South Africa must embrace the future, or we will inevitably retreat into the past

So far this election campaign is not preparing South African voters for the shock of likely austerity budgets after 15 years of economic decline.

While people in business are well aware of the extent of decline, I found in a series of webinars I conducted for Defend our Democracy that many otherwise informed viewers were surprised to be told South Africa’s economy has a worse growth record and worse unemployment than most African states, including our small southern African neighbours.

Repeated government assurances that any apparent decline is a result of “global trends” or “jobless growth” have misled many average South Africans into thinking we aren’t doing worse than our neighbours.

Read more in Daily Maverick: Economic crisis — SA unemployment rate edges up to 32.1% in Q4 2023

This reality has also been disguised by windfalls from the rise in commodity prices which brought in more tax from the mining companies. Government made cuts in important areas like the Defence budget which carried little political cost.

But interest groups continue to demand more money — teachers, state-owned enterprises, land reform, social grants, the criminal justice system, a universal basic income grant and National Health Insurance. But new money is not coming. Any expansion of one budget item will have to lead to contraction somewhere else.

Adding to potential scarcity are effects of the rise in unpredicted new crises abroad.

Our ministers are not preparing us.

Competence and passion lacking

In 1994, when Nelson Mandela set out to build the rainbow nation, China was still a relative backwoods nation, in the early stage of climbing out of its century of humiliation. Today China is a superpower, but the average individual South African is moving backwards. We weren’t focused. We got behind.

China is geared up to produce enough electric vehicles to meet the entire world market’s needs. Electric cars may not work out as China hopes, but our preparations for electric cars have been bogged down.

China has shown that the role of the state has been vital, and they have ignored the drumbeat from Washington for the state to get out of the way and to leave everything to the free market. But they learnt the lesson that the role of the state is not successful from its ownership of business, but from its skilled management of the best interests of its national economy. From a realistic appreciation of state capacity, and prioritising what delivers the best bang for the buck.

The Chinese Communist Party appoints mayors on the basis of their track record in growing private businesses while South African politicians demand more state ownership of the economy.

Better understanding of what drives growth will be vital for the next government. So many hard choices have been kicked down the road. What we need is a different kind of Cabinet that tells the unvarnished truth about how much we have to change.

We need Cabinet ministers who are relentless champions for the departments they lead. Imagine an education minister who sleeps, eats and breathes education, hammers on the core messages to get the right practices in place. Explaining to parents the value of stimulating their children, encouraging people to get books into empty school libraries, obsessing about better teacher training.

The defence minister needs to face the stark fact that a majority of the products of the arms deal are not in working condition. Unless the Defence budget gets a sudden injection, the defence minister needs to lead the process to trim back and focus on core issues — stopping illegal fishing, being ready for climate emergencies, and being prepared to aid neighbouring states in stopping conflict.

We need ministers with good expert advisers on how we grow the information economy — to make the internet cheaper and faster, make it accessible to people where they live, in townships and near peoples’ homes, growing African tech of every kind.

We need only one minister in electricity and energy, a minister who sees the big picture of the green economy, getting quick progress in approving mines that mine minerals the green economy will need, green industrial parks, updated electric car manufacture and making charging stations available — because that is where future opportunities will lie.

Historical achievements vs contemporary results

South Africa’s growing pains echo those of other African countries. Governing parties that made their reputation as liberation movements have historic legitimacy. The result was their legitimacy was not derived from providing services and growth, as it should.

This was true of the Congress Party in India, and even the Labour Party for the first 30 years in Israel. They do not feel the same pressure to earn legitimacy by delivering results.

As a result, the African countries doing the best economically in the 21st century are often those whose government is not from a major ethnic group, was not key to their liberation struggle, and has to fight for legitimacy day by day the only way that matters — by delivering prosperity: jobs, growth, a better standard of living, and efficient services.

I don’t believe there is a secret, white counter-revolution waiting in the wings, as former president Thabo Mbeki sometimes suggests, but the best way to secure democracy’s gains is with a government that fights to prove itself every day and fears electoral defeat.

Risk and security

China changed its rules to bring Pretoria-raised Elon Musk and his Tesla factories into China. After two decades China has learnt from Tesla, and now produces more electric cars more cheaply than he does.

We kept Musk out of South Africa when he wanted to bring cheap, fast Wi-Fi through Skylink, while our Wi-Fi connection remains slower and more expensive than some neighbours.

Musk’s business dealings tell us a lot about the shifting balances of power in the world. In the US, his space technology contains many of America’s most valued secrets and he is a key factor in America’s defence industry. In Ukraine, his technology was critical to their early battlefield victories.

The rise of Tesla and SpaceX were fueled by hundreds of millions of dollars in US government funds to help him get started. His ownership of Twitter makes many countries nervous. Where do his loyalties lie?

But his enterprises show how technology and national security are intertwined, and how countries need to be on the ball to take advantage of opportunities and protect themselves against new kinds of harm.

South Africa’s exports to Europe face risks. Besides the war in Ukraine, most European nations are facing a potential new arms race at a time when their economies look bleaker than they have for decades.

India has a bright future, though it seems to have discarded Mahatma Gandhi’s principled determination to respect Muslims and Hindus equally. India continues to grow fast, even as China may be slowing down.

In Africa, there are serious conflicts that get little attention. Among the biggest are Sudan and the DRC. But West Africa has seen a string of military coups that reject the yoke of French influence, while throwing out democratically elected governments and bringing in Russian interests that I believe they will live to regret. Ecowas, the West African regional bloc, is in tatters.

America isn’t standing still either. The days of a hands-off government are over.

In America, after decades under the spell of Ronald Reagan’s famous line — “what are the nine most dangerous words in the English language? ‘I’m from the government and I’m here to help’” — America no longer believes that.

Former president Donald Trump rejected the Reagan idea of free trade to give American industry protection — but he did it clumsily, as he does most things.

But the team around current US president Joe Biden have systematically institutionalised an expanded role for government. America won’t be able to tell countries to abandon government any more.

Biden has passed a massive programme that is rebuilding infrastructure after decades of neglect since Reagan cut taxes so there was no money left for roads, bridges and airports. Biden has imposed 25% tariffs on Chinese electric cars, incentivised a massive move into the green economy, and placed an equally heavy bet on building America’s microchip industry to help halt America’s own deindustrialisation. America’s economy is booming.

Future challenges

To face this changing world, we need to embrace the future or we will inevitably retreat into the past, and continue to decline. And we have to strictly control any government role we lack the capacity to perform — a very severe limitation.

In southern Africa we will have our hands full. We have withdrawn troops from northern Mozambique, but the conflict is reviving nevertheless. We have soldiers in the DRC, but we took casualties immediately.

To be ready, we need Cabinet members and other leaders who are champions of SA’s interests based on a broad vision, a grasp of a rapidly changing world of shifting alliances, leapfrogging technology and permanent uncertainty brought by the end of the post-World War 2 world order, as well as rapidly changing climate, even in our region.

Our responsibilities will grow. Our neighbours will need our help. We have a duty to ourselves and them to be properly equipped and know how to give it.

After the 2024 election, South Africa will face a stark dilemma - do we embrace the future or retreat into the past? DM

This Op-Ed is adapted from the ninth and final webinar in a series of webinars John Matisonn conducted for Defend our Democracy titled ‘Towards a new vision for South Africa’. The webinar can be viewed at https://youtu.be/GYSO1n5QQjs).

For links to the other eight see Defend our Democracy’s facebook page.