The Presidency this week revealed for the first time, the results of an 18-month long scenario-planning exercise to plot what South Africa will look like in 2014. Planning for the future began in earnest when a review of the African National Congress’s first decade in power revealed that “we’ve done very well in the past 10 years but if we continue doing so well, then it’ll be disaster,” labour analyst Karl von Holdt said of the assessment.
The 10-year review says that: “The advances made in the first decade by far supersede the weaknesses. Yet, if all indicators were to continue along the same trajectory, especially in respect of the dynamic of economic inclusion and exclusion, we could soon reach a point where the negatives overcome the positives. This could precipitate a vicious decline in all spheres.”
To arrest a decline, the government is thinking about the future with the help of scenario planning exercises, which involve identifying the main social, economic and political forces at play and thinking about how they may interact to determine the future of country.
In the early Nineties the Mont Fleur scenarios, drawn-up by, among others, the ANC — then still a government in waiting — were instrumental in shaping the organisation’s first years in power.
The Mont Fleur scenarios, sketched with the help of the now Minister of Finance, Trevor Manuel, and Reserve Bank Governor Tito Mboweni — among many others now in power — saw the organisation make fundamental policy changes as it began to consider the possible results of its then populist economic policies, which were heavily influenced by socialist thinking.
The ANC and the government’s decision to drop nationalisation and adopt a relatively conservative fiscal policy, which focused on stabilising South Africa’s macro-economy in its first years in power, can be traced back to these scenarios.
The 2014 scenarios suggest that another set of more subtle policy shifts will happen in the next 10 years. Most significant of these is government’s re-embrace of the concept of a strong and redistributive state and of the need for fiscal transfer to stimulate the domestic market. The scenarios discount empowerment and global competitiveness as cure-alls. Trickle-down theory is trumped, though commentators gathered at a discussion of the scenarios complained that the thinking behind the fiscally conservative growth, employment and redistribution strategy (Gear) still constrained effective poverty alleviation, especially in the labour market.
“In reality, Gear was a self-imposed structural adjustment programme. There were many things that were not meant to be there, like the employment targets. Most of us now say we are in a post-Gear period,” said the Presidency’s Joel Netshitenzhe who led the scenarios exercise.  “This is not to say that the principles [of low deficit, inflation and debt costs] will be eschewed.”
The scenarios are likely to greatly influence future policy. They were drawn up by the Presidency and involved Cabinet ministers, directors general of government departments and a wide range of local and international experts from the private sector, trade unions and civil society. Cabinet and government departments are also expected to review the 2014 scenarios and take them into consideration when developing their programmes for the coming years.
To draw up the scenarios, the government identified as many as 31 social, economic and political forces that may influence the future of the country. These include the global economic and political situation, the capacity of the South African state to tackle domestic and international problems effectively, economic growth, social and political instability, investment in infrastructure and technology, the impact of HIV and Aids, urbanisation and employment and land ownership patterns in the country, among others.
The selection of topics up for discussion at the launch of the scenarios are an indication of what the strategists in the Presidency consider some of the major social, political and economic forces that will help determine the future of South Africa — at least for the next 10 years.
The economy, particularly unemployment and the resultant inequalities and social and political tensions between the “haves” in South Africa’s formal economy and the “have-nots”, in the “second” or “informal” economy, is the major concern. Netshitenzhe said that the government views social instability, brought on by popular dissatisfaction caused by poverty and unemployment, to be the biggest threat to constitutional democracy in South Africa.
Business concurs. “The biggest long-term threat to stability is poverty and inequality. The balance in the economic debate is not sufficiently geared to [dealing with] unemployment,” said Colin Coleman, the chief executive of Goldman Sachs, and a member of the 2014 team. The boom option, Shosho-loza, which envisages slicing poverty in half, requires an annual growth rate of 6,5%, which will then only halve unemployment to 18%, he said.
Netshitenzhe pointed out that the government was struggling to deal with an awkward catch-22. Investors are reluctant to put their money into the country because they do not believe that a society as unequal as South Africa’s is sustainable, but without investment, South Africa cannot achieve the levels of economic development needed to overcome the existing disparities.
It was also underlined that stability in the international economic and political system, on the continent and across the globe, is necessary if South Africa is going to attract foreign investment and its economy, now part of the global chain, is going to grow.
However, there are reservations about the government’s determination to attract investment and concentrate on stimulating economic growth. A concern was registered that the trend in many countries is towards “jobless growth”, and that even significant levels of economic expansion may not be enough to reduce South Africa’s unsustainably high levels of unemployment.
It was also noted that very little of the government’s efforts to establish small, medium and micro enterprises in poverty-stricken areas of the country were likely to succeed if there simply was not enough money in the local markets to sustain businesses. The government needed to use social grants — including a Basic Income Grant — and its land reform programme to put money, and hopefully capital and wealth, into the hands of South Africa’s poor. This would result in sustainable growth. The government opposes an income grant for adults, who would prefer to see in full-time formal employment, yet the Presidency’s scenarios point to the benefits of using grants to transfer income, along with increasing employment.
The role of civil society organisations in the coming years is also a concern for the government, and the ANC in particular. As South Africa’s class of unemployed and economically disenfranchised grows, they will turn away from state and constitutional structures and the traditional political parties to civil society organisations and social movements to take up their concerns. Unless the relationship between the state and these organisations and movements is carefully managed, it could become adversarial and ultimately cripple the country as the state and mass‒based movements struggle for political power.
The Human Sciences Research Council’s Phillip Dexter argued that while government has generally seemed to be suspicious of civil society organisations and social movements, especially those that were critical of its programmes, it needed to accept that it must engage them and ultimately win their support, where possible.
It would appear that for the next 10 years the government is going to focus on reducing the size of South Africa’s unemployed, to a more sustainable 12% of the working population, and grow the country’s black middle class. It will also move to provide greater social security for those who remain outside the formal economy.
S’gudi S’nais
‘The phrase S’gudi S’nais (so good, so nice) was made famous by a series of ads for fried chicken, and suggests a future in which only an elite lick their chops. It is also a bust scenario, symbolised by a cartoon that reveals a sight common in South African cities: a world-at-my-feet executive driving an open-top sedan, gawked at by an I’m-on-my-last-legs beggar.
“Life is good, good, good … for the rich and connected,” says this scenario. Its tone illustrates that in some quarters of government a wheeling-dealing brand of black empowerment that depends on connections and is heavily state-assisted is frowned upon.
This sort of empowerment yields an initial spurt in growth to an annualised rate of 7% in 2008 and then declines to 1% by the decade’s end. Joblessness remains high, with opportunities in public works reserved for “friends and family”. Through the decade unemployment stays constant.
“Primary exports and tourism increase, but competitive strength declines” in an economy described as “stagnant and corrupt”.
This is a scenario that sounds ominously like many post-colonial African societies where an elite takes hold and nothing trickles down to an increasingly alienated and desperate underclass. “The rich rely almost entirely on private schools and hospitals and facilities abroad. Life is good and nice for the elite, but the majority of South Africans feel the pain.”
In an increasingly insular world where the experience in Iraq has turned Northern governments to a domestic focus, South Africa has to compete with other poor countries for its place in the queue for humanitarian aid. The year 2003 seems a long way back when a self-sufficient government in fact was a donor of aid.
By 2007 politics shifts tectonically. “…a group from within the ruling party announces the creation of a ‘principled left’ … By 2014 a federation of the left contests the elections to win the highest number of votes, but without an absolute majority”.
Both the African National Congress and the Democratic Alliance clamour to form an alliance with the new left victors.
Skedonk
A “skedonk” is a beat-up car. It is also the bust scenario. If South Africa was a car, it would be “a much panel-beaten assembly of chop-shop bits and pieces, motoring through an environment where you wouldn’t want to get stuck by the side of the road”.
Says the Presidency’s Joel Netshitenzhe, with a sly smile: “To paraphrase BJ Voster, it’s a future too ghastly to contemplate.”
Trade wars between the economic giants send food prices spiralling; a drought wreaks havoc.
Inequality worsens as real government spending tails off from its high in 2008. In this atmosphere, disunity prevails and images of present-day Zimbabwe loom.
“Parliament loses credibility and the state becomes increasingly intolerant of debate. The state increasingly assumes the character of a weak authoritarian state resorting to repressive measures at any small opportunity.”
With a weak state and high social discontent “many turn to petty crime, begging and the invasion of housing complexes left by residents fleeing the crime wave.”
“In the face of collapsing services and economic meltdown, patience becomes not so much a virtue, as the only option for those who still place a premium on their humanity.”
Internationally, this is a world in which the “First World comes first. The Third World follows orders.” This is a time in which the “developing world is essentially an assembly of client states.”
Dulisanang
For those of moderate ambition (and possibly a good grasp of reality), this scenario, which means “We’re all in this together”, is the future within grasp. It is the social democrat, non-racist dream — a bit of a boom that is not only economic, but also social and political in nature.
Cohesiveness and a sense of national identity have replaced the racial fractures that characterised the first years of the turn of the century.
Still poor, this is a society that makes room for one more in the taxi. “It may be a bit of a struggle to fit everybody in, but the close proximity creates a sense of community solidarity and goodwill”.
Growth is moderate at about 2% a year and unemployment is in a slow but steady decline. “… Levels of inequality are reduced through the uplifting effects of the larger social wage to the poor, and the high levels of taxation of the rich.”
But the large social welfare bill has pushed up both inflation and the budget deficit, raising questions about the sustainability of the system. Ratings agencies keep a beady eye on the country from New York, but a more humane Europe keeps the wolf from the door with more generous trade and investment policies.
But “[the New Partnership for Africa’s Development] and the African Union struggle to catch and hold the attention of an indifferent, preoccupied world”.
Domestic policies are more inspiring as civil society and government find each other (and debate each other) after the destructive times that followed the implementation of the home-brewed structural adjustment policy, the growth employment and redistribution strategy in 1996. The Dulisanang scenario dreams of a highly involved, politicised society that draws in the young. Optimism for the third decade of freedom (which starts in 2015) is high as the deep-pockets of social spending begin to yield fruit. The sectoral education and training authorities are graduating thousands of workers who are finding work in the formal economy and matric pass rates are improving.
Shosholoza: On the fast track
Shosholoza is the boom landscape — its image is that of a sleek train that looks like early artist models of Gauteng’s Gautrain, the vaunted high-speed shuttle service linking Johannesburg to the airport and Pretoria. With grand ambition, the Shosholoza scenario predicts that poverty will be reduced by half by 2014, in line with the United Nation’s Millennium Development Goals. According to the UN, one in six South Africans lives on less than $2 a day — the global measure of poverty.
This scenario is predicated on a strong state able to run effective health programmes, that coped with a drought in 2007 and which can insist on and monitor an effective system of corporate governance. Growth is more than 5%, while unemployment has declined steeply through industrial and service sector development. “Outsourcing, communication, tourism, bio-technology, minerals beneficiation and the motor industry are the most thriving sectors of the economy.”
The increase in social spending, which was flagged as a trend in the 2004 budget, has continued and has raised local demand, creating a virtuous economic cycle. The gini coefficient, a measure of inequality, has declined from 0,66 to 0,30 — zero is equality and one is inequality.
South Africa thrives in a more egalitarian world. And, together with Brazil and India, the country takes its seat on the UN Security Council. Emerging regions and economies like South-East Asia, as well as China and India, are thriving.
The United States’s ambitions of empire, which began in 2003, have been vanquished. “The ‘one-world superpower’ gives way to the power of one world,” according to this dreamscape. Multilateralism is back on the agenda and in this atmosphere both the African Union and its policy framework, the New Partnership for Africa’s Development, are beginning to shape up.
But unlike the Dulisanang political scenario where there is greater social cohesion and social contracting, politics fractures in the Shosholoza scenario.
“The expanding middle classes become more volatile in political outlook and new parties merge, mainly around sectoral issues such as New Greens.” Those alienated from the labour force and who remain poor mobilise to form a political voice. They win 10% of the vote in the 2009 election.