/ 10 June 2011

Tough call made with political sensitivity

At first glance the National Planning Commission’s “diagnostic” overview is cautious, hedged with references to context and repeated reminders that poverty, inequality and unemployment are the legacy of apartheid and colonial development.

On the toughest policy questions, however, it is one of the more muscular documents to emerge from the state.

Trevor Manuel, whose ministry coordinates the commission’s work, is careful to point out in his foreword that the mandate to produce an independent and critical report comes from President Jacob Zuma and that its role is advisory. Criticisms, he says, “are made with an understanding of our historical context and an acknowledgement of our achievements so far; driven by a commitment to do better, to fix what is wrong and deliver a better life for all”.

His aides point out anxiously that Manuel himself did not write the overview and that it does not bind the Cabinet.

However, this is a hygienic precaution to shore up the commissioners’ political legitimacy as they set out their stall on unemployment, education, corruption and accountability in stark and often controversial terms.

Threaded through the analysis is the contention that bad policy choices and poor state performance since 1994, particularly in health, education and local government, have seen the relative disadvantage of black South Africans persist and even grow. Worse, the commissioners say, there are signs that the progress made since 1994 is at risk.

“Political change brings no guarantee of social, economic or indeed political progress,” they say. “Throughout history many civilisations, empires and countries have experienced dramatic decline — the Hapsburg empire in Europe, Argentina in Latin America and a number of [postcolonial] African states.”

Key indicators of decline are rising corruption, weakening of state and civil society institutions, poor economic management, skills and capital flight, politics dominated by short-term opportunism, ethnicity or factionalism and lack of maintenance of infrastructure or service standards.

“Elements of these indicators are already visible in South Africa, though their strength and prevalence is uneven and differs from sector to sector. If they become more prevalent the country’s progress could be stalled, its gains reversed and even the foundational aspects of democracy unravelled.”

This warning resonates with concerns expressed outside the government by Cosatu’s general secretary, Zwelinzima Vavi, more liberal voices such as that of Moeletsi Mbeki and business and civil society.

On the key policy issues the commission’s position will not surprise anyone familiar with budget documentation during Manuel’s tenure as finance minister.

First, they argue that South Africa did not experience “jobless growth” during the boom years of 2003 to 2008, when official unemployment figures fell sharply and the ratio of job creation to GDP growth was high by international standards. But they concede that this will be of little comfort to the very poor and those trapped in the informal sector. The question is what to do about it.

There is clear implicit support for a youth-wage subsidy and some labour market reform. “The big and necessary adjustment lies in changing the economic incentives in the private sector to use more labour,” the commission says. “We have to upgrade our economic and industrial infrastructure — promote growth in newer, more labour-absorbing and knowledge-intensive sectors and improve the resource efficiency of our economy — we have to raise productivity through better education and training, better and less onerous regulation, more competitive pricing.”

Despite the nod to the new growth path and industrial policy action plan, this outline relies on creating real conditions for growth and job creation rather than legislating against labour brokers and subsidising infant industries.

The commissioners are particularly tough on the quality of education available to most black children, concluding that the main problems are teacher performance and the quality of school leadership.

There is growing political consensus over this, but whether there is the political will to tackle it with teacher unions and the basic education department is less clear. However, no reform programme is likely to work if corruption and accountability failures continue to undermine the state.

The commission emphasises that the government inherited a civil service built to maintain apartheid and that, in overhauling it, a highly politicised bureaucracy has been created, vulnerable to sudden personnel changes and wild policy swings as senior officials are replaced.

Loyalty to party bosses rather than the Constitution undermines accountability, the commissioners warn, suggesting that directors general should report to a head of the civil service rather than to ministers.

Corruption “is not only an institutional problem but also a moral and political one. It will not be easy to eradicate corruption in the public sector if the problem is not addressed at a political level.”

The diagnostic overview, intended to lay the basis for further work and recommendations, is a clear statement of intent by the commissioners and Manuel. The question is whether the Cabinet, and crucially Zuma, will treat the commission as the crucible of a national policy vision or as a dream in a semi-detached wing of the presidency.