/ 18 November 2011

Trusted, shared information is key to future

So we’ve reached Halfway House, on the road from Dark Past to Bright Future. It’s been difficult enough to get here but now the way forward is daunting. Ahead lie the mountains of globalisation, the jungles of populism, the swamps of indecision and the desert sands of uncertainty.

To reach our destination, we need to chart a path that avoids dead ends and dangerous diversions. We need to agree on the route because otherwise, at each crossroad, we will waste our limited energies arguing about which way to go. So we need information about the terrain that lies ahead and the resources that we have at our disposal.

And we had better get it right. This is not a computer game; there is no reset button. So, in the process of producing the country’s first formal national development plan, the National Planning Commission (NPC) tried to ensure that we had adequate information about the areas in which we focused as well as about the human, physical and financial resources that we have at our disposal.

In some areas, information is widely available and uncontested.

So there is wide sympathy for teachers in poor communities who say they should not be judged on poor exam results because these reflect the underlying problems their pupils face at home. But evidence that these teachers spend far less time in class than counterparts in better-performing schools helps to focus attention on where intervention is needed — control by principals and discipline among teachers.

Proposals to create more jobs in rural areas by expanding irrigation were initially challenged because we all know water is scarce. Yet evidence from the Water Research Commission shows that water is inefficiently used in many places. It has also demonstrated that structured improvement programmes can release a substantial amount of additional water for use by new farmers, a finding confirmed by many commercial farmers, who suggested that a greater problem might be getting workable land tenure and technical-support arrangements in place.

In other areas, agreement on basic information is hard to come by. We know little about the scale of South Africa’s natural-gas reserves, particularly the potential of shale gas. For a country with an economy driven by minerals and which is committed to extracting as much value from them as possible, it should be a priority to find out what is available. We have shortages of liquid petroleum gas, Mossgas’s diesel from gas plant is continually threatened by limited supplies, and we do not have a large-scale gas import terminal. Deliveries from Sasol’s gas fields in Mozambique have helped, but not enough to meet potential needs.

Foreigners appear to know more than we do. So it is the United States government’s Energy Information Agency that estimates our reserves of shale gas to be the fifth-largest in the world. The Americans are interested because shale gas has, over the past decade, transformed the US’s domestic energy picture.

Could it do the same for us? If so, Mossgas’s future, and our liquid-fuels security, would look much brighter. We could generate base-load electricity from gas with far less carbon-dioxide emissions than from coal and with much greater financial and technical flexibility than from nuclear. Yet efforts to answer the question “How much gas might we have?” have been blocked by government, which is strange given that the open-cast coal business is already drilling and blasting with gay abandon in more vulnerable areas. So the NPC has simply recommended that we start exploring, now.

In this case, information deliberately withheld and distorted could set us on the wrong road. That may indeed be the intention; in Britain, an official of the World Wildlife Fund told Parliament that her organisation opposed fracking because “gas may displace renewable energy and …. our decarbonisation targets could be threatened if there was another dash for gas or too much investment in new gas generation”.

At the same hearings, an expert geologist testified that “Fracturing, which is a very old technique, as old as Moses, has been used in the oil industry since the 1940s” — which might come as a surprise to many South Africans to whom it has been presented as a completely new and dangerous technology.

The point is that although information has immense value for national development, the benefits to the community of sharing it might be seen as costs by groups with different agendas. Increasingly, this bedevils our policy debates and the challenges of limited capacity to take policy decisions are aggravated by a reluctance to provide the information needed for sensible debate.

In another example, two major banks commissioned an independent study to find out whether their head offices were indeed about to collapse as a result of acid mine drainage (AMD) as some “experts” had suggested. The report’s conclusions were reassuring: it suggested that AMD was produced as much by the extraction of gold from old mine dumps as by the mines themselves, and that underground water-pollution levels would reduce naturally even if nothing was done. But those reports have not been shared, perhaps because the banks do not want to upset clients with vested interests in promoting the “pump and treat” solution.

Those interests include mining companies that want government to keep their old mines and speculative gold reserves dry and viable. Other companies have proposed technical solutions to the treatment problem. None would be happy for it to become public knowledge that the “do nothing” option might be just as effective.

But barriers to the generation and flow of information are not just those erected by individual private interests. Government has itself put up some of the barriers, as is shown by the current shortages of bitumen for road building and gas for industry and kitchens — caused, in part, by a series of uncoordinated refinery closures. Energy Minister Dipuo Peters now wants an audit of what is happening at the refineries. It would have been easier had the companies co-ordinated between themselves, as they used to — but competition policy now outlaws such common sense.

The same occurs in the construction industry, another pillar of our new economic growth path. When companies talk to each other about major national programmes that will tax the capacity of the entire industry, they are accused of collusion. Yet if they could share information about the available capacity of, for instance, specialised heavy machinery and human resources, they would not all budget separately for it in their tenders and costs might actually be reduced.

In the national development plan, the NPC recognises the importance of information flows as a contributor to development. So we focused not just on the importance of cost-effective ICT networks but also of ensuring that we take full advantage of them by making information widely available and helping people and organisations to use it.

Unfortunately, all too often, well-intentioned efforts to make information flow have the opposite effect. Our independent regulators in the energy, telecoms and other sectors were established in part to address “information asymmetry” and to help the public and policymakers control the costs of private and parastatal monopolies. The evidence suggests that they have generally failed.

In telecommunications, South Africa’s comparative performance has been falling steadily. The electricity-pricing debacle was presided over by a regulator that failed to communicate the implications of its decisions. Regulated increases in airport tariffs have generated an unprecedented warning from the head of the International Air Transport Association that they are way too high. And, despite the regulator’s best efforts, our ports are woefully uncompetitive and overpriced. On the basis of such evidence, the NPC has proposed a review of the performance of the regulators.

These examples show that we need to focus more on improving the flow and use of development information throughout society. In a considered article in the South African Journal of Science about South Africa’s shale-gas prospects, Professor Maarten de Wit of the African Earth Observatory lamented the tone of the debate and asked a more general question: “How can we weigh up these issues to the satisfaction of all concerned and arrive at sure-footed conclusions that will support sound policy outcomes?”

StatsSA could help by maintaining a consistent flow of information, not chopping and changing methodologies so that it becomes difficult to track progress on anything from household income to passenger-transport numbers.

But the challenge is a larger one. Research organisations, their funders — and even single-issue lobby groups — can all contribute by recognising the need to base public policy on sound arguments based on shared information that can be publicly evaluated rather than on the release of partial information, carefully designed to generate emotive newspaper headlines or support sectoral policy agendas.

To achieve this, we will need leadership across all sectors of society — and trust between them. That is one of the larger conclusions of the NPC and the more fundamental challenge that we highlight. National development is not a competitive game between different players but a common challenge that we need to address together.

Mike Muller is a commissioner of the NPC