Better Choices

Description

‘A must-read, accessible and skilful account of South Africa’s socio-economic challenges, policy and governance choices.’– THEMBA MASEKO

All the numbers on South Africa’s crisis dashboard are blinking red. The economy is failing to grow and more and more young people find themselves on the outside looking in as education falters and jobs disappear. Energy and transport are in crisis. Governance is floundering as debt mounts and government runs out of money.

Better Choices is a collection by South Africa’s top thinkers on the political economy, providing an unflinching account of the myriad challenges the country faces. The picture that emerges is of a nation on the brink of a catastrophic slide into failure unless better, if tough, policy choices are made.

As stark as these problems are, their solutions are tantalisingly close at hand. The chapters in this book outline exactly the solutions – those ‘better choices’– that need to be made by leadership to alter the country’s bleak trajectory.

South Africa cannot talk its way out of trouble. Key to success is removing the sources of friction – the red tape, over-regulation and rents – that slow down investment. This is only possible if a more effective, focused government acts decisively.

Compiled by The Brenthurst Foundation, Africa’s leading think tank on economic development, Better Choices is for those who want to build a positive, inclusive future for South Africa.

Sujets

• Republic of South Africa
• South Africa
• Afrique du Sud

Informations

• Publié par: Pan Macmillan South Africa
• Date de parution: 01 avril 2022
• Nombre de lectures: 0
• EAN13: 9781770107540
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

Better Choices
Ensuring South Africa’s Future
Edited by
Greg Mills, Mcebisi Jonas, Haroon Bhorat and Ray Hartley
PICADOR AFRICA

THEMBA MASEKO is the Director of the Executive Development Unit at the Wits School of Governance.
First published in 2022 by Picador Africa
An imprint of Pan Macmillan South Africa
Private Bag X19, Northlands
Johannesburg
2116
www.panmacmillan.co.za
isbn 978 1 77010 753 3
e- isbn 978 1 77010 754 0
Editorial matter and selection © 2022 Greg Mills, Mcebisi Jonas, Haroon Bhorat and Ray Hartley
Text © 2022 Individual authors
All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior permission of the publisher. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.
Editing by Sally Hines
Proofreading by Russell Martin
Design and layout by Triple M Design, Johannesburg
Cover design by Joey Hi-Fi


Contents
foreword by jonathan oppenheimer
preface and acknowledgements
abbreviations
I ntroduction : Better Choices for South Africa Greg Mills
High roads, low roads, a fork in the road?
The political conundrum
Plans, plans, plans – policy rich, priority and implementation poor?
More than agency
Conclusion: A path to better choices
1 Governance Choices Ivan Pillay, Sri Kesavan and Yolisa Pikie
Background
A systems view of organisations
State of systems in the state
Most state institutions perform very poorly
A basic operating system
How does governance fit in?
Understanding governance operationally
Does the presence of four lines of defence ensure compliance?
Building a solution
The hard choice
Implementing the solution: A Governance Improvement Plan
Conclusion
2 Crime and the Justice System Gareth Newham
The impact of state capture on the criminal justice system
Decline of the criminal justice system
The consequence for public safety
Why is South Africa so violent?
What has been done?
What can be done?
3 Policy Choices for the Labour Market Haroon Bhorat and Ben Stanwix
A nation in search of jobs
Structural shifts
The public sector, union membership and wages
Labour market institutions
Dispute resolution systems
Bargaining councils
The informal sector
Scarce skills and the sectoral training system
The SETA system
Critical skills and immigration constraints
Direct employment creation
Conclusions and recommendations
4 Service Delivery at Sub-National Level Andrew Murray
The role of provincial government
Governance performance
Service delivery performance: Education
Service delivery performance: Health
Local government and service delivery
Conclusion, thoughts and solutions
5 The Informal Economy and Informal Employment in South Africa David Francis and Imraan Valodia
Definitional issues
The size and shape of the informal economy in South Africa
The informality conundrum in South Africa
Policy proposals – what can be done?
Conclusions and three critical actions
6 The Politics of the Political Economy Mcebisi Jonas
Conceptual framework
Reconciliation
Renationalisation
Capture
Reform
Conclusion
7 Competition Policy and Excessive Market Power : The Other Path Liberty Mncube
The stack of the deck: Excessive market power
The challenge: COVID-19 crisis and the doom loop
The choices
Conclusion
8 Fixing SARS : An Institution Dismantled by State Capture Dennis Davis
The Nugent Commission final report, 2018
The first turnaround: The Gordhan era
The Moyane era
The challenges facing the new Commissioner
Towards solutions
9 Social Insurance : Building Better Institutions Andrew Donaldson
The Road Accident Fund
Pension, death and disability coverage
National health insurance
Employment, unemployment and basic income support
Conclusion
10 The Origins of the Fiscal Crisis Michael Sachs
The road to crisis
Political transition
Incoherent policy
The political economy elements of a chronic fiscal crisis
Conclusion
11 The Role of SOEs in Development in South Africa Alan Hirsch
A brief history
The rise of statism in the ANC
The damage done
Crisis and response in the South African SOE landscape
Why is it hard to get what you expect out of SOEs?
How to think about SOEs
Conclusions and recommendations
12 Eskom and the Great Power Puzzle Ray Hartley
Panic stations
Hyenas at the door
Crisis point
Can a new broom sweep clean?
Balancing the books
The structural challenge
Are we there yet?
The big energy choices
13 Transnet on the Line Derek Thomas
SOEs and the South African growth imperative
Transnet: Drivers of the current position
Improving Transnet
Private sector participation in Transnet
Better policy choices for Transnet
14 Agriculture in South Africa
Policy Reforms to Stimulate Growth and Employment
Wandile Sihlobo and Gracelin Baskaran9
Transformation and redistribution
Addressing structural inefficiencies in South Africa’s agriculture
South Africa’s agricultural growth and employment
Policy recommendations
Concluding remarks
15 Creating Employment : Can Labour-Intensive Manufacturing Work? Anthony Black
The poor performance of light manufacturing
Is labour-intensive manufacturing still a viable development strategy?
What accounts for poor performance?
What is the way forward?
Conclusion
16 Getting Tourism Flying Kate Rivett-Carnac
Recent tourism performance
Why the low growth rates?
COVID impacts: An existential crisis
The Tourism Sector Recovery Plan
Three priority actions for tourism recovery
Conclusion
17 The Financial Services Sector and Its Support to the Economy Annabel Bishop
South Africa’s banking sector in perspective to GDP
Recent history and the current state of the banking sector
The negative impact of government debt on the banking sector
Climate change and the responsibility of the banking system
Early-stage financing
Conclusion: The imperative for better choices
18 Tech and Business Process Outsourcing Tim Harris
Background
A 250-year-old trend worth tapping into
An increasingly remote world
The ‘offshorability’ of service sector jobs
BPO and other exported services
Tech now rules the world
Better policy choices for tech and BPO
Three critical actions
about the contributors


Foreword
Jonathan Oppenheimer
South Africa is poised, seemingly, on the edge of a low-growth, high-unemployment abyss, from which it needs a miracle to emerge.
And yet, the country consistently continues to defy the harbingers of doom, specialising in snatching victory from the jaws of defeat. Think of the 1994 election, the drop-goal that sealed the 1995 Rugby World Cup in extra time, preparations for the 2010 World Cup, and even the 2019 Rugby World Cup. We have come to expect that a few good men and women will perform miracles on the majority’s behalf in spite of the odds and the familiarly dire predictions.
It has been like this for a long time. We seem to prefer living on such an edge, even though Jan Smuts characterised South Africa as a place where ‘the best never happens, and the worst never happens’. He has been proved right, so far.
Still, this approach comes with a tremendous cost in dashed opportunities and failed dreams. It squanders potential, while the country slips backwards, not only against expectations, but when measured against the most jarring empiricism of all: our citizens’ wealth when compared to the rest of the world. South Africa has seen a dramatic decline in its GDP per capita relative to global income, from 84.2% in 1990 to 66.4% in 2019.
We are now going to have to pull yet another of our ‘miracles’ out of the proverbial hat. And this is going to be the toughest challenge of all since we have been able to ignore the telltale signs for some time, partly because of our depth of talent where it matters.
We need growth, and growth across the whole economy: growth that creates real jobs that are sustained by real activity; growth that is felt at all levels of the country and not just by a small elite who have access to the financial markets.
The COVID-19 crisis has laid bare all of the signs of ill health of the South African economy in three respects: we spend much more than we can afford; our economic growth rate has been low and stuck there for more than a decade; and our society is increasingly characterised by in equality, essentially between the minority, who have a stake in the economy, and the majority, mostly young people, who are on the outside looking in, dependent on social grants or hand-to-mouth informal work.
COVID-19 has exposed already shaky circumstances, the result of a number of factors that have combined to constrain the country’s ability to grow: a quarter-century of insufficient growth, governance built on the back of an apartheid legacy and amplified by a decade or more of state capture, an enormous skills deficit and an over-influential trade union sector.
We know what to do, at least economically, to get out of this trap. We have to attract more capital into the real economy, the economy that makes things and services and so creates, rather than re