SA needs action, not another economic Codesa

By Raymond Parsons
It is said that ‘the road to hell is paved with good intentions.’ For some time now, some analysts have been calling for an economic CODESA. Their idea is to recreate what would be a large-scale and prolonged ‘summit’ with the goal of achieving a new economic accord against the background of recent developments like Marikana and the tensions they have generated. This concept is by no means new. 

‘Summitry’ is almost a way of life in SA. The proof is in SA’s long record of talks, diagnostics and plans for higher economic growth beginning with the RDP (1994) and continuing with the Growth, Employment and Redistribution Strategy (1996), the Jobs Summit (1998), the Growth and Development summit (2003), ASGISA (2005), the Harvard Economists Study (2007), the Growth Commission (2008), and the New Growth Path (2010), to mention only a few. 

Should we be telling the unemployed, the poor, the disillusioned, the striking and disappointed that what South Africa needs now, in 2012, is another talk shop, yet another economic plan? Most businesspeople are unlikely to have an appetite for more talking instead of action. Sensible action builds confidence. Effective social dialogue remains essential. But social dialogue cannot govern the country; it can only help to keep it governable. South Africa has never suffered from a lack of plans and summits, but we have often suffered from a lack of political will and capacity to successfully implement the great plans we develop. 

The Codesa of the 1990s will always be remembered as a glorious moment in our history. A time when South Africans came together to craft our constitution and shape our democracy. But we cannot recreate that time. The clock cannot be turned back. Events have moved on. The prospect of an economic Codesa could also mean that the economic clauses in the existing constitution – such as on property rights and the status of the Reserve Bank – are reopened for negotiation. Let us be careful what we wish for. 

Yet even if we were to consider an economic Codesa, we simply do not have the time – the months or years – it will require to complete its work. Nor is an economic Codesa actually necessary, as we already have a sound plan to get our economy moving. 

In 2010, President Zuma set up the independent National Planning Commission, under the chairmanship of Minister in the Presidency Trevor Manuel, to help envisage the South Africa we would like to see in 20 years’ time, and to create a roadmap for achieving this vision. After two years of work, including widespread consultations with broader SA society and relevant stakeholders from business, labour and civil society, the Commission was able to find consensus on both a vision and a plan for its achievement. 

The culmination of its work – indeed, the culmination of every economic plan that came before – can be found in the 500 pages of the National Development Plan (NDP). The vision of the NDP is simple and can resonate with every South African. It foresees a South Africa where we live happy and safe, have access to education and jobs; where our economy is growing, and poverty and inequality have been reduced; where all South Africans are part of society, playing the role chosen by them; where the private and public sectors work together to achieve goals; where government works for the people. 

The NDP sets out the practical steps that must be taken to achieve this vision. It includes strategies on every aspect of South African life, from the economy and employment, infrastructure and environmental stability to transforming human settlements, improving education, promoting health and building safe communities. A social compact is implicit in the NDP. Is the NDP perfect? Of course not. But without a roadmap like the NDP, South Africa now risks remaining in a ‘low growth trap’ of about 3% growth p.a. which is woefully inadequate to meet our socio-economic challenges. 

In the recent mini-Budget there were several positive references to the NDP. This can now begin to put South Africa in a better position to take coherent and coordinated short and long term decisions to deal with the stresses and strains in the current economic outlook. We need more of the NDP, especially that we now have the benefits of the latest national census data. 

The census results have put SA in a stronger position to move towards a shared vision for 2030, as outlined in the NDP, based on the practicalities that need to be embedded in future decision-making by government and business alike. It provides a reliable basis for proper planning and targeted development. The census confirms why it is necessary to expedite the actions and processes that are necessary to translate the vision that SA must now have for 2030 into reality. 

As the ‘fiscal cliff’ prospects in the US, the continued haggling in the Eurozone over the Greek and Spanish debt crisis and even the long-standing structural problems in the Japanese economy show, the most important lesson is the peril of procrastination. Unless a country uses its opportunities timeously to change its course through structural change, the options of policymakers to tackle the challenges narrow. That is why we now need action, not an economic Codesa, for SA.

Raymond Parsons: Professor at the Graduate School of Business, North West University and Special Policy Adviser at Business Unity South Africa.


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