Herbert W Vilakazi
There is a most serious economic crisis facing this country, even though, like an earthquake or a tornado, it affects different communities differently, depending on how close they are to the epicentre of the destructive force.
In recent years, our economy has barely been growing faster than the population; the level of wealth produced in society as a whole has either not risen, or has not been reaching the majority of people to enable them to meet their basic needs.
An indication of the crisis is the rate of unemployment 30%, as it is reported within the country, and above 40%, as it is reported abroad. This means that for the masses of ordinary African people, this economy has collapsed.
Yet what is taught is the wrong economics. It is shaped by the leading lights in historically white universities and is more related to economics as a study of developed capitalist economies than to development economics, whose main preoccupation is understanding the roots of mass poverty in the Third World and strategies for its elimination.
Yet it is the wrong economics which is fed into virtually all political parties in our government and Parliament. What South African economics desperately needs is a change of paradigm, a change of world-view.
A fundamental cause of the sickness of our economy is the low buying power and low consumer demand of the masses of African people, the majority of our society, most of whom are in rural and semi-rural areas. The heritage of white supremacy is that the masses are not properly integrated into the industrial sector of the economy. The existing industrial and commercial sector is not the growth engine of the economy.
Until recently, the white-controlled economy was purely a plundering, vandalising economy. This economy, and its economics, failed to recognise the majority of society, Africans, as the goose that lays the golden egg. They never suspected the health of their economy in fact depends directly on the buying power and consumer demand of the African majority.
The forward movement of our economy can only occur from the stimulation and impulse being injected into the economy by the development of the African people, as buyers and consumers, as skilled workers, managers and controllers of the economy. Advancement can only come from the modernisation and industrialisation of the underdeveloped African communities in rural and semi-rural areas.
The growth plan for our economy cannot be industry-driven, or city-driven, as current growth plans wrongly prescribe. No, the growth plan for our economy should be, and can only be, African-driven, and African- based. Only then can the entire economy of the country develop, benefiting black and white alike.
What we need to do first is empower the masses of African people to meet their immediate material needs food, shelter, clothing, etc. This will unleash the vast creative, entrepreneurial skills and imagination of ordinary men and women.
The recent economic experience of China, whose growth rate has been spectacular, is quite suggestive. The empowerment of ordinary Chinese men and women in the countryside unleashed enormous creative, entrepreneurial talents, which resulted in the formation of village and township firms, owned co-operatively or privately, right up to the formation of banks.
This created an enormous potential market for the goods produced and sold by Western corporations, which has made China so attractive an economic prospect for the West.
The lesson is: first develop your people, then you acquire the base for entering the world market as a competitor; not the other way around.
Such a development strategy in our case shall also avoid the debt-trap, so often cited as a limitation to the growth of the economy. Developing and empowering the masses of African people shall not, from the start, call for the importation of a lot of capital goods, or machinery. Therefore, it shall not increase to any significant level our debt to foreign economies.
The author is executive director: Council for African Thought, and professor of sociology at the University of Zululand