The future of the state

The now-popular idea of a developmental state represents an emerging consensus that we need an active state with the capacity to intervene in the economy to coordinate and drive transformation.

Implicit in this consensus is that strategic state-owned enterprises are important. Also implicit is that public servants, such as teachers, healthcare workers, policemen and women are (or should be) a valued part of any developmental effort.

If the state is to play an active developmental role, it needs to be able to plan over the medium and longer term, to coordinate its own efforts while mobilising the widest range of national energies, and it needs to be able to monitor and evaluate what it is doing. Reviewing our own state reality, it is clear that we have a long way to go.

The ANC national executive set up a task group to develop proposals around planning and coordination.

Proposals, which remain works in progress, were presented, amended and broadly endorsed last weekend at the alliance economic summit.

In the first place the task group’s report focused on the need for an institutional centre for government-wide economic planning.
Modern societies face complex challenges that cannot be dealt with in an adhoc manner. Operating in a global environment with uncertainty and turbulence, a strategic vision is
required if we are to stay on track.

Especially in a society such as our own, facing obdurate and systemic challenges, transformation is likely to take time and we need to remain mobilised and focused as a society on our big challenges—job creation and sustainable livelihoods, education and healthcare, community safety and rural transformation.

Planning by the state has, of course, been one of those things scoffed at by the international neo-liberal onslaught in the past decades (unless it happened to be strategic planning by the Pentagon). You can’t second guess the markets; ‘leave it to them”, has been the mantra. But, as the eminently liberal economist James K Galbraith argues in his recent book, The Predator State, ‘the great fallacy of the market myth lies simply in the belief, for which no foundation in economics exists, that markets can think ahead.

A country that does not have a public planning system simply turns that function over to a network of private enterprise—domestic or foreign—which then becomes the true seat of economic power.”

The alliance summit broadly endorsed the proposal for setting up a high-powered planning commission in the presidency. It would need to develop medium and longer-term strategic planning. It would need to ask challenging, cross-cutting questions that often drop between the cracks.

How will peak oil impact on South Africa? Will we run out of water? It will need to assist Cabinet to assess mega-projects strategically. Do we need aluminium smelters?

We are not good at posing, let alone beginning to answer, questions such as these.

But it is one thing to have high-level planning and risk evaluation capacity. It is another thing to actually implement plans or take effective practical measures to mitigate problems. It was for this reason that the Alliance Summit looked at the institutional configuration of our national executive.

We have a relatively large Cabinet—30 ministers running 37 departments. It is a structure that has been inherited relatively unchanged from the past. To overcome the dangers of dissipating coordination in a Cabinet of this size, a Cabinet cluster system was introduced a few years back. By all accounts the clusters have not functioned effectively.

There is no hierarchy of ministers within clusters. As a result, cluster plans tend to consist merely in the agglomeration of separate-line department plans. There have also been problems of deadlock, in which ministers disagree and there is no strategic override.

Additionally, there are 21 deputy ministers. In many cases (but not all) deputy ministers are appointed because some departments cover an extremely wide and demanding field. But the function and powers of deputy ministers are often unclear. Some deputy ministers are involved in high-level functions (such as trade negotiations at the World Trade Organisation) but have no original powers.

The relationship between a deputy minister and a departmental director general is often fraught with difficulty. Does the director general have one, two, or, in some cases, three political principals?

Then there are questions of the configuration of national departments. Should a key strategic challenge, such as energy, for instance, be housed within a single minerals and energy department (with the additional danger that our energy policies will be dominated, as they have been historically, by mining interests)? Why have we grouped environmental affairs with tourism? Is it because addressing the challenge of climate change is largely for the benefit of tourists?

Other departments appear to cover wide areas, perhaps too large for a single ministry (trade and industry, for instance).

As we ask ourselves these questions, we are well aware that we find ourselves in a transitional moment. This gives us the opportunity to ask questions about departmental configurations without bumping too much into the problems of incumbency. But the alliance summit agreed that, although we must be prepared to act decisively, we also need to ensure reconfiguration does not end up preoccupying us for the next five years to the detriment of actual implementation.

This is the context within which we have dusted off a proposal that appears to have first been mooted (rather quietly) in the policy unit of the presidency a few years back—namely a two-tier national executive structure. Such an arrangement is to be found in a wide array of countries, including the United Kingdom, India and China. In the case of the UK there is a relatively small Cabinet with a prime minister and senior Cabinet ministers (Cabinet secretaries, as they are called), and then there are ordinary ministers (who are not in Cabinet) with their own departments, budgets and bureaucracies.

In other dispensations the senior structure is often called a ‘council of state”. In the alliance summit we have agreed to look seriously at proposing such a two-tier arrangement for South Africa. We could have a senior executive structure, a council of state or, perhaps, we might call it a Cabinet working committee.

It would consist of the president, deputy-president, senior ministers responsible for convening strategic clusters (for example, governance, economic development, infrastructure, human development, social development and the criminal justice system), as well as a few other senior ministers—finance, international affairs and defence.

These, I stress, are proposals for further debate and refinement. To ensure that we are not creating more layers of bureaucracy, the senior ministers coordinating a strategic cluster would have line departments in their own right. One imagines, for instance, that the minister of education might convene the human development cluster.

Below the Cabinet working committee would be, in terms of our Constitution, a Cabinet consisting of all ministers.

This Cabinet would possibly be somewhat larger than it is now if we split up some of the rather too extensive current departments. In terms of meeting schedules, we could shift the broader Cabinet back into a once-monthly meeting, with the Cabinet working committee meeting fortnightly and clusters every other fortnight.

There is a strong sense across government that, perhaps by default as a result of the present lack of strategic coherence, treasury has become a tail that wags the dog. As one senior political administrator put it to me, where there is a lack of effective developmental coordination in any government, treasury becomes the default position.

Our developmental state certainly requires a strong, disciplined and technically competent treasury, and we require financial management and macro-economic discipline.

But financial management is not the same thing as strategic developmental planning. Treasury (working closely with Cabinet) needs to set the macro envelope, but budgetary allocations should be determined by strategic priorities. Where a major priority has a weak departmental business plan or there is poor capacity, it should not be the job of a treasury official to simply reject it or slice it down, but rather to help, collectively, develop an adequate business plan to ensure the realisation of the strategic priority.

To help achieve this, we envisage a much stronger role for the senior Cabinet working committee in the budget process. To round the circle, we envisage that the planning commission should act as a high-powered
secretariat to this Cabinet working committee.

Of course, reconfiguring the national executive and establishing a high-level planning capacity in the state does not guarantee anything. Weak leadership or poor policies can undermine matters. But, as Galbraith puts it pithily, to walk away from this challenge and to rely on the markets is ‘to disenfranchise the future”.

What’s left?

The Amandla Forum and the Wits department of sociology invite all to a panel discussion titled Deepening Global and National Crises: What is

Debating the issue will be former Numsa official and SACP member Dinga Sikwebu, prominent writer
Hein Marais, former Gauteng SACP secretary and Copac director Vishwas Satgar and prominent
environmental sociologist and activist Jacky Cock. The chair will be head of sociology and former
unionist Devan Pillay.

When: Wednesday October 29 at 6pm.
Where: Southwest Engineering
Building, ground floor, room 10 (graduate seminar room), Wits University.

Jeremy Cronin is an ANC national executive committee member, MP and SACP deputy general secretary

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