SA’s interlaced political and economic
difficulties are multiplied by profound shifts in the global economy.
That SA’s elites are not articulating comprehensive solutions reflects
decades of its universities producing specialists, while the nation’s
challenges have become extraordinarily diverse.
Leaders of top global universities have long maintained that business
people well-educated in social sciences are better prepared to navigate
at times of social shifts. UK and US educators committed to such paths
long ago. Other countries have adopted similar approaches, as has SA,
but only recently. The payoffs of getting academics to think like
business people can be massive, as demonstrated by Silicon Valley having
been parented by Stanford University.
Resetting SA’s economy requires similarly exceptional leadership that mixes business savvy with seeing SA’s possibilities within an updated, broadly developed world-view.
The business community has not been rising to the occasion because successive governments have discouraged private sector policy inputs; SA’s businesses are geared for the status quo; and rarely are business leaders expected to contribute meaningfully to such sweeping politico-economic shifts.
The country’s growth prospects have been pummelled, as consumer discretionary incomes wilt under rand weakness and over-indebtedness, made worse by rising interest rates. The ruling party’s anti-business tripartite alliance has blocked fruitful government-business relations. Normally, extensive economic policy missteps trigger opposition gains but, while economic casualties are set to expand from a large base, a change in political power is distant
The global economy is reinventing itself in ways that refute the foundations of SA’s political-economy. While today’s global order has provoked progress, its core flaw has been the proliferation of patronage machines dominating resource-focused economies, such as SA’s. The collapse in commodity prices is destabilising resource-endowed countries that have not developed competitiveness-focused economies.
Yet some suggest SA can be righted by removing President Jacob Zuma or through avoiding a recession and a junk credit rating. Vastly greater shifts are required.
Another impediment is that discourse in SA is concentrated amid so-called "right brain" processing. Learning maths teaches the ability to think abstractly and objectively. Such lessons have been overwhelmed in SA by the calculus of victims-and-villains politics.
SA’s values’ collage reflects residual resentments inspired by the apartheid government’s efforts to restrict information flows and silence values-based debates. The current dialogue is restricted by vilifying the viewpoints of those deemed outcasts.
Rejecting the policies of a Hendrik Verwoerd, Robert Mugabe, George W Bush or Jacob Zuma should not preclude critically examining their perspectives and tactics. Each of them took controversial positions regarding the global order being predicated on unconditional sovereignty, which encourages domestic imperialism — patronage machines in resource-endowed counties.
...
AS commodity prices have been harshly impaired, these issues pose severe threats to countries including Venezuela, Saudi Arabia and Russia. SA’s future hinges on being able to manage such problems, while adopting policies to accelerate transformation and growth. The country is stuck in a political-economic paralysis with indulging values and biases substituting for informed debates.
The comments sections of South African media outlets evidence a belief that the capture of economic rents by political elites is an African trait. Economic and political history make clear that power grabs were the way of the world until recently. Educators delight in illuminating the twisted stairs political philosophy ascended for societies to favour individual rights over might-is-right.
Scholarly efforts have further considered how the painful path of democratic advances benefited by the unfolding of profound economic forces. Nobility-peasant constructs were predicated on the importance of rural land. Industrial-led growth devastated rural land’s political and economic value.
Similarly, today service-led growth is pummelling the economic value and political relevance of controlling commodity deposits.
SA’s pre-1994 regime manipulated constitutional protections to legislate privileges for a minority defined by race. This was an affront to what so many intellectuals consider to be humankind’s signature social accomplishment: the rule of law answerable to democratic forces.
The old South African regime also positioned itself as a bulwark against communism, which represented a global threat to the economic dynamism necessary for people to be free to pursue their ambition. Today SA’s political-economy is as hectically complicated as it is unsustainable; this is not new.
Since Nelson Mandela was released, communism has ceased to be relevant and the economies of the East and the West have merged. As Karl Marx respected Adam Smith, he would not be surprised that it is the corollary to Smith’s insight that dominates global commerce today: as the size of the market increases, returns to specialisation benefits expand.
Political and economic stability requires SA’s businesses becoming more competitiveness-focused through specialising and innovating. But SA’s big businesses retain their oligopoly biases, while the ruling party is disdainful toward competitiveness-focused policies. Today’s vulnerable countries have failed to invest in people and competitiveness. The lists of such countries are dominated by resource-endowed nations.
SA’s polity is captured by a patronage network encircled by populists. The global economy demands that countries compete through innovating, specialising and integrating across supply chains domestically and abroad. As the hopes of most young South Africans unravel, the ruling party and its business leaders dither.
...
UNDER the pre-1994 regime, business students were encouraged to specialise in accounting and actuarial science. Today, SA’s top universities have adopted variants of Oxford University’s esteemed philosophy, politics and economics programmes.
Sending the next wave of business leaders on international management courses seems reasonable. Except such programmes sharpen their existing skills rather than broadening them to grow and transform SA’s economy while accelerating competitiveness gains.
As neither the pre-nor post-1994 governments have been receptive to business leaders intruding on their policy-setting turf, the private sector has not invested in understanding how economic development policies and commercial objectives can complement each other. Yet only the private sector has sufficient institutional capacity to drive formidable economic progress.
Now that SA’s prospects orbit economic stagnation, thus luring political upheaval, there is pressure for public and private sector leaders to co-ordinate efforts. Notwithstanding much expertise in capital markets economics, the understanding of SA’s executives of economic development drivers is impoverished.
The global order can no longer tolerate the domestic imperialism of resource-endowed countries being captured by cronyism. The featured political transmission mechanism, the Mediterranean refugee crisis, threatens European integration and inter-regional peace. The economic counterpart, collapsed commodity prices, threatens SA’s fragile calm.
Youthful ambitions require a new political-economic dispensation which seems beyond the purview of the nation’s leaders. Upgrading from SA’s ill-conceived policies is neither difficult nor adequate. Transitioning swiftly from a resource-reliant economy with a patronage-focused government into a globally integrated, competitiveness-focused economy is a demanding undertaking.
SA’s public and private sector leaders must accept their mutual dependency and shared responsibilities. Discussions should begin by acknowledging the breadth of the challenges.
• Hagedorn is an independent strategy adviser
Resetting SA’s economy requires similarly exceptional leadership that mixes business savvy with seeing SA’s possibilities within an updated, broadly developed world-view.
The business community has not been rising to the occasion because successive governments have discouraged private sector policy inputs; SA’s businesses are geared for the status quo; and rarely are business leaders expected to contribute meaningfully to such sweeping politico-economic shifts.
The country’s growth prospects have been pummelled, as consumer discretionary incomes wilt under rand weakness and over-indebtedness, made worse by rising interest rates. The ruling party’s anti-business tripartite alliance has blocked fruitful government-business relations. Normally, extensive economic policy missteps trigger opposition gains but, while economic casualties are set to expand from a large base, a change in political power is distant
The global economy is reinventing itself in ways that refute the foundations of SA’s political-economy. While today’s global order has provoked progress, its core flaw has been the proliferation of patronage machines dominating resource-focused economies, such as SA’s. The collapse in commodity prices is destabilising resource-endowed countries that have not developed competitiveness-focused economies.
Yet some suggest SA can be righted by removing President Jacob Zuma or through avoiding a recession and a junk credit rating. Vastly greater shifts are required.
Another impediment is that discourse in SA is concentrated amid so-called "right brain" processing. Learning maths teaches the ability to think abstractly and objectively. Such lessons have been overwhelmed in SA by the calculus of victims-and-villains politics.
SA’s values’ collage reflects residual resentments inspired by the apartheid government’s efforts to restrict information flows and silence values-based debates. The current dialogue is restricted by vilifying the viewpoints of those deemed outcasts.
Rejecting the policies of a Hendrik Verwoerd, Robert Mugabe, George W Bush or Jacob Zuma should not preclude critically examining their perspectives and tactics. Each of them took controversial positions regarding the global order being predicated on unconditional sovereignty, which encourages domestic imperialism — patronage machines in resource-endowed counties.
...
AS commodity prices have been harshly impaired, these issues pose severe threats to countries including Venezuela, Saudi Arabia and Russia. SA’s future hinges on being able to manage such problems, while adopting policies to accelerate transformation and growth. The country is stuck in a political-economic paralysis with indulging values and biases substituting for informed debates.
The comments sections of South African media outlets evidence a belief that the capture of economic rents by political elites is an African trait. Economic and political history make clear that power grabs were the way of the world until recently. Educators delight in illuminating the twisted stairs political philosophy ascended for societies to favour individual rights over might-is-right.
Scholarly efforts have further considered how the painful path of democratic advances benefited by the unfolding of profound economic forces. Nobility-peasant constructs were predicated on the importance of rural land. Industrial-led growth devastated rural land’s political and economic value.
Similarly, today service-led growth is pummelling the economic value and political relevance of controlling commodity deposits.
SA’s pre-1994 regime manipulated constitutional protections to legislate privileges for a minority defined by race. This was an affront to what so many intellectuals consider to be humankind’s signature social accomplishment: the rule of law answerable to democratic forces.
The old South African regime also positioned itself as a bulwark against communism, which represented a global threat to the economic dynamism necessary for people to be free to pursue their ambition. Today SA’s political-economy is as hectically complicated as it is unsustainable; this is not new.
Since Nelson Mandela was released, communism has ceased to be relevant and the economies of the East and the West have merged. As Karl Marx respected Adam Smith, he would not be surprised that it is the corollary to Smith’s insight that dominates global commerce today: as the size of the market increases, returns to specialisation benefits expand.
Political and economic stability requires SA’s businesses becoming more competitiveness-focused through specialising and innovating. But SA’s big businesses retain their oligopoly biases, while the ruling party is disdainful toward competitiveness-focused policies. Today’s vulnerable countries have failed to invest in people and competitiveness. The lists of such countries are dominated by resource-endowed nations.
SA’s polity is captured by a patronage network encircled by populists. The global economy demands that countries compete through innovating, specialising and integrating across supply chains domestically and abroad. As the hopes of most young South Africans unravel, the ruling party and its business leaders dither.
...
UNDER the pre-1994 regime, business students were encouraged to specialise in accounting and actuarial science. Today, SA’s top universities have adopted variants of Oxford University’s esteemed philosophy, politics and economics programmes.
Sending the next wave of business leaders on international management courses seems reasonable. Except such programmes sharpen their existing skills rather than broadening them to grow and transform SA’s economy while accelerating competitiveness gains.
As neither the pre-nor post-1994 governments have been receptive to business leaders intruding on their policy-setting turf, the private sector has not invested in understanding how economic development policies and commercial objectives can complement each other. Yet only the private sector has sufficient institutional capacity to drive formidable economic progress.
Now that SA’s prospects orbit economic stagnation, thus luring political upheaval, there is pressure for public and private sector leaders to co-ordinate efforts. Notwithstanding much expertise in capital markets economics, the understanding of SA’s executives of economic development drivers is impoverished.
The global order can no longer tolerate the domestic imperialism of resource-endowed countries being captured by cronyism. The featured political transmission mechanism, the Mediterranean refugee crisis, threatens European integration and inter-regional peace. The economic counterpart, collapsed commodity prices, threatens SA’s fragile calm.
Youthful ambitions require a new political-economic dispensation which seems beyond the purview of the nation’s leaders. Upgrading from SA’s ill-conceived policies is neither difficult nor adequate. Transitioning swiftly from a resource-reliant economy with a patronage-focused government into a globally integrated, competitiveness-focused economy is a demanding undertaking.
SA’s public and private sector leaders must accept their mutual dependency and shared responsibilities. Discussions should begin by acknowledging the breadth of the challenges.
• Hagedorn is an independent strategy adviser
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