South Africa

Op-Ed: Five strategic questions South Africa must ask to survive

By Marius Oosthuizen 27 November 2017

South Africa is poised at a precipice of fiscal default, political fracture and a return to social polarisation. These three pitfalls are avoidable, but it will require a concerted effort and a number of about-turns to change the trajectory of the country. Here are some questions with which South Africa’s leadership echelons in business and government need to concern themselves in 2018 and beyond. To the degree that we develop robust answers to these questions, we will succeed. To the degree we fail, the country will. By MARIUS OOSTHUIZEN.

First, a word on strategic perspective. Many of our leaders in government cannot run a spaza shop, let alone develop and implement sophisticated policy that has the intended outcomes, in an advanced free-market environment. Most of our captains of industry, I would argue, are brilliant at sailing their own corporate ships, but are newcomers to the domain of national strategic adaptation. Neither of these constraints are insurmountable. For every incapable bureaucrat there is a capable technocrat somewhere in the wings. Our industry captains, similarly, can be brought along to see their broader societal role. Many have already made this shift. These questions are not exhaustive, but they offer a start.

1. What is the economic logic for the existence for each of our towns?

South Africa is like a picturesque quilt of diverse rags sown together in an experiment of extreme diversity. The flat mountain in the Western Cape is surrounded by world-class and sought-after properties, and the empty mine shafts of Egoli are surrounded by sprawling suburbs of professionals working in the post-industrial services economy of Gauteng. In between lies the flat and dusty Bloemfontein maize corridor and to the south-east the rolling green hills of the Zulu Kingdom.

There should be no towns along the monotonous N1 or N3 or N4, to the north, but there are. Why, because as our history rolled up and down the landscape of Mzansi, the various agendas of miners, salesmen and bankers built structures and institutions around which increasingly educated white and historically excluded black inhabitants clustered. So today, as a product of the infamous legacies of colonialism and apartheid, South Africa’s towns are running dry and economically stagnant.

This poses a strategic challenge, because as young migrants move to the cities we are increasingly confronted with explosive growth in urban poverty and unemployment. South Africa needs to rethink the economic logic of each of our towns, and turn these insights into opportunities for investment, growth and job creation. By way of example, Rustenburg with its platinum belt economy must think beyond the life of the mines, and needs the societal stakeholders to rally around a viable future strategic vision for the now burgeoning city. Unless this is done, potholes in the main street and dusty, depressing townships full of unemployed youths will be the long-term outcome. Each of our towns needs a strategic vision, rooted in the economic logic of their existence.

2. How can our cities move to more inclusive and competitive economies?

The top five cities in SA are the economic engines of the country. If the cities thrive, so will the population at large, the fiscus and the entire system. If the cities become stagnant relics of an old era’s success, their streets will turn to ghettos. So, what is needed is a redesign of the large systems in our cities on which the dynamic interplay of social-mobility and economic competitiveness coalesce. Roads, rail, fibre, zones of productivity and proximity to affordable labour – all of these must align to ensure that our cities are competitive hives, in a globally connected system where New York competes with Shanghai, Singapore and Johannesburg.

By way of example, Tshwane is the embassy-capital of Africa with more countries represented than any other. In addition, it boasts the most tertiary education institutions on the continent and is a hub for auto-manufacturing and the sector’s up- and downstream industries. How can these competencies be aligned and harnessed to make Tshwane the university-city of the continent, driving auto-manufacturing competitiveness in the now emerging post-combustion future, of electric cars, drones and micro mobility?

These strategic alignments would unlock significant industrial and labour absorptive opportunities for South Africans. But they cannot be achieved through the actions of one social partner alone. They, by their nature, will require a co-ordinated effort between the public and private sectors, with concessions by the likes of labour.

3. What is a viable political economy for SA in 2030?

South Africa infamously grew its advanced economy on the back of cheap labour, dirty coal and oppressive politics. Now democratic, South Africa is neither here nor there, caught between apartheid spacial and industrial designs and the exclusive services-orientated economy which grew out of, and survives on, the consumption of the middle class.

This status quo is not sustainable with 11-million working age unemployed, more than 17-million on social grants and a young, poorly educated youth bulge. We need urgently to rethink the political economy or we’ll face revolutionary change, driven by naive populists who have been reading archaic Marxisms and Leninisms, with a just enough of a mix of black African consciousness to give them a sense of purpose. These populists are misguided and dangerous, because they understand neither the psychology of true human emancipation nor the economics thereof.

Without getting side-tracked into a discussion of what liberation means, and to whom, let’s accept that South Africa needs a new viable vision for a political economy in 2030, where more citizens enjoy a slice of the pie. A future where hope for upward mobility is a reasonable feeling. A system in which every South African, with a little help from the state and society at large, can emerge as a productive, dignified, and even affluent participant, if they want to.

4. What is our geo-strategic future in the region, given our resources and capabilities?

South Africa is not an island. If Zimbabwe’s last decade has taught us anything, it should be that we are vulnerable to the whims of the region. Similarly, we will be the beneficiaries should the region develop and grow. As the regional power, in economic terms at least, it is in our interests to think long and hard about what this means for us geo-strategically.

We have certain innate resources and hard-earned capabilities as a country. We have logistics infrastructure, rare earth metals and we’re good at plastics and chemicals manufacturing. What are our neighbours good at and how can we leverage these differences to complement each other? Will we sit back and watch Mozambique become a gas and energy powerhouse and Zimbabwe recover from Mugabe’s misrule alone, or will be on a journey of mutual-benefit with these neighbours? I doubt that, left to the politicians and industrial policy community, these opportunities will be effectively identified and used.

5. The Global South is changing, what is our role?

In the next 50 years China will probably become the polar end of a bipolar world in which Western orthodoxies are challenged and new markets in East Asia emerge larger, more vibrant and hopefully more conducive to business than ever before. South Africa needs to position for this wave of global systemic change. The BRICS formation and development bank, in this context, is a good move. However, we should not imagine that the Americas and Europe will simply lie down and give away their leadership perch. They remain centres of innovation, knowhow and immense wealth. The key for South Africa will be to dance with various suitors, depending on the music playing at the time.

Also, to prevent us from being a junior partner in these relationships, we need to inculcate a world view free from ideologies and paradigms that blind us to the very real opportunities for our nation to participate in a global order where friends are fickle and there are no guarantees of stability and growth.

South Africa has succeeded at many things, from developing world-class companies to innovating in social processes and political transition. But we have not yet succeeded at turning our often-fledgling country into a nation. We have deep fault lines and unforgettable histories from which we are yet to recover. But we do have a lot to work with. We are not at war, nor are we starting from scratch. We are capable people, have an open society and an abundance of energy. If aligned and invested, imagine what we can become. DM

Marius Oosthuizen is a member of faculty at GIBS. He teaches leadership, strategy and ethics.

Photo of Johannesburg at night by Nico Roets via Flickr

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