As a curtain-raiser to today’s State of the Nation address by President Thabo Mbeki, the government this week launched two flagship programmes to signal the theme of Mbeki’s second term — “implementation”.
The expanded public works programme was launched on Tuesday; the National Social Security Agency on Thursday. They indicate important trends in Mbeki’s administration in his final term — the state will play a stronger role in the economy and a supra-provincial authority will be used to expedite development and cut graft.
In line with this approach, it is also clear the more strategic state-owned enterprises (Transnet and Eskom, in particular) will be used to grow the economy, rather than be put up for sale.
Mbeki is likely to face questions in his big business working group on what many interpret as a u-turn on privatisation policy, but all indications are that government will tough it out, only selling those assets that are not central to the economy.
The social security agency effectively removes authority for grant payments from the provinces to central government. An acting CEO, Fezile Makiwane, who is also a Deputy Director General in the Department of Social Development, was appointed to fast-track its establishment. The Cabinet initially intended implementation in only six years time, but has slashed the deadline to three years.
Mbeki launched the expanded public works programme that is rapidly becoming the government’s big project. This is part of a programme to spend up to R20-billion to create one million jobs in the next five years. The money will be spent in the infrastructure, environment, social and cultural sectors of the economy and encourage the use of labour-intensive methods.
In October Minister of Labour Membathisi Mdladlana will launch a second skills plan that will run from 2005 to 2009. It is an effort to energise the sectoral education and training authorities to bring key skills into the economy more quickly.
The three measures, among others, are efforts to put South Africa on to what Presidency strategists call a “high-growth path” — to take the country to its economic holy grail, a growth rate of 6% when net job creation can take place.
The skills plan is an effort to match more closely the personnel available to the growth nodes in the economy, while the public works approach recognises that the country has a structural problem of an unemployable mass of people who need short-term relief.
Similarly, the social welfare agency is an acknowledgement that grants — old age; child support and disability — prop up chunks of the rural economy, a point acknowledged in the government’s 10-year review. Because of the economic and welfare impact of grants, government wants to improve payments and cut graft, said to cost about R1-billion a year.
In the village of Mankoshi, Limpopo, a self-help project established in 1992 has been absorbed into the expanded public works programme. A group of women bake bread, do beadwork and make bricks. They run a day-care centre for the village’s children and receive a subsidy of R5 a day a child. Beyond that, none of the project’s economic activities yields any significant profit.
They exist in South Africa’s second economy and the function of the works programme must be to link them with its first, says Maikel Lieuw Kie Song, a consultant for the Department of Public Works.
Markets must be found for the beads, bread and bricks the women make. Gundo Lashu (meaning “our victory” in Venda), is a five-year-old road maintenance project that will end when between 300km and 500km of the province’s roads have been improved.
Twenty-four contractors are used on the project; their business skills boosted by a 14-week training contract in Lesotho. Labour laws are relaxed on the public works’ programmes, to the consternation of some. Silah Muleya complained about the working conditions. “The work is too strenuous and we do not get paid for overtime or weekend work.” Work often finishes after dark.
Wages are set below those that apply to the rest of the construction industry to prevent an exodus from full-time private sector jobs to temporary public jobs. Despite this, Song says they have already seen people leaving farm work to take up the Limpopo road construction jobs.
The public works programme currently functions with existing projects it has taken over. The first set of projects to be conceptualised, formulated and implemented under its auspices will begin in July, the new municipal financial year. Given South Africa’s massive infrastructure needs it’s unlikely that public works will equate with “digging holes and filling them again” — the short-hand definition usually used by free market economists.