NATIONAL PLANNING COMMISSION: NATIONAL DEVELOPMENT PLAN

A summary of the plan

This section summarises each chapter in the plan, focusing on key priority areas.

An economy that will create more jobs

South Africa needs an economy that is more inclusive, more dynamic and in which the fruits of growth are shared more equitably. The plan envisages an economy that serves the needs of all South Africans - rich and poor, black and white, skilled and unskilled, those with capital and those without, urban and rural, women and men. In 2030, the economy should be close to full employment; equip people with the skills they need; ensure that ownership of production is less concentrated and more diverse (where black people and women own a significant share of productive assets); and be able to grow rapidly, providing the resources to pay for investment in human and physical capital.

To eliminate poverty and reduce inequality, the economy must become more inclusive and grow faster. These are twin imperatives. Governments New Growth Path aims to create 5 million new jobs by 2020. It seeks to do so by providing a supporting environment for growth and development, while promoting a more labour-absorptive economy. Its proposals are intended to lower the cost of living for poor households and for businesses through targeted microeconomic reforms, especially in transport, public services, telecommunications and food. Lowering the cost of living is a necessary adjunct to raising the standard of living and encouraging investment.

The commission builds on this approach. The national development plan proposes to create 11 million jobs by 2030 by:

• Realising an environment for sustainable employment and inclusive economic growth
• Promoting employment in labour-absorbing industries
• Raising exports and competitiveness
• Strengthening government's capacity to give leadership to economic development 
• Mobilising all sectors of society around a national vision.

Meeting these objectives requires leadership to drive implementation, and to convince South Africans of the need to make mutual sacrifices for longer-term benefits. It will also require a change in the structure of the economy and the pace at which it grows.

The crisp question is how. The economy needs to meet a different set of objectives, beginning with job creation. It needs to become more nimble, responding quickly to opportunities and circumventing risks. Furthermore, patterns of ownership and control have to change. This will not be easy. It requires carefully sequenced actions that transform the economy without destroying its capacities.

The first step is to act on the fact that South Africa has millions of able-bodied people who want to work. In the short term, the economy needs to create jobs for millions of unemployed South Africans, many of whom are young and low-skilled, while upgrading skills and knowledge for a different economy in future. Raising employment levels will have benefits beyond the empowering experience of having a job. It will help people invest in their children's education, upgrade their homes and manage life's risks. Work and education will enable citizens to improve their own lives.

Sustainable growth and development will require higher savings, investment and export growth. Yet the country faces something of a quandary. The things that drive growth are not always the things that drive job creation - and the things that are good for job creation are not always good for growth. Because the economy needs both, efforts should focus on growing exports and building the linkages between export earnings and job creation, which often occur in domestically focused small- and medium-sized firms, most often in the services sector.

South Africa has to exploit its existing strengths to increase exports. This means using the country's advantages - its skills, technologies, firms, mineral wealth, underutilised labour and geography. If the economy is less competitive in one area, it will have to do better in others.

Figure 1

In the short term, the world economy is expected to grow at a relatively slow pace. In these circumstances, South African businesses need to think carefully about what they produce, for which markets, using what capabilities. As a small open economy, South Africa can develop niche products. Capturing a small share of global demand in areas where local firms can be competitive will have a big impact. For example, as discussed in the chapter on the rural economy, South Africa produces just 197 tonnes of cherries per year. The global market is 4 million tonnes. The country has the land, weather, skills and capabilities to grow cherry exports substantially to meet a greater share of global demand.

The economy is well endowed with mineral resources, with large global shares in platinum group metals, gold, diamonds, manganese, coal, iron ore and uranium. Yet over the past decade the mining sector has failed to match the global growth trend in mineral exports due to poor infrastructure and regulatory and policy frameworks that hamper investment. South Africa can benefit greatly from Asia's growing demand for commodities. To do so means improving water, transport and energy infrastructure, and providing greater policy and regulatory certainty to investors. This will enable the mining sector to deploy the skills, resources, know-how and capital that are available, and for government to raise much more tax revenue than it does at present.

A contentious issue is whether South Africa can mobilise unemployed people into production for export markets. Some argue that the economy is not competitive in labour-intensive manufacturing because the cost structure is too high, labour laws are not conducive to such industries, and the country lacks the management acumen to manage large, labour-intensive firms. This is probably true in some sectors. But in certain higher-value goods or niche markets, South African firms can compete. These include agricultural and agro-processing, white goods and appliances, and certain niches in clothing and footwear. Keeping costs (especially logistics costs) down is important for these types of exports. There are trade-offs relating to mineral beneficiation, because beneficiation is often energy and capital intensive, both of which are scarce resources.

There are no easy answers. Developing high skills levels and network infrastructure takes time and needs to be paid for, even as the country finds ways to create jobs for millions of unemployed people. Difficult choices will have to be made. To promote large-scale job creation, South Africa will have to find ways to improve the functioning of the labour market. The commission makes several proposals in this regard, broadly within the framework of the existing labour relations regime. The country must also find ways to keep the cost of living low and grow the capabilities of the state.

Our proposals to increase employment and growth include the following:

• Raise exports, focusing on those areas where South Africa already has the endowments and comparative advantage, such as mining, construction, mid-skill manufacturing, agriculture and agro-processing, tourism and business services. 
• Increase the size and effectiveness of the innovation system, and ensure closer alignment with companies that operate in sectors consistent with the growth strategy. 
• Improve the functioning of the labour market to help the economy absorb more labour, through reforms and specific proposals concerning dispute resolution and discipline. 
• Support small businesses through better coordination of activities in small business agencies, development finance institutions, and public and private incubators.
• Improve the skills base through better education and vocational training.
• Increase investment in social and economic infrastructure to lower costs, raise productivity and bring more people into the mainstream of the economy. 
• Reduce the regulatory burden in sectors where the private sector is the main investor, such as broadband Internet connectivity, to achieve greater capacity and lower prices. 
• Improve the capacity of the state to effectively implement economic policy.

Long-term growth and investment requires trust and cooperation between business, labour and government. In South Africa, levels of trust are low. Similarly, the labour relations environment has become unduly tense and sometimes violent. It is inconceivable that the economy will evolve in a more labour-intensive manner if the present state of tension between employers and labour persists. Promoting more rapid, job-creating growth means tackling these tensions in an honest and open manner.

Improving infrastructure

Investment spending in South Africa fell from an average of almost 30 percent of gross domestic product (GDP) in the early 1980s to about 16 percent by the early 2000s. Similarly, public infrastructure spending is at low levels by historical standards. In effect, South Africa has missed a generation of capital investment in roads, rail, ports, electricity, water sanitation, public transport and housing. To grow faster and in a more inclusive manner, the country needs a higher level of capital spending in general and public investment in particular. Gross fixed capital formation needs to reach about 30 percent of GDP by 2030 to see a sustained impact on growth and household services.

Public sector investment in economic infrastructure crowds in private investment. Private investment is a function of current and projected growth and profitability. Importantly, it is also a function of mutual trust and confidence in economic policies. In recent years, the public sector has favoured consumption over investment. The government's 2011 Medium Term Budget Policy Statement acknowledges this and announces a shift in the composition of expenditure towards investment, which is absolutely necessary.

The commission's recommendations on economic infrastructure cover the financing, planning and maintenance of infrastructure.

Who pays for infrastructure? Investment in some types of infrastructure has broad social and economic benefits. But playing catch-up means that charges have to increase steeply in the short to medium term to make services financially viable. The fact that one new power station (producing 4 800 MW of electricity) costs about twice the entire depreciated capital stock of existing power stations (producing 40 000 MW) illustrates the challenge. Moreover, high levels of joblessness and inequality make some of these services unaffordable for most of the population, unless they are subsidised.

The commission's view is that in the long term, users must pay the bulk of the costs, with due protection for poor households. The role of government and the fiscus is to provide the requisite guarantees so that the costs can be amortised over time. The state must also put in place appropriate regulatory and governance frameworks so that the infrastructure is operated efficiently. For infrastructure that ge nerates financial returns, debt raised to build facilities should be on the balance sheets of state-owned enterprises or private firms that do the work. Guarantees should be used selectively to lower the cost of capital and to secure long-term finance. Subsidies to poor households should be as direct and as transparent as possible. Infrastructure that does not generate financial returns - such as schools or hospitals - should be financed from the budget.

The electricity crisis of 2008 exposed some institutional weaknesses. Averting such problems requires clear institutional arrangements, transparent shareholder compacts, clean lines of accountability and sound financial models to ensure sustainability. We make specific recommendations in each of these areas. As stated earlier, government should appoint the boards of entities and the boards should appoint chief executives, making the lines of accountability clear. Public documents should state the entity's public interest mandate. Laws that govern regulation are often confusing, conflating policy with regulation. We propose ways to fix this.

For infrastructure that supports human settlements (housing, water, sanitation, roads, parks and so on) the picture is similarly complicated. The planning function is located at local level, the housing function assigned to the provincial level, and the responsibility for water and electricity provision is split between those responsible for bulk services and reticulation. In practice, this doesn't work. Human settlements are badly planned, and there is little coordination between those installing water reticulation infrastructure and those responsible for providing bulk infrastructure. Responsibility for housing should shift to the level at which planning is executed - the municipal level. Weak capacity in poorly resourced local authorities does not justify chaos. These problems must be fixed for effective urban development.

Compared with the best international standards, South Africa's information and communication technology (ICT) infrastructure is abysmal. An efficient information infrastructure that promotes economic growth and greater inclusion requires a stronger broadband and telecommunications network and lower prices. The economic and employment benefits outweigh the costs.

After carefully reviewing South Africa's infrastructure plans, the commission believes that the following investments should be prioritised:

• The upgrading of informal settlements.
• Public transport infrastructure and systems, including the renewal of the commuter rail fleet, supported by station and facilities upgrades to enhance links with road-based services. 
• The development of the Durban-Gauteng freight corridor, including the development of a new dug-out port on the site of the old Durban airport. 
• The construction of a new coal line to unlock coal deposits in the Waterberg, extension of existing coal lines in the central basin and, through private partnership, the upgrading of the iron ore line to Saldanha. 
• The timely development of a number of key new water schemes to supply urban and industrial centres, new irrigation systems in the Umzimvubu river basin and Makatini 
• Flats and the establishment of a national water conservation programme with clear targets to improve water use arid efficiency. 
• The construction of infrastructure to import liquefied natural gas and accelerated exploration activity to find sufficient domestic gas feedstocks (including exploration of shale and coal bed methane reserves) to diversify our energy mix and reduce our carbon emissions. 
• Procuring about 20 000 MW of renewable electricity by 2030, importing electricity from the region, decommissioning 11 000MW of aging coal-fired power stations and accelerated investments in demand-side savings, including technologies such as solar water heating.

Transition to a low-carbon economy

South Africa needs to move away from the unsustainable use of natural resources. As water becomes scarcer, and global policy aims to price in the cost of carbon emissions, the country needs a coherent plan to use water more sustainably and to emit less carbon. Similar approaches apply to protecting the oceans, soil and wildlife, which are used unsustainably to the detriment of the country's future.

All of this needs to be done in a way that increases the ability of the economy to employ more labour productively. The way forward is not obvious, nor is it likely to be smooth. Large-scale economic transitions are disruptive and costly. Changes to energy generation, water conservation and the uses of both are likely to be challenging and potentially disruptive for society. Managing this transition in a way that reduces costs - especially for the poor - will require competent institutions, innovative economic instruments, clear and consistent policies, and an educated and understanding electorate.

Key proposals to support the transition to a low-carbon economy include:

• Support for a carbon budgeting approach, linking social and economic considerations to carbon reduction targets. 
• Introducing an economy-wide price for carbon complemented by a range of programmes and incentives to raise energy efficiency and manage waste better.
• A target of 5 million solar water heaters by 2030.
• Building standards that promote energy efficiency.
• Simplifying the regulatory regime to encourage renewable energy, regional hydroelectric initiatives and independent power producers.

With a realistic strategy and global partnerships, South Africa can manage the transition to a low-carbon economy at a pace consistent with government's public pledges, without harming jobs and competitiveness.

An inclusive and integrated rural economy

By 2030, South Africa's rural communities should have greater opportunities to participate fully in the economic, social and political life of the country. These opportunities will need to be underpinned by good quality education, healthcare, transport and other basic services. Successful land reform, job creation and rising agricultural production will all contribute to the development of an inclusive rural economy.

The economic and social legacy of colonialism and apartheid mean South Africa's rural areas are characterised by unusually high levels of poverty and joblessness, with very limited employment in agriculture. The apartheid system forced much of the African population into rural reserves. The result was an advanced and diversified commercial farming sector relying on poorly paid farm labour, and impoverished, densely populated communities with limited economic opportunities and minimal government services.

To change this, we propose a multipronged approach. The first is to create a million jobs through agricultural development based on effective land reform, and the growth of irrigated agriculture and land production. Second, basic services that enable people to develop the capabilities they need to take advantage of economic opportunities throughout the country and so contribute to the development of their communities through remittances and the transfer of skills. This includes ensuring food security and the empowerment of farm workers. Last, industries such as agro-processing, tourism, fisheries and small enterprises should be developed where potential exists.

Institutional capacity is integral to the success of this multipronged approach, including the reforms required to deal with contested relationships between indigenous institutions and constitutional ones.

Reversing the spatial effects of apartheid

Apartheid left a terrible spatial legacy. Housing policies since 1994, in some instances, have reinforced the spatial divide by placing low-income housing on the periphery of cities, far from economic activity. Reversing the country's spatial inheritance, even with sound and sensible policies, is likely to take decades.

Settlement patterns should meet the needs and preferences of citizens, taking into account broader social, environmental and economic interests. Travel distances need to be shorter. This means ensuring that a larger proportion of workers live closer to their places of work, and that public transport is safe, reliable, affordable and energy efficient. It means building denser and more liveable cities and towns. In rural areas, settlement patterns must balance the social, cultural and agricultural needs of families with the need to provide cost-effective services to households.

The commission proposes three complementary strategies:

• Increasing urban population density, while improving the liveability of cities by providing parks and other open spaces, and ensuring safety. 
• Providing more reliable and affordable public transport with better coordination across municipalities and between different modes. 
• Moving jobs and investment towards dense townships that are on the margins of cities. Building new settlements far from places of work should be discouraged, chiefly through planning and zoning regulations responsive to government policy.

We recognise that there are several obstacles to these proposals, including the costs of densification and resistance to new residential patterns. These obstacles can be overcome with sound planning frameworks, political will, clear policies, consistent application and sensible financing arrangements.

Rural spatial planning has its own features. Government's efforts should focus on sensible and sustainable land reform, support to farmers, rollout of household services, and appropriate economic infrastructure such as roads and irrigation schemes. The focus of rural development must be to improve livelihoods through income generation, employment, and household and social services.

To date, rural zoning discussions have centred on the merits of transforming agricultural land into use for game farming, golf estates and townhouse development. While these debates are important, they do not address the bigger economic issue. Farmland is being converted to other uses largely because agriculture is potentially less profitable and more risky than property development. The reasons for low margins in agriculture are beyond the scope of this overview. Higher agricultural output is desirable and the instruments that can promote this are broader than zoning regulations. We make specific proposals to raise agricultural investment, output and employment.

Improving the quality of education, training and innovation

The quality of education for the majority of black learners remains poor. Poor-quality education not only denies many learners access to employment - it also affects the earnings potential and career mobility of those who do get jobs, and reduces the dynamism of South African businesses.

By 2030, South Africa needs an education system with the following attributes:

• High-quality early childhood education, with access rates exceeding 90 percent. 
• Quality school education, with globally competitive literacy and numeracy standards. 
• Further and higher education and training that enables people to fulfil their potential. 
• An expanding higher education sector that is able to contribute towards rising incomes, higher productivity and the shift to a more knowledge-intensive economy. 
• A wider system of innovation that links key public institutions (universities and science councils) with areas of the economy consistent with our economic priorities.

Improving the quality of education requires careful management, support from all interested parties and time. According to one study2 of reform in 20 education systems across the world, sound approaches begin to produce results about six years after reforms are initiated, with the real sustained dividends emerging over the long term. [2 McKinsey (2010). How the world's most improved schooling systems keep getting better.]

An urgent start must be made. Action is needed on several fronts simultaneously. The first set of proposals involves households and communities. Proper nutrition and diet, especially for children under age three, are essential for sound physical and mental development. The home and community environment is critical for the development of children's deductive abilities. The commission makes recommendations on child nutrition, addressing micronutrient deficiencies, supporting parents and families to break the cycle of poverty, and providing the best preparation for young children. We suggest ways in which every child can have at least two years of pre-school education.

The second set of proposals relates to improving the management of the education system. Removing layers of bureaucracy would make more resources available to support schools and teachers. The general rule of thumb is that interventions, both supportive and corrective, need to be inversely proportional to school performance. In this way, better-performing schools can be given the freedom to get on with the job, as long as there is measurable, continuous improvement. We make specific recommendations focused on better support to schools, delivering the basic necessities for a good education and measuring the right things. We propose a campaign to improve infrastructure in poor schools, especially in rural areas.

The third set of proposals aims to improve the competence and capacity of school principals. The common feature of all well run schools is leadership. The Department of Basic Education has recently launched a programme to measure the competencies of principals and deputy principals. This survey will also help identify weak performers, based on learner scores, and allow for appropriate support for principals and teachers. Principals should be selected purely on merit, be given greater powers over school management and be held accountable for school performance.

The fourth set of proposals relates to teacher performance, covering training, remuneration, incentives, time on task, performance measurement (based on learner scores), and appropriate content and pedagogical support. We make recommendations in each of these areas, but the crux of the issue is teacher accountability. Teachers both individually and collectively (at school level) must be held accountable for learner performance, with due recognition of the learning environment.

The further education and training system is not effective. It is too small and the output quality is poor. Continuous quality improvement is needed as the system expands initially at a moderate and later at an accelerated pace. The quality and relevance of courses need urgent attention. When quality starts to improve and the employability of graduates begins to increase, demand for these educational services will rise automatically. Simply increasing the size of the sector without focusing on quality is likely to be expensive and demoralising for young people, further stigmatising the system. By 2030, the sector should cover about 25 percent of the age-relevant cohort, implying an increase in numbers from about 300 000 at present to about 1 250 000 by 2030.

The country's higher education system will make a critical contribution to economic and social progress, but performance of existing institutions ranges from world-class to mediocre. Continuous quality improvement is needed as the system expands at a moderate pace. A major challenge is that poor school education increases the cost of producing graduates, and a relatively small number of black students graduate from universities. Increasing participation and graduation rates, with the option of a four-year university degree, combined with bridging courses and more support for universities to help black students from needy backgrounds, is likely to yield high returns. Some universities have begun to do this. Though it raises costs, it increases flow-through and reduces dropout rates, and should be expanded on a targeted basis.

A simultaneous focus on research and development (R&D) and on the calibre of teaching would improve the quality of higher education, but inadequate capacity and quality of staff will constrain knowledge production and innovation unless effectively addressed. The country's universities need to become world-class centres of excellence at the cutting edge of technology. They can attract students from abroad generating revenue and increasing the skilled resource pool. The commission proposes that foreign students who graduate from South African universities should qualify for a seven-year work permit to encourage them to stay and work here.

R&D has played an important role in helping middle-income countries such as South Korea advance to high-income status. While South Africa needs to spend more on R&D in general, the institutional set up also needs to improve the link between innovation and the productive needs of business. Government should partner with the private sector to raise the level of R&D in firms. Public resources should be targeted to build the research infrastructure required by a modern economy in line with the country's development strategy.

Quality health care for all

Long-term health outcomes are shaped by factors largely outside the health system: lifestyle, nutrition, education, diet, sexual behaviour, exercise, road accidents and the level of violence. The commission makes recommendations in each of these areas. Priority areas include sex education, nutrition, exercise, and combating smoking and alcohol abuse. These are social responsibilities that deserve to be taken seriously by every citizen, and promoted by families and institutions.

Good health is essential for a productive and fulfilling life. The Diagnostic Report demonstrates the starkly interrelated challenges posed by a crumbling health system and a rising disease burden. The public health system must be fixed. While greater use of private care, paid for either by users or health insurance, is part of the solution, it is no substitute for improvement of the public health system. Given the systemic weaknesses in that system today, a root-and- branch effort to improve the quality of care is needed, especially at primary level.

By 2030, the health system should provide quality care to all, free at the point of service, or paid for by publicly provided or privately funded insurance. The primary and district health system should provide universal access, with a focus on prevention, education, disease management and treatment. Hospitals should be effective and efficient, providing quality secondary and tertiary care for those who need it. More health professionals should be on hand, especially in poorer communities.

Reform of the public health system should focus on:

• Improved management, especially at institutional level
• More and better-trained health professionals
• Greater discretion over clinical and administrative matters at facility level, combined with effective accountability 
• Better patient information systems supporting more decentralised and home-based care models 
• A focus on maternal and infant health care.

At institutional level, health care management is in crisis. The Department of Health has recently launched a programme to evaluate management competence. Complementary reforms should include greater delegation of authority over staffing, shift structures and routine procurement.

A district-based approach to primary health care is part of the pilot phase of national health insurance. For this approach to be successful, the health system needs more personnel (including professionals and paramedics), new forms of management authority, and strengthened statutory structures for community representation in health system governance.

The HIV/AIDS epidemic has illustrated South Africa's ability to make monumental social and political mistakes - as well as its ability to correct them and implement a complex programme effectively. The health system's success in managing the epidemic over the past five years is commendable. Yet there is no room for complacency.

There is a continued need for education, prevention, testing and treatment. Reducing the rate of new infections will cut this figure substantially. However, even if there are no new infections, there will still be a sizeable number of HIV-positive people requiring treatment, posing ongoing challenges for the tuberculosis infection rate, and sustaining the risk of drug-resistant HIV strains developing. The HIV epidemic and its implications for public policy are likely to be with us for at least another generation, possibly two.

Building a national health insurance system is an important objective. There are four prerequisites to its success: improving the quality of public health care, lowering the relative cost of private care, recruiting more professionals in both the public and private sectors, and developing a health information system that spans public and private health providers. These reforms will take time, require cooperation between the public and private sectors, and demand significant resources.

Social protection

Effective social protection and welfare services are an integral part of our programme for inclusive economic growth and central to the elimination of poverty and reduction of inequality.

Social protection plays several roles in a society. Firstly, it sets a floor through which, through social solidarity, we deem that no person should live below. At present, given South Africa's extremes of unemployment and working poverty, many people regularly experience hunger and find it difficult to meet the basic needs of their families. Progressively and through multiple avenues, we seek a society where everyone is lifted above this floor. Secondly, it plays an important role in helping households and families manage life's risks. Thirdly, it helps ease labour market transitions, thereby contributing towards a more flexible labour market and economic dynamism.

Our vision is for a social security system that fulfils all these roles. Our vision is that by 2030, South Africa would have a comprehensive system of social protection that includes social security grants, mandatory retirement savings, risk benefits such as unemployment, death and disability benefits and voluntary retirement savings.

Part of our approach to social protection is through a social wage, which includes no-fee schools, free basic services and subsidised public transport. In addition to creating more work opportunities in the private sector, a significant broadening of public employment programmes will also help to ensure that fewer households live below a determined floor.

To achieve the objectives of broader social security coverage, we propose the following reforms:

• An acceptable minimum standard of living must be defined as the social floor, including what is needed to enable people to develop their capabilities. 
• The retirement savings and risk benefit gap should be closed through reforms, including mandatory contributions, with consideration given to government subsidising these contributions for low income or periodic workers. 
• Social welfare services must be expanded, with more education and training for social work practitioners and a review of funding for non-profit organisations. 
• Public employment should be expanded to provide work for the unemployed, with a specific focus on the youth and women. 
• The integration of a number of databases in the social security environment with information from public employment programmes will enable communities to conduct social audits of government services, leading to better and more effective targeting of government's social and employment programmes.

Building safer communities

When people feel unsafe it makes it harder for them to develop their capabilities, pursue their personal goals and to take part in social and economic activity. To achieve the goals set out in this plan, South Africans need to feel safe everywhere and have confidence in the criminal justice system to protect them and to act speedily and effectively when required to do so.

By 2030, people living in South Africa should feel safe and have no fear of crime. Women and children and all vulnerable groups should feel protected. They should have confidence in the criminal justice system to effectively apprehend and prosecute criminals who violate individual and community safety. The South African Police Service and metro police should be a professional institution staffed by skilled, disciplined, ethical individuals who value their work and serve the community.

Achieving this vision requires targeted action in five key areas:

• Strengthening the criminal justice system - This requires cooperation between all departments in the justice crime prevention and security cluster. We believe the correct implementation of the recommendations in the Review of the South African Criminal Justice System will go far in dealing with the system's current weaknesses. 
• Making the police service professional - We propose linking the police code of conduct and a code of professionalism to promotion and discipline in the service. Recruitment should attract competent, skilled professionals through a two-track system; one for commissioned officers and one for non-commissioners officers. 
• Demilitarising the police service - The decision to demilitarise the police force, moving away from its history of brutality, was a key goal of transformation after 1994. The remilitarisation of the police in recent years has not garnered greater respect for police officers and higher conviction rates. If anything, it has boosted violence in the service. The commission believes that the police should be demilitarised to turn the force into a civilian, professional service. 
• Building safety using an integrated approach - Achieving long-term, sustainable safety requires an integrated approach focused on tackling the fundamental causes of criminality. This requires mobilising a wider range of state and community resources. 
• Building community participation in community safety - Civil society organisations and civic participation are critical elements of a safe and secure society. Local government legislation provides for establishing community safety centres to enable safe, healthy communities. Establishing these centres should be considered.

To improve the functioning of the criminal justice, the sector has developed a seven-point plan, discussed in detail in the chapter. The commission endorses this plan.

Reforming the public service

A plan is only as credible as its delivery mechanism is viable. A capable state is an essential precondition for South Africa's development. The market cannot resolve all of the country's challenges; many require direct interventions by an effective government that delivers public goods of high quality - education, health services, economic and social infrastructure - guarantees the safety and security of its citizens, and provides an enabling environment for private investment.

In many countries, plans fail either because they are not implemented or because implementation is uneven. There needs to be a uniformity of effort and competence across the entire public service. There is a real risk that South Africa's national plan could fail because the state is incapable of implementation. The commission makes far-reaching proposals to remedy the uneven and often poor performance of the public service.

A capable state does not materialise by decree, nor can it be legislated or created from conference resolutions. It has to be painstakingly built, brick by brick, institution by institution, and sustained and rejuvenated over time. It requires leadership, sound policies, skilled managers and workers, clear lines of accountability, appropriate systems, and consistent and fair application of rules.

There are often blurred and inconsistent lines of overlap.

The plan proposes radical reforms in several areas. Parliament's oversight role should be enhanced, the political/administrative interface stabilised, the public service professionalised, skills upgraded and coordination improved. A more pragmatic approach to the intergovernmental system is required, recognising uneven capacity.

To professionalise the public service, we propose that:

• Heads of departments should report to a head of the civil service on administrative matters. 
• A hybrid system of appointing heads of departments should be introduced, incorporating both political and administrative elements. 
• A graduate recruitment programme and a local government skills development strategy should be introduced to attract high-quality candidates. 
• The Public Service Commission should be given the power to develop and monitor norms and standards for appointments at each level. 
• A purely administrative approach should be adopted for lower-level appointments, with senior officials given full authority to appoint staff in their departments.

The link between accountability, leadership instability and political appointments is most critical in state-owned enterprises. The chief executives of state-owned enterprises are appointed by Cabinet on recommendation of the shareholder minister(s). There is clear evidence of political influence by the ruling party in these appointments, creating confusion and blurring lines of accountability. Are chief executives accountable to the political party, to the President, to Cabinet, to the Minister of Public Enterprises or to the board?

The commission recommends that, as shareholder, the government should appoint the boards and the boards should appoint the executives. In this way, it is possible to have a clear line of accountability between government and the board, and between the board and the chief executive.

Policy instability is a concern. The general cause of policy instability is that policies change too often. While there are cases where policy must change, government often underestimates the disruptive effect that adjustments have on service delivery. A balance has to be struck, and at present that balance is missing.

The skills profile of the public service mirrors the national skills profile. Senior managers at the top of the public sector are generally skilled and competent. But there are critical shortages of good-quality doctors, engineers, information technology professionals, forensic specialists, detectives, planners, accountants, prosecutors, curriculum advisors and so on.

Improvements have been achieved in the efficiency of service delivery pockets of government, notably the South African Revenue Service and pilot projects in the Departments of Home Affairs, Health and Justice. At the heart of these reforms have been operations management and systems improvements and these need to be systematically rolled out to more areas of government.

The intergovernmental system requires review. Some argue that this system is too complex, weakening accountability for key services and the ability of national government to intervene at provincial and local level. Others contend that some nationally run services are as dysfunctional as some provincial education departments. The solution they propose is to focus on fixing the problems of leadership and policy instability, and weak skills.

The commission's view is that within the present constitutional framework, it is possible to have more differentiation in the powers and functions of provinces and municipalities, taking capacity into account. The present system can be improved, with clarifications in the areas of housing, water, sanitation, electricity and public transport. We propose regional utilities to provide services on behalf of less resourced municipalities on an agency basis, without undermining the accountability of the services. Large cities should be given greater fiscal and political powers to coordinate human settlement upgrading, transport and spatial planning.

Fighting corruption

High corruption levels frustrate society's ability to operate fairly and efficiently and the state's ability to deliver on its development mandate. In Transparency International's global corruption survey, South Africa has fallen from 38th place in 2001 to 54th place in 2010, out of 178 countries. Corruption often involves both public and private sector participants. The perception of high levels of corruption at senior levels of government makes the fight against corruption that much harder.

Political will is essential to combat this scourge. Political will is measured by assessing the amount of money spent fighting corruption, the legal arsenal that corruption-busting institutions have at their disposal, the independence of anti-corruption authorities from political interference and the consistency with which the law is applied. Being soft on smaller cases, or unusually tough on corruption involving political opponents, implies inconsistency.

In addition to political will, the fight against corruption has to be fought on three fronts: deterrence, prevention and education. Deterrence helps people understand that they are likely to get caught and punished. Prevention is about systems (information, audit and so on) that make it hard to engage in corrupt acts. The social dimensions of corruption can only be tackled by focusing on values, through education. South Africa has some, but not all, of these elements in place.

Government's procurement policies blur the line in matters of corruption. Multiple and sometimes contradictory objectives lead to poor value for money and make corruption easier.

There are still gaps in the anti-corruption arsenal. First, despite their competence and skill, institutions like the Public Protector and Special Investigative Unit are underfunded, understaffed and subject to external interference. Second, while thousands of cases are investigated, very few get to court. We propose the establishment of specialised teams of prosecutors and special courts to handle corruption cases.

Third, the state procurement system has become overly bureaucratised, with an emphasis on compliance by box-ticking, making the system costly, burdensome, ineffective and prone to fraud. We propose centralising large and long-term tenders, making it illegal for public servants to operate certain types of businesses, and making individuals liable for losses in proven cases of corruption.

Finally, the country has barely begun to tackle the associated societal factors that contribute to corruption. Attitudes that justify breaking the law to help family members because they are poor, or because they suffered under apartheid, or just because they are family, must be tackled head on.

If the public believes that people will only be prosecuted if they are not politically protected, confidence in the anti-corruption agencies wanes and their efficacy is compromised. No one can be untouchable.

International experience shows that with political will and sustained application of the right strategies, corruption can be significantly reduced and public trust restored.

Transforming society and uniting the country

A united people and a more cohesive society are not only national objectives; they are also means to eradicating poverty and inequality. Our strategy to enhance social cohesion is based on three themes:

• Reducing poverty and inequality by broadening opportunity through economic inclusion, education and skills, and specific redress measures. 
• Promoting mutual respect, inclusiveness and cohesion by acting on the constitutional imperative that South Africa belongs to all who live in it, and that all are equal before the law. 
• Deepening the national appreciation of the responsibilities and obligations that citizens have towards one another.

The struggle against apartheid was first and foremost about the construction of a non-racial and non-sexist democratic society, in which all people have equal rights. This is embedded in the Constitution. Despite consistent progress since 1994, South Africa remains a divided society, with race still forming the main divide. Individual stereotyping of race and ethnicity is widespread, and pockets of discrimination persist.

Progress is not linear. The nation has its moods, wh ich swing from generosity of spirit to anger. The country's institutional framework - and its broad economic and social trends - have contributed to gradual deracialisation, but progress is not sufficient or deep enough.

Reducing poverty and inequality, eliminating spatial segregation and unemployment, and improving the quality of education are the primary tools to build social cohesion. Unity will deepen and become durable as opportunities expand. But South Africa's own history and the experiences of other countries have taught us that a sense of unity and social cohesion are necessary to meet our social and economic objectives. The preamble of the Constitution captures this balance best. It recognises the obligation of the state to effect redress to reverse the effects of apartheid, in a context where all citizens feel part of the country and its programmes.

Achieving and maintaining this balance requires the confluence of several factors, not all of which are in government's control. A growing economy, rising employment and incomes, falling inequality, an improving education system, fertile conditions for entrepreneurship and career mobility in the workplace will contribute significantly to uniting South Africa's people. Programmes such as affirmative action, black economic empowerment and land reform are proper responses to our legacy, but they contribute much more when the economy is growing and the education system is improving. Without such an environment, these measures can raise the level of social tension.

In good times, nation-building is easier. In bad times, when the environment is less conducive to redress, progress is slower. South Africa ca nnot afford a downward spiral that frustrates redress and sharpens social tensions. Strong leadership is needed to promote the vision of the Constitution. A formal social compact may help to strengthen the alignment between growth and development and nation-building, generating a virtuous circle.

In addition to measures that promote social equity outlined elsewhere in the plan, we propose:

• The Bill of Responsibility, developed by the Department of Basic Education and others, should be popularised, encouraging all South Africans to live the values of the Constitution. 
• A pledge based on the Constitution's preamble should be developed and used in school assemblies. 
• All South Africans should be encouraged to learn an African language and government programmes should work to make this a reality. 
• The Commission on Gender Equality and the Ministry for Women, Children and People with Disabilities should jointly set clear targets for the advancement of women's rights and report on progress in achieving this in an annual publication each August. 
• Employment equity and other redress measures should be made more effective by focusing on the environment within which capabilities are developed. 
• A review of black economic empowerment. While this remains the correct approach to broaden ownership and control over productive parts of the economy, the present model is not achieving the desired objectives quickly enough.
• Redress measures in the workplace should focus on enterprise development, access to training, career mobility and mentoring.

Conclusion

To make meaningful, rapid and sustained progress in reducing poverty and inequality over the next two decades, South Africa needs to write a new story. At the core of this plan is a new development paradigm that seeks to involve communities, youth, workers, the unemployed and business in partnership with each other, and with a more capable state. The aim is to develop the capabilities of individuals and of the country, and to create opportunities for all South Africans.

The commission's draft plan is based on extensive research, consultation and engagement. Yet it is neither perfect nor complete. It provides the basis for a detailed and deep engagement among South Africans, based on firm proposals to solve the country's problems.

The key ingredients for success are:

• The active efforts of all South Africans
• Growth, investment and employment
• Rising standards of education and a healthy population
• An effective and capable government
• Collaboration between the private and public sectors
•  Leadership from all sectors of society.

The country we seek to build by 2030 is just, fair, prosperous and equitable. Most of all, it is a country that each and every South African can proudly call home.

This is an extract from the National Planning Commission's National Development Plan: Vision 2030, November 11 2011. The full version can be accessed here - PDF.

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