Given the magnitude of domestic and international events since our 29 May elections, expectations and goals await a reset. The success of our new national governance structure should be gauged by the number of productive jobs created.
The year 2024 will be routinely referenced. In Europe and North America, comparisons are already being made between this year’s unrest, particularly on university campuses, and those of 1968. In America that year - and again this year - a top US presidential candidate was the target of an assassin’s bullets and the Democratic Party’s convention in Chicago was confronted by abundant strife.
The political evolution sparked in 2024 must deliver for SA’s unemployed. Although 1994 promised widespread upliftment, three decades of sputtering economic progress amid sweeping patronage, has produced the world’s most severe youth unemployment crisis.
Escaping poverty is unlikely for those who, years after leaving school, still lack valued work experience. SA’s typical young adults are poor, poorly educated and unemployed. Most of them are stranded with their aspirations expiring amid compounding dependencies.
Reflecting its liberation credentials and political dominance, the ANC could expect to benefit electorally from such dependencies increasing reliance on government programmes. This was one of many examples of crude patronage being recklessly indulged. Coalition politics and a new opposition party - led by a patronage-minded former ANC president - demand a rethink by policy makers constrained by vanishing fiscal headroom.
Ruling elites of commodity exporting nations are innately shielded from pressures to create a highly productive workforce. If, however, their countries hold elections, they are then incentivised to redistribute some export earnings to fund patronage. The electoral value of the money spent on patronage will, presumably, increase if the recipients are so poor that they rely on grants. Alternatively, if young adults are highly skilled and productive, they will want to hold elected officials accountable.
According to a study by the UN’s Trade and Development agency, “in 2020, all 20 countries with the smallest portion of the population with access to electricity were commodity dependent.” “In 2021, 29 out of the 32 countries with low HDI scores were commodity dependent.” “HDI” refers to the UN’s human development index.
As commodity dependence encourages patronage while undermining accountability, of course it undermines development. It misaligns the interests of the elected with those of average citizens. Ruling elites of resource endowed nations with diverse populations are also well positioned to exploit identity politics. Having expelled Jacob Zuma, who personified such malevolent governance, the ANC and its various alignment partners must freshly reassess the altered domestic and international landscapes while, finally, purging the remnants of Zuma’s destructive policies and practices.
President Ramaphosa’s successes at reversing Zuma’s state capture have, thus far, been as meagre as his economic wins. The next step is to have sub-subsistence grants counter staggering unemployment. That hardly constitutes meaningful progress.
Given how SA’s political economy is structured, a substantial increase in commodity exports will not surge job creation. Instead, grant payments would rise. While this would not noticeably decrease deeply entrenched poverty and unemployment, it would modestly mitigate the hardships so many must endure. The ultimate goal, broad prosperity, would slip further from sight.
The ANC has corroborated how the patronage biases of commodity exporting countries undermine their productivity. Conversely, the hallmark of successful 21st century economies is their young workers adding value to exports. Rather than embracing value-added exporting, the ANC has doubled down on productivity-limiting regulations. This has further inflamed our unemployment crisis leading to its becoming the world’s worst.
We have some impressive institutions yet the ANC’s chosen path will leave us generations away from having a successful, and broadly inclusive, economy. Such widespread success follows from adults being productive for many decades while saving and investing prudently.
We need to recognise that the volume of sustainable jobs we can create through domestic growth will remain woefully inadequate for a very long time. Meanwhile, most wealthy countries have too few young workers. Services will dominate global job growth with an ever expanding array of digital jobs driving the expansion. We must emulate the high growth counties which carve out niches in global supply chains.
Whereas many countries struggled initially but then benefited greatly from global integration, here in SA reluctance toward competing globally runs deep. Factors span geographic isolation, geological riches and expectations that we can progress adequately by simply getting our house in order.
Our willingness to accept isolationist policies, such as localisation, which condemn most young South Africans to lifelong poverty is not rational, rather it traces to idealism. Blacks were led from oppression by a globally lionised icon. Europeans, and others, arrived in SA via treks made by individuals and groups over a dozen generations. Such heritage shaping migration helps to frame people’s identities. As many have left in recent decades, those who could have followed friends and family but chose to remain, may have weighed their options objectively. Yet humans are an emotional species prone toward emotional bonds. Such emotions were not immune to whimsical expectations of Madiba magic.
The vast majority of whites who stayed endorsed the peaceful pursuit of justice and unity that Nelson Mandela came to personify. However, his vision and values aren't reconciliable with his party’s current embrace of patronage and authoritarian foreign governments.
Nor have local perspectives digested the implications of the most recently unfolding global shifts. Once upon a time, it was only the best educated who were able to integrate into the global economy. Globalisation and the rise of China devoured the foundations of such thinking while today’s hectic pace of change very much favours youth. Meanwhile, AI’s capacity to displace traditional notions about education is rapidly gaining much momentum.
Our government of national unity took shape quickly amid turbulent times. Its success requires an enterprising outlook that takes the world by storm - one where we will need all hands on deck.
@shawnhagedorn
