1.2: Education expenditure at provincial level, 1995–2006 (constant 2004 rands) Figure 4.1.1: Expenditure shares by household quintile Figure 4.1.2: Inflation and nominal growth in grant values, 2001–2008 Figure 4.2.1: Trends in public health care financing (in 2007 prices)

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LIST OF TABLES AND FIGURES

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CONTRIBUTORS

Iraj Abedianis the chief executive officer of Pan-African Capital Holdings and an honorary professor in economics at the University of Pretoria. He previously served as chief economist and executive committee member of the Standard Bank Group of South Africa.

Linda Bierstekeris the head of research at the Early Learning Resource Unit (ELRU) in Cape Town.

Oupa Bodibeis a senior analyst in the Enforcement and Exemptions Division of the Competition Commission and worked until recently as the director of the National Labour and Economic Development Institute (NALEDI).

Ronelle Burgeris an economic researcher at Stellenbosch University and specialises in the problems surrounding socio-economic development and service delivery in African states.

Sumayya Gogais a researcher at the Development Policy Research Unit (DPRU) at the University of Cape Town.

Marie Huchzermeyeris an associate professor in the School of Architecture and Planning at the University of the Witwatersrand in Johannesburg.

JP Landmanis an independent political and trend analyst, who consults to several of the country’s largest corporates on trends and future scenarios.

Shireen Motalais the director of the Education Policy Unit of the University of the Witwatersrand in Johannesburg.

Kalie Pauwis a senior researcher at the Development Policy Research Unit (DPRU) at the University of Cape Town.

Mills Sokois a senior lecturer at the University of Cape Town’s Graduate School of Business, the founding director of Mthente Research and Consulting Services, and a research associate of the South African Institute for International Affairs.

Servaas van der Bergis a professor in economics at the University of Stellenbosch. His research focuses on poverty, inequality and social policy.

Russell Wildemanis the programme manager of the Economic Governance Programme at IDASA. His main research interests are education financing in post-1994 South Africa and quantitative education research relating to school effectiveness and quality.

Chris Woolardis an affiliate of the Southern Africa Labour and Development Research Unit (SALDRU) at the University of Cape Town.

Ingrid Woolardis an associate professor in the School of Economics at the University of Cape Town and an associate of the Southern Africa Labour and Development Research Unit (SALDRU).

CONTRIBUTORS

RISK AND OPPORTUNITY

PREFACE he ability to embrace change at points of historical in the recall of the then President Thabo Mbeki, has been that disjuncture, and to turn the risk associated with such several key leaders have left the fold to found a new political Afric T the contours of party politics in South Africa, and the reputation a reached such a turning point – seizing the opportunity change into opportunities for widespread gain, separates formation to challenge the ANC in the 2009 general elections. functional societies from the rest. In 1994, South The bruising battle has tested the cohesion of the movement, to embrace democracy and to begin a comprehensive process of democratic institutions, several of which had become of social and economic transformation. The change generated embroiled in the infighting. widespread gains, indeed turning risk into opportunity. Today Thus, at the end of 2008, we find ourselves at another we find ourselves in a stable South Africa with sound economic profound turning point in South Africa (in no small measure due fundamentals. This is a tribute to a leadership that drove the to this random convergence of international and local vision of a South Africa that could change peacefully and to the developments), which has significantly deepened the sense of benefit of the majority of its citizens uncertainty and risk experienced by most South Africans. It However, with the gains of democracy also came massive makes the consolidation of political stability and economic expectation and, 15 years later, some disappointment. Despite policy urgent, but also elusive. It also begs the question how democracy, peace in communities remains brittle. Despite eco- South Africa can again turn risk into opportunity. nomic gains, racialised inequality lingers. Despite transformation South Africa was able to turn potential risks into opportunities programmes, institutions continue to suffer from a lack of during the change in 1994, because of extraordinary leadership, popular legitimacy. Despite ambitious government policies, the not only of top leaders such as Nelson Mandela, but also of poor continue to suffer from patchy service delivery. Despite committed cadres lower down the ranks who shared a sense of having turned the risk of civil war into the opportunity of responsibility towards the nascent democracy they helped democracy, we still have a long way to go towards realising a just to create. society at peace with all its citizens, whether rich or poor, The question is whether we will be able to draw on similar indigenous or foreign, black or white. leadership, both political and in the civil service, to guide us This year, theTransformation Audit once this period of change in order to ensure that opportunityagain points with through clarity and specificity to a variety of fault lines within our society. trumps risk. With this in mind, South Africans will look with South Africa’s peculiar version of socio-economic inequality great expectation, and some trepidation, to the way in which manifests itself in terms of both monetary income and access to political leaders conduct themselves in the run-up to the 2009 basic services. Those who find themselves at the bottom of this elections. social equation remain extremely vulnerable to the consequences Having said this, the 2009 election campaign should not be of local or international change. To the poor, change almost about personality politics. Policy, not personality, ought to be invariably means large risk and minimum opportunity. decisive – not least policies that can allow economic and political This publication appears at a time of change reinforced by gains to feed into the central goal of eradicating the obscene international and South African developments. We find ourselves levels of inequality in South Africa. This publication makes an at a point where deteriorating global economic conditions are important contribution to that policy discourse.Risk and beginning to affect all South Africans, particularly the poor. AllOpportunitytakes stock of where we find ourselves at present, indications are that the world economy may be verging on a but also makes key suggestions about where we ought to be recession that will almost certainly culminate in a fundamental heading. realignment away from the ‘turbo capitalism’ that has driven The Institute would like to recognise and express its sincere excessive profit seeking for more than a decade. While these gratitude to Old Mutual and Investec Asset Management for changes take effect, and Wall Street millionaires seek early their generous financial contributions towards making this retirement, millions of vulnerable people will bear the brunt of publication possible. the void of uncertainty that the old system is leaving behind. In addition, the Institute would once again like to acknowledge Simultaneous with these changes washing over the world’s its core funders, the Royal Dutch Embassy, the Swedish financial markets, South Africa’s political landscape is realigning International Development Co-operation Agency (SIDA) and the itself. At the time of writing, the situation continues to unfold in Charles Steward Mott Foundation for their continued support of a number of unpredictable, if fascinating, ways. The once rock- our work. solid African National Congress (ANC) is reeling from a few years of feuding between followers of its two top leaders, Thabo Mbeki Fanie du Toit and Jacob Zuma. The result of this struggle, which culminated Executive Director

2008 Transformation Audit

PREFACE

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Institute for Justice and Reconciliation

INTRODUCTION

TRANSFORMATION AND UNCERTAINTY

Jan Hofmeyr

I am confident that 2008 will be one of the most remarkable years of our democracy, as we all work together to realise the core aspiration of our people to attain a better life for all. I say this because, in our own estimation, it is not often that a nation is called upon to strain every sinew of its collective body to attain a dream. And such is the injunction that history has imposed on us today. Former President Thabo Mbeki in his 2008 State of the Nation Speech to Parliament (8 February 2008) hen Presîdent Thabo Mbekî uttered these words at the begînnîng of 2008, he dîd W so amîdst încreasîng îndîcatîons that dark couds were gatherîng on the goba economîc front. Just how severe the approachîng storm woud be was uncear at the tîme, but the presîdent nevertheess appeaed for unîty amongst hîs compatrîots în facîng up to the chaenges that confronted the natîon. There was of course a subtext to Mbekî’s address to Parîament that was dîficut to îgnore. Just two months earîer, he had been ousted as presîdent of the Afrîcan Natîona Congress by Jacob Zuma and a new guard of eaders who dîsassocîated themseves from Mbekî’s eadershîp stye. A sîtuatîon had arîsen where the ANC în government and the ANC as a movement had become amost two dîstînct entîtîes. The tensîon that thîs eîcîted eventuay cumînated în the dramatîc reca of Mbekî and the swearîng în of hîs repacement, ANC Deputy Presîdent Kgaema Motanthe. Thîs reca took pace at amost the same tîme that the goba inancîa crîsîs started to unfod. Thus, ît added a domestîc dîmensîon of uncertaînty to an aready jîttery goba envîronment. At thîs stage, both the natîona and înternatîona scenarîos offer few cues about theîr respectîve outcomes. As we exît 2008 and enter the new year, we take eave of a poîtîca and economîc envîronment that has been argey predîctabe, and enter one that îs far more voatîe. The irst four edîtîons of theTransformatîon Audît were pubîshed under the former condîtîons of predîctabîîty. Thîs edîtîon îs the irst to înterrogate our foca areas în a context that cannot be taken for granted.

2008 Transformation Audit

THE WORLD THAT WE KNEW…

Four years ago, when the irst edîtîon of thîs pubîcatîon appeared, South Afrîca found îtsef cose to the pînnace of one of îts most protracted perîods of economîc growth. As Trevor Manue stepped up to the podîum that year to deîver hîs eîghth budget speech to the Natîona Assemby, he dîd so în the knowedge that the country’s economîc andscape ooked dîstîncty dîfferent to that of seven years earîer, when he had addressed the house for the irst tîme as inance mînîster. Bostered by 20 consecutîve quarters of growth, Manue fet vîndîcated for havîng pursued a strategy of isca austerîty under the Growth, Empoyment and Redîstrîbutîon (GEAR) poîcy, whîch had made hîm hugey unpopuar wîthîn the eft wîng of the trîpartîte aîance. Revenue over- runs now made ît possîbe for the mînîster to tabe hîs thîrd consecutîve expansîonary budget, whîch încuded a further enargement of the state’s socîa wefare net, as we as the announcement of an expanded pubîc works programme that was dîrected at stîmuatîng empoyment. Hîs bodness was underpînned by an înternatîona economy that was especîay frîendy towards commodîty-rîch deve- opîng economîes and a domestîc market that was rîdîng hîgh on the back of încreased pubîc consumptîon. However, such favourabe taîwînds aso requîred proper aîgnment to extract maxîmum mîeage out of these propîtîous cîrcumstances. GEAR provîded a map wîth the vîta co-ordînates to navîgate the country în thîs goba economîc envîronment, whîe a coherent medîum-term expendîture framework made budgetîng far more predîctabe. Importanty, economîc stabîîty over thîs perîod had a strong poîtîca dîmensîon. The ANC’s domînance of the body poîtîc and, în turn, the fact that power and înluence wîthîn the movement was argey the preserve of those who subscrîbed to GEAR’s underyîng tenets made the poîcy envîronment hîghy predîctabe. Theîr contro of the ruîng party saw the Congress of South Afrîcan Trade Unîons (COSATU) and the South Afrîcan Communîst Party (SACP), the ANC’s eft-wîng aîance partners, effectîvey beîng shut out of fundamenta poîcy dîscussîons, and where theîr advîce was sought, the boundarîes cîrcumscrîbîng decîsîon-

INTRODUCTION

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