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Trip advisor: To understand the real state of our econo...

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Opinionista

Trip advisor: To understand the real state of our economy, look down at our pavements

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Jeffrey Dinham is a senior economist with Econometrix.

The cracked and broken remains of a pavement laid in the 1950s speaks to a much more serious problem: The shortage of accumulated capital reserves in the economy. Infrastructure is simply another form of a savings account.

Understanding the economic state of a country can rapidly become a complex task “best left to the professionals” who decipher the latest Cabinet reshuffles, pore over volumes of statistical data and compute complex conundrums. Indeed, there is value to all these things. Still, there is a much easier approach for the amateur economic sleuth — go and walk on your city’s pavements. 

Your first challenge may be finding a pavement, because pavements represent the government’s objective view of the literal “man in the street”. Nothing says “you are not our priority” as clearly as the absence of a simple concrete slab in a country where so many people rely on their feet to move around each day.

This is more than just a middle finger. A government that can utterly divorce itself from ever needing to interact with the public infrastructure and services (which it taxes the country to provide) speaks to its underlying understanding of democracy. No voter in South Africa has ever asked for fewer pavements and more luxury government cars.

Once you’ve managed to find a pavement, have a look at its condition. Freshly laid concrete? Unlikely. Infrastructure whose decline is not ruinous (such as sewerage and water lines) is usually the first to be cut as municipal skill and competence are eroded. This outcome is doubly true for pavement-like infrastructure because SA’s “complaining class” (made up of the more affluent taxpayers) do not rely on it daily.

A lack of municipal ability is part of the issue, but the cracked and broken remains of a pavement laid in the 1950s speaks to a much more serious problem: the shortage of accumulated capital reserves in the economy. 

Infrastructure is simply another form of a savings account. When times are good, you build up infrastructure to facilitate faster future economic growth by drawing down on this savings account of fantastic roads, abundant electricity supply, safe drinking water and well-run hospitals.

Unfortunately, South Africa has dodged this responsibility and instead spent its good-time savings on consumption (which is the opposite of saving). Hiring more public sector employees, bailing out failing SOEs, turning a blind eye to corruption and expanding social support. Consequently, we have no infrastructure savings account to support new economic growth.

To be fair, this outcome isn’t entirely the government’s fault. In a savings-starved economy, interest rates should rise to prompt new savings from the private sector. The SA Reserve Bank’s artificial manipulation of the interest rate prevents this from happening.

That said, you may see a trench dug for fibre optic internet cable on your walk. The government is committed to state control, but sometimes the market system moves too quickly, and the results are usually positive. It’s doubtful fibre optic internet would be a reality had it been assigned to a committee and an SOE.

Perhaps you are (un)lucky enough to live in an area where citizen groups have taken over control of failed municipalities and laid a new pavement. These interventions will occur more frequently, and while they are undoubtedly positive, they are also costly — as another form of taxation.

What about the more obvious thing: how safe do you feel? As crime rises in South Africa, people retreat from public spaces, further increasing the lack of integration between different demographics and giving the government an easy out to avoid dealing with homelessness and illegal informal settlements.

Watch for signs of real improvement

It’s easy to get caught up in the buzz of new Cabinet announcements, new spending schemes and inter-factional political battles. South Africa faces huge structural headwinds and a realistic assessment of the country’s prospects need not be unduly complex. Common infrastructure is a great proxy for many important economic trends and realities. Walk on pavements in Cape Town, Johannesburg and Makhanda and compare them — each one will tell the same general story.

When the pavements start to improve, so too will the country. DM

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All Comments 3

  • Quite right. It’s easy – and common – to underestimate the importance of local government in assuring (or undermining and destroying) the quality of our daily lives: roads, sanitation, public buildings such as libraries and clinics, public spaces including parks, etc. Quite unglamorous but essential work. It can be quietly frittered away by not doing the small things well and regularly.

  • Agree 100%. This is also analogous to the “broken window” initiative which helps reduce crime in areas where all windows are kept in good repair. If the government does not care, why should the people. This spirals into a lack of respect for both property and life, leading to violence and crime.

  • In Transkei towns we noticed people walked in the road because the pavements were a total mess. In Fishhoek it was hard to use a wheelchair because the pavements were full of signage poles. In downtown Pretoria I used to walk in the road to avoid the potholes and chalk muggers who lurked on the pavements. Early in the day workers jostle on too narrow pavements to avoid the hectic traffic alongside them. This article is spot on. The state of our pavements reveals a lack of concern for people’s safety and welfare when they are on foot.

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