Joel Netshitenzhe

Article: There is virtue in strength and certainty

4 April 2004

Nelson Mandela concludes the epic drama of his pre-1994 life, Long Walk to Freedom, with the now famous words:

"I have walked that long road to freedom. I have tried not to falter; I have made missteps along the way. But I have discovered the secret that after climbing a great hill, one only finds that there are many more hills to climb. I have taken a moment here to rest, to steal a view of the glorious vista that surrounds me, to look back on the distance I have come. But I can rest only for a moment, for with freedom come responsibilities, and I dare not linger, for my long walk is not yet ended."

These words capture a profound dynamic in the process of social change. Firstly, the past lives in ubiquitous ways in the present, grappling to pull the present back but also spawning forces that push it forward. Secondly, the present marches to the future not in linear fashion, but it has to zigzag around many obstacles. Thirdly, ours is a long walk precisely because in 1994 we arrived only at the end of the beginning.

Methodologies galore can be employed in reviewing the past ten years, from an overemphasis on the will and acumen of leading actors to an assumption that all-powerful forces beyond our control were responsible for what has transpired. As Adam Habib says, the truth is somewhere in-between.

But how do we measure such progress? Habib argues that we cannot use the apartheid social reality as a frame of reference, for that would be to compare ourselves with an aberration, a crime against humanity.

The philosophical underpinning of Habib's argument aside, there is also a practical problem - as the Policy Unit in The Presidency came to realise in finalising government's Towards Ten Year Review.

The statistics of the previous era are highly unreliable. No sooner do you start developing arguments to interpret a strange massive decline in life expectancy since 1994, than you discover that "South Africa" in pre-1994 statistics excluded the poverty-stricken "independent homelands". Further, where quantification applies, so qualitatively different is the current order that often you end up with differences of the order of magnitude of infinity.

However, we have to understand the present against the backdrop of the past. Otherwise we may end up conjuring up all kinds of warped theories about why the poor evince such confidence in the government and such optimism about the future - that it is a race-based herd mentality rather than the sense of dignity, belonging and material change that they have experienced.

Habib asserts an intractable contradiction in government's policies which would make it impossible to address the deep-rooted reality of Two Economies in one country. Government's macroeconomic policy (GEAR) is, to him, an antithesis of the RDP and it represents a pandering to the dictates of capital to the exclusion of the aspirations of the majority.

Having made this assertion, Habib cannot but reach two conclusions: that, if government felt threatened in terms of majority support, it would listen more to the poor; and that there may be hope because government is now abandoning GEAR.

What Habib fails to appreciate is that the art and science of governance is essentially about weighing trade-offs and making choices. With a budget deficit close to 10% and the country entering a debt trap, the choice was either to borrow more and end up begging bowl in hand at the IMF and World Bank. Or to reduce the budget deficit while reprioritising expenditure in order to ensure sustainable development. Government chose the latter.

The RDP expressly called for the development of a macroeconomic policy. But the form that such policy assumed was dictated to by the realities of that moment, including an unmanageable budget deficit, high interest rates, and very weak local and foreign investor confidence. So in a sense, GEAR was a structural adjustment policy, self-imposed, to stabilise the macroeconomic situation.
Indeed, the massive increase in social expenditure in real terms over the past few years reflects success in such stabilisation. Besides, since 1992/93, spending on social services has grown from 44,4% of general government expenditure to 56,7% in 2002/03.

Habib seems to be cavalier about this change - juxtaposing millions connected to water and millions cut off; millions connected to telephony and millions cut off; jobs created and millions of jobs lost. But rigour in research does matter: it is two million net new jobs after accounting for job losses; it is partly the acquisition of some 12 million cellular phones in the past decade as distinct from reliance only on fixed lines; and the 10 million connected to water which cannot by any stretch of the imagination be compared with the few households occasionally cut off.

So is there a GEAR shift? The principles of macroeconomic stability remain. But because such stability has essentially been attained, there is more space for massive social and economic interventions by government. In that sense, we are in a post-stabilisation phase, a post-GEAR period.

Government can utilise this space by upping the pace in providing social services and leave matters at that. But the impact of such delivery does get somewhat discounted if people do not have jobs: for instance, 50% of households use electricity only for lighting because the unemployed do not have electrical appliances or they cannot afford the bills. The other approach would be to combine improved social services with interventions to lift the Second Economy and reduce dependence on social grants.

Measures on the table include the Expanded Public Works Programme, better labour market intelligence, improved access to micro-credit for productive purposes, co-operatives, faster land reform and more effective skills development. This should help promote sustainable livelihood and the "graduation" of some of the marginalized into the First Economy.

For these interventions to succeed, the First Economy needs to grow faster, generate more resources and create more opportunities. In other words, these latest initiatives are not an antithesis of, but a logical progression from, previous programmes.

Government cannot do this alone. Thus the core organisational principle for the Second Decade of Freedom is pursuing a social compact: a partnership among government, the community sector, business and labour, with clear tasks that each will carry out variously and collectively to build an economy from which all can benefit.

Logic suggests that what you need for this purpose is a partnership among confident rather than weak actors, more certainty rather than uncertainty.

Indeed, the greatest danger in the coming period is the spectre of an indecisive and weak government, unable firmly to identify and lead the pursuit of the common interest in the midst of competing and conflicting sectoral self-interests.

Otherwise, the long walk continues.

Joel Netshitenzhe
CEO: Government Communications (GCIS) and Head: Policy Unit (PCAS) in The Presidency

Published in Sunday Times

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