Money and Morality: 2006 Transformation Audit

Institute For Justice And Reconciliation

Description

South Africans are struggling to characterise the times we are living through. Is this a time of deepening grievance, of political patronage and plunder – or a season of hope and previously unimaginable opportunity for most?The 2006 Transformation Audit – Money and Morality focuses on accountability, corruption and its costs.

Sujets

• Economie

Informations

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

Extrait

Accountability and the Auditor-General

The New Establishment: old connections 2006 Transformation Audit Money and Morality

Means-based affirmative action

Maladministration undermines delivery

Schooling reforms – reading the signs

A N A N N U A L P U B L I C AT I O N O F T H E I N S T I T U T E F O R J U S T I C E A N D R E C O N C I L I AT I O N

Money and Morality

Transformation Audit www.transformationaudit.org.za

Edîted by Susan Brown

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

2006 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 Cover image © Getty images © Eric Miller/iAfrika Photos, pages 20, 27 and 37 © Alamy/The Bigger Picture, page 54 © Anna Ziemski/iAfrika Photos, page 79 © Eric Miller/ iAfrika Photos, page 87

All rights reserved

ISBN: 0 9585002 7 4

Scorecard calculations: Alta Fölscher, Servaas van der Berg and Ingrid Woolard Copy-editor: Laurie Rose-Innes Production management: Compress www.compress.co.za

Marketing and sales agent: Oneworldbooks

All orders to be placed with Blue Weaver Marketing and Distribution Tel: [phone] Fax:[phone] E-mail: [e-mail]

Contents

List of tables and figures

Contributors

Preface Charles Villa-Vicencio

Introduction Susan Brown

Acronyms

CHAPTER 1

Scorecard:

Review

Research

Briefing

Briefing

Briefing

CHAPTER 2

Scorecard:

Review

Research

Briefing

Economic growth and development

Economic performance

Changing gear Yolisa Koyo-Leballo Public sector accountability: The Auditor-General Grace Hong Corruption: Ranking ourselves Ethel Hazelhurst Controlling corruption while delivering development Monty Narsoo The New Establishment: An indicative chart Zandile Gubeni, David Le Page and Nthuthuzeli Vananda

Employment and industrial policy

Labour market performance

Quality jobs and skills still at a premium Morné Oosthuizen Affirmative action: An evolving remedy Sumeet Jain The unions and the labour market: Politics and premiums Martin Wittenberg

2006 Transformation Audit

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CONTENTS

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Contents

CHAPTER 3

Scorecard:

Review

Research

Research

CHAPTER 4

Scorecard: Scorecard:

Review

Research

Appendix

References

Education

Education and skills development

Education: Expenditure, quality, equity Alta Fölscher School reform and skills development Nick Taylor Patterns of educational attainment and social mobility Megan Louw, Servaas van der Berg and Derek Yu

Poverty, conflict and governance

Income poverty and inequality Access poverty

Poverty declines, resentment rises Megan Louw Overflows and outages: Mismanagement of utilities in two cities Martin Nicol, Zandile Gubeni and Leo Makgamathe

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CONTENTS

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LIST OF TABLES AND FIGURES

TABLES

Table 1.1.1: Wasteful expenditure by departments Table 1.1.2: Wasteful expenditure by national public entities Table 1.1.3: Failure to meet statutory requirements (national departments) Table 2.1.1: Earnings in the South African labour market, 2005 Table 2.2.1: Interracial inequalities Table 2.2.2: The generic BEE scorecard Table 2.2.3: Improving interracial equality, 1995 and 2000 Table 2.2.4: Interracial and intra-racial inequality (Gini coefficient by race group) Table 2.2.5: Migration trends Table 2.2.6: Unemployment rates for individuals with a tertiary qualification Table 2.2.7: Distribution of workers by occupational category and race group, 2003 Table 2.2.8: Sectoral employment distribution by race group, 2004 Table 2.3.1: Unionisation rates as shown in national surveys, 1993–2005 Table 3.1.1: Consolidated expenditure on education by share, 2005/06–2008/09 Table 3.1.2: Provincial education spending and outcomes Table 3.2.1: Distribution of high schools by performance in SC mathematics, 2004 Table 3.2.2: Three high school types, based on 2004 SC results Table 3.2.3: A comparison of QLP SC results with the national mean, 2000–2004 Table 3.2.4: A comparison of Dinaledi I SC results with the national mean, 2001–2004 Table 3.3.1: Mean educational attainment by race group and parent education category Table 3.3.2: Performance of 14 to 18-year-olds by parent education level, 1985–2001 Table 4.1.1: GJMC expenditure on repairs and maintenance (all services) Table 4.1.2: City Power, capital expenditure Table 4.1.3: Local government structures in Cape Town and Johannesburg, 1993–2000

LIST OF TABLES AND FIGURES

2006 Transformation Audit

FIGURES

Figure 2.3.1: Shifts in real earnings distribution, 1993–2005 Figure 3.2.1: Curriculum coverage for mathematics, rural Grade 3 teachers Figure 3.2.2: Teaching practices, rural Grade 3 teachers Figure 3.3.1: Mean educational attainment by birth cohort and race group Figure 3A.1: Mean African educational attainment by birth cohort and location Figure 3A.2: Proportion of African population with matric by birth cohort and location Figure 3A.3: Proportion of population with complete primary schooling by birth cohort and race group Figure 3A.4: Proportion of population with matric by birth cohort and race group Figure 3A.5: Proportion of population with tertiary qualifications by birth cohort and race group

2006 Transformation Audit

LIST OF TABLES AND FIGURES

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CONTRIBUTORS

Susan Brownmanages the Political Analysis Programme at the Institute for Justice and Reconciliation. Alta Fölscheris an international and regional consultant specialising in public finance analysis and management Zandile Gubeniis a researcher at the Institute for Justice and Reconciliation. Ethel Hazelhurstis presently on a 12-month contract toBusiness Reportas a columnist, reporter and coach. Grace Hong is the senior editor of theJournal of International Affairsand has been a fellow of the Council of Women World Leaders in Washington, DC. In 2006, she conducted research at the Institute for Justice and Reconciliation. Sumeet Jaingraduated from the University of Notre Dame with a BA in economics and political science. He was with the Institute for Justice and Reconciliation as an associate researcher from October 2005 to June 2006. Yolisa Koyo-Leballo is an independent economic development consultant specialising in project management and research, with particular interest in strategic planning and policy analysis. Megan Louwworks as a researcher at the Department of Economics, University of Stellenbosch. Leo Makgamatheworks as an associate consultant with Organisation Development Africa. Monty Narsoois a visiting research fellow at the Graduate School of Public and Development Management, University of the Witwatersrand. Martin Nicolis an economist who has worked for the trade union movement and for the Department of Trade and Industry. He is a senior consultant at Organisation Development Africa, a majority black-owned strategic change management consultancy. Morné Oosthuisenis a deputy director at the Development Policy Research Unit, University of Cape Town. Nick Tayloris the executive director of Joint Education Trust. He has co-authored two books on schooling,Getting learning rightand Getting schools working. Servaas van der Bergis a professor of economics at the University of Stellenbosch. His research focuses on poverty, inequality and social policy, including education. Martin Wittenbergis an associate professor at the School of Economics, University of Cape Town, and teaches econometrics and labour economics. Ingrid Woolardis a chief research officer at the Southern Africa Labour and Development Research Unit (SALDRU) at the University of Cape Town. Derek Yuis a research assistant at the Department of Economics, University of Stellenbosch.

CONTRIBUTORS

2006 Transformation Audit

PREFACE

he market can never be an adequate substitute for morality; hence, the importance of ‘Money and Moral- T ity’ as the theme of this year’s Transformation Audit. There cannot be an efficient market unless people have reason to trust one another. Honesty and integrity are essential to ensure fair competition between individuals and businesses, while a fair price for labour, services and commodi- ties is a priority to ensure the kind of efficiency and economic well-being that we all desire. This is the third of the Institute for Justice and Reconciliation’s annual Transformation Audits. Last year we stressed urgency, as did others, to ease the complicated regulatory burdens on small, medium and micro enterprises. Mechanisms are now in place for reviewing these regulations under the provisions for the Accelerated and Shared Growth Initiative for South Africa (ASGISA). We welcome this policy response. These are indeed volatile times. Last year’s Transformation Audit warned of debates and contention arising in the ruling party, and noted that ‘it is increasingly part of popular public perception that policy is made and implementation managed from behind closed doors, often on the basis of internal party politics, involving political connections, favouritism and power trade-offs’. The momentum of challenge has increased under the rubric of the Zuma trials and the ruling party’s leadership succession, but is no longer limited to them. Increasingly, the issue is depicted as a changing of the guard. This year has seen organised challenges to the present political leadership, its policies and its style. The interests of the poor, workers and youth are counterposed rhetorically against those of the ruling,

2006 Transformation Audit

exile and empowerment elites. As we point out, these challenges to the old, secretive, disciplinarian style of the ANC in exile are couched in the mode of the UDF of the 1980s – organiser-driven, popular and populist, with ad hoc songs and speeches, built around mass events and mobilisation. A major driver of dissent may be the high South African levels of inequality, with a Gini coefficient of 0.58, which is among the highest in the world. It is a truism among the masses that it is the politically (and otherwise) well-connected few who are getting rich. The thematic focus of the Transformation Audit this year enables us to present, in addition to our regular research updates, some studies relevant to that concern of many South Africans: enrichment and official malpractice. This covers a spectrum ranging from legal corruption, inertia and neglect through to mismanagement, self-enrichment and criminal corruption on the part of officials. This year, we also provide an indicative list of the ‘new establishment’, identifying some of the networks of social capital associated with political, struggle and business elites. We acknowledge with appreciation the generous financial support for the 2006 Transformation Audit, provided by the Conflict and Governance Facility (CAGE, a partnership project of the European Union and the National Treasury) and Investec Asset Management.

Charles Villa-Vicencio Executive Director Institute for Justice and Reconciliation

PREFACE

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INTRODUCTION VOLATILE TIMES: A SEASON OF GRIEVANCE

Susan Brown

he Presîdent’s state of the natîon address thîs year had as îts theme ‘a season of hope’, and so îndeed T dîd the numbers he provîded: progress în empow- erment, ightîng poverty, job creatîon, the Afrîcan Renaîssance. The Acceerated and Shared Growth Inîtîa- tîve for South Afrîca (ASGISA) was announced, wîth major înfrastructure învestment and severa ways and means to ramp up growth and thereby stîmuate job creatîon. By that tîme aready, eary în 2006, such reassurance was needed. Notîng restîveness în the ruîng party about the perceîved cosed-door character of poîcy formatîon and management, the 2005 Transformatîon Audît întroductîon concuded that ‘the character of economîc transformatîon woud seem to be hostage to poîtîca transformatîon’. Thîs appears to be the case. The prospects of împementa- tîon or success în a number of înterventîons wî be affected by the omnîpresent împîcatîons of the inay open eader- shîp chaenge în the ruîng party. The dîemma here îs that thîs Presîdency has another four years to run, athough the eadershîp îssue wî be decîded ate în 2007. However, în a number of înstîtutîons, especîay weak departments and provînces, ît îs aready dîficut to obtaîn decîsîons or actîon on poîcy, as oficîas avoîd raîsîng theîr heads above the parapet, seekîng to avoîd gîvîng offence to whoever wî hod theîr jobs în hîs hand. At the same tîme, ît must be remembered that a pubîc opînîon survey conducted în January and February 2006 found Presîdent Mbekî’s job performance approva ratîngs, at 77 per cent, to be as hîgh as those of Presîdent Mandea at a comparabe stage (Afrobarometer 2006a). Approva of poîcîes was hîgh, notaby wîth 65 per cent approva for economîc poîcîes, though not for job creatîon at 28 per cent. Approva of eected oficîas was near or over 60 per cent, wîth the exceptîon of oca government councîors at 38 per cent. Sîmîar indîngs were returned by other surveys. The Transformatîon Audît Scorecards, too, show some economîc basîs for a season of hope. The Transforma- tîon Audît serîes – pubîshed each year, and trackîng the macro- economy, abour, educatîon, and poverty and înequaîty wîth key îndîcators for each – sets out to show

INTRODUCTION

how far South Afrîca has come în terms of economîc transformatîon, how far we have to go, and what the crîtîca success factors are. The Audît focuses on the outcomes of poîcy change – îts împact on the macro-economy, on the popuatîon proie and on areas of essentîa întermedîate transformatîon. The 2006 Transformatîon Audît Scorecards, shown at the begînnîng of each chapter, are broady posîtîve. The economîc îndîcators and trends, wîth the exceptîon of înla- tîon, whîch îs sîghty up, are posîtîve, încudîng the numbers of Afrîcan professîonas and managers as îndîca- tîve of a broadenîng base of economîc partîcîpatîon. The abour market scorecard shows jobs up by over haf a mîîon sînce ast year, athough the dreadfu empoyment dîfferentîa between men and women îs aso sîghty up, at 1.48. Educatîon gaîns are sîght, but a trends are posîtîve. Access poverty shows sîght annua changes, but arge posî- tîve deveopments over ten years ago – except în the case of HIV/AIDS, wîth the prevaence rate up to 10.9 per cent. The încome poverty and înequaîty scorecard shows mar- gîna împrovements over the prevîous year; îndeed, the overa împrovement sînce the eary 1990s îs woefuy sma (thîs scorecard uses the A Medîa Products Survey data, whîch enabes a comparîson goîng back to 1990, whereas Stats SA’s data îs not comparabe that far back). The Gînî coeficîent, measurîng înequaîty, îs near the hîghest în the word, wîth that for the Afrîcan popuatîon, at 0.68, hîgher than that for the popuatîon as a whoe. We have a pîcture of sow aggregate change, wîth dra- matîc împrovements for a few; thîs, together wîth the HIV/ AIDS eve, whîch erodes socîa capîta especîay among the poor, coud be a generator of resentment based on rîsîng expectatîons and awareness of change, especîay îf system- atîcay mobîîsed. In her revîew of deveopments în the anaysîs of poverty and înequaîty, Megan Louw dîscusses economîc thînkîng on the emergence of pubîc grîevance în a sîtuatîon where, as she argues, materîa condîtîons have been împrovîng for the poor. One anaysîs focuses on measurîng wîdenîng poarîsatîon, whîch theoretîcay woud încrease the îkeî- hood of mobîîsatîon and coectîve actîon; thîs woud appy

2006 Transformation Audit