Poor implementation of directionless policies has caused the South African economy to suffer Photo Pexels
South Africa – In 1996 the new government incorporated macroeconomic policies to increase employment and lessen poverty. Although the intention was to bolster the economy, the implementation of these policies is poor.
For economies to work a clear plan needs to be set and followed. For economist Lebohang Pheko, those in the economic cluster failed to understand this, made clear by the multitude of failed policies over the years.
“I think over the last 28 years we’ve seen a series of policy experimentation … Policy which is very market friendly, which is intended to distribute through trickle down mechanisms. The whole hope is that if you have enough direct investment, enough employment, enough multinational companies which are willing to invest in this country that somehow the benefits of all this will then somehow spontaneously trickle down. You can’t run an economy by hope and by chance. Economies need to be engineered.”
South Africa is not lacking in resources, just the wrong policies
South Africa is ranked as having the most unequal society in the world. While Pheko doesn’t agree with that statement citing the metrics as “slightly problematic”, she does believe the country should be in a much better place given its resources. The resources are there but the correct policy hasn’t been implemented.
“We could be doing far better especially with the mineral wealth environment that we have. With the realistic strength and stature as a nation that we have. We have the levity to be slightly more autonomous and more independent in our economic thinking. We have a vibrant, willing, energetic, talented population which is ready to make contributions in different sectors of the economy. It just doesn’t seem to be happening as smoothly as one would hope.”
The problem that exists in the policies and what needs to change
There are foreign companies in South Africa which provide numerous jobs. The problem, according to Pheko, is they don’t pass on any skills to South Africans so they can do these jobs by themselves. This and the tax holidays they get hamper the progress of the country.
“Companies come here, and we need to be able to mine from them the transfer of skills so that we can reproduce what they are doing for ourselves. We also have to rethink the idea of tax holidays and the unwillingness for a lot of these companies to comply with labour relations to comply with basic environmental requirements. It’s one thing to say that a company is bringing jobs, but jobs are not an investment. The investment is in the skills [which are taught].”
The country is a mineral rich country. It is not a secret that majority of the world’s diamond mines are owned by De Beers. They also hold a large stake in the diamond mines in South Africa. For Pheko a monopoly like this simply cannot exist. It simply cannot be that South Africa’s minerals prices are being dictated to by an outside force.
“It can’t be that there’s this monopoly of a few families you know the De Beers and so forth who own them. Who are the ones who are still managing the mineral cartel 28 years after so-called liberation. It can’t be that our prices are set for us by external forces, by external bodies that we don’t always necessarily understand. There certainly should be some sort of a state-led process. Of course, that’s always going to be open to accusations and possibilities of corruption but there has to be a middle ground.”
Redirecting the country and putting it back on course
Poor and wrong implementation of policies has cost South Africans time and time again. From the ageing infrastructure to an education system that is not helping to create future leaders, Pheko believes the ANC does not have the strong leadership needed to turn things around.
“I’m not sure that the ANC per se has been willing or able to really put foot to its social democratic principles. It’s social economic democratic principles especially in the economic sector. This I think is really to do with overly appeasing those secular minorities since 1994.”
The lack of direction in policies and changing from one policy to another has damaged the country. With a poor policy framework currently in place and with seemingly no one at the helm who can rectify and restructure things properly, it might be some time before things start to turn around.