Does contemporary South Africa meet the requirements pertaining to the implementation of a developmental state strategy?

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Abstract

Deeply conscious of the need for rapid economic development in order to eliminate the high levels of inequality, poverty and unemployment as well as the dangers that may emanate from these social evils, the South African government made the momentous decision in 2007 to formally embark on the implementation of a developmental state strategy. The first practical step toward the realisation of this goal was the adoption in 2012 of the National Development Plan 2030 (NDP 2030), also known as Vision 2030, drawn up by the National Planning Commission (NPC).

This plan envisages the radical transformation of the economic and social landscape in South Africa by 2030. The following examples may serve as illustration: an increase in employment from 13 million in 2010 to 24 million in 2030; an increase in per capitaincome from R50 000 in 2010 to R120 000 in 2030; an increase in the share of the national income of the bottom 40% from 6% to 10%; the elimination of poverty by reducing that part of households with a monthly income of R419 per person (2009 figures) from 39% to 0%; an annual growth in GDP of 5,4%; and an annual rise in export volumes by 6%.

Although the necessity for implementing a developmental state strategy in South Africa is a view shared by politicians and academic scholars alike, no unanimity exists regarding the viability of this particular strategy. The most intensely debated aspect relates to the question whether the essential requirements pertaining to its implementation are prevalent in contemporary South Africa. By means of a literature study, this article attempts to get greater clarity on this vexed question.

The analytical framework employed is fivefold in nature: First, the basic theoretical assumptions underpinning a developmental state strategy will be highlighted. Of primary importance in this regard is the assumption that the socio-economic development of underdeveloped societies can be attained only when the state has extensive powers not only to influence the economic, political and social development of society, but also to determine the direction of development. However, even though a developmental state strategy implies state intervention in the economy, it does not mean authoritarianism, socialism or the absence of economic liberalism. On the contrary, state intervention in order to promote the living standards of even the least developed sections of society should always be conducted within the framework of a democratic political dispensation and a capitalist economic system.

Secondly, those requirements generally regarded as essential for the implementation of a developmental state strategy will be identified.

Thirdly, a brief overview will be presented regarding the commitment of the current South African government to the implementation of a developmental state strategy. This will serve to simultaneously present the necessary background as well as to indicate the nature and objectives of the specific strategy envisaged by the political leadership for South Africa.

Fourthly, the important question posed in this article, namely whether or not contemporary South Africa meets the essential requirements pertaining to the implementation of a developmental state strategy will be addressed. Those essential requirements regarded by most scholars as of crucial importance will serve as analytical tool. These requirements are: a long-term vision regarding economic development by the political leadership as well as the political will to steadfastly strive toward the attainment of that vision; a development-oriented and performance-driven political leadership; a state-led industrialisation policy actively supporting the business sector; a labour force supporting the singular objective of economic growth; an education system providing the knowledge and skills needed for rapid economic growth; previous experience with state-led development programmes; an effective coordinating and monitoring centre; a manufacturing-oriented business sector; an effective and professional state bureaucracy; a high savings rate providing investment capital for rapid economic growth; a corporatist framework; and societal cohesion.

The article will be concluded by providing a summary of the findings.

On the basis of the literature study conducted it is possible to conclude that while contemporary South Africa does meet some of the essential requirements, other equally essential requirements are not being met. The following four requirements are being met:

  • The political leadership is committed to a long-term vision that aims at the implementation of a developmental state strategy. The leadership also displays the necessary political will in bringing that vision to fruition. Indicative are the adoption of the National Development Plan 2030 (NDP 2030) in 2012; the formulation of the Medium Term Strategic Framework (MTSF) in 2014 for implementing the NDP 2030 in three five-year cycles; and the alignment of the national budget to the first MTSF (2014–2019). However, the attainment of this vision is seriously being undermined by the leadership of the ANC’s allies in the Tripartite Alliance in their ultimate aim toward creating a socialist system.
  • The government did adopt an industrialisation policy that actively supports the business sector. In 2015 the government approved the seventh Industrial Policy Action Plan (IPAP) containing several incentive schemes for industrialists. Special emphasis is being placed on the empowerment of black industrialists.
  • The government did establish a coordinating and monitoring centre. The Ministry of Planning, Coordination, Monitoring and Evaluation (MPCME) in the Presidency is not only specifically charged with the responsibility of implementing the NDP 2030, but also for coordinating, monitoring and evaluating the priority action plans by the various social actors as outlined in the MTSF (2014–2019).
  • The government did garner previous experience regarding the implementation of state-led economic development programmes. It could draw both on the experience of governments during the apartheid era with state-sponsored economic development programmes, and also on its own experience in the implementation of its own programmes after assuming power in 1994.

Contemporary South Africa fails to meet the following eight essential requirements:

  • The current political leadership is not development-oriented and performance-driven. On the contrary, based on the policy uncertainty being created on a regular basis by arbitrary and poor decision-making, a history of low economic growth, efforts toward “rent-seeking” by the “patronage politicians” within the ruling party, and the ongoing government subsidisation of a large number of ineffective and dysfunctional state-owned enterprises, the capacity as well as the quality of the political leadership displayed is seriously questioned.
  • The manufacturing sector is too small to make a significant contribution toward the implementation of a developmental state strategy, even though it does constitute a foundation upon which such a strategy could successfully be implemented. In addition to its inadequate size, the contribution of the manufacturing sector toward the GDP is also on the decline.
  • Except for some pockets of excellence on all levels of government, the state bureaucracy as a whole is plagued by such a myriad of deficiencies that it can hardly be expected to play a supportive role in the implementation of a developmental state strategy. Having analysed the drivers of corruption in the public sector some analysts are of the opinion that this factor alone may cause the entire sector to become dysfunctional.
  • The labour force is not fully committed to the single objective of economic development as is required by a developmental state strategy. Although there are some indications that a significant section of the labour force is indeed positively inclined toward rapid economic growth, any substantial positive impact this may have is neutralised by the absence of a strong work ethic among the workers. Indicative are the high levels of labour unrest, strikes, absenteeism, low productivity and a low level of competitiveness.
  • The educational system is ill-equipped to provide the labour force with the knowledge and skills that will ensure rapid economic development typifying the implementation of a developmental state strategy. Despite the fact that South Africa’s spending on education and training is among the highest in the world, the labour force is still plagued by severe skills shortages in all the vital occupational fields.
  • The implementation of a developmental state strategy in South Africa is unlikely because a high savings rate that would provide the capital needed for investment and rapid economic growth is absent. Not only is the savings rate a mere 14,5% of GDP, but the inflow of foreign capital is also in sharp decline.
  • The existing corporatist framework is not conducive to the implementation of a developmental state strategy. Measured against the structural, role, behavioural, and macro-environmental requirements pertaining to a successful corporatist framework, the South African framework is deficient in many respects.
  • The implementation of a developmental state strategy in South African is hampered by a lack of social cohesion. Despite the transition to an inclusive democracy in 1994, the “rainbow nation” is still a deeply divided nation. Indicative are the class, regional, ethnic and tribal divisions; ideological differences; economic inequality; cultural differences and prejudices; political intolerance; racism; and the deep schisms caused by the opposing forces of modernism (individualism) and traditionalism (collectivism).

On the whole, contemporary South Africa does not satisfy the most essential requirements pertaining to the implementation of a developmental state strategy. However, this does not mean that the long-term vision regarding the implementation of such a strategy in this country should be abandoned. The strange irony is that a developmental state strategy is actually ideally suited for bringing about the rapid economic development in South Africa that is needed to ensure meaningful socio-economic transformation and stability. Given this stark reality, it is incumbent on all the main social actors in South Africa to convene a national convention, similar to the Convention for a Democratic South Africa (Codesa), at which they could collectively commit themselves to creating those conditions conducive to the implementation of a developmental state strategy.

Keywords: business sector; democracy; developmental state strategy; liberalism; long-term vision; national development plan; rapid economic growth; social actors; socio-economic transformation

Lees die volledige artikel in Afrikaans: Voldoen eietydse Suid-Afrika aan die vereistes vir die inwerkingstelling van ’n ontwikkelingstaatstrategie?

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