Taming the Illusive Policy Complex in South Africa requires a scrum master

By Dr Pali Lehohla, Indlulamithi Steering Committee Member and former statistician general.

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Dr-Pali-Lehohla
Dr Pali Lehohla.

Much research, data analysis and modelling has been done during the COVID-19 crisis, as South Africa aims to predict the economic impact of the pandemic. Various entities are urgently seeking out ways to boost economic recovery and cushion the negative effects of COVID-19.

What we do know is that we don’t want to put a good crisis to waste. This pandemic could be the catalyst to speed up the much-needed progress that addresses the burgeoning challenges our country is facing – unemployment, inequality, poverty and low growth.

To date, unemployment has risen to 30.1% up from 29.1% in 2019, GDP is expected to contract by a minimum of 7% in 2020, and Business For South Africa (B4SA) suggests it will take at least two years for the economy to get back to pre-COVID 19 levels because the domestic economy was already weak at the start of 2020.

These challenges are not the result of the pandemic:

They were present long before COVID-19. The pandemic is however exacerbating them. Unless we act with speed and efficiency to determine a positive outcome – our future post-pandemic looks bleak.

Our inability to act more efficiently is hinged on deeply contradictory policies I like to describe as the ‘illusive policy complex in South Africa’.

However, we cannot do away with policy as it is essential in defining course of action. The question then, is how we address this challenge of consensus and agree on a way forward which balances the scales of accountability and fosters cohesion? And how do we do it earnestly?

Indlulamithi South Africa Scenarios 2030 recently hosted a panel of discussion around building our economy as we prepare for a post-COVID future.

The Many Economic Futures for South Africa – 29 July 2020

During the discussion, we heard from the African National Congress’ (ANC) who presented on the topic ‘Reconstruction, Growth and Transformation: Building A New, Inclusive Economy’; B4SA on ‘Post COVID-19: A New Deal for South Africa Delivering an Accelerated Economic Recovery Strategy’; and Indlulamithi South Africa Scenarios’ 2030 on ‘Economic Model for South Africa in the Context of COVID-19.’

All representatives addressed our nations challenges with scenarios on how these challenges, when left unaddressed continue to impact on our country. Whilst everyone offered different projections regarding the outlook – there was agreement that we need to implement solutions that contribute to our economy not only for it to just recover, but to stimulate a more dynamic, competitive and resilient economy.

In order to achieve this,  it was suggested that we  create sustainable policies and set clear targets that will define our roadmap to success.

Including testing the policies for their robustness, to build a different future that will guarantee optimisation of human resource deployment  and significantly reverse the dire challenges we are in .

The way forward

It is not an easy one, but we cannot sit back without action. Similarly, we cannot be firing solutions in different directions.

My proposal is for a collaborative strategy encompassing both private and public sectors, that is  sensitive to and supported by society.

We know that economics is not a science. There are multiple views on the working of a market economy and the role of policy. Given the failure of our past policies to overcome the challenges of low growth and high unemployment, poverty and inequality, we need to have a healthy and constructive debate on the way forward.

We then need to define a well examined policy roadmap to our seemingly common long-term objectives as an essential step.

Given the extent and depth of our challenges, we cannot afford to ring-fence any policy area or tools we have at our disposal. These serve to create synergy so that policies work together to move in the direction of growth.

What does the roadmap look like?

The ideal for a developmental state remains a constant desirable to achieve.

When it comes to economic policy, we understand the ramifications of debt and before we enter into these agreements, we need economic policy to pass the eye of the needle test so that the long-term impact does not hinder this movement to growth.

Just this past week, South Africa received a $4.3 billion loan from the International Monetary Fund, which the government intends to use to bring relief to both the health and economic situation. It’s the largest loan any African country has received since the start of the COVID-19 crisis. While having relatively light terms, the loan has come with one warning: “South Africa cannot carry on as is and there is a pressing need to strengthen economic fundamentals and carry out structural reforms to achieve sustainable and inclusive growth.”

We need to explore nodes that make our social policy real. For instance, can we apply multidimensional poverty systems as instruments for broadening and deepening social contracts?

Our Process

Indlulamithi aims to steer this process by convening with relevant stakeholders to take proposals through the eye of the needle test and align them to create synergy versus contradiction. Of course, this entails having to look at tools and competencies that exist amongst the groupings in our public and private sectors to drive and shape the outcome.

As part of the roadmap implementation, we should use the tools and impart competencies that empower government to do what it should do whilst intimately engaging with society. This will assist in defining state competencies so that they can exact accountability. It is this approach that will enable a developmental state and build social cohesion and support.

Through our own economic modelling, we have shown how this is possible. Using a six-pillar policy bridge, we believe South Africa can mitigate the impact of COVID-19, reduce its negative impact on growth, employment and poverty, and shorten the recovery period.

What we have learnt so far, is that drawing in all key stakeholders, such as political formation, labour, youth, business, and women, to agree on a social contract or a blueprint for their developmental goals is the most important step in creating a sense of common purpose and single destiny.

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