South Africa's path as a society headed into peril can easily be diverted into the direction of a great society. The ease with which the country can make that adjustment is not because of happenstance: it is enabled by a series of policy choices made by different leaders over the past century. These policies have ultimately built a prosperous nation with strong institutions and a wealth of critical infrastructure.
Successive administrations focused on a set of domestic investments that enabled the country to access, transport and export minerals to willing international buyers. Throughout the apartheid period, investments were made in critical domestic infrastructure to counteract the increasing isolation of the country and to legitimise the government's separate development policy. As a result, there was a steady increase in both the quantity and the quality of infrastructure available per person between 1960 and 1985. The real per capita value rose from R18 360 in 1960 to R41 055 in 1985.
The first democratic government, led by President Nelson Mandela, and the subsequent administrations, led by presidents Thabo Mbeki and Jacob Zuma, have all had the foresight to continue to build on this critical infrastructure at as fast a rate as was deemed responsible by their economic teams. The net result is that South Africa has a critical public infrastructure, the replacement value of which stood at R1556-billion in 2009. The Zuma government has announced plans to spend close to R1-trillion by 2020. This amount, which includes all infrastructure spending proposed through state-owned entities such as Transnet, Eskom, Sanral and the Development Bank of South Africa, will take the total value of national infrastructure to north of R2 556-billion.
It is in the area of harnessing and unlocking sufficient human capital to generate the economic dynamism needed to take advantage of this wealth of public infrastructure that South Africa has failed. Consequently, the biggest national challenge facing us is finding ways to facilitate the growth of companies that can create the five million to 10-million new jobs needed to bring the country's unemployment to acceptable levels.
Analysis of the causal relationship between poor education and lack of economic progress has so far been avoided, not because policymakers are unaware of its roots or the way the problem manifests itself in the distribution of jobs in the economy, but because of an inability to fund the remedy and to take the tough political steps required to deal with its root causes.
South Africa is not alone in this dilemma. Brazil, a country that shares some of our socioeconomic challenges (inequality, urban slums and high crime and HIV rates), has had to learn the same painful lessons. "Education has the largest explanatory power when disentang-ling the sources of income inequality," writes Albert Fishlow in his 2011 book on Brazil.
"A variety of studies indicate that variation in educational attainment of the household head explains more than a third of total inequality. No other factor – age, gender, region, family type, race – has a third as large an effect."
Significant emphasis
Brazil made three key policy interventions that helped to improve its overall quality of education.
First, it put significant emphasis on improving the numbers of students at primary school level, resulting in a 40% increase in primary school enrolment between 1980 and 1994.
Second, it dramatically improved the quality of its public school teachers by creating a national fund for primary education development and for enhancing the value of the teaching profession, which helped to decrease the number of teachers without university training.
Third, close attention was paid to measuring the proficiency of students on a national basis to serve as feedback for the quality of students being produced by the system.
The government partnered with the United Nations Development Programme to do comprehensive nationwide sample tests of student proficiency in Portuguese and mathematics every two years for pupils in grades four, eight and 12.
In South Africa a second, equally serious taboo negatively affecting policymaking is the inability to deal with the reality that, even with a helping hand in the form of access to quality education, citizens will still perform at differentiated levels, necessitating different types of higher learning institutions (further education and training colleges for some, apprenticeships for others and universities for a small number of pupils).
This reality will always produce a dichotomy between so-called white- collar and blue-collar job seekers. The type of social engineering that should be sought after is not to prevent this segmentation, but to allow it to happen more efficiently and without any racial prejudice.
Theory of the case
The term "theory of the case" refers to the comprehensive and orderly mental arrangement of principles and facts, which are conceived and constructed for the purpose of securing a judgment or decree of a court in favour of a litigant.
In this case, the "litigants" are the poor and marginalised of South Africa. The "theory of the case" I give is meant to create the rationale for a shift in the burden of economic redistribution, away from the exclusive realm of the public sector's welfare regime of social grant programmes, and towards a more balanced, shared and sustainable social safety net with equitable private sector participation.
The hypothesis is that South Africa's socioeconomic realities have been created by a combination of the apartheid legacy and policymaking errors by the democratically elected government post-1994.
The private sector was complicit in this through its lobbying for conservative macroeconomic policies, which were beneficial to them in the short term (post-1994) but detrimental to the country in the long term (through the lack of economic dynamism, which resulted in minimal foreign direct investment, leading to economic stagnation for many and real unemployment for close to 40% of working age South Africans).
This hypothesis concludes that the elite domination of the economy by a small upper-middle class (of both black and white South Africans) is unsustainable and is likely to result in a populist revolt in the medium term, which would have grave consequences for all of South African society, including business.
So far, policymakers in the Zuma administration are proposing that the state should identify market failures such as the land redistribution process and the failure of transformation in the mining industry, and increase the costs to the holders of these assets through taxation. The economic theory behind this is that government can use targeted taxes to diminish "rent-seeking behaviour" by these owners of assets and that the government would use the tax receipts to finance programmes that would work towards poverty alleviation.
A land tax has been mooted to tax those land owners who are in possession of agricultural land that is not being used productively. Similarly, in the mining industry a tax on "super profits" is being advocated by some policymakers.
The danger of this approach is that the risk of policy failure through inappropriate or outright adverse incentives is high, and this could lead to reduced private sector investment in these industries as well as increased tax avoidance.
The bigger challenge for the state is avoiding a situation in which policymakers are complicit in creating a siege mentality within the corporate sector, where chief executives are constantly looking over their shoulders in fear of the next redistributive tax proposal. Not only does this encourage cynical behaviour, it also discourages visionary corporate stewardship.
Abundance and liberty for all
"Your imagination, your initiative, and your indignation will determine whether we build a society where progress is the servant of our needs, or a society where old values and new visions are buried under unbridled growth.
"For in your time we have the opportunity to move not only toward the rich society and the powerful society, but [also] upward to the Great Society.
"The Great Society rests on abundance and liberty for all. It demands an end to poverty and racial injustice, to which we are totally committed in our time. But that is just the beginning.
"The Great Society is a place where every child can find know-ledge to enrich his mind and to enlarge his talents … It is a place where the city of man serves not only the needs of the body and the demands of commerce but [also] the desire for beauty and the hunger for community …
"It is a place where men are more concerned with the quality of their goals than the quantity of their goods." – United States President Lyndon B Johnson in a speech made in May 1964
This is an edited extract from Hlumelo Biko's The Great African Society: A Plan for a Nation Gone Astray, published by Jonathan Ball