How South Africa Works

Greg Mills, Jeffrey Herbst

Description

The overwhelming challenge that South Africa faces, and has to date failed to address, is unemployment, which falls especially on African youths who were promised a better future after 1994. If the current unemployment challenge is not addressed, it will be impossible to sustainably lift many millions of people out of poverty. How South Africa Works reviews the country’s major economic achievements over the past two decades.

Through numerous interviews with politicians, business leaders and analysts, it examines the challenges and opportunities across key productive sectors – including agriculture, manufacturing, services, and mining – illustrative of the policy challenges that leaders face. It scrutinises the social grant and education systems to understand if South Africa has established mechanisms for people not only to escape destitution but be ready to be employed, and identifies steps that some of South Africa’s most notable entrepreneurs have taken to build world-class enterprises. Recognising the essential challenge to cultivate more employers to employ people, How South Africa Works concludes by offering an agenda and active steps for greater competitiveness for government, business and labour.

Sujets

• Comparative Politics
• POLITICAL SCIENCE
• Droit et juridique
• Republic of South Africa
• Sudáfrica
• South Africa
• LAW
• Employment
• Labor
• Afrique du Sud

Informations

• Publié par: Pan Macmillan South Africa
• Date de parution: 01 juillet 2015
• Nombre de lectures: 1
• EAN13: 9781770104099
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

‘Are the economic imperatives for employment and growth reconcilable with those for transformation and redress? What are the tough choices confronting a developing economy to lift itself out of poverty into a globally competitive player? Read more from Herbst and Mills to find out the answers.’
— SIPHO PITYANA, Chairperson, AngloGold Ashanti
‘South Africa 20 years after transition is a complex and multidimensional country. Competing alliances and juxtapositions have changed the dynamics of the “new South Africa”. How South Africa Works helps to understand the evolving paradigm and provides potential solutions. It is a welcome and unemotional addition to the debate – a worthwhile read!’
— GARETH ACKERMAN, Chairperson, Pick n Pay
‘As we enter the third decade of our democracy, the disjuncture between South Africa’s potential and its performance has never been as stark. How South Africa Works is an urgent call to all South African leaders to revisit yesterday’s assumptions and to abandon the politics, policies and practices that are stifling growth and with it, for millions, the hope of a better tomorrow.’
— MARK LAMBERTI, Group CEO, Imperial Holdings Limited
‘South Africa is a complicated place. Held back by its history, it is challenged to break out of a motionless present to build a brighter future for the generation still to be born. This is an enormous task that all South Africans must debate and embrace. How South Africa Works is a courageous and timely contribution to that debate and needed course of action.’
— MOE SHAIK, Development Bank of South Africa
‘The great strength of this book is that the analysis is supported by a wealth of in-depth interviews: Herbst and Mills illustrate how South Africa could work so much better if its considerable human potential were to be liberated by economic reform.’
— MIKE SPICER, Wesgro
‘Jeffrey Herbst and Greg Mills present intriguing findings about how South African businesses are squaring up to local and global challenges, putting a vivid, human face to South African entrepreneurship. Their proposals provoke much-needed debate on how to improve South Africa’s economic performance.’
— KENNETH CREAMER, economist, University of the Witwatersrand
‘Jeffrey Herbst and Greg Mills have written an exceptionally timely book. Notwithstanding the country’s significant political and economic advances, high rates of unemployment threaten those gains and, indeed, the freshly woven social fabric of the “Rainbow Nation” itself. The volume meticulously examines this crisis and thoughtfully engages virtually everyone in a position to either contribute to its resolution, or obstruct that progress. Even those who will find themselves disagreeing with the remedies prescribed in How South Africa Works will nevertheless need to grapple with the comprehensive case made by the authors.’
— J. PETER PHAM, Director, Africa Center, Atlantic Council, and Editor-in-Chief, Journal of the Middle East and Africa
‘A brilliant book that lays out the problems and solutions for the South African economy with clarity.’
— RAY HARTLEY, Editor, Rand Daily Mail
‘Jeffrey Herbst and Greg Mills succinctly argue in How South Africa Works that economic decline is not inevitable and that South Africa can compete on the world stage. This book is a must-read for those concerned about South’s Africa economic future and how it may develop.’
— ALEX VINES OBE, Head, Africa Programme, Chatham House, London


HOW SOUTH AFRICA WORKS


HOW SOUTH AFRICA WORKS

And Must Do Better
Jeffrey Herbst and Greg Mills
MACMILLAN


First published in 2015
by Pan Macmillan South Africa
Private Bag X 19, Northlands
Johannesburg, 2116
www.panmacmillan.co.za
ISBN 978-1-77010-408-2
eBook ISBN 978-1-77010-409-9
© Jeffrey Herbst and Greg Mills 2015
All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording or otherwise) without the prior written permission of the publisher. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages.
Editing by Sally Hines
Proofreading by Sean Fraser
Indexing by Ethné Clarke
Design and typesetting by Triple M Design, Johannesburg
Cover design by K4
Front cover and back cover, far right, photographs courtesy of Toyota South Africa; all other photographs courtesy of Greg Mills


South Africa’s economy has enormous potential. But to realise this, we need the efforts and leadership of all. This cannot just come from one person. All of us occupying positions of leadership have responsibility to put the interests of tomorrow ahead of today.
— LESETJA KGANYAGO, Governor of the South African Reserve Bank


Contents
Forewords by Nicky Oppenheimer and Johnny Clegg
About the Authors
Abbreviations
Introduction A Post-Heroic Future
Chapter 1 South Africa’s Development Story
Chapter 2 Expectations of a New Country
Chapter 3 Agriculture: More than Land
Chapter 4 Selling Forever? The Services Sector
Chapter 5 The Manufacturing Basics
Chapter 6 Mining: A Trail of Crumbs and Riches
Chapter 7 The Social Wage and Education: From ‘All-Pay’ to a Paid Job?
Chapter 8 A Bridge to the Future?
Conclusion A Pivot from Confrontation to Competitiveness
Notes
Index
Acknowledgements
‘This is How it Works’


Foreword
Nicky Oppenheimer
Countries should never waste a crisis. Moments of great urgency provide opportunities to usher in reforms that otherwise might be too politically unpalatable.
To have a good crisis, however, governments first need to recognise the problem. In South Africa’s case, our rates of economic and employment growth have been too low to meet the aspirations of our citizenry, particularly the burgeoning numbers of young people, where unemployment runs at almost 70 per cent. While we are still a young country, other nations have done more over two decades than we have accomplished since the transition to non-racial rule in 1994.
The reason for low growth is that we have too little public and private investment in the economy, nearer 20 per cent of gross domestic product compared to over 30 per cent for much of Asia and nearly 80 per cent in the case of China. This is a reflection of both a lack of opportunity and a shortage of confidence. Business craves stability and policy predictability, but too many variables are constantly introduced in this milieu for its comfort. Moreover, the rates of return do not justify the risk for many, reflecting, too, our relative uncompetitiveness, the difficulty of doing business, especially for smaller companies, and overall lack of productivity. If we are to develop our economy and create jobs on the scale required, we need to attract businesses that can invest anywhere in the world, and not just in what lies beneath our soil.
A little panic can be a good thing; it is a call to action and does not allow the option of doing nothing because the question is too difficult. A little panic will stimulate a sense of urgency for government to change direction. As this book points out, South Africa has had no shortage of plans for development. It is the political will and leadership, at every level, in business, government and labour, that has been lacking. The history of successful global reform tells us that to take advantage of a crisis, leaders also have to act toughly, not sparing their own privileged constituencies.
We have to conquer the legacy and mistrust of South Africa’s divided past to go forward. With the depth of engineering talent and financial resources we have available, for example, we should easily be able to resolve the electricity crisis, the record of chronic disappointment in education and the poor performance of many government agencies. However, these actions require a national and not an intrinsically narrow, political response. It requires acknowledging failures of governance and delivery, and acting on them. It demands breaking the stand-off between government, labour and business, which fuels misperception, isolationism and poor performance.
If we are to grow South Africa’s economy and to live up to our promises to our future generations, we need to set priorities and act on them. In this, there is no room for ‘them’ or ‘us’, only ‘all of us’.
I am proud that this study by members of The Brenthurst Foundation shows exactly how South Africa can work better. It illustrates that there are a great many South Africans who are poised to make significant innovations and investments that could change the fundamental trajectory of the economy. Many countries lack the basic entrepreneurial talent that resides in South Africa. The task now is to create a political and economic milieu that will encourage new investment and thereby address the fundamental issue of employment.


Foreword
Johnny Clegg
As someone who lived through the struggle for a free, democratic, non-racial and non-sexist South Africa in the 1970s, 1980s and early 1990s, I am wary of prophets of doom, and have a long view of history. In 1994, South Africa beat the predictions of a ‘race war’, ‘economic collapse’, and ‘tribal and ethnic cleansing’. We found a way to negotiate ourselves to a new start, a fresh promise of an all-inclusive South Africa, and laid the constitutional foundations for this.
All things considered, we have done reasonably well over the past 21 years. The post-1994 period has been framed by the immense historical weight and consequences of both segregation during British colonial rule and then apartheid, and the terrible damage th