South Africa, World

Op-Ed: A New Deal, by and for Davos – or The People?

By Luke Jordan 23 January 2018

It’s a new year and we have new leaders. When exactly the formal transition happens matters little, compared to the policies that follow. Will we merely see the old, pre-2007 ways return — old interests sitting in rooms trying to bring dead ideas to life? Or will we have a moment of renewal, a change not just in who governs but in how we govern ourselves? By LUKE JORDAN.

The road into Ivory Park is narrow. The township has 200,000 people and a two-lane road. Dust swirls, taxis queue, accidents are common. It also has a swimming pool. More accurately, a giant hole that will one day be a pool. Nobody really knows why it’s there. People in the community laugh at the idea that this was their priority. “The road, man, the road,” they say. Better sanitation. Housing. Those are priorities. They got a swimming pool.

This being a construction contract, some form of corruption is likely. But mid-sized construction companies don’t need to sell nuclear reactors to line their pockets. Their corruption works across any sector, so corruption is rarely the reason one project is built instead of another, a swimming pool instead of the road. If you can rig a contract for one, you can rig it for the other.

So, why the pool? The answer lies in national regulation. That requires local governments to spend at least a billion rand a year (5% of their infrastructure grants) on sports and recreation facilities. There are almost certainly good intentions here. You can almost imagine yourself in the workshop in Pretoria, where an earnest, thoughtful person stood up and delivered a plea to provide kids with good facilities, so that they could stay off the streets and get healthy. All the heads around the table would have nodded in vigorous agreement. It’s a noble goal.

But the real world did what the real world does to noble goals decided by elites sitting around tables. Local governments, already low on capacity, already struggling to include people in decision making, did what was natural, and looked for the easiest way to clear the threshold. That was to build big, expensive projects on pieces of land they already owned. And what fits that description better than a swimming pool, with all the expense to dig out the pits, install the pipes, and build the facilities? The maintenance costs are huge, but there’s no minimum there, so they can be cut when need be. The distance between good intentions and unused swimming pools is that small.

What could have been done differently? Grant, for the sake of argument, that 5% is a good number. Grant that after much persuasion and brow-beating, local governments just hadn’t responded. An alternate programme could take the budget and place it in a national fund for sports and recreation, divided into amounts for every area of roughly 10,000 people on a formula that weighted strongly for poverty. Most importantly, it could require that in each of those areas a council decided on how the funds were spent, a council made up of local coaches and sports teachers, sports and after-school-related NGOs active in the area, and a randomly selected set of local citizens.

Fully empowered, they could decide, if they wanted, to reallocate part or all the funds for the year to some other project in the community (a road, for example). Once a year, members of all such citizens’ sports committees in a city could gather to swap notes and ideas. Once a year, the details of how this all operated could be reviewed and iterated, through forms of peer review. The job of municipal officials would change from top-down selection of what they thought was best for each area, to managing the process by which people learned from each other.

The details of such a plan would require a great deal of work and experimentation. There would be many risks and a fair deal of waste at the beginning. Realistically, the whole program would have significant overheads. All these would be cited as excuses for not pursuing it, as if the alternative were a realistic chance of not wasting all the money on more swimming pools.

These arguments are, though, beside the point. What is really at issue is a difference in world view. On one side is the idea that you qualify as an adult based on your access to certain credentials, titles, or meeting rooms. Within that circle, you may be considered incompetent, but you will always be considered legitimate, and have the benefit of the doubt. Stand outside it, and you may be allowed to speak, but on sufferance — with every fact or experience you state being subject to doubt.

In this world view, programmes that begin from the idea that the people shall make decisions are always suspect. Any lapse or mistake is seized upon as evidence that they do not work. In contrast, problems in top-down programs are ascribed to individual errors, to be overcome by training. When the people make a mistake, the response is to take power from them; when officials make mistakes, the response is capacity-building workshops.

The officials who subscribe to this world view are not malicious. There may be a moral and intellectual pleasure in lumping all officials into a single bucket, all of them having ill-intent. That may be helpful when, for example, you are a DA mayor failing to manage a metro and looking for a scapegoat (“saboteurs” have not been sought with such enthusiasm since Stalin). But when attempting to transform the country, blanket assumptions about millions of people are lazy and unhelpful.

Instead of using a single bucket, it’s useful to divide officials into three categories: the corrupt; then the many more who are doing a job, watching the clock to get home to their families; and then the dedicated, doing as much as they can to serve the public. The corrupt can be contained, if not eradicated. That is necessary, but not sufficient. In the second category — the huge numbers of officials in the middle, ordinary people doing their jobs —change is necessary, but takes enormous time.

It is within the third group that both the promise and necessity of change lies. Be as cynical as you like, and the number of such people is still very large. Assume only one in a 100 of the roughly two million officials in the country is a devoted public servant and that’s still 20,000 people. Assume it is one in 10 and you have 200,000. The transformation of our country rests on the possibility of raising and harnessing the energy of these thousands upon thousands of people.

That must be one of our new leadership’s primary tasks. But even if done, it will not help if the energy is put to work within a culture that is top-down and inward looking. Even with new leaders, even with new energy, the old world view will produce well-intentioned programmes that state, on paper, that they will take citizen voice into account — but will not. The first time a citizen proposal conflicts with an official consultant report, the first time a choice must be made between real decision making in the hands of the people and some internal process of meetings and documents, the people will be cut out. The result will simply be a greater urgency in the building of unwanted swimming pools.

A contrasting world view starts from the idea that citizens are adults. Like all adults we make mistakes. We are often short-sighted and selfish. But we know our own lives better than others, and we learn with practice. When provided the means to act against our worst selves and cultivate our best, we can and do flourish. The role of government is to provide those means, to enhance our capacity to govern ourselves. That is a hard task — much harder than deciding on a minimum amount to spend on swimming pools.

But it is also more fulfilling, not just for us as citizens, but for officials. It is one thing to be caught in the grind of endless meetings and tenders and reports. It is another to be in the field coaxing and guiding the energy of millions. The deep support of citizens and sense of ownership is also the only viable answer to the honest official’s nightmare — the constant change of project and programme as politicians rotate above, the constant risk that the right thing will be undone by a piece of petty patronage. From the cities of Japan and Europe to the mountains of India, those have been the results. “Unhappy is the land that breeds no hero,” the scientist’s daughter says to Galileo in Bertolt Brecht’s play. “No,” Galileo replies. “Unhappy is the land that needs a hero.

Here we come to our national leadership, and the opportunity for renewal. In November, Cyril Ramaphosa published what he called his policy programme, promising a “new deal. The next day, the DA put out a statement calling it “DA-lite”, which is somewhat like Budweiser calling your beer weak. There were some new ideas in the new deal, such as renewable energy and stronger antitrust activity, but most of it smelled very old.

Our economic policy has low-hanging fruit. An immediate tax write-off for new physical investment, paid for by steep increases in taxes on dividends and luxury consumption, would both generate growth and start rebalancing our economy from consumption to investment. We build at least a 100,000 private homes a year less than we should, because banks are incentivised to lend for TVs instead of houses. Closing that gap would generate a million jobs.

An already designed carbon tax is waiting for implementation, and would raise R20-billion a year for improving the homes of the poor and accelerating RD (perhaps in low-energy desalination?). A draft amendment to our competition laws will finally bring them in line with developed world precedent, and allow us to start breaking apart our monopolies. Even that noted radical, S&P, has called our economy overly concentrated. We could combine that with direct grant funding for township entrepreneurs, so they could move into the spaces opened up. These and other policies could create the political capital and breathing space to take up the harder, deeper long-term reforms needed, above all in education.

Or, we could focus on Special Economic Zones (SEZs), the most prominent idea in the new deal speech. SEZs have been tried here in one form or another for two decades. Tried, too, and failed almost everywhere from Guatemala to the Democratic Republic of Congo. One SEZ worked, once, in China—when the SEZ was next to Hong Kong and part of a national economy already growing at over 10% a year. The latest kind of SEZ in China has failed, even in Shanghai itself. SEZs failed in India, despite a rapidly growing economy with over a billion people. Especially when applied to low-skilled manufacturing, an activity rapidly being replaced with robots, it is a dead idea.

So why does it head the list of new deal policies? Possibly because it is an easy sell in meeting rooms. The idea has been around for so long that anyone in officialdom who opposed it was probably worn down long ago, or opposes it from rightly discredited neoliberalism. Possibly because the idea is made for paternalism—special investors swooping in to special areas administered by special committees to provide jobs for a grateful populace. Again, those who promote such ideas are unlikely to be malicious. It’s just they’ve been talking to the same people in the same rooms for so long that they’ve lost the sense of when something is outworn. That applies as much to the “private sector” as it does to the public — you will rarely hear more dead ideas than at conferences of industry (or, for that matter, at ski resorts in Switzerland).

Which brings up the idea that headed the new deal. A “new social compact” to bring together “government, business, labour and civil society”. There are two ways this could be done. One would rely on a false notion of representation to bring together a few dozen people to talk to each other, about the same ideas as always.

Who would they be? Business leaders of large companies, who turn out to be bad at their jobs or fraudulent as soon as they venture into markets with real competition. Labour leaders whose unions are going insolvent and whose own branches doubt or openly attack their legitimacy. Civil society members who are good at getting journalists to write front page articles, but could turn out maybe a 100 people to a protest if they supplied free KFC. Any new deal struck by such people sitting in meeting rooms would have all the force, imagination and legitimacy of the National Development Plan.

The alternative would be to finally make good on the Constitution’s promise of open, responsive government that belongs to all of us. A promise at the heart of the early Mandela government and the RDP, and later abandoned.

Such an alternative would lay the grounds of deeper change with practical, short term gains from bold action. It would then rebuild the processes by which we govern ourselves. It would start with planning and performance management in our cities, and move on to policies and programmes in land and agriculture, training and education, and innovation and industry. In each, it would sweep away encrusted habits and dead ideas and create the mechanisms by which the poor and public servants and all of us could learn together the art of governance.

The legislation for such reform already exists. The institutional reform would be hard, but we have many examples to learn from, at home and abroad. It would take what Max Weber once called “a strong and slow boring of hard boards”. But Weber also said that “all our experience confirms that what is possible in this world would never have been achieved if people had not time and again reached for the impossible”. What country knows this better than we do?

So that is the choice before our new leaders. Go back to the crypt. Or allow millions of citizens to meet thousands of officials in the joint work of our common governance. That would be a social compact and a new deal worth being excited about. It may sound ambitious. But ask yourself this: what else is equal to what lies ahead of us? DM

Photo: A snowman on the roof of the Congress Centre on the eve of the 48th Annual Meeting of the World Economic Forum, WEF, in Davos, Switzerland, 22 January 2018. The meeting brings together entrepreneurs, scientists, chief executives and political leaders in Davos January 23 to 26. EPA-EFE/LAURENT GILLIERON

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