There has been widespread debate in the media about President Cyril Ramaphosa’s insistence that South Africa should use a social dialogue and social compacting approach to resolve our national conundrums of poor governance, low growth, joblessness and social decay.

Peter Bruce has lambasted the President in Business Day, arguing that business is “gatvol of Ramaphosa’s empty talks of ‘compacts’”. 

Economic policy expert Duma Gqubule has dismissed the progress on social compacting by trashing the National Development Plan and myriad other documents that supposedly represent consensus but have led to zero forward movement for the country.

Corruption Watch’s co-founder David Lewis has called for more action and less talk, saying, “Just do it!” and that “unrelenting strife and disarray means the government should do what it is elected to do: govern”. 

Journalist John Matisonn put the boot into the Macroeconomic Research Group (Merg) of the 1990s, explaining how the ANC’s early failures in constituting and listening to a well-capacitated economic policy brains trust and the resultant elite compact have pillaged the country’s economic fortunes.

If Bruce, Gqubule, Lewis and Matisonn are to be believed, Ramaphosa’s compacting agenda will be a lame duck at best, and bad for the country at worst.

They are mistaken, and I’ll explain why.

First, South African society is fraught with competing interests and contradictions. Black people want the wealth which white people have. The poor want the jobs that the affluent have. Women want the power and privilege that men have. Communities want the incomes from spaza shops and informal work that foreigners have. Cultural and linguistic groups who have not tasted the power of the presidency want the prestige that the Xhosas, Zulus and now Vendas have. The North West, Limpopo, Northern Cape and Mpumalanga want the economies that Gauteng, the Western Cape and KwaZulu-Natal have, along with their political influence.

The rural and peri-urban poor want the infrastructure that the suburban elites have. The political opposition wants tickets to the gravy train that the ANC has. The departments of social development and of women, children and people with disabilities want the fiscal allocations that the police and our sovereign creditors in the financial markets have.

The municipalities want the powers that the provinces have, and the traditional leaders want the privileges that the fat cats in Cabinet and Parliament have. Importantly, the bureaucrats in government and the state-owned enterprises (SOEs) want the profitability that the private sector has, only without its efficiency.

Party politics won’t work

These competing interests and contradictions will not be resolved by normal party politics. Especially not while the ANC’s so-called broad church provides cover for centre-left socialists alongside centre-right capitalists, and a motley crowd of captured unions and pretender communists.

Or while fractured opposition politics is characterised by a Capetonian delusion of sustainability; of a two-speed society with winemakers at the core surrounded by intergenerational grape-pickers. 

Or while the only energy in the room worth noting is a beret-wearing, slogan-spewing populist infected by a nostalgic Marxist statist utopia, while floating in a sea of illiteracy and, paradoxically, a growing culture of individualist materialism.

What has happened between 1994 and 2022 is that the unresolved contestation in the political process (see a. in figure below) has bled over into the policymaking and social dialogue process, and snuffed out the chance at consensus. 

Illicit acts and a dire lack of capacity in and by government (see b. in figure below) have created debilitating uncertainty across the system, and vested interests and conflicts of interests (see c. in figure below) have enabled an endemic pattern of rent-seeking.

Excerpt from PhD thesis by Dr M Oosthuizen, Stellenboch University School of Public Leadership. Accessed at: https://scholar.sun.ac.za/handle/10019.1/124012 

Second, South Africa’s economy is structured for narrow patterns of inclusion, with the masses on the outside looking in. The government’s own SOEs are fit for purpose only for a half-century of coal-fired industrialisation that is dying out.

There is no sign of institutional reform at a pace and depth that would create a new epoch of national economic competitiveness. The private sector economy has mastered the two arts of local production for export, on the one hand (benefitting from an ever-weakening rand), and, on the other, efficient distribution of imported commodities for consumption by increasingly pressed consumers.

So, the handful of investable firms on the JSE continue to turn a profit and impress with their innovation-for-efficiency drive, but they cannot and will not deliver a better life for all – not even close.

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Liberal economics alone won’t work

These economic contradictions will not only not be resolved, but instead will worsen until they represent a self-instigation of resentment and produce a rupture in the social fabric. 

Either we will see a grand reform of the economic order, including through rapid growth and equitable distribution, or we will see a revolution from the top – through populism, along with a revolution from below through looting.

To pretend that the system is not primed for an explosion is to be either dishonest or deluded. The reason the system has not exploded is precisely because of Ramaphosa’s approach and the way it offers some of what we need.

Is social compacting the right fix?

The answer is yes, but not in the form social compacting is currently conceived. The current approach, either centred at Nedlac or in some new summit between the presidency and big business, with a splatter of civil society representation, will not work.

Simply put, corporatism has been tried in South Africa and has been shown to fail for three simple reasons: 1) Political interference and turbulence kill the “certainty” required for business investment; 2) Big business has its own interests, and these are not automatically aligned to the long-term and national interest; and 3) Because the problems we face are most often local and grassroots, or practical such as sewage management on the public side and local economic activity – including in the informal sector.

This means that high-level and national social compacts will not reach the majority of South Africa in terms of impact through limited trickle-down effects in under a decade. Only, we do not have another decade.

Instead, we need national social consensus on a handful of “big stuff”, such as energy security (aka fix Eskom already), pragmatic policy reform and the reduction of red tape.

Targeted compacts led from below

What we desperately need, and which social compacts can deliver, is clarity on our shared direction on an industry-by-industry and town-by-town basis. 

The masterplans being developed by government with the involvement of industry are a good first step, but do not go nearly far enough. We need agreement by stakeholders around a series of tables, who have clear and immediate interests in the agenda which each table represents. This is only possible at a local or industry scale.

For more on this, watch our recent interview with scenario planner Adam Kahane during the Indlulamithi Social Compacting Seminar at Gibs.

So why support Ramaphosa’s call?

What the president offers us is an attempt at sufficient consensus in the absence of absolute consensus. He offers us open dialogical contestation as an alternative to fully fledged conflict. His agenda represents a style of being together as a people that begins from the premise of consultation, with an eye on collective action.

The alternative, in the environment we have, is collective action against one another without consultation. Some have called that option a “leaderless revolution”.

Or we can reform and rebuild the political mechanisms within the guardrails of procedural democracy. Good luck on achieving that ahead of the fiscal and social undoing coming our way due to structural reasons.

Yes, David Lewis is right to call on government to do its job and govern. But this will not be enough. Peter Bruce and Duma Gqubule are right to be flabbergasted at the slow pace of implementation. There is no excuse, and clearly the burden of responsibility remains at government’s feet.

John Matisonn is, of course, also correct that we did indeed witness a form of elite compact which emerged at the exclusion of a better alternative, but none of these truths equates to a dismissal of the basic idea that we need to talk to one another as South Africans – and come to agreements – in order to walk together.

My plea is that the President can only set a tone, not parent the nation.

South Africans will have to come together in a local, social compacting movement to find each other and find common ground. There are experiments under way where this is being tried.

Imagine the tragedy if we criticised the President, only to discover too late that the compacting we needed was between us, for us and by us. I challenge my fellow contributors to use the powers of their pen and intellect to follow the President – not to use their ink from the sidelines as critics.

By all means, critique the man’s approach, but provide some light while we traverse the tunnel we’re in. DM