Sun, 17 Jan 2021

I wish to thank the Council of Advisors and the Board of Governors of the Mapungubwe Institute for Strategic Reflection (Mistra) for this privilege to present the Mapungubwe Annual Lecture, based on the two fundamental questions that inspired MISTRA's formation: Why do nations succeed and how do civilisations sustain themselves?

Two events informed the decision to make these two questions the fulcrum of our reflections this year.

The first is the fact that the Mapungubwe Institute celebrates its tenth anniversary in 2020, which, in our estimation, is a momentous event in its own right.

The second one pertains to the global disruption of the Covid-19 pandemic - which, in a sense, is a prod to the 'think industry' to improve its utility to humanity.

I have been asked specifically to reflect on the question: Can South Africa's civilisation of national democracy sustain itself?

To answer this question, we fall back to the basic law of the land, which guarantees, among others:

• Liberal political rights such as free and fair elections, inviolability of human dignity arising from the very intrinsic value of being human and generally the right to treated with respect irrespective of age, ability, status, gender, ethnicity and sexual orientation.

• A profound social humanism that enjoins access to basic services including potable water, sanitation, education, health, housing and other elements of social security

• Freedom of trade, occupation and profession without regard to racial and other identities

• The right to own property, but with the proviso that it can be expropriated for 'a public purpose and in the public interest'

• Environmental justice, i.e. clean air and an environment protected, for the benefit of present and future generations

• The right of access to information as well as freedom of association, expression and religion.

Now, with twenty-six years of lived experience, a restatement of these principles may justifiably sound trite. This is partly because the civilisational character of this constitutional dispensation cannot be drawn from a contrast with what was. It relates to the philosophical foundation of the new society, to aspiration, and to praxis over a short period of some 26 years.

It entails the freedom of those oppressed and marginalised under colonialism; but also, the liberation of the oppressor.

In other words, to quote an assertion made a few years ago: [South Africa's] liberators are required to manage and lead both the erstwhile oppressed and oppressors. To turn the provocative, racist and sexist prose of Rudyard Kipling on its head: in South Africa, 'the white man's burden' has, both in theory and in actual practice, become 'the black man's burden' ('man' used in this instance as denoting the more universal 'human'). In other words, there coexists, within South Africa, an advanced metropolis and a poverty-stricken colony.

It is the combination of these factors that render the South African social experiment not so much unique or exceptional; but a laboratory of humanity as it seeks to address social challenges that afflict most societies across the globe - the intersection primarily of race, class and gender.

The efforts to reverse this historical injustice - to create an antithesis of internal colonialism - is South Africa's civilising mission of the current age.

Some insights from current global dynamics

For the sake of completeness, let us briefly characterise the global environment in which South Africa's efforts at social change manifest today. This is because, the sustenance of the civilisation of national democracy is dependent on dynamics in the global political economy. We are a small open economy, and many of the country's economic fundamentals are influenced as much by developments in other parts of the world as they are by perceptions among global economic actors of the dynamics in our political economy.

Like other countries, South Africa today has to navigate the changing global power balances and ensuing geopolitical tensions.

The Thucydides trap today finds expression in the characterisation of a rising China in Western capitals as strategic competitor or rival.

As these tensions increase, many developing countries find themselves having carefully to tread a tight-rope.

While changes in leadership in the United States may moderate the tone of engagement, most analysts believe that the strategic posture of intense rivalry (already manifest during the Obama years' Asia pivot) is bound to be the US' default position over the coming decades. The global market system is in poly-crisis, with multiple challenges of slow economic growth, growing inequality, debilitating identity politics, and declining legitimacy of the political economy.

In addition, is the Anthropocene's consequence of global warming. The level of leadership strategic acumen leaves much to be desired, and, in the sciences, hyper-specialisation, ideological partisanship and reliance on standard fare constrict spaces for creative transdisciplinary thought. It would seem that some leaders of global corporations keenly sense this danger.

Lynn Forester de Rothschild captures this concern when she opines that: faith in market institutions has rarely been lower. This is not without reason.

Markets mostly encourage a near maniacal focus on short-term financial results, tolerance of disparities of opportunity, and an apparent disregard for the common good. If these tendencies are left unchecked, the public cannot be expected to show faith in capitalism.

In 2019, more than 180 CEOs of large US corporations jointly called for an approach based not only on shareholder value; but one that includes delivering value to customers, investing in employees, dealing fairly and ethically with suppliers and supporting communities in which their companies operate.

These difficulties have been worsened by the Covid-19, reflected, among others, in:

• The expected global economic contraction of about 4.4% in 2020 (according to the IMF in October 2020 before the second pandemic wave in the northern hemisphere)

• Developing countries being likely to experience a devastating slump including crippling debt • progress in reducing poverty, according to the Financial Times, being reversed by at least three years, while

• 32 of the world's largest companies, who according to Oxfam, stand to see their profit jump by US$109 billion more in 2020 by increasing their policy lobbying, shifting costs and risks, avoiding taxes and putting workers at risk.

One of the major deficits in the global political economy is the allocation of research resources to collective threats facing humanity, as distinct from those that generate the highest returns.

In addition, long-term foresight studies have not received the necessary attention. And it is in this context that many have challenged the characterisation of Covid-19 as an extremely rare 'black swan' event. Rather, they argue, it is 'a gray rhino' - a highly probable, high impact yet neglected threat [as] gray rhinos are not random surprises, but occur after a series of warnings and visible evidence. (Wucker: 2016)

As the Financial Times of 29 October 2020 put it, there was planning; but little practical preparation: For years, epidemiologists and the World Health Organization planned for the advent of an unknown illness - often referred to as "Disease X". It would be highly contagious, not previously identified and cause a major international epidemic. In other words: a lot like Covid-19.

All this critique may sound too harsh; but it is well-deserved because now, when faced with a rampant virus, the current civilisation seems to be rising to the occasion at the level of vaccines. This is through transdisciplinary undertakings that combine, among others, health sciences, nanotechnology, microbiology, genetics, artificial intelligence and engineering.

The RNA-based vaccines hold much promise as a new drug class that may stand humanity in good stead even beyond the novel coronavirus. Characterisation of a South African epoch 'What then' of South Africa's trajectory going forward?

To recapitulate: South Africa combines the attributes of both an erstwhile metropolis and colony.

The attainment of the ultimate constitutional objective should result in the emergence of a 'new and unique civilisation'.

Since 1994, the changes, particularly at the level of the political superstructure had to be immediate, with brief transitional mechanisms. The socioeconomic transformation can only take place progressively. There are many measures that can be used to assess the advancement of quality of life, including the rate of economic growth, the system of income redistribution and the change in social demographics.

According to the government's 25-year review, between 1994 and 2012 the economy experienced relatively high positive growth for 71 out of 74 quarters including a boom period between 2003 and 2008.

However, per capita growth has been declining since 2011 and has been negative since 2016. Official unemployment reached an all-time high in 1999 (36.4%) dipping to 21.5% in 2008. Zizzamia et al indicate that the composition of the various strata of society shows a stubborn trend of over-representation of African people (over 90%) among the chronically poor. But the African middle class expanded rapidly from 47% of the total in 2008 to 64% in 2017.

According to Mattes quoting a different piece of work by Kotze et al more or less close in methodology (with Black referring to Africans) that proportion was at about 17% in 1993. Zizzamia et al further assert that the elite, in the highest income category, are 'more homogenously white' although the African proportion of this category grew from 14% in 2008 to 22% in 2017.

There are of course issues of stability and transience in these categories that require discussion on another occasion.

In tertiary education, enrolled students have almost doubled since 1994. And while African students were less than half of the student population then; they are now about 71%. According to research conducted for the National Treasury (and other works) direct black shareholding on the JSE was estimated at 9-10%% in 2013, much of which may be encumbered through loans; while combined with ownership through institutional funds brings the total to about 20-23%, and there has been some progress - though pedestrian - at board, management and skilled levels in the private sector. What impact the economic slowdown of the past ten years and Covid-19 have had on these figures is a matter for ongoing research.

The efforts to extend access to basic services have been commendable - mostly as a result of government intent and action, but in some instances also at the cajoling of civil society and the courts. Over the years, the voice of these institutions has grown due to weaknesses in the pace and quality of service provision in terms of potable water, health, educational infrastructure, electricity and so on.

This is partly because of weakened capacity of the state and corruption which became systemic over the past decade.

Combined with new instances of malfeasance under Covid-19, this has massively undermined the legitimacy of the state.

Some defining macro-trends

We can engage in technical number crunching and qualify quantitative data with complex qualitative considerations. This is an important exercise. But it does little to explicate the fundamental issues about the fate of a civilisation.

We can periodise and demonstrate an embarrassing decline during the past decade. While this may help in letting off steam and salving a conscience, it does not clarify the more fundamental issues.

What is required is an understanding of the philosophical underpinning to the transformation project as a civilising mission. I will outline four strategic trends in this regard.

Quality of growth

After the difficulties of the initial years - caused by poor trust between the new state and the private sector, including low rates of investment and a run on the currency - the post-apartheid dividend started to bear fruit. According to the government's Fifteen Year Review (2008), the economy had become more open and more productive, with rapid growth in both exports and imports.

But industrial development was still skewed to the highly developed minerals and energy complex with weak linkages to other industries domestically [and it] had poor employment outcomes. The microeconomic reforms to address investment and growth constrains were poorly implemented. Thus, while South Africa's export growth improved, the rate was less than 10% that of Botswana, Brazil, Canada, Malaysia and Mexico.

Three interrelated factors also negatively affected the possibility of taking advantage of improving conditions.

Firstly, the path dependency of the mineral-energy complex has persisted.

Secondly, levels of monopolisation spawned in part by both the colonial structure and sanctions-busting efforts of the previous era continue to generate high mark-ups in the product markets.

Thirdly, the decimation of black entrepreneurial impulses under colonialism has left the country with a low entrepreneurial activity index. From the perspective of a civilisation that should have, as one of its core pillars, the development of productive forces, can South Africa's national democracy point to decisive interventions that are both prominent and epoch-making? Of course, a proper audit would unearth a few successes; but we will also find a large graveyard where innovations go to die.

And so, there is a sense in which the new elites have, so to speak, inherited the master's mansion and are engaging in minor renovations.

Inequality

Persisting inequality derives in part from the reproduction of the inherited deficits with regard to assets, skills, income and social capital. Experience over the years has shown that economic growth and poverty-reduction do not necessarily translate into the reduction of inequality.

The wealth effect is important in that it reflects the growing value of existing assets.

Thus, inequality increased even during years of high economic growth. Post-tax redistribution in the form of the social wage does reduce multi-faceted inequality. But this generates a vicious cycle. For instance, people may be connected to the electricity grid; but are unable to use this for more than lighting. People may be allocated free housing; but some sell these in order to access much-needed cash.

This dynamic of inequality is raised not just from the perspective of social morality. It is fundamental to social cohesion and the sustenance of economic growth.

Wilkinson and Pickett illustrate this with their global in-depth study on the correlation between inequality and poor macrosocial indicators. On the other hand, Berg and Ostry demonstrate from their study that longer growth spells are robustly associated with more equality in income distribution.

In other words, South Africa will not attain high rates of growth on a consistent basis unless it also deals decisively with social inequality.

Post-colonial capitalist class formation

A critical element of the evolution of South African national democracy is the necessary makeover of class demographics as the post-colonial system takes root. Though many in the liberation movement are loath to acknowledge this, the fact of the matter is that - both by implication and in actual practice - South Africa's transformers are operating in, and managing, a capitalist system.

It follows, therefore, that construction of national democracy also has to entail a deliberate and conscious act of building of a new capitalist class. And lest we forget, capitalist class formation was historically a brutal, heartless and often violent process of competition and elimination. History is littered with wars, colonial invasions, forced labour, slavery and neo-colonial machinations impelled by the search for profit and dominance.

Over the years, there have of course been attempts to introduce rules that promote some order and a level of protection from the rapacious licence of the system. But this has not stopped illegal activities and operations in the grey area between legality and lawlessness. This is of profound relevance to the trajectory of the South African political economy.

Many postcolonial societies have had to grapple with path dependencies that include, among others, large monopolies introduced by imperial powers, a subordinate relationship with the erstwhile metropolis, as well as a parasitic state-dependent bureaucratic bourgeoisie and local comprador capitalists dependent on the established capitalist elite.

It can of course be argued that there is capitalism and capitalism. There is the Anglo-Saxon model associated with neo-liberalism. There are social democratic welfare states. There are unique features found in the German model. Southeast Asia and its developmental states have added new insights. But, even in the more socially-conscious variants of the system, there has been cronyism, including the chaebols in South Korea and German national champions who get a slap on the wrist when they misbehave.

South African society has to exercise its mind on this phenomenon of post-colonial capitalist class formation. We should appreciate that there will be run-of-the-mill entrepreneurs seeking to succeed from an honest day's work. Others will seek to operate in grey areas bordering on illegality; and yet others will engage in corrupt activities and even try their hand at systemic state capture.

There will also be some in sectors such as the taxi industry who strive to avoid full-blown legality and - at the extreme end - criminal raiders who stalk construction sites to extract ransom. We should have tried better to align empowerment programmes with industrial policy as happened in Southeast Asia. We should also have expected and planned for the negative tendencies - for a 'lumpen bourgeoisie' working with elements of the established capitalist class to attach themselves to corrupt individuals in politics, the trade union movement and civil society.

The abiding lesson from postcolonial countries is that, if these negative tendencies are allowed to become dominant, the new and fragile polity can easily unravel into a cesspool of illicit accumulation and political disorder.

Current party-political dynamics

As many have emphasised, political organisation and leadership are critical to the sustenance of a civilisation.

How do South Africa's political permutations stack up in this regard? We have referred to the country's constitutional dispensation and the generations of rights that it enshrines. Let us briefly reflect on the party-political terrain and related dynamics. What is of concern currently is the rise of narrow identity politics - the tendency quite opportunistically and crudely to retreat into racial laagers as the primary form of mobilisation.

While, in the early post-1994 period, many of the large parties seemed to appreciate that success in sustaining the process of change depended on consciously avoiding setting the tinder of social discontent alight, this seems to have somewhat dissipated. To mix metaphors, the pressure cooker is being heated without any escape hatch for the rush of steam. Recent pronouncements by a leader of the Freedom Front Plus calling for an 'independent Western Cape' constitutes an extreme manifestation of this.

Faced with the challenge from its right, the Democratic Alliance seems bent on playing in that terrain - to try and retain the bird in hand in terms of electoral support from conservative white voters, instead of pursuing two in the bush. This is reflected, for instance, in its recent resolution rejecting the use of racial categories as a means to identify and uplift the disadvantaged, who are almost exclusively those who suffered under apartheid's racist policies or their lasting impact; as well as the dog-whistle that farm murders are a hate crime.

The leadership of the Economic Freedom Fighters (EFF) has historically sought crudely to exploit racial tension; but it seems to be even outdoing itself in the recent period. The demonstrations and pronouncements around the Senekal farm murder and the alleged racist incident at the Brackenfell High School reflect this tendency. Added to this have been its conduct in the national legislature and recent pronouncements against the police.

At the same time, the African National Congress (ANC), through some of the resolutions from its 2017 national conference - particularly on the nationalisation of the South African Reserve Bank and expropriation of land without compensation - seems to be inspired by a desire to cover its 'left' flank on 'radical economic transformation'. On these and other issues, the political parties do face an existential question about capacity to lead all of society, even if sectoral interests may diverge.

In addition, the ANC as the governing party faces a more critical challenge about whether it can renew itself and society and at the same time maintain unity within its ranks. This question arises also in the context of massive open and clandestine resistance by beneficiaries of corruption and state capture to the renewal efforts. To use Biblical fables, two syndromes worsen this situation: the first one is the Samsonite suicidal mission to want to collapse the temple with all inside; and the second one is about the danger of mass exhaustion and impatience in the renewal trek to the socalled 'promised land'. Given the pain that is endured in such a journey, some get tempted to 11 demand a return to their place of enslavement.

Further, through actions that, on the surface, appear militant, we may end up sabotaging the renewal project.

Coalescence around essence

And so, given all these challenges, shall the nascent civilisation of national democracy follow the polities of the Nile settlements, Mapungubwe, Zimbabwe and Machu Pichu: to survive largely as a riddle to future generations and a footnote of history? The South African Economic Reconstruction and Recovery Plan announced by government in October contains major interventions required to extricate the economy from the current rut.

As we all know, due to the Covid-19 pandemic, the economy is expected to contract by about 8.2% in 2020; the fiscus is heavily constrained; job losses for the year are topping more than a million and the provision of many basic services is under strain. And so, our task is not just about correcting small weaknesses and introducing minor adjustments to clear binding constraints. It is fundamentally about the need to pick up a political economy battered by a once-in-a-century event.

The challenge is two-pronged: firstly, to stem the decline that was already manifest before the pandemic and, secondly, to introduce drastic measures that lift society onto a higher trajectory of growth and development.

The elements of the plan are widely known and do not require detailed treatment: ensuring energy security; aggressive infrastructure programmes premised on investment by both public and private sectors; building a thriving industrial base that creates jobs; a mass public employment programme; macro-economic policies that include strengthening revenue collection, incentives for job-creation and tax measures that encourage investment in non-consumptive expenditure; focus on the green economy as well as food security and the revival of the tourism sector.

Critical in this regard is strengthening the capacity and ethical fibre of the state - with a pilot agency at the centre, which has the authority to integrate all elements of government work and ensure focued implementation.

There are many issues that can be debated including whether the stances on fiscal expenditure and monetary policy are bold enough. Further, in terms of civilisational discourse and development of productive forces there are many issues that require consideration as a formal part of the plan. These include: the hydrogen economy and fuel cell technology; developing manufacturing capacity for supplies to infrastructure programmes in South Africa and the rest of sub-Saharan Africa; taking advantage of global efforts towards better management of supply chains and integrating these initiatives into global value chains; and more systematic utilisation of Fourth Industrial Revolution technologies.

There could also be better support for informal businesses, taking advantage of the registration processes that took place during higher levels of the Covid-19 lockdowns - and these businesses are owned mostly by women with daring and initiative. What is most critical is that the reconstruction and recovery plan emerged from consultative processes; and it forms an important part of the social compact that South Africa requires. However, the circle of participants in these processes can be expanded to ensure better inclusivity.

For instance, it is not quite clear why the second largest trade union federation is not part of these processes - it would seem, by dint of some bureaucratic gatekeeping in the National Economic Development and Labour Council (Nedlac). The debate on these and other issues should continue; but this should happen as we implement the agreed measures.

What I wish to emphasise is the need for coalescence around essence. In other words, as we clamour for quick-wins and measurable objectives, we should not lose sight of the conceptual questions facing South African society, by burying our heads in a welter of detail Let us look at three elements of this essence.

The first one is about the character of the social system: If it is indeed true that we are managing a capitalist system, then we need to agree on a conceptual underpinning to the social compact we seek to build: how we can re-engineer an economic structure inherited from colonialism.

An analysis of the injunctions contained in the Constitution points towards a combination of a developmental state that leads all of society in pursuing consistently high rates of growth, and social democracy underpinned by comprehensive redistributive measures. The second element of essence is about the core objective of socio-economic policy: The Constitution does indirectly identify a minimum standard of living below which no South African should sink.

Elements of a decent standard of living are outlined in the National Development Plan (NDP) and they include: nutrition; housing, water, sanitation and electricity; education; health care; safety and security; education; employment; recreation and leisure; as well as a clean environment. There should be serious dialogue on this concept of a decent standard of living as a national objective.

The third element of the essence is about the leadership role of the state: Besides its responsibility to lead in crafting a vision and to mobilise society in its implementation, there will be moments when decisive leadership is required. When consensus eludes the partners, a democratic state has to weigh in and make the difficult choices. Pursuit of absolute consensus can only result in the lowest common denominator and minimal progress.

Let us cite, for purposes of illustration, some crude examples of sacrifices that may be required under current conditions:

• For the business community, in what way can the Covid-19 'winners' such as ICT and data providers and those who develop and handle vaccines including the syringes, glass vials and fridges give back to society? Or should there be a global windfall tax that can be used to improve data access and public healthcare?

• With regard to workers, given that the facilitators of state capture cleverly and carelessly extended populist benefits to employees within some state institutions, how does society deal with the conundrums in relation to public service pay, and an unsustainable personnel budget at the SABC and other state entities?

• For civil society and communities, we need to ask ourselves whether we should expect the judiciary and security agencies to meet their mandate in the face of resistance if we do not contribute through mass mobilisation by helping to disrupt the disruptors!

Further, can communities expect uninterrupted services such as electricity if there is no commitment to pay when we use more than the guaranteed free basic service? These are random examples to underline the point that leadership in the context of social compacting also means accepting sacrifices and having the courage to communicate difficult decisions to constituencies.

In conclusion, let us get back to the question of the day: Can South Africa's civilisation of national democracy sustain itself? In a roundabout way, the answer from this exposition is: Yes; but this is more as a function of social agency - of citizen activism and leadership acumen - and cannot be a quirk of fate.

In this regard, the words of African leaders at the recent Tana Forum come to mind; and this is that our aim should not be to build back better; but to build forward differently. In that way, we will be able to reach for Chief Albert Luthuli's ideal that: "Somewhere ahead there beckons a civilisation which will take its place in God's history with other great human syntheses: Chinese, Egyptian, Jewish, European. It will not necessarily be all black: but it will be African".

As we all strive together to emerge from the devastation of the Covid-19 pandemic, we dare to remember that we are our own liberators.

Source: News24

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