In the debate about whether South Africa should ally itself with Beijing or with Taipei, the choice is between a huge potential market and an immediate investor. But, argues Peter Vale, it doesn’t have to be an `either/or’ option
South Africa’s great China debate has ignited inconsequential arguments which have pitted one China over the other as they reduced policy choices to an “either/or” option. As a result, South Africa has been forced to declare one China as a winner, the other as a loser.
Through this, South Africa has been drawn towards the same crude diplomacy which sent the United States into the “who lost China?” tumble for 40 long years. That development ignited McCarthyism, badly damaging the State Department, and setting back US relations with China for three decades.
This is also a delicate moment for South Africa and its foreign policy. The transition and changing national priorities — particularly the demands of the reconstruction and development programme — have complicated a decision which once would have been easy. The country is being forced to choose between an huge potential market and an immediate investor in its prosperity.
These figures put it in perspective: there are 1,2- billion people in the People’s Republic of China and South Africa’s potential trade is estimated at R4,4- billion per annum; Taiwan, with a population of 23- million, has promised R1,1-billion for RDP projects.
As always, statistics hide a number of issues which have complicated the decision. China enjoys the weight of international law, while Taiwan enjoys the largest foreign reserves in the world. For close on 40 years, China supported South Africa’s exiled movements; from 1976 onwards, Taiwan was cosy with apartheid.
But political developments in both countries shifted this matrix. Five years ago Beijing ordered troops to break up pro-democracy demonstrations in Tiananmen Square and cracked down on human rights activists. A year later, Taiwan’s leaders pushed the island towards an impressive and increasingly contested democratic
These items — and the way in which they have been set down — illustrate the uncertainty of making choices in a rapidly changing world. Which one will take priority? Which particular combination will catch the eye of the decision-maker? Which pressure-group can effect the greatest leverage on the political process? Can extensive lobbying — as there has been in this case — shift diplomatic and economic preferences?
During the Cold War, solutions to problems like these were easy; the simple either/or choice offered outcomes which satisfied domestic and international constituencies. But these are no longer appropriate — as South Africa’s diplomats are discovering — in a world in which diplomatic practice and the imperative of economic growth are increasingly in conflict. Successful international outcomes, as this decision over China so painfully demonstrates, need to be posed in open-ended ways.
All indications are that South Africa has chosen Beijing. A document circulating in the foreign ministry shows a clear and decisive swing away from Taipei. This reflects a groundswell movement — in parliament and elsewhere too — that the China issue should be resolved within weeks rather than months. Dragging it out, many have privately argued, reflects poorly on South Africa’s commitment to forging new sets of international relations. The solidarity movements, for instance, have suggestest that continued relations with Taiwan make it difficult to distinguish Alfred Nzo’s foreign policy from Pik Botha’s.
As the country implements this decision, there is a need for cool creative thinking which can engineer outcomes beneficial to all the parties. Can the either/or choice which has been forced upon the country be implemented in an open-ended fashion? Can South Africa turn this difficult decision to its advantage and that of the international community?
Three suggestions may help those in Foreign Affairs, and elsewhere, reach beyond the set-pieces which characterise their approach to international relations.
First: express disbelief that South Africa has been placed between the proverbial rock and a hard place. The new South Africa has no part in the making of this domestic wrangle between the two countries; our people are angry, futhermore, that our prestige has been used by both sides to bridge the gap between them. South Africa’s success demostrates how important it is for long drawn-out conflicts to be resolved by accommodation and compromise rather then by viewing the world in crude either/or terms.
Second: insist on a phasing-in of the new arrangement, because switching sides will do considerable economic harm. South Africa must protect its own interests. It is not usual, in modern diplomatic practice, to insist on periods of grace. Compliance with the regulations on, for instance, intellectual property rights in the international trading system are geared to take effect within time-frames of as long as seven years. The neatest way to achieve this would be to retain the link with Taiwan at its present level for, say, five years; at the same time, seek immediate and creative diplomatic interface with mainland China.
Finally, move the thrust of the China issue towards Southern Africa. With its neighbours, South Africa needs to craft a scheme in which the region can reap the benefits of links with both China. Right now, only Swaziland, Malawi and ourselves have relations with Taiwan; all the countries of the region however, require the investment potential which it so obviously offers.
Last week’s SADC meeting made an urgent call for international investment in the region; faced with this, it would be plain silly for South Africa not to share its extensive knowledge of Taiwan with its neighbours. As a matter of urgency, then, Southern Africa needs to develop protocols which will enable the region, through SADC, to establish economic and even diplomatic relations with Taiwan. As this happens, SADC might explore similar multilateral relations with the
The search for a `magic bullet’ to heal all ills
Dr Jonathan Broomberg, co-chairman of the ministerial inquiry looking into health care reform, pleads for greater public understanding and input into this crucial debate
THE public debate about the minister of health’s investigation into reforms of health care financing has been intense, acrimonious and, until this point, largely de-structive.
While there may be arguments about the respective roles of the government and the press in the handling of the debate, there can be none about the urgency of the issue. The minister has rightly recognised that this is the moment to dispense with the old pattern of tinkering at the margins of the system, and to attempt bolder reforms.
This presents an exciting opportunity for public participation in the policy-making process, an opportunity which has been constrained by gross
What is urgently needed is a clearer public understanding of the range of possible approaches to reform presently under consideration.
The two basic forms of public funding for health care are general taxation funding and national health insurance (NHI). An NHI system consists of a compulsory payroll tax which is earmarked for health care, as distinct from the allocation of general tax revenues to the health sector, which is the current method of funding the public health care system in South Africa.
The NHI payroll tax is usually paid by all in formal employment and their employers, and is linked to the provision of a defined package of health care benefits.
NHI systems have several advantages over general tax funding, among them the stability of funding they guarantee and the relative public acceptability of dedicated health care taxes. Variants of NHI are thus widely used throughout the developed and developing worlds, including Holland, France, Germany, Canada, Australia and Israel — and, more importantly from our point of view, in numerous middle-income countries in Latin America and Asia.In addition to its general appeal, an NHI system has attracted the attention of South African policy makers because it offers, at least in theory, answers to some thorny and peculiarly South African health care problems.
In particular, it offers a potentially powerful mechanism for the redistribution of some of what are now exclusively private-sector resources. In a context in which 61 percent of total health care spending, 60 percent of doctors and more than 90 percent of dentists are reserved for the exclusive use of about 23 percent of the population, the appeal of some form of redistribution is clear.
In addition, through the creation of a single purchaser of services and tighter controls and regulation, an NHI system has the potential to address effectively several of the critical efficiency and cost problems affecting both the private and public health sectors.
No wonder, then, that NHI has been perceived as the policy equivalent of a “magic bullet”.
There are, however, a range of critical factors, once again peculiar to our own situation, which may constrain the ability of an NHI system to live up to its potential. In almost every country in which NHI has been introduced, the initial stages have required a distinction between contributors and non-contributors to the system, with contributors gaining access to the insured benefit package and non-contributors continuing to rely on the pre-existing public health care system.
This system is often termed social health insurance (SHI) to distinguish it from NHI, in which the whole population has access to the benefit package. The pattern of initially introducing an SHI, with the explicit intention of moving rapidly towards NHI, has occurred particularly in countries with highly unequal income distributions and significant unemployment levels, in which the relatively small pool of contributors could not at the outset generate sufficient funds to cover the extension of benefits to the whole population.
As the economies of these countries grew, cover was systematically extended to larger proportions of the population, with universal cover taking some decades to achieve in several Latin-American countries, and approximately a decade in some Asian countries.
In the South African context, a SHI system would mean that all in formal employment would be obliged to contribute, and would in return obtain access to the insured benefit package. This would make the current medical aid system more affordable and accessible to a much larger proportion of the population.
At the same time, it would bring several benefits to the public sector, on which the unemployed and other non-contributors would continue to rely for the time being. The SHI would remove from the public sector the burden of caring for all those who could afford to pay for their own care. The public sector could also attract substantial revenues from the SHI by treating contributors and charging the SHI for this.
Finally, additional redistributive funding mechanisms that increased support for the public sector could be introduced alongside the SHI.
As attractive as this approach may seem, it has a fundamental and, from a political perspective, apparently fatal flaw. Given our history, and the potential imperatives of both the government of national unity and the ANC, the minister of health has made it clear that the introduction of a reform which explicitly discriminates between the employed and the unemployed is unacceptable. She has thus given an explicit brief to the committee of inquiry that any system it recommends must guarantee universal access to whatever package of care is provided by the system.
It is obvious that South Africa could not at this stage afford to provide a full package of health care benefits, and this has led to the search for a smaller, more basic package of benefits that could be extended to all South Africans. This explains the exclusive focus on primary health care (PHC) in the committee’s
A system that was able to fund and deliver a comprehensive range of PHC services to all would clearly be a major step forward. It would enhance the life chances and quality of life of those who have until now relied exclusively on the poorly organised and underfunded public-sector PHC system. Provided it was appropriately structured, it would ensure that those who currently enjoy the benefits of private- sector PHC would not have to accept significant compromises in the levels or quality of care they
It would also address the efficiency and cost problems blighting both the private and public sectors. Over and above these very significant technical advantages, the political appeal of a reform of this kind is obvious.
Once again, however, the apparent attractiveness of this approach disguises several obstacles and problems. The first concerns economic and administrative feasibility. It is not at all clear that the contributions of those in employment will be sufficient to cover the costs of providing a comprehensive PHC package to all, particularly if the system is to incorporate a component of general practitioner (GP)
Even if the system turns out to be affordable, there may be an insufficient supply of personnel, facilities and drugs, particularly in rural areas. The administrative burden of the system will also be substantial, particularly in the context of large migrant and homeless populations.
A second set of concerns relates to the health care system itself. The design of a system of funding and providing PHC in isolation from the rest of the health care system, in particular the hospitals, contradicts widely accepted health planning wisdom, and creates serious risks of lack of co-ordination and uncontrolled referrals to the hospitals.
The Department of Health is in the process of designing a vital reform to the public sector based on a district health system model, and it is unclear how an NHI- funded PHC system might be integrated within the district model. There is also a risk that the incorporation of GPs might lead to an unacceptable reorientation of PHC towards the curative model of care which GPs currently practice, and away from a more desirable, comprehensive model of care.
There are also critical questions of political feasibility. There are many potential sources of resistance to a reform of this kind, including employers and employees, private-sector providers and producers. The balance of forces for and against such a reform remains unclear at this stage, and will obviously depend on the nature of the proposals which emerge.The committee of inquiry is faced with a complex task. It has been set broad but firm principles within which to operate, and most solutions it has to investigate have both advantages and problems.
It is vital for the public to understand, however, that the committee is free to investigate any model or system that meets the basic policy objectives, and that much additional data is required before any judgments can be made on the uncertainties and potential
The model that may ultimately emerge may be some permutation of an NHI system but, given the range of difficulties noted above, it is also possible that a model that has nothing to do with NHI may emerge. The committee of inquiry is firmly committed to a process of wide consultation, and to a transparent method of functioning and decision-making. Whatever result emerges will depend in significant measure on informed inputs from all sections of the public. It is vital that this crucial debate be shifted away from crude histrionics, and towards more level-headed and informed public discussions that will facilitate meaningful public input into the committee’s deliberations.