In the late 1980s, South Africa was in a bad state. The refusal in 1985 of, then President PW Botha, to deliver the progressive Rubicon speech that many were expecting, dumped Apartheid South Africa even further into global isolation. Economic sanctions were quickly followed by a dramatic decline in the value of the Rand. With his back to the wall, Botha decided he would fight, declaring a state of emergency the following year.
This was the most brutal period in South Africa’s history, with a sharp increase in killing, torture and detention without trial. Local resistance, together with international pressure, had backed Botha’s government into a corner, but he was not prepared to concede a thing.
Or, should I rather say, he was not prepared to make any meaningful changes. Because his term as president, while brutally oppressive, was characterised by a host of superficial concessions to black South Africans. The legalisation of interracial marriages, the relaxing of the Group Areas Act, allowing contact with the imprisoned Nelson Mandela, the granting of limited political rights to coloured and Indian South Africans – on the surface these looked like pragmatic compromises, but they did nothing to change the fate of black South Africans. None of these cosmetic concessions restored the dignity or recognised the rights of black South Africans.
Tweaking and relaxing Apartheid laws simply would not do. Everything about the old system was wrong, nothing was worth saving. What was required was a complete re-boot – a new way of doing everything. South Africa had reached a point where the only solution was to “switch it off and switch it back on again”.
The unbanning of political parties, the release of Nelson Mandela, the CODESA talks and the 1994 election – these things were our re-boot. They allowed us to start with a clean slate and say: “What do we need to do, from here on, to improve the lives of the millions of excluded South Africans?”
For a while we seemed to be on track. But 21 years into our democracy, we once again find ourselves in a position where we should be reaching for the reset button. Our government’s plan to alleviate poverty, reduce unemployment and address inequality has proven to be completely ineffectual. Our policies chase investors away, our legislation scares entrepreneurs off and our incredible levels of corruption and waste mean that government can’t get round to fulfilling its core mandate to the people. It is the poor who need help. It is the unemployed, the shack dwellers, the subsistence farmers, the social grant recipients, the single mothers, the child-headed households and the homeless who rely on government for their survival. And they have been let down, because government’s plan has done very little, if anything at all, to better their lives.
They haven’t seen the benefit of B-BBEE. They haven’t seen the benefit of Affirmative Action. They don’t know what quality education or world-class healthcare looks like. They don’t own land or the title deed to a house. Twenty-one years later, they’re still waiting for this plan that was supposed to free them from poverty.
Government pats itself on the back for the growth in the black middle class, but what they don’t mention is that this middle class is still extremely vulnerable. They may be called “middle class” by statisticians, but most of them are just one pay day away from financial disaster. For most of this so-called middle class it is a short and slippery slide back into poverty. The recent interest rate hike along with the looming food inflation will hit many of them hard.
When we talk about growing the middle class, we must mean a robust, resilient middle class. Because we need this middle class to deal with the poor. We need more people paying taxes, starting businesses and employing people. We cannot leave it to government alone to help poor South Africans. Nothing they have done so far has worked. Their plan has seen growth stall, unemployment rise and only a small new elite become enriched.
It makes no sense to carry on making cosmetic tweaks to this plan. What we need is a new beginning – a clean slate. We need to, once again, say: “What exactly are we doing for the poor? How are we opening opportunities for those who have nothing?” We need to admit that what we’re currently doing is simply not working, and we need to hit the reset button once again.
And this new plan must focus on six key aspects:
- Growth: Re-cutting the existing pie is just not good enough. If we want to bring millions more South Africans into the economy, we need a substantially larger pie. And this means expanding our GDP at four times its current rate of growth. For this we need policies that attract foreign direct investment and encourage entrepreneurship. We must make those who create jobs the heroes and we must create new tax incentives for employers. This includes tax cuts for employing the youth (Youth Wage Subsidy) as well as a further reduction in corporate tax for those who employ more than a certain number of people. This growth will further require that we sell off some of the state-owned enterprises and issue shares to employees.
- Inclusion: Policies that simply benefit and then re-benefit the rich must be kicked to touch. BEE, as it currently stands, simply entrenches the insider vs outsider economy. If our legislation doesn’t benefit the poor, then we have the wrong legislation. If we’re compiling scorecards for businesses to comply with, the criteria should be: What does this do for the poor? Shouldn’t we rather be rewarding businesses that build classrooms and offer scholarships than those who re-empower the already empowered?
- Education: Basic education in South Africa has failed an entire generation, leaving them unemployable and without hope. This is another area where we simply cannot carry on modifying the current failed plan. We need to start afresh, and think outside the box. And one way to do so is to look at models of privatised education that rely heavily on government subsidies.
- Ownership: This new plan must look at two aspects of ownership. Firstly, workers need to have a stake, through share schemes, in their business, whether it is a farm, a mine or a manufacturing plant. And secondly, people must own their homes. Once you have a title deed, you have a material asset, and this opens a whole new world of opportunity that is currently not available to millions of South Africans.
- Entrepreneurs: It must be government’s priority to roll away every conceivable obstacle to starting and running a small business. From tax breaks and relaxed labour laws to start-up capital and business advice, we should be helping every small business to survive beyond that precarious first year. We should even be offering new ventures free office space in state-owned buildings for the first six to twelve months of their operation.
- Corruption: We require a body comprised of representatives of both the public and the private sector to improve legislation that deals with the eradication of corruption. It is crucial that the state and business have a working relationship and the same goals when it comes to dealing with private and public sector corruption.
There’s much more to it, but this is where the core focus of a new plan for South Africa should be. It’s not going to come from the ANC government – if we leave it up to them, we’ll simply carry on making incremental tweaks to a plan that’s clearly not working. It will require a government with a firm grasp of the market economy and an impeccably clean track record of delivery. And there’s only one party in SA that ticks those boxes.