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Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. All records and findings included in this report, originate from a panel discussion on developing a new economic blueprint for South Africa, which took place in February 2022 Author: Olivia Main Editor: Daryl Swanepoel Contents Introduction Key growth constraints Neoliberal macroeconomics Lack of localisation Corrupt politicians roam free Too many policies Not enough urgency Foreign nationals and casualisation Towards a new growth path Conclusion References Cover page image: www.mg.co.za Introduction On 2 March 2022, Employment and Labour Minister, Thulas Nxesi, officially tabled the National Labour Migration Policy (NLMP) for public comment and engagement. Touting the policy as the first time in the history of South Africa that government has formulated a comprehensive NLMP, the Minister said that “government have researched extensively and benchmarked internationally in search of policy based on best practice”. Together with the tabled NLMP, amendments to the Employment Services Act (of 2014) were proposed to limit the extent to which employers can employ foreign nationals (BizNews, 2022). And this is all good news. It points to the government’s willingness to look at labour laws that are not working and change them. But it is not enough. South Africa’s reputation – in fact its very standing – as the industrialised leader of the African continent is diminishing. On Statista.com, South Africa is listed as the third-largest economy in Africa in 2021 with a GDP of US$329.53-billion, trailing behind Egypt (GDP US$394.28-billion) and Nigeria (GDP US$514.05-billion). Our strength on the world stage has never been weaker (Statista, 2022). The situation does not look any better back home. According to the Quarterly Labour Force Survey (QLFS) carried out by Stats SA, the number of employed persons declined by 660 000 to 14,3 million for the 3rd quarter of 2021 compared to the 2nd quarter of the same year. South Africa’s unemployment rate in Q3:2021 increased by 0,5 of a percentage point to 34,9%. This is the highest official unemployment rate recorded since the start of the QLFS in 2008 (Stats SA, 2021). It seems there is room for improvement in just about every sphere of the economy. The Inclusive Society Institute has committed to an intensive three-phase research project, culminating in a blueprint for rejuvenating and reigniting South Africa’s flailing economy. This map will, ultimately, be shared with government representatives in the presidency and other important policy institutions and public bodies, such as Parliament, in 2022. A dialogue, hosted by the institute, brought together trade unionists from across a number of unions – as part of the second phase, to interrogate what in terms of the generally accepted economic architecture of the world South Africa is doing wrong. And to explore fresh out-of-the-box ideas that could grow the economy beyond the expected 2-3% to the 4-5% trajectory that is needed to really start chipping away at unemployment and backlogs (National Treasury, 2021). Key growth constraints Neoliberal macroeconomics The panel largely agreed that the South African government’s seemingly unapologetic neoliberal approach to running the economy is problematic. It was felt that the government relies too heavily on the private sector to cure social ills such as unemployment, while not doing any of the heavy lifting itself. In addition, the austerity measures that result from this neoliberalism is not speaking to the lived realities of South Africans. With no state-led development – and the private sector seemingly on an investment strike – money is not ending up in the pockets of the people. The trickle-down effect that the country has been waiting to witness for years has not come, which means the people are excluded from taking part in the economy and, so doing, contribute to growth (Mail and Guardian, 2021). As things stand, South Africa finds itself in the so-called middle-income trap with a middle-income economy, failing to transition to a high-income economy due to rising costs and declining competitiveness (Daily Maverick, 2019). The country’s macroeconomic policies are not assisting its social and industrial policies. Expenditure on industrial incentives is lacking, which does little to grow manufacturing. As a result, South Africa’s social cohesion is being tested as economic strife is compounded by the high levels of inequality still seen in the spheres of healthcare and education, among many others. Lack of localisation Far too little of the South African rand is circulating in the country. Whether it is officials receiving kickbacks from imports or consumers not buying local products, discussants felt that South Africa is losing out due to a lack of localisation. Although good work has been done to get big clothing retailers like Foschini, Woolworths and Markham’s to buy local, a lot more is needed. And not only from industry. As one discussant put it, ordinary consumers must also contribute, saying that “we should all make a little bit of effort to check the label on the trousers we choose to wear”. Additionally, too much revenue is lost to manufacturing done overseas. South Africa is a large producer of raw materials. The fact that those materials are shipped elsewhere and turned into consumable goods amounts to big losses when it comes to taxation, job creation and keeping money circulating within our borders. In a sign of the country’s lagging manufacturing capability, Trade, Industry and Competition Minister Ebrahim Patel recently requested the social partners at the National Economic Development and Labour Council (NEDLAC) to consider an import-substitution target of 20% for non-petroleum imports, which he argued could drive progressive localisation worth up to R200-billion over the coming five years. According to the minister, South Africa’s “propensity to import is out of line with peer countries and developed economies and more can sensibly and sustainably be produced locally” (Engineering News, 2021). Corrupt politicians roam free The panel was unanimous in their assessment that the South African prison system has too few corrupt politicians in its jails. The individuals who have stolen from South Africa for what seems like an eternity must be punished – and punished publicly and with consequences. Simply put, the crooks must go to jail. South Africa lost R1.5-trillion through corruption in the years between 2014 and 2019 (News24, 2021). And it is not only the government’s coffers that are being cleaned out. All over the country, copper cables are disappearing from railways faster than they can be replaced. Transnet and PRASA have seen the systematic destruction of their infrastructure by criminal syndicates over the past two years. Without money, the economy cannot grow. Without cables the trains cannot run. Commuters cannot get to work. Goods cannot get to ports. The panel felt that if the police and the National Prosecuting Authority (NPA) do not act, SOEs like PRASA will soon be gone. In addition, the public will not have confidence in the integrity of the leaders of society. Leaders such as Siyabonga Gama and Anoj Singh, former executives of state-owned infrastructure firm Transnet, as well as Brian Molefe, former CEO of public utility firm Eskom, who the Zondo Commission recommended be investigated for corruption and racketeering amounting to millions of dollars. The latest part of the report also implicates senior political leaders of the ruling African National Congress itself (Al Jazeera, 2022). Too many policies South Africa’s long history of policy changes reads as follows: In 1994, the Reconstruction and Development Programme (RDP) was chosen as the primary socio-economic programme. Two years later, government introduced the Growth, Employment and Redistribution (GEAR) programme to stimulate faster economic growth than RDP had managed. GEAR was replaced in 2005 by the even faster Accelerated and Shared Growth Initiative for South Africa (ASGISA) as a further development on the first two developmental strategies. Shortly after ASGISA came the New Growth Path (NGP), which was followed, in early 2013, by the National Development Plan (NDP) 2030 (South African History Online, 2014). In 2019 the Department of Trade, Industry and Competition (DTIC) put forward proposals for Master Plans for all 15 priority industries in the country in order to “target specific action points relating to the respective industries” (IOL, 2021). In total, therefore, a staggering 20 policies have made it onto the desks of government officials so far (SA History, 2014). The panel felt that such a large number of policies and the shifting ideologies between them is not the best way to take the country forward. The Master Plans have been in the making for three years and some are still not even concluded, while those policies that are currently in place are not being delivered on. Also problematic, is a dual system of social policies whereby one set of policies applies to the poor and another for the rich. A discussant also highlighted that to establish economic policies that are progressive, the youth and gender development must be considered. Not enough urgency South Africa’s economy is growing at a snail’s pace. Although growth was projected to rebound to 5.2% in 2021 (but that is still not enough to recover to pre-Covid 19 levels), the forecast is for the economy to slow to 1.9% in 2022 and 1.6% in 2023 (OECD, 2021). For a country brimming with natural resources, the growth rate is well below what can be achieved. In fact, it seems the only sphere showing real growth in the country is that of unemployment. The recent unemployment statistics released by Statistics South Africa show the rate of growth now sits at 34.9%, while under the expanded definition of unemployment, it rose from 44.2% to 46.6% (Daily Maverick, 2022). Yes, the recent social upheavals in the form of the looting in July 2021 are major setbacks that point to the fragile nature of the country’s social cohesion. But solutions to these problems have been tabled and are waiting to be actioned. Across the board, however, these well-thought-out policies and ideas are not being implemented. Promises are not kept as people in key positions seem to lack the energy, the will, or the know-how to act. A pertinent example is the National Anti-Corruption Strategy 2020-2030 (NACS). The first step in implementing the strategy is to establish an interim National Anti-Corruption Advisory Council, which has yet to happen, despite President Ramaphosa’s promise that it would be established by mid-2021 (Corruption Watch, 2022). Furthermore, from the names of those responsible for sabotaging Eskom, to the persons who stole directly from the State, the information about who did what has been made public. The natural – some might say inevitable – next phase to root out the problem would be to swiftly go into action and apprehend the criminals. But that is not happening. The panel felt that the slow speed of progress and political criminals still at large is, in large part, the result of a lack of political will. The ANC as the governing party has been indecisive and has thus far failed to restore the organisation to its former glory. It still has the overwhelming confidence of the majority of people in the country, but it is not able to lead a society as it has in the past. Foreign nationals and casualisation The twin issues of immigrant workers flocking to South Africa to gain employment and the country’s shift towards casualisation has profound implications both in terms of employment and social cohesion. At present, about three million of South Africa’s 60 million residents are migrants (Stats SA, 2022). Never, since the xenophobic attacks of 2008, has anti-immigrant sentiment been this high. In Gauteng recently, the Alexandra Dudula Movement and Operation Dudula have emerged with the joint purpose of ridding their townships of foreigners. Dudula loosely means to "push back" or "drive back" in isiZulu and gives an indication of the growing discontent among South African communities who feel marginalised. The campaigns of the two groups include a call for all undocumented African migrants to stop trading in Alexandra – a call they made clear by closing down all the stalls owned by foreign nationals who could not show the correct papers for running the business or a valid passport (BBC, 2022). The panel described foreign nationals working on a casual basis in South Africa as having a detrimental effect on the money earned and spent inside the country’s borders, together with taking employment opportunities away from hard-working citizens. As mentioned in the introduction to this report, a law is being finalised by government which will cap the number of foreigners that businesses owned by locals can hire. It remains to be seen whether the legislation will have a noticeable effect on the dire unemployment rate. Towards a new growth path Conclusion South Africa is a country with tremendous potential. As a discussant rightly pointed out, we are not dependent upon a single cash crop or commodity, like most African countries. We have a very diversified agricultural sector. We have all the infrastructure in the world, and we have a significant education system. Unfortunately, we are bearing witness to large parts of that potential coming to nothing through the actions – and inaction – of those we elected to represent us in what we hoped – and still do – is a democratic society. South Africa’s unemployment figures are dismal. The labour force is becoming less skilled. We are losing jobs to outsourcing and desperately poor people attracted to a country which until very recently still had the fastest-growing economy on the African continent. The outlook is poor, but the resolve of the people is not. Despite all the challenges and truly tragic events that have had this country in utter turmoil, South Africans are still pulling together and making things work. The SOEs are in dire straits, but they still exist. We have come through Covid-19 just as the rest of the world has, and let it be said that we still have a Rugby World Cup trophy – and the positivity that came from winning it – safe and secure in the country. However, people can only take so much, and the social cohesion of the country is not guaranteed. Real change is needed to bring about real hope. The labour sector invites all governing bodies to facilitate tangible changes to South Africans’ lived realities through constructive dialogue and innovative ideas – and action. The spirited discussions and the distilled solutions that come from these think tanks will then be in the public domain. More importantly, they will be within arm’s length of those with the power – and passion – to make a difference. References Al Jazeera. 2022. More S African corruption exposed in ‘state capture’ report, March 8, 2022. [Online]. Available at: https://www.aljazeera.com/features/2022/3/8/analysis-south-africas-state-capture-report-questions-anc-leg [accessed March 2, 2022]. BBC. 2021. Dudula: How South African anger has focused on foreigners, March 13, 2022. [Online]. Available at: https://www.bbc.com/news/world-africa-60698374 [accessed March 7, 2022]. BizNews. 2022. National Labour Migration Policy released for public comment, March 2, 2022. [Online]. Available at: https://www.bizcommunity.com/Article/196/717/225576.html [accessed March 3, 2022]. Corruption Watch. 2022. Solutions abound to SA’s graft problem – political will, not so much, February 14, 2022. [Online]. Available at: https://www.corruptionwatch.org.za/solutions-abound-to-sas-graft-problem-political-will-not-so-much/ [accessed March 7, 2022]. Daily Maverick. 2019. China, South Africa and the middle-income trap, April 23, 2019. [Online]. Available at: https://www.dailymaverick.co.za/article/2019-04-23-china-south-africa-and-the-middle-income-trap/ [accessed March 2, 2022]. Daily Maverick. 2022. South Africa needs renewed citizen activism and political imagination to stop the democratic degradation, January 4, 2022. [Online]. Available at: https://www.dailymaverick.co.za/opinionista/2022-01-04-south-africa-needs-renewed-citizen-activism-and-political-imagination-to-stop-the-democratic-degradation/ [accessed March 10, 2022]. Engineering News. 2021. Report warns that industrialisation-through-localisation could stunt South Africa’s development, November 16, 2021. [Online]. Available at: https://www.engineeringnews.co.za/article/report-warns-that-industrialisation-through-localisation-could-stunt-south-africas-development-2021-11-16 [accessed March 2, 2022]. IOL. 2021. Sectoral Master Plans playing a vital role in reviving SA manufacturing, June 30, 2021. [Online]. Available at: https://www.iol.co.za/business-report/opinion/sectoral-master-plans-playing-a-vital-role-in-reviving-sa-manufacturing-6873b700-9d37-47f2-836d-89f68aa589ef [accessed March 7, 2022]. Mail and Guardian. 2021. Intensifying economic insecurity may threaten South Africa’s social cohesion, February 16, 2021. [Online]. Available at: https://mg.co.za/opinion/2021-02-16-intensifying-economic-insecurity-may-threaten-south-africas-social-cohesion/ [accessed March 10, 2022]. National Treasury. 2021. Budget Review 2021. [Online]. Available at: http://www.treasury.gov.za/documents/national%20budget/2021/review/Chapter%202.pdf [accessed March 2, 2022]. News24. 2021. SA lost R1.5 trillion to corruption in five years and continues to bleed – report, June 23, 2021. [Online]. Available at: https://www.news24.com/fin24/economy/south-africa/sa-lost-r15-trillion-to-corruption-in-five-years-and-continues-to-bleed-report-20210623 [accessed March 7, 2022]. OECD. 2021. South Africa Economic Snapshot. [Online]. Available at: https://www.oecd.org/economy/south-africa-economic-snapshot/ [accessed March 2, 2022]. SA History. 2013. South Africa’s Key economic policies changes (1994 - 2013). [Online]. Available at: https://www.sahistory.org.za/article/south-africas-key-economic-policies-changes-1994 2013 [accessed March 7, 2022]. Statista. 2022. African countries with the highest Gross Domestic Product (GDP) in 2021, February 1, 2022. [Online]. Available at: https://www.statista.com/statistics/1120999/gdp-of-african-countries-by-country/ [accessed March 2, 2022]. Statistics South Africa. 2021. The South African economy sheds more than half a million jobs in the 3rd quarter of 2021, November 30, 2021. [Online]. Available at: http://www.statssa.gov.za/?p=14922 [accessed March 7, 2022]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. All records and findings included in this report, originate from a panel discussion on developing a new economic blueprint for South Africa, which took place in March 2022 Author: Mariaan Webb Editor: Daryl Swanepoel Contents Abbreviations & acronyms Introduction Identifying weaknesses Ailing infrastructure Brain drain Environmental concerns Labour cost and relations Limited producer support Livestock theft Policy uncertainty Research and training capacity Trust deficit and lack of social cohesion Veterinary support Suggestions for fostering growth Conclusion References Abbreviations & acronyms AAMP Agriculture and Agroprocessing Master Plan BFS Blended Finance Scheme GDP gross domestic product ISI Inclusive Society Institute NDP National Development Plan Introduction South Africa has a well-developed agricultural sector, which is a key driver of economic growth. Good rains during the summer and winter seasons helped boost agricultural activity in 2021. Together with a rise in animal products, increased wheat production boosted the industry by 12.20% in the fourth quarter of 2021, contributing to 1.20% gross domestic product (GDP) growth in the final three months of the year. Economic growth of 4.90% was recorded for the full year, after contracting by 6.40% in 2020 (Stats SA, 2022). The agriculture industry provided employment to 829 000 people in the third quarter of 2021 (Stats SA 2021). The agriculture sector ensures that South Africans not only have enough food, but it also has a vital role to play in foreign earnings and exports. In 2020, South Africa became the world’s second-biggest exporter of citrus after Spain. While the industry delivered a stellar performance in 2021, industry association AgriSA has warned that there are many challenges that could derail its continued success, chief among them the country’s crumbling infrastructure. The impact of deteriorating economic infrastructure was a key point of discussion during the Inclusive Society Institute’s (ISI’s) recent interaction with the agriculture sector as part of an economic research project. The industry’s concern about the state of the country’s roads, railways and port infrastructure echoes that of the mining industry, which is also heavily reliant on State-owned infrastructure for bulk exports. This report is a summary of the themes that emerged from the engagement that the ISI held with the agriculture industry. The first part deals with the industry’s views on the factors hampering economic growth and development and the second part seeks to provide some answers about interventions that could place South Africa on a higher economic growth trajectory. The ISI’s research project will culminate in a new economic blueprint for South Africa. Identifying weaknesses Ailing infrastructure The agriculture sector’s growth and its contribution to the South African economy, although positive, continues to be hindered by crumbling infrastructure, particularly economic infrastructure such as roads, ports, railways, telecommunication networks and electricity generation. The agriculture sector is increasingly shifting from rail to road transport to move goods between provinces and to ports for export. The modal shift is driven by the steady decline in the efficiency of the State-owned rail industry, partly owing to theft and vandalism of critical infrastructure. The ‘Ctrack Freight Transport Index’ illustrates the change in fortunes between rail and road, particularly since the Covid-19 lockdown. Ctrack’s road freight index reached a level of 129.90 points in January 2022, compared with rail freight’s index level of 81.70 in the same month (Ctrack, 2022). In the 2021 financial year, agricultural products accounted for only 0.60% of Transnet revenue from commodities transported (Transnet, 2022). There is concern that an increase in the number of heavy trucks on the roads results in more safety incidents, damages the road infrastructure and results in more congestion. For example, to load a vessel with a 55 000 t carrying capacity, requires 1 617 trucks loaded with 34 t each, the equivalent of a line of trucks 37 km long. Poor road infrastructure, particularly in rural areas where farmers rely on gravel roads, further increases production costs to the industry. Port infrastructure is also not adequately equipped to deal with demands from the agriculture sector. Port inefficiencies can cost producers of yellow maize up to R200/t, while rail line inefficiencies can add another R150/t. The industry argues that it is imperative that South Africa improves its rail and port infrastructure to ensure the country’s global competitiveness. Transnet is considering various initiatives to improve inland and port logistics, including increased private-sector participation. Telecommunications is another area where the farming community lacks infrastructure. Land-line infrastructure has been stolen in rural areas and has been overtaken by a shift to cellular technology. However, as farmers are dispersed and often in very rural areas, the industry is not a priority for profit-driven cellular companies. A lack of connectivity is a major productivity constraint and a security concern. Brain drain South Africans with experience in farming are in high demand in other parts of the world, particularly in the US. In 2019, about 275 000 workers entered the US on the H-2A programme that allows for US farmers to hire migrant labour to assist with planting, cultivating and harvesting. While more than 90% of these labourers arrive from Mexico, South Africans accounted for the second-most in demand workers. About 7 000 South Africans successfully obtained H-2A visas in 2019 (Business Insider, 2022). As these are seasonal employees, these South Africans often ‘learn, earn and return’. However, as the number of South African citizens emigrating abroad continues to rise, farmers are among those selling up and leaving the country, with Canada and Australia popular destinations. Environmental concerns There is threat to agricultural soils from mining and fracking. The Centre for Environmental Rights published a report in 2016 that showed how some of South Africa’s best agricultural soil has been decimated because of coal mining in Mpumalanga. Labour cost and relations Although farmers, like other economic stakeholders including government, want a decent wage for their workers, given the set of inflated costs the sector is forced to contend with, the cost of labour remains a concern for the industry. In 2021, farm workers’ wages were equalised with the minimum wage, resulting in a double-digit increase. It is argued if wages are too high, farmworkers will be priced out of the market and farmers may turn to mechanisation to remain competitive. The industry’s relationship with labour also has an impact on policy developments, and certain demands could derail progress. Further, labour legislation should not be made more complex, making permitting success, for instance, dependent on labour outcomes. Limited producer support Compared with many international competitors, South Africa’s agriculture sector does not receive direct support from government. Citing an internal study by AgriSA, a participant in the ISI roundtable discussion noted that of relevance to the country, is that four of South Africa’s emerging market counterparts, which had significant budget allocations to agriculture, experienced average yearly GDP growth of 3.40% over a ten-year period. Livestock theft Livestock theft is a major concern for the industry. According to the National Stock Theft Prevention Forum, livestock theft is costing the economy about R1.40-billion a year (Independent Online, 2021). Although stock theft is not new, what has changed is that the crime is now perpetrated by organised syndicates, rather than ordinary thieves. Whereas those stealing for survival will take only a few animals, criminal syndicates operate on a larger scale. Such syndicates often also target railway lines or power infrastructure. Policy uncertainty Policy uncertainty is among the chief structural constraints holding back economic growth and development in South Africa (IMF, 2022). Uncertainty about land reform, particularly the issue of expropriation without compensation, and property rights in general, continue to rattle the agricultural industry, threatening much-needed investment in the sector. A study commissioned by AgriSA and conducted by economist Dr Roelof Botha has quantified the economic output and job losses that the country would face should it pursue expropriation without compensation. Botha’s study involved a future perspective on the likely macroeconomic impact of the policy. The study forecasts a cumulative loss of economic output over nine quarters amounting to R735-billion in one scenario and R1.15-trillion in a second scenario. The policy will lead to substantial job losses (Botha, R, 2021). The National Assembly in December 2021 failed to pass the amendment to Section 25 of the Constitution to allow for expropriation without compensation. AgriSA has said Section 25 does not pose an obstacle to land reform, concurring with findings by a high-level panel led by former President Kgalema Motlanthe, and that it is rather factors such as inadequate budgets, poor implementation, corruption and a lack of political will that hold back land reform (AgriSA, 2021). The organisation has warned that an attempt to expropriate productive land without compensation will not only undermine growth of the sector, but will damage South Africa’s economy and the country’s standing internationally. Another major contributor to policy insecurity is that plans change too often, owing to the fiveyearly electoral cycle. The agriculture sector believes that South Africa is not “policy poor” and that it should rather focus on implementing plans, such as the National Development Plan (NDP). There is cautious optimism about the Agriculture and Agroprocessing Master Plan (AAMP) and the Blended Finance Scheme (BFS). The AAMP aims to accelerate land reform by implementing a comprehensive land agrarian strategy and finalising restitution claims, as well as mitigating and preventing the outbreak of diseases among livestock and products in the agricultural value chain. The BFS, relaunched in 2021, will leverage private funding to support investments to enhance agricultural production by black farmers through deliberate, targeted and well-defined financial and nonfinancial interventions (DALRRD, 2021). These plans are specific, the goals and objectives are clear, and they are measurable with timelines linked to each. A final point on policy uncertainty centres on black economic empowerment. Although the reasons behind the policy are understood, the challenge rests with how it is being implemented. Research and training capacity Agricultural colleges, of which there are 11 in South Africa, play a vital role in producing future farmers and scientists. The research and training at some of the agricultural colleges is not deemed suitable, with the focus tilting towards subsistence farming and food security, instead of state-of-the-art research that will keep South Africa on the cutting edge of agricultural development. Practical experience among graduates from colleges and universities is also lacking. Trust deficit and lack of social cohesion A trust deficit exists between the agriculture sector and government. Farmers are less willing to participate in land reform or other government-led initiatives, such as Statistics South Africa enquiries, when they feel that the country’s progress is threatened by corruption. Farmers feel despondent when provincial and local governments misuse the money allocated for operational expenses. There is also a perception that government spends too much of its wage bill on high-paying jobs, and too little on administrators who ensure the optimal functioning of the State. The distribution of public-service personnel across various income levels has shifted dramatically in the past decade-and-a-half, according to a 2020 study by Intellidex. Using inflation-adjusted income bands, the Intellidex analysis indicates a declining share of personnel earning less than an inflation-adjusted R20 000 a month – from 85% of staff in 2006/7 to 48% in 2018/19 – and a rising share of those earning above that figure (Intellidex, 2020). Further, South Africa’s success in achieving its developmental State goal has been questioned, with participants arguing that more active citizenry is needed, and that higher levels of social unity and cohesion are required among different racial and cultural groups. The NDP envisions building South Africa into a developmental State, which relies on the capabilities of people to improve their own lives, while the State intervenes to correct historical inequalities (NDP, 2012). Veterinary support South Africa has a severe shortage of veterinarians. According to Professor Vinny Naidoo, Dean of the Faculty of Veterinary Sciences at the University of Pretoria, South Africa needs at least 100 veterinarians per million people. Currently, about half of this number are registered in the country (Farmers Weekly, 2022). Rural areas are the worst affected by the shortage. It is estimated that there is one veterinarian for every 800 small-scale livestock farmers. A shortage of veterinary support has big implications for productivity. In a globalised, trade-oriented world, veterinarians working in food production are crucial for the management of international trade in animal and animal products, disease diagnostics and surveillance. The Food and Agriculture Organisation of the United Nations recommends a ratio of one veterinarian per 100 000 livestock units. Using this norm would result in the State requiring 253 State veterinarians to carry out disease control, laboratory diagnostics and veterinary public health (Department of Agriculture, Forestry and Fisheries, 2015). A veterinary strategy has been drafted to address the issue. The strategy was published in 2015, but its implementation has not gained traction, making it difficult to effectively curb diseases. Besides a veterinary shortage, problems with veterinary medicine regulation have also been raised. It reportedly takes between three and five years to have a vaccine registered. The South African Health Products Regulatory Authority has committed to clear its veterinary backlog and to reduce registration timeframes for new registrations to 12 months and major Type II variations to between three and six months, however, these timeframes are not being met yet (Health for Animals, 2021). Poor implementation of animal biosecurity systems and the enforcement of disease control regulations limit the ability of rural farmers to participate in major contracts. Fast-food chain McDonalds, for instance, uses A-grade meat from South Africa, Namibia and Botswana for its local operations, but has said that it could use C-grade meat if it had enough supply (Sunday Times, 2014). Rural farmers in Africa are major producers of C-grade grass-fed beef, but because they lack traceability systems, they cannot supply large food chains. The commercial ostrich production industry, which in 2011 experienced an outbreak of highly pathogenic avian influenza, had to implement livestock traceability systems to continue to be able to sell into export markets. To implement a livestock traceability system required the buy-in from an entire industry, from farmers, to abattoirs and processing plants. The ostrich industry also established a private laboratory to do rapid testing to European standards, instead of relying on the State to provide testing. The commercial ostrich production industry, which is reliant on exports, advocates adopting a do-it-yourself attitude if the State does not cooperate. Suggestions for fostering growth Conclusion The agriculture sector represents a high-potential sector of the South African economy – as driver of economic growth, export earnings and employment. Supportive government policy has an important role to play in enhancing the growth and development of the agriculture sector and ensuring that it remains globally competitive. Political stability, policy certainty and labour flexibility are focus points that the industry requires to continue with ongoing investment. References AgriSA. 2021. Focus on effective implementation of land reform plans, December 7, 2021. [Online]. Available at: https://agrisa.co.za/media/focus-on-effective-implementation-of-land-reform-plans [accessed March 21, 2022]. Botha, R. 2021. Expropriation without compensation: A looming catastrophe, March 12, 2021. [Online]. Available at: https://www.farmersweekly.co.za/opinion/by-invitation/expropriation-without-compensation-a-looming-catastrophe/ [accessed March 21, 2022]. Ctrack. 2022. Transport ad Freight Index Report, February 24, 2022. [Online]. Available at: https://ctrack.com/za/february-2022-transport-and-freight-index/ [accessed March 21, 2022]. Department of Agriculture, Forestry and Fisheries. 2015. South African veterinary strategy (2015 – 2020), October 2015. [Online]. Available at: https://www.nda.agric.za/docs/media/veterinary%20strategy%2003%2010%202015%20revision%2016(a).pdf [accessed March 21, 2022]. Department of Agriculture, Land Reform and Rural Development. 2021. Official guide to South Africa 2020/21, 2021. [Online]. Available at: https://www.gcis.gov.za/sites/default/files/docs/resourcecentre/pocketguide/7AgricultureLandReformRural Development2021.pdf [accessed March 21, 2022]. Farmers Weekly. 2022. SA’s dire animal health situation is a constraint on livestock production, January 12, 2022. [Online]. Available at: https://www.farmersweekly.co.za/agri-news/south-africa/sas-dire-animal-health-situation-is-a-constraint-on-livestock-production/ [accessed March 21, 2022]. Health for Animals, 2021. Global benchmarking survey 2020, May 2021. [Online]. Available at: https://www.healthforanimals.org/wp-content/uploads/2021/05/gbs2020-report-for-south-africa-final-with-covers.pdf [accessed March 21, 2022]. Independent Online. 2021. Farmers sleep with one eye open as stock theft costs SA R1.4bn annually, February 26, 2021. [Online]. Available at: https://www.iol.co.za/business-report/economy/farmers-sleep-with-one-eye-open-as-stock-theft-costs-sa-r14bn-annually-29972e20-5e9d-4aed-a90c-0bed356ebd61 [accessed March 21, 2022]. Intellidex. 2020. The Public Sector Wage Bill – an evidence-based assessment and how to address the challenge, November 2020. [Online]. Available at: https://www.intellidex.co.za/wp-content/uploads/2020/11/Intellidex-Public-Sector-Wage-Bill-Nov-2020.pdf [accessed March 21, 2022]. International Monetary Fund. 2022. IMF Country Report No 22/37, February 2022. [Online]. Available at: https://www.imf.org/media/Files/Publications/CR/2022/English/1ZAFEA2022002.ashx [accessed March 21, 2022]. National Development Plan. 2012. NDP 2030, Our future – make it work, August 12, 2012. [Online]. Available at: https://www.gov.za/sites/default/files/Executive%20Summary-NDP%202030%20-%20Our%20future%20-%20make%20it%20work.pdf [accessed March 21, 2022]. Stats SA. 2021. Quarterly Labour Force Survey Q3 2021, November 30, 2021. [Online]. Available at: http://www.statssa.gov.za/publications/P0211/Presentation%20QLFS%20Q3_2021.pdf [accessed March 21, 2022]. Stats SA. 2022. South African economy records a positive fourth quarter, March 8, 2022. [Online]. Available at: http://www.statssa.gov.za/?p=15214 [accessed March 21, 2022]. Sunday Times. 2021. Fast Food: Behind the Golden Arches, May 11, 2014. [Online]. Available at: https://www.timeslive.co.za/sunday-times/lifestyle/2014-05-11-fast-food-behind-the-goldenarches/[accessed March 21, 2022]. Transnet. 2021. Integrated report for 2021, October 29, 2021. [Online]. Available at: https://www.transnet.net/InvestorRelations/Pages/Annual-Results-2021.aspx [accessed March 21, 2022]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

The ISI seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. To this end, it has a very active programme of international collaboration, which contributes to its research work as well as participation in conferences and seminars. During April 2022, the CEO of the ISI, Daryl Swanepoel paid visits to various institutions in Sweden and Denmark. He also took the opportunity to meet with South Africa’s ambassadors to Sweden, HE Ms Brigitte Mabandla, and Denmark, HE Ms Fikile Sylvia Magubane. On his visit, Swanepoel also met with leaders of the Social Democratic Parties of both Sweden and Denmark. A particular highlight was a meeting with Professor Jorgen Elklit, who was an international member of the Independent Electoral Commission (IEC) that oversaw South Africa’s first democratic elections in 1994. Swanepoel also engaged with the Olof Palme International Centre and International IDEA. In addition, meetings were held with the following: Institute for Future Studies Swedish International Centre for Local Democracy (ICLD) Global Challenges Foundation Arenagruppen Cevea Worker's Museum Danish Institute for Parties and Democracy (DIPD) University of Copenhagen, Centre of African Studies Arbejdernes Erhvervsrad (AE) The objectives of the visit were to build on existing international partnerships as well as to establish new opportunities for collaboration.

Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute. DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. Author: Daryl Swanepoel April 2022 Content 1. Introduction, background on social cohesion and motivation for survey 1.1. What is social cohesion and why it matters? 1.2. What are the elements of social cohesion? 1.3. What drives social cohesion? 1.4. Obstacles to social cohesion 1.5. Systems to achieve social cohesion 1.6. Conclusion and motivation for study 2. Survey methodology 2.1. Desktop review 2.2. Survey 2.3. Assessment tools 2.4. Limitations of the study 3. Findings 3.1. South Africans remain committed to ‘unity in diversity’ 3.2. South Africa has worrying trust issues 3.3. Emigration could reduce South Africa’s skilled workers by 11 percent 3.4. South Africans don’t sufficiently trust immigrants 3.5. South Africans deeply distrust their compatriots from other parties 3.6. High sense of community provides solid foundation on which to build social cohesion 4. Further discussion, assessment, and conclusions References List of tables Table 3.1.: Reconciliation moving in the right or wrong direction indicated by race Table 3.2.: Level of everyday life integration indicated by race Table 3.3.: Trust differentiation between persons known and met for the 1st time Table 3.4.: Top five emigration destinations Table 3.5.: Trust in people from other parties – based on gender Table 3.6.: Comparative chart on giving patterns of the different race groups Table 4.1.: Assessment of conditions that promote social cohesion Table 4.2.: Evaluating social cohesion in terms of demographic integration, connectedness, and community List of figures Figure 1.1.: Social Cohesion Triangle Figure 3.1.: Percentage of South Africans who are doubtful one nation can emerge Figure 3.2.: Percentage of South Africans wanting the country to unite Figure 3.3.: Percentage of South Africans against association with other racial groups Figure 3.4.: Differentiation based on gender, education, or income considerations Figure 3.5.: Trust of neighbours based on race, age, education, and income Figure 3.6.: Trusting those from other religions Figure 3.7.: Trust for black South Africans Figure 3.8.: Trust for white South Africans Figure 3.9.: Comparison with regard to in-group trust Figure 3.10.: Percentage of population considering emigration – by race Figure 3.11.: Top 5 reasons for emigrating Figure 3.12.: Percentage of population considering emigrating – by age Figure 3.13.: South Africans not trusting African immigrants – based on party affiliation Figure 3.14.: South Africans not trusting African immigrants – based on provinces Figure 3.15.: South Africans not trusting non-African immigrants – based on party Figure 3.16.: South Africans not trusting non-African immigrants – based on provinces Figure 3.17.: Comparison: distrusting South Africans by race and party-political affiliation Figure 3.18.: People willing to trust compatriots from other parties – based on age Figure 3.19.: People willing to trust compatriots from other parties – based on education Figure 3.20.: People willing to trust compatriots from other parties – based on race Figure 3.21.: People willing to trust compatriots from other parties – based on income Figure 3.22.: Percentage of people trusting supporters of the same party Figure 3.23.: Percentage of people willing to trust those from other parties Figure 3.24.: South Africans getting involved in the community – based on age Figure 3.25.: South Africans getting involved in the community – based on education Figure 3.26.: South Africans getting involved in the community – based on income Figure 3.27.: South Africans getting involved in the community – based on race Figure 3.28.: South Africans getting involved in the community – based on party support 1. Introduction, background on social cohesion and motivation for survey South Africa is emerging from a divided past. The obvious division being that of race, where separation between the various race groups was ferociously enforced during the apartheid years. Apartheid was a system of segregation in South Africa that enforced racial separation. After the National Party took power in 1948, the government enforced segregation policies by separating non-white citizens into separate areas with separate public facilities. Contact in everyday life was limited (History, N.d.). The general election in 1994 ushered in a new democratic order in which all citizens were to be considered free and equal, regardless of race, language, religion, and/or sexual orientation. The democratic order that was established in South Africa was the result of a political settlement between the African National Congress, the broader liberation movement, and the then National Party government. The objective of this settlement was to put an end to apartheid and establish a new democracy based on values aimed at removing social and racial discrimination which permeated general society (The Presidency, N.d.). The nation has since been on a journey of reconciliation. Under President Mandela much progress was made in bringing the various racial groups in the country together, but, some argue, reconciliation has stagnated, and fragmentation remains embedded, driven largely by a divisive [social and] political narrative (Tau, 2021). But racism is fuelled by more than just the pigment of one’s skin. There are a myriad of factors that drive wedges between communities – inequality being one. 64% of black South Africans remain poor, 40% of coloured people remain poor and then, on the other hand, 6% of Indians and Asians are poor and only 1% of whites are poor (SAHRC, 2021). Inequality, for example, manifests along racial lines in the health sector, where only 16% of the population is covered by medical aid, 72% of whom are white, 17% coloured, and 10% black Africans (Pikoli, 2021). There are numerous other such socio-economic divisions which could be cited to equal effect. Regional economic instability also exacerbated fragile relations in the country, as millions of migrants, some legal, many illegal, have been driven to South Africa. This has led to many charging these immigrants of “stealing our jobs”, serving to promote xenophobia, often with violent consequences (Matema, 2021). Over the years there have been numerous attempts to assess the state of racial relations in South Africa, as well as attempts to measure socio-economic conditions, including the level of xenophobia in the country. There however seems to be a dearth of measuring instruments, bringing all the elements together with specific intent to promote social cohesion, reconciliation, and nation-building. As discussed in the sections that follow, social cohesion is dependent on all these factors being addressed simultaneously. To this end, the Inclusive Society Institute has resolved to develop a comprehensive Social Cohesion Index or Radar, which will enable policymakers to track progress annually as to headway being made on social cohesion. This report serves as a precursor to such an index. 1.1. What is social cohesion and why it matters “At [the] heart [of social cohesion] is the notion that relationships among members and groups in society are sufficiently good and that all feel a sense of belonging, that they perceive the whole society as greater than the parts, and when differences develop, they can be dealt with peacefully” (Langer et al., 2017). In socially cohesive societies there is generally an “absence of latent social conflict”, for example conflict based on wealth, ethnicity, race, and gender; and “presence of strong social bonds”, for example civic society, responsive democracy, and impartial law enforcement (SFRI, N.d.). “Social cohesion involves building shared values and communities of interpretation, reducing disparities in wealth and income, and generally enabling people to have a sense that they are engaged in a common enterprise, facing shared challenges, and that they are members of the same community” (Maxwell in SFRI, N.d.). The OECD defines a cohesive society as one that works towards the well-being of all in society, “fights [all forms] of exclusion and marginalisation, creates a sense of belonging, promotes trust, and offers its people the opportunity of upward mobility” (SFRI, N.d.). Thus, social cohesion drives long-term prosperity and competitiveness because cohesive societies are politically stable and focus on economic growth. It allows everybody in society to share equitably in its prosperity (Bris, 2014). 1.2. What are the elements of social cohesion? There are a number of dimensions to social cohesion, namely inequality, trust, and identity. Inequality – that is the extent of perceived inequalities within and across groups, which can manifest itself in various forms, such as economic, social, political, or cultural disparities. Social cohesion is threatened when there are high levels of inequalities within a society, because it erodes the relationships within that society, which, in turn, may cause conflict. Trust in others – societal trust is the “glue” that holds societies together. When trust is missing between members of society, it weakens the ability of individuals and groups to cooperate peacefully and to collaborate in order to achieve inclusive economic growth. Mistrust towards state institutions may, for example, fuel violent protests, and similarly, mistrust between individuals and/or groups may cause aggressive behaviour towards each other. Identity – this relates to whether people have a stronger adherence to their national identity vis-à-vis their group or ethnic identity. This is particularly applicable in multi-ethnic communities, more so in countries with a colonial history, such as South Africa. (Langer et al., 2017). Figure 1.1.: Social Cohesion Triangle (Source: Langer et al., 2017) 1.3. What drives social cohesion? The main determinants that drive social cohesion in society are racial diversity, economic inequality, education, historical events, GDP, subjective well-being, and health. 1.3.1. Racial diversity Racial diversity offers a very strong group demarcation. Divisions across ethnic and racial lines is often considered as the main obstacle to social cohesion, as it offers a very strong group demarcation, even more so than gender and/or age. It has a tendency of categorising people into groups, to identify with one group and to draw comparisons across groups (Tänzler & Grimalda, 2018). 1.3.2. Economic inequality Economic inequality generally has the negative impact of income inequality and horizontal trust. This is due to lack of confidence that one will profit from societal progress. As a side note, given the South African environment, there is evidence that immigration has a negative effect on social cohesion in countries with high levels of economic inequality (Tänzler & Grimalda, 2018). 1.3.3. Education It has been found that there is a positive correlation between education and social cohesion. This is because mutual identity and societal cooperation is one of the principle purposes of public education (Tänzler & Grimalda, 2018). 1.3.4 Historical events In line with the idea that cultural values may be lasting, there is evidence that historical events have a long-term impact on social cohesion. Trust is, for example, still lower among ethnic groups in Africa which were most affected by slave trade and colonialism in the past. (Tänzler & Grimalda, 2018). The lasting legacy of apartheid being particularly relevant to South Africa and this study. 1.3.5. GDP Social cohesion has both a direct positive effect on GDP, as well an indirect effect, through the facilitation of better institutions, systems, or the ability to express and live out one’s freedoms. One may consider huge economic costs of inter-racial conflict and war. Similarly, countries whose GDP was more strongly affected during economic crises, typically do not have cohesive societies (Tänzler & Grimalda, 2018). 1.3.6. Subjective well-being There exists a positive connection between well-being and overall social cohesion. Increased trust has, for example, the same impact on life satisfaction as a two-thirds increase in household income (Hellwell & Wang, 2011 in Tänzler & Grimalda, 2018). 1.3.7. Health To illustrate the correlation between social cohesion and health, data from 39 US states show that social cohesion fosters both mental and physical health. It has also been demonstrated that a disinvestment in social capital leads to the rise of mortality rates (Kawachi & Berkman, 2001 in Tänzler & Grimalda, 2018). 1.3.8. Religion On the one hand there is evidence that religious groups and institutions build social cohesion within communities by fostering integration and societal interaction. On the other hand, religious denominations often differ greatly in terms of doctrine, and come into conflict with those in the community beyond their own belief. Often, bonding efforts may have “the opposite effect by increasing group insularity and, in turn, social fragmentation” (Andrews, 2011). 1.3.9. Culture Here too there are two sides to the coin. On the one hand, “acceptance of diversity and the interaction between cultures foster harmonious relations between people [and] enrich their lives. It is not the denial, but rather, the recognition of differences that keeps a community together”. On the other hand, there needs to be mutual respect for the differences, because without such, “communities may turn in on themselves, ultimately leading to their disintegration, decline or disappearance” (Jensen, 2002). 1.4. Obstacles to social cohesion In a study of twenty disadvantaged neighbourhoods in London, the researchers found that, across all the areas studied, “lack of community” emerged as a strong theme. A number of key barriers to building communities emerged from the study. Young people. The participants expressed strong anxieties about young people in their communities, many of whom seemed attracted to gangsterism, disrespect for and destructive crevices between them and older persons. The behaviour was driven by young people that “had nothing to do”, that were bored, and who lacked self-respect, needed self-protection, and did not have sufficient community activities to participate in. The breakdown of the family unit was also problematic in that they wanted to feel connected, which need was not satisfied within the family, driving many to gangsterism and untoward behaviour. Lack of safety. Crime emerged as a strong barrier to the development of solid communities. This is because when crime is rampant in society, people are afraid to go out and interact with one another. High levels of transience. Participants identified the high level of community turnover as a barrier, in that people found it difficult to “get to know their neighbours”. In turn, this affects safety and security, as the ability and willingness to “look out for one another” is diminished. So too, as neighbourhoods became increasingly ethnically and culturally diverse, and in areas of high numbers of immigrants, sensitivity as to the safeguarding of their rights emerged. Racism. Tension between ‘cultures’ is a strong force to divide the community along ethnic lines, which often results in racist incidents and behaviour that contributes to ethnic segregation. Language. Being unable to communicate with one another was felt to be a significant barrier to achieving more cohesive communities, since it contributed to mutual suspicion, feelings of isolation, and lack of interaction between different groups. Lack of activities and information about activities. Activities and events are opportunities to get out of the house and interact with one’s local community. The lack of such activities weakens opportunities to build community spirit. Provision of accessible and affordable/free community spaces. Easily accessible and affordable, even free, community spaces are important for promoting community cohesion and inter-cultural communication. In providing these spaces it is important to ensure that they are not hogged by one ethnic or age group to the exclusion of others. Empowerment and community capacity. Community apathy and over-consultation, with no results, leads many to avoid community consultation or engagement. When people feel that they have no influence over the processes, they feel disempowered and then don’t get involved. Efforts therefore need to be made to build local capacity and devolve power to the community to make decisions about their neighbourhood. Similarly, volunteering is important for the development of communities, but a lack of encouragement, resources, and capacity weakens the ability of local organisations to participate in activities that promote community cohesion. (Bertotti, Adams-Eaton, Sheridan & Renton, 2016). 1.5. Systems to achieve social cohesion According to the Australian Human Rights Commission there are five elements for achieving social cohesion within a country. 1.5.1. Government needs to be ready A socially cohesive society is not achieved overnight. It takes time, and therefore requires from government a long-term commitment to build social cohesion and then to sustain its implementation. Key steps include: Establishing a measure or benchmark capable of measuring progress towards social cohesion on a regular basis. Placing social cohesion at the forefront of government priorities by using strategic planning to align the country’s policies and actions therewith. Assessing the country’s readiness and capacity to build social cohesion. Embedding social cohesion objectives in all policies and processes. (Australian Human Rights Commission, 2015). 1.5.2. Communities need to be regularly engaged in order to understand the issues Government needs to understand their communities and where there is potential for tensions to arise between different groups. They need to: Know their community in order to understand the characteristics of society and how it may change over time. Engage the community in order to identify the existing or potential areas that can strengthen and build social cohesion. Ensure that all voices are heard. Continually identify issues and tensions that could undermine social cohesion. (Australian Human Rights Commission, 2015). 1.5.3. Long-term partnerships need to be established Building social cohesion requires strong partnerships with business, community groups, the police, all spheres of government, and agencies, such as the Constitution’s Chapter 9 institutions. In doing this, government needs to: Identify and understand which partners, across the range of sectors, could help build social cohesion. Develop strategies to make contact and build and engage with the broadest possible range of social cohesion partners. Work collaboratively with partners to identify issues of concern that need to be responded to and demonstrate that they are willing to lead and take action. Ensure sustainable partnerships capable of existing for the long term by keeping in contact with the social cohesion partners and nurturing those relationships. (Australian Human Rights Commission, 2015). 1.5.4. Take place-based, targeted action Building social cohesion requires actions that meet the specific needs of the community. This means that: Communities need to be empowered and capacitated to meaningfully participate in both the planning and implementation activities. Government and their partners need to be prepared and ready to respond quickly to situations as they develop. They need to target programmes that meet specific needs. They need to engage and provide safe spaces for young people in order for them to feel connected to their community. They need to support bystanders to effectively respond to racism. Government needs to develop an effective media and communications strategy, with targeted messages to build social cohesion. (Australian Human Rights Commission, 2015). 1.5.5. Evaluate and share outcomes Government needs to continually evaluate their social cohesion efforts so as to ensure that resources are allocated efficiently and effectively, and that sufficient progress is being made in their social cohesion-building efforts. This requires them to: Work with the community to develop an evaluation framework to measure the effectiveness and efficiency of their actions. Collect appropriate data that will support the evaluation. Regularly review the outcomes achieved in order to draw conclusions as to whether, and how, social cohesion has been influenced through their efforts. Constantly share experiences so as to help others and to learn from the outcomes and processes deployed to achieve their results. (Australian Human Rights Commission, 2015). 1.6. Conclusion and motivation for study Measured against the backdrop of the aforementioned desktop review, it is manifestly clear that there is still a material social cohesion deficit in South Africa, and that the country’s reconciliation and nation-building aspirations remain unfulfilled. 1.6.1. In terms of definition of social cohesion In terms of the definition, there is still substantial social conflict, in terms of wealth, ethnicity, race, and gender. For example, in the recent rioting and looting in KwaZulu-Natal, racial tension between the Indian and black communities in Phoenix raised its ugly head (Naidoo & Nkosi, 2021). There are also regular xenophobic incidents, such as the murder of more than 200 foreign truck drivers in recent years (Ryan, 2021). And there has been a significant rise in gender-based violence (Bosch, 2021). 1.6.2. In terms of the elements of social cohesion With regard to the elements of social cohesion – inequality, trust, and identity: With a Gini coefficient of 63, according to the World Bank, South Africa is the most unequal country in the world (Warah, 2021). A 2019 South African Reserve Bank report suggests “South Africans have relatively low levels of trust in the state” (Moosa, N.d.). The dominance of a racial identity has prevented the forging of a truly common identity (Allie, 2021). 1.6.3. In terms of the determinants for social cohesion South African society is negatively driven by all the determinants required for social cohesion: Racial diversity: The racial segregation caused by apartheid is well-documented. Economic inequality: As previously mentioned, the World Bank has found South Africa to be the most unequal in terms of income inequality. Education: The school drop-out rate is between 37 and 42 percent (BusinessTech, 2020). Historical events: Once again, the history of apartheid and colonialism and its devastating impact on South African society, is well-documented. GDP: The South African economy has been stagnating for a prolonged period, and fails to deliver jobs (RSA, N.d.). Subjective well-being: There is a stark contrast in the subjective well-being of the minority communities, especially the white and Indian communities, versus the black majority. There are also deep intra-community well-being outcomes (Neff, 2005). Health: The disparity in health cover between the various race groups has already been alluded to. 1.6.4. In terms of the obstacles to social cohesion All the defined obstacles to social cohesion remain in present-day South Africa: Lack of community: A relatively recent study into community participation in Khayelitsha, found a lack of community participation due to impediments such as poverty among the community residents, and ineffective police response to crimes (Manaliyo, 2016). Young people: Youth unemployment currently stands at 66,50 percent (Trading Economics, N.d.). Lack of safety: Crime in South Africa remains at very high levels, with crime statistics showing that South Africa remains a “very violent country” (Gifford, 2021). High levels of transience: Informal settlements have increased from around 300 in 2002 to 3200 in 2020 (Mbanga, 2020) and there are around four million migrant workers in South Africa (Stats SA, 2021). Racism: For example, more than a quarter of a century into the new South Africa and the country has still not been able to shed race-based politics (Cilliers, 2021). Language barriers: Since the post-apartheid desegregation of schools, for example, language continues to create learning challenges in the classroom. Many scholars now struggle with language as a learning barrier in the classroom (Friedman, 2019). Lack of activities and information about activities: The South African president has himself lamented that poor communication between government and communities prevails. Using local government as an example, he said that the refraining complaint from citizens was their inability to make contact with their councillors (Ramaphosa, 2021). Under-utilisation of community space: Shackleton and Gwedla (2021), attached to the Department of Environmental Science at Rhodes University, in their analysis of public green spaces in South Africa, found marked inequalities in its distribution and quality between neighbourhoods designated for different race groups during the colonial and apartheid periods, and that it “continues to be reproduced by the post-colonial (and post-apartheid) state”. Empowerment and community capacity: One point to illustrate this is youth empowerment, which “has long been identified as a catalytic tool for tackling youth unemployment and other youth challenges”. But many factors hinder the expansion of such empowerment (DBSA, 2022). This is further illustrated in a master’s thesis by Phendu (2019), where he assessed the state of public participation in the Western Cape. He found, for example, that most ward committee members do not understand their roles and responsibilities. He proposed that the municipalities facilitated regular capacity building programmes with the view to increase ward committee awareness and understanding of municipal functions, systems, and procedures. 1.6.5. Motivation for undertaking the survey To this end, the Inclusive Society Institute has embarked on the project to develop the Social Cohesion Index or Radar for South Africa, as previously mentioned. The survey covered in this report is a precursor to that index/radar, which will be designed around three main themes: Demographic integration Questions in the survey were designed to test the various demographic groups’ (race, religion, political party support, education, income, gender, and age) attitudes towards integration and trust in their fellow South Africans. For all the reasons highlighted in the desktop review above, and given the historical context of the demographic segregation actively pursued by apartheid, to build a cohesive nation, the Inclusive Society Institute is of the opinion that breaking down the ‘silo effect’ is important for social cohesion. Level of connectedness to the country This part of the survey aimed at testing various demographic groups’ attitudes towards emigration. South Africa has a severe shortage of skills and expertise. The economy can simply not afford to lose such skills and expertise on a large scale. In order to understand what social cohesion determinants are at play within the South African environment, the Inclusive Society Institute would like to establish the level of such risk and the drivers behind it. Sense of community This part of the survey aimed at testing various demographic groups’ attitudes towards socialising and working with their fellow citizens from within their communities and from across a range of demographic groups. The Inclusive Society Institute is of the view that a sense of community is important, not only to bring about reconciliation and to promote nation-building, but equally so for purposes of security, safety, and to counteract destructive damage to community assets during times of protest and unrest. 1.6.6. Parting shot It is hoped that this report will serve to further motivate public policymakers and civil society leaders to promote the building of social cohesion in South Africa to a greater extent, and that they move it up on their lists of priorities. This is equally important for purposes of promoting human fraternity, as it is for the sake of rejuvenating the country’s lagging economy. 2. Methodology The research was undertaken in three parts. The research takes a pragmatic view; a concurrent mixed methods research design is employed in this study. This is an approach that involves the use of quantitative and qualitative methods within a single phase of data collection and analysis. This allows both sets of results to be interpreted together to provide a richer and more comprehensive response to the research questions (Saunders, Lewis & Thornhill, 2016). Similarly, Creswell & Creswell (2018) argue that mixed methods research design yields additional insight beyond the information provided by either the quantitative or qualitative data alone. The mixed-method also counterbalances the weaknesses associated with quantitative and qualitative approaches when used separately (Creswell & Creswell, 2018; Johnson & Onwuegbuzie, 2004; Saunders et al., 2016) and leads to greater confidence in the findings. 2.1. Desktop review The first part involved a desktop review aimed at building an understanding of social cohesion: To develop a framework as to what it is, why it matters, and what the elements, determinants of obstacles are. Parallel to this, the author attempted to position the current-day South African social cohesion experience within this framework. 2.2. Survey The second part involved an extensive survey, the Inclusive Society Institute annual GovDem Poll. 2.2.1. Questionnaire The questionnaire for this study focused on the three elements of Demographic Integration, Level of Connectedness in the Country, and the Sense of Community. Questions on these three elements were developed by Ipsos and submitted to the Inclusive Society Institute for approval. 2.2.2. The Ipsos Khayabus The questionnaire was included in the Ipsos Khayabus questionnaire in 2021. The Khayabus is a syndicated study, undertaken twice a year by Ipsos to provide clients with the ability to pose questions to a large sample of South Africans, without carrying all the daunting fieldwork costs themselves. While each participating client pays for the administering of their own questions and receives their own results and the results of the included demographic questions, results are not shared freely, and the findings are treated confidentially to the client and belong to the client. This process can be summarised graphically as follows: 2.2.3. Sampling Stratified random sampling is designed by the Marketing Science team at Ipsos – the sample is firstly stratified by province and then within province by various sizes and types of settlements. Sampling points are chosen at random, and six interviews are conducted in the vicinity of each sampling point, following the random selection rules as determined by the process of random sampling. On each plot/erf/farm, the household to be included is chosen by applying a prescribed random process and within the selected household the individual to be interviewed is also chosen by applying a random process. This process is well-documented and conforms to the ISO standards, which are followed at Ipsos and regularly audited. The stringent rules are designed to ensure that all interviewers follow the same process and that interviewers do not have any influence on the eventual choice of respondent. Marketing Science also produces the maps to enable interviewers to work in the chosen areas. The next graph is a summary of this process: 2.2.4. Interviewing All interviews for the Ipsos Khayabus are conducted by trained and experienced interviewers. Interviews are conducted face-to-face in the homes and home languages of respondents. As a result of COVID-19, interviewers have to adhere to certain procedures: This process ensures that results are representative of the views of adult South Africans and the results are projected to this universe/population. 2.3. Assessment tools To enable an assessment as to the state of social cohesion in South Africa, two tables were developed from the information gathered in the desktop review. The first table allows for a somewhat subjective but informed assessment as to the state of social cohesion in South Africa, as tested against the elements, determinants of, and obstacles to social cohesion within society. The second table draws from the empirical data gathered from a set of questions in the GovDem Poll survey that were designed to test respondent perceptions with regard to the extent of demographic integration (to what extent do South Africans socialise across racial lines), their level of connectedness (their commitment to South Africa as opposed to seeking a future outside of the country), and sense of community (an important element to ensure social stability and order). 2.4. Limitations of the study In terms of the elements and determinants of, and obstacles to, social cohesion, whilst in some respects credible secondary data, such as GDP and unemployment, are readily available and adequate for drawing conclusions, in other respects the data are not. Especially as it relates to the obstacles to social cohesion, empirical data collected via the survey would have been more conclusive than having to rely on a subjective conclusion to been drawn from a desktop study. To this end, however, questions were not included in the survey. This can be corrected in future surveys. 3. Findings 3.1. South Africans remain committed to ‘unity in diversity’ Whilst nearly half of the South African population doubt whether the different groups in South Africa are able to form a single nation, they do believe that they can unite, and live and work together, as fellow South Africans. This was the first principal finding of the survey commissioned by the Inclusive Society Institute. 3.1.1. Doubt as to whether one nation can be formed from amongst the different groups 47,96 percent (nearly half) of South Africans either agreed or strongly agreed with the notion that it is not possible to form one nation out of all the different groups in the country. This finding held true across all race groups, with whites being slightly more inclined to believe it possible, and coloured people being the most doubtful. 42,7 percent of white South Africans thought is not possible to form one nation, whilst 47,45 percent of black South Africans, 54,55 percent of Indian and 55,77 percent of coloured South Africans also thought so. On the opposite side of the divide, 31,44 percent of South Africans disagreed with the notion that it was impossible to form one nation out of the different groups in the country. Stated otherwise, these respondents therefore believed that it was possible to form one nation in South Africa. 15,36 percent of South Africans did not express an opinion either way. Figure 3.1.: Percentage of South Africans who are doubtful one nation can emerge The more educated they were, the more optimistic they were that one nation can emerge from the different groups in the country. Indeed, there is a large differentiation between those with higher education and those without. 40,45 percent of South Africans with higher education were of the opinion that it is impossible to form one nation, whilst this hovered at around 50 percent for less educated South Africans (No schooling: 49,85%, Some high schooling: 50,95%, and those with Matric: 51,09%). There was little differentiation between gender and age groups. However, this did not mean that various race groups were not willing to come together within a diverse, but unified country. Indeed, a minority of South Africans were of the view that race relations in the country were getting worse. Only 29,63 percent of South Africans were of the view that the relationships between the different races in the country were getting worse. 70,37 percent were of the view that the relationships either remained the same (47,64%) or were improving (22,37%). In this regard, 73,55 percent of whites believed that the relationships either remained the same (47,04%) or were improving (26,51%). 70,57 percent of black South Africans believed that the relationships either remained the same (47,76%) or were improving (22,81%). And amongst Indians it was 67,66 percent of the view that relationships were either remaining the same (50,77%) or improving (16,89%). 66,11 percent of coloureds said that the relationships either remained the same (46,38%) or were improving (19,73%). Therefore, the survey seems to suggest that whilst across all races two-thirds or more did not suggest a regression in race relations, they were of the view that a South African construct would not necessarily comprise a single nation, but rather a conglomeration of groups capable of working together under a common South African identity. 3.1.2. But most agree South Africa must unite Most were of the opinion that it was important for all South Africans to unite. 70,53 percent of South Africans either agreed or strongly agreed with this notion, whilst only 13,15 percent either disagreed or strongly disagreed. 2,75 percent did not know. In this regard it was the Indian (80,75%) and coloured (80,76%) South Africans who, in terms of agreeing or strongly agreeing, registered the highest level of concurrence, followed by whites at 75,65 percent and trailed by blacks at 68,24 percent. Figure 3.2.: Percentage wanting South Africa to unite 3.1.3. More agree than disagree that reconciliation is moving in the right direction Whilst the majority of South Africans do not “yet” believe that reconciliation is moving in the right direction, it is encouraging that those who do agree outnumber those who don’t by a significant margin. 44,97 percent of South Africans agree or strongly agree that it is moving in the right direction, as opposed to 27,54 percent who disagree or strongly disagree. 21,27 percent neither agreed nor disagreed, and 6,22 percent did not know how they felt about it. In terms of racial breakdown of the responses, 43,39 percent of whites felt positive about the direction, 46,06 percent of blacks felt positive, and 40,51 percent of coloureds felt that reconciliation was moving in the right direction. At 35,62 percent, Indian South Africans trailed somewhat in this regard. One explanation could be that the survey was in the field at the time of the rioting and looting in eThekwini, during which period there was racial tension in the Indian suburb of Phoenix. Apropos reconciliation moving in the wrong direction, at 27,48 percent and 26,92 percent for white and black South Africans respectively, there was not much between them. Indian and coloured South Africans were slightly more negative, registering 33,05 percent and 31,00 percent respectively. Table 3.1.: Reconciliation moving in the right or wrong direction indicated by race 3.1.4. High level of racial integration in everyday life The survey suggests that there is a relatively high level of integration between the various race groups in the country when it comes to everyday life activities. Moreover, the integration appears not be forced integration, but rather of a voluntary nature, as can be deduced from the table 3.2 below, where there was a high level of enjoyment flowing from such integration and friendships being formed. Table 3.2.: Level of everyday life integration indicated by race Table 3.2 above shows that across the various activities, a majority of the population is integrating as it relates to everyday life activities. Even more encouraging is the trend that replicates itself across all the racial groups. Whilst the hard statistics indicates that the black community is slightly lagging in terms of integration, this should be understood within the socio-economic context of South Africa, where the majority of the poor and jobless are black and thus not within the workplace or able to participate in extra-mural social activities to the same extent as the employed and socially mobile. This is corroborated by the results of the survey, which shows that in terms of having friends from different population groups, high-income earners (at 61,05%) are around 6 percentage points ahead of the overall results; and in terms of entertaining friends from different population groups, high-income earners (at 57,86%) are similarly nearly 4 percentage points ahead of the overall average. What the statistics do tell us, is that the majority of South Africans have commenced the journey towards reconciliation, nation-building and social cohesion. 3.1.5. But, whilst on the decline, racial bias is still alive and kicking Nearly a third (33,44%) of adult South Africans still do not like associating themselves with people from other population groups. This would suggest that the country has still some way to go before it can consider itself to be fully reconciled. It is a high percentage that cannot be left unchecked, lest it festers to the detriment of the vast majority who the survey statistics suggests are committed to building a united, non-racial South Africa. When asked to indicate whether they like associating with people from other population groups, the results show that whites are quite open to it, while Indians feel very differently on the matter. Once again, it is worth mentioning that the survey was done during the period which saw racial tension in the Indian suburbs of Phoenix. This may have had some impact on the results. 28,3 percent of whites indicated that they do not like associating with people from other population groups. Similarly, 33,88 percent of blacks, 41,73 percent of Indians and 33,05 percent of coloureds indicated that they do not like to associate with people from other population groups. Figure 3.3.: Percentage against association with other racial groups 3.1.6. Conclusion South Africa still has a long way to go on its journey towards full reconciliation. The results from this survey show, however, that much progress has been made, with more in the country committed to uniting the country, than dividing it. Most striking is the disconnect between the general negative political racial narrative which drives division, and the realities of everyday South Africans going about their daily business. Whilst many in the political establishment seem to be fuelling division, citizens, in turn, are finding each other at the human level. Politicians would be well advised to focus equal energy on a narrative that aims to build the nation. What still appears unresolved is a national understanding as to the concept of Unity in Diversity and how it relates to the nation we wish to build. Can one nation with an undefined racial identity be formed out of the different population groups, or will it be a nation of cultural cooperation? This question is central to understanding the dichotomy of the survey results, which point to both doubt that one nation can be formed out of the different groups and the strong desire to unite the nation. This is a concept worthy of finding national consensus on in order to develop a unified path for all in the country. 3.2 South Africa has worrying trust issues The trust needed to underpin social cohesion in South Africa is largely absent. South Africans do not sufficiently trust their fellow compatriots. The lack of trust runs across most dimensions, be it race, gender, age, education, or income. It is only the family unit which seems to be holding. This was the second principal finding of the Institute’s survey. 3.21. High trust in family 87,42 percent of South Africans trust other members of their family. This holds true across all racial groups, with more than 85 percent of South Africans of all racial groups indicating that they completely trust or somewhat trust members of their family. The highest level of trust within the family was recorded amongst the whites (90,68%), with the coloureds recording the lowest (85,47%). The level of trust recorded amongst blacks was 87,21 percent, and amongst Indians, 88,19 percent. There was little differentiation based on gender, education, or income considerations. 87,82 percent of men completely or somewhat trust their family members, whereas 87,04 percent of women do. Those with no schooling or some schooling are slightly less trusting than those who have completed matric or who have a higher education (no education: 83,14%; some schooling: 83,97%; matric: 89,93%, higher education: 85,55% completely trusted or somewhat trusted their family). Those with no income recorded an 82,54 percent complete trust in or somewhat trust in their family members, 86,89 percent of those in the lowest income band indicated that they completely trusted or somewhat trusted their family, the mid-income group 87,75 percent, and the highest income group 86,73 percent. Figure 3.4.: Differentiation based on gender, education, or income considerations 3.2.2. Reasonable trust in neighbours From the results of the survey, it is apparent that people have a reasonable level of trust in people within their own neighbourhoods. Overall 62,27 percent of South Africans indicated that they either completely or somewhat trusted their neighbours. However, there were sharp differences amongst the various demographic groups. Racial demographics Whites and Indians have a higher level of trust in their neighbours as measured against their black and coloured compatriots. In this regard 72,95 percent of white South Africans indicated that they completely trusted or somewhat trusted their neighbours. 77,54 percent of Indians indicated such. On the other end of the spectrum this percentage came down to 60,6 percent amongst black South Africans and 60,1 percent amongst coloureds. Thus, a material difference of more than ten percentage points between the former two and latter two groups. This may warrant deeper analysis in future studies. Age demographics The older people get, the more they trust their neighbours. Whereas 58,33 percent of those South Africans in the age group 18-24 indicated that they completely or somewhat trusted the people in their neighbourhoods, this rose sharply to 67,74 percent for those over fifty years of age. For South Africans within the age groups 25-34 and 35-49, the percentages came in at 59,84 percent and 63,44 percent respectively. Education demographics In general, there is little difference in the level of trust of neighbours whether South Africans are educated or not. For those with no schooling, 64,63 percent indicated that they either completely or somewhat trusted their neighbours. Whilst for those with some high schooling it came down quite sharply to 56,75 percent, it again rose to 63,6 percent amongst South Africans with matric and 63,56 percent amongst those with a higher education. Income demographics Lower income earners trust their neighbours significantly less than higher income earners. For South Africans with no household income, only 59,5 percent indicated that they either completely or somewhat trusted their neighbours. This rose sharply to 65,58 percent amongst the highest income grouping. For those in the lower income and middle-income groupings, it was 55,17 and 61,48 percent respectively. Figure 3.5.: Trust of neighbours based on race, age, education, and income 3.2.3. Trust improves as people get to know each other From the results of the survey indicated in the table below, it is apparent that South Africans do not trust people at first sight. It is only after relationships are built, and people have gotten to know one another, that trust develops. There is little differentiation to be made amongst the gender and education demographic groups, but there is quite a stark difference based on race and income. Younger people also take somewhat longer to trust their fellow compatriots than do older people. Table 3.3.: Trust differentiation between persons known and met for the 1st time 3.2.4. Distrust high amongst religious groups Less than half of South Africans indicated that they completely or somewhat trust people from religious groups other than their own. Overall, only 47,1 percent indicated that they did (48,68% of males and 45,70% of females). There are no stark differences between the various demographic groups, although it does appear the more one is educated and earns, the more inclined one would be to trust people from other religions. That said, the difference is only marginal. The most prominent demographic differentiation is that black South Africans indicated a somewhat greater censure of those from religious groups other than their own. Whilst only 45,36 percent from this group completely or somewhat trusted people from other religious groups, those from the white and Indian demographic groups registered just over 50 percent. Those from the coloured community, at just under 55 percent, were most trusting. Figure 3.6.: Trusting those from other religions 3.2.5. Distrust between races still worryingly high Only around 50 percent of those South Africans from the minority communities indicated that they completely or somewhat trusted people from the black community. For those from the white and coloured communities it was just over 50 percent (50,69% and 51,21% respectively). The distrust was somewhat higher amongst the Indians, where only 43,92 percent indicated that they completely or somewhat trusted black South Africans. It should, however, be mentioned that the survey was undertaken at a time of unrest and tension between some Indian and black communities in KwaZulu-Natal, the home of most Indian South Africans. This may have to a degree impacted the results. More alarming was the high level of distrust that the black South Africans have for their compatriots from the minority communities. In this instance, only 41,07 percent of the blacks completely or somewhat trusted their white compatriots, which deepened to only 38,93 percent completely or somewhat trusting their coloured compatriots, and a mere 34,84 percent their fellow Indian South Africans. Complete or somewhat trust for black South Africans from: Figure 3.7.: Trust for black South Africans Complete or somewhat trust for white South Africans from: Figure 3.8.: Trust for white South Africans It is worth noting that, as can be deduced from the aforementioned graphics, the trust-deficit between the minority communities is also not at an optimal level. Similarly, it is worth mentioning that the in-group level of trust is not at optimum levels either. For example, black respondents when asked to what extent they trust their fellow black South Africans, only 54,46 percent indicated that they completely or somewhat trusted their fellow black compatriots. Indian and coloured respondents were somewhat more trusting of people from their group. In this regard 59,97 percent of the Indian respondents indicated that they completely or somewhat trusted their fellow Indian compatriots, whilst this grew to 62,97 percent within the coloured group. The most cohesive group appears to be the white community, since 74,51 percent of white respondents indicated that they completely or somewhat trusted their fellow white South Africans. Figure 3.9.: Comparison with regard to in-group trust 3.2.6. Conclusion Trusting one’s fellow compatriots is crucial for the establishment of social cohesion in a country. Social cohesion is also hugely important for economic development. Sadly, there are worrying trust-deficit trends within South African society. But for high levels of trust within families, disquieting trends endure across all other dimensions. Whilst people have reasonable trust in their neighbours, and whilst they grow to trust people who they have gotten to know, they highly distrust people they do not know. There are also disturbingly high levels of distrust amongst people from different religions and races, also with high levels of in-group distrust in the latter. The current South African society and its economy is rather fragile. It requires a national effort to unite the nation and rebuild the shattered economy. The part that social cohesion is to play in this must not be underestimated. Leaders of society should refrain from divisive narratives and other actions that undermine trust. Its replacement with language and deeds that create unity and confidence, will help. 3.3. Emigration could reduce South Africa’s skilled workers by 11 percent The third principal finding of the survey was that emigration is a material risk to the South African economy. 11,13 percent of South Africans with higher education indicated that they were seriously considering emigrating to another country in the next year or two. For a country that is already experiencing a skills shortage, it would be a serious blow to the economy should an exodus of the magnitude suggested, materialise. The trend is confirmed when cross-correlating the results of South African incomes, where 10,35 percent of the top earners indicated that they were seriously considering emigrating in the next year or two. 3.3.1. Similar trends across race groups It appears that race is not a material driving force behind the motivation to emigrate, since similar trends are found across all the race groups. Whilst white South Africans, at 11,72 percent, reflected a slightly higher desire to emigrate, they were closely followed by their black, Indian and coloured compatriots. Just under 10 percent of black (9,73%) and Indian (9,69%) South Africans suggested that they wanted to emigrate. Though only 8,96 percent of coloured South Africans signalled their intention to emigrate, there is less than a percentage point between them and their black and Indian compatriots. Figure 3.10.: Percentage of population considering emigration – by race 3.3.2. Opportunity: the driving force South Africans indicating their intention to emigrate, were mainly driven by economic and personal well-being considerations. Three of the top five reasons for emigration suggested this. 24,26 percent of South Africans (25,68% of those with higher education and 32,91% of high-income earners) cited better job opportunity as the rationale for their consideration, whilst 8,36 percent suggested overall better opportunity and 5,42 percent cited a better life / standard of living as the reason. Corruption also weighed heavily in their decision (6,71%), as did their desire to experience different societies, cultures, and lifestyles (5,13%). The underlying motivation for the latter was not measured. In considering the overall poll, it may however be deduced that at its core is their inability to achieve self-fulfilment in the current South African environment. Figure 3.11.: Top 5 reasons for emigrating 3.3.3. Younger people are the most vulnerable group As may be expected, given the high youth unemployment statistics and greater flexibility of younger people to emigrate (e.g., single, early stage of career, still building asset base), the aspiration to emigrate seems to reduce the older people become. In this poll it proves to be significantly so. South Africans in the 18–24-year-old category considered emigrating more than three times that considered by those over the age of 50. The results of the survey show that as people get older, their intention to emigrate declines. In the category 18-24 years, 15,91 percent were considering emigration. In the category 25-34 years, it reduced to 11,25 percent. In the category 35-49 years this went down to 8,06 percent. And in the category 50 years and older it was 4,76 percent. Figure 3.12.: Percentage of population considering emigrating – by age 3.3.4. Top five emigration destinations It is mainly developed economies, and English-speaking countries, that seem to appeal to those considering emigration. The outlier is Germany, which came in third, but which, at a ratio of 2:1, is favoured more by white and coloured South Africans than their black compatriots. No Indian South Africans chose Germany as a potential emigration destination. This could possibly be due, in part, to Afrikaans having its roots in the Germanic language, which makes it easier for Afrikaans speakers to assimilate in Germany than other language groups. Also, in modern times, English is widely used in Germany. The top five emigration destinations are indicated in table 3.4 below: Table 3.4.: Top five emigration destinations 3.3.5. Conclusions South Africa is at risk of losing up to ten percent of its working-age population. Of even greater concern is the number of educated and high-income earners considering emigration. For any economy to lose ten to twelve percent of its qualified workforce is problematic, more so in an economy such as ours, which lacks skills and expertise. The risk is real. The South African economy is not providing enough job opportunities for the educated and high-income earners to grow. This against a backdrop of developed economies – including those favoured most by South Africans – that have a qualified jobs deficit and are actively seeking especially qualified individuals to relocate to their shores. The driving motivation behind emigration from South Africa appears, in the main, to be economic and wellbeing opportunity. There is little evidence in the survey to suggest that politics, race, and/or cultural assimilation play much of a role in emigration decisions. Only 1,76 percent of South Africans identified political issues/systems/instability as a motivator. The inherent danger that emigration holds for the current stagnant and job-losing South African economy, is that it is also driving the qualified abroad, which in turn, because of the skills deficit in the economy, further reduces its ability to perform optimally. And optimal performance is needed to expand GDP and employment growth. 3.4. South Africans don’t sufficiently trust immigrants In general, there is not enough trust in South Africa to sufficiently underpin social cohesion. What has emerged as an alarming trend, is the extreme lack of trust that South Africans have in foreigners, be they from Africa or other overseas countries. This is particularly important to take note of, given the sporadic incidents of xenophobia in the country. The lack of trust runs across most dimensions, be it race, gender, age, education, income, or political party. This was the fourth principal finding of the Inclusive Society Institute survey. 3.4.1. Immigrants from Africa Overall, only 31,23 percent of South Africans said they completely trusted or somewhat trusted immigrants from African countries, with only a slight differentiation between men and women. 62,62 percent of male and 62,63 percent of female South Africans either did not trust immigrants very much or at all. Based on race The results of the study made it clear that the Indian and coloured communities in South Africa were slightly more trusting of immigrants from Africa. 57,9 percent of Indians and 54,87 percent of coloured South Africans indicated that they did not trust immigrants from Africa very much or at all. This increased to 62,61 percent and 63,76 percent of white and black South Africans respectively. Based on education The survey results suggest, however, that the more educated South Africans are, the more they are willing to trust African immigrants. 68,27 percent of South Africans with some high schooling either did not trust immigrants very much or at all. For those that had matric it improved to 62,24 percent, and for those with higher education it was 59,71 percent. Based on age and earnings There is little differentiation to be made based on age, with all age bands recording a distrust (not very much or no trust) in the lower 60 percent range. Similarly, earnings did not appear to make much of a difference in South Africans’ attitudes. Based on political party support Amongst supporters from the various political parties, those from the FF+ emerged as the most trusting (with only 45,34% either not trusting very much or at all) and the IFP the least trusting (88,95%). Amongst the three largest parties, although still alarmingly high, the ANC was the most trusting, whilst the EFF was the least. 59,57 percent of ANC supporters, 67,15 percent DA and 68,67 percent of EFF supporters either did not trust immigrants from Africa very much or at all. Figure 3.13.: Percentage of South Africans not trusting African immigrants – based on party affiliation Based on provinces Bearing in mind recent xenophobic incidents that sporadically flared up in, particularly, KwaZulu-Natal (KZN) towards the end of 2020 and into 2021, it was KZN that, when measured at a provincial level, emerged as the most distrustful of immigrants from Africa. 79,68 percent of South Africans from KZN either did not trust immigrants from Africa very much or at all. For the other provinces, the results are indicated in the chart below. Figure 3.14.: Percentage of South Africans not trusting African immigrants – based on provinces 3.4.2. Immigrants from outside of the African continent Overall, only 32,29 percent of South Africans said they completely trusted or somewhat trusted immigrants from countries other than those in Africa, with only a slight differentiation between men and women. 61,03 percent of male and 61,13 percent of female South Africans either did not trust immigrants very much or at all. Based on race The results of the study made it clear that the racial minority groups in South Africa were more trusting of immigrants from outside of Africa, than were their black compatriots. 54,23 percent of white South Africans, 55,41 percent of Indian South Africans, and 51,61 percent of coloured South Africans indicated that they did not trust immigrants from countries outside of Africa very much or at all. This increased to 63,37 percent of black South Africans. Based on education Once again, the survey results suggest that the more educated South Africans are, the more they are willing to trust immigrants. 66,64 percent of South Africans with some high schooling either did not trust immigrants from countries outside of Africa very much or at all. For those that had matric it improved to 60,32 percent, and for those with higher education it was 57,97 percent. Based on age and earnings There is little differentiation to be made based on age, with the trend for all age bands recording a distrust (not enough or no trust) in the lower 60 percent range. Similarly, earnings did not appear to make much of a difference in South Africans’ attitudes. Based on political party support Amongst supporters from the various political parties, those from the FF+ again emerged as the most trusting (with 47,79% either not trusting very much or at all) and the IFP the least trusting (90,37%). Amongst the three largest parties, although still very high, the ANC and DA were neck-and-neck as the most trusting, whilst the EFF was the least. 59,84 percent of ANC supporters, 59,37 percent DA, and 67,36 percent of EFF supporters either did not trust immigrants from countries outside of Africa very much or at all. Figure 3.15.: Percentage of South Africans not trusting non-African immigrants – based on party Whilst supporters from all parties other than the DA appear not to make much of a differentiation between immigrants from within or outside of Africa, the DA supporters were, by quite a large margin, more favourably disposed towards immigrants from outside of Africa, than they were towards those from within Africa. 68,24 percent of DA supporters indicated not very much or no trust in immigrants from Africa, but this figure dropped to 59,39 percent with regards to distrust for those immigrants from outside of Africa. Based on provinces Provincial responses are indicated in the chart below. From a provincial perspective, the same trends remain, more or less, true, for immigrants from outside of Africa as they do for those from within Africa. Figure 3.16.: Percentage of South Africans not trusting non-African immigrants – based on provinces 3.4.3. Conclusion In general, there is a low level of trust between South Africans, from across all demographic groups, be it race, gender, age, education, income, political party, or province, and immigrants. This does not bode well for social cohesion and presents a socio-political risk within an environment which is prone to xenophobic confrontation. The authorities would do well to heed these warning signs and to ensure that social interventions are undertaken to improve relationships between the local and immigrant communities. This should be particularly high on the Kwazulu-Natal agenda, although there are other provinces such as Gauteng, the Eastern Cape, and Mpumalanga where the levels of distrust (not very much or no trust) are also worryingly high. Whilst the general trend holds true for all South Africans not having a strong level of trust in immigrants, be they from Africa or outside of Africa, the notable differences are: South Africans from the minority race groups are significantly better disposed towards immigrants from outside of Africa, than those from within Africa. Whilst South African supporters from all political parties, bar the DA, have a similar disposition towards immigrants from both within and outside of Africa, the DA supporters are significantly better disposed towards immigrants that are from outside of Africa, than those from within Africa. Figure 3.17.: Comparison of distrusting South Africans based on race and party-political affiliation 3.5. South Africans deeply distrust their compatriots from other parties South Africans deeply distrust fellow compatriots who do not belong to the same party as their own. This undermines social cohesion, and points to a high level of political naïveté, in that in a mature democracy people should be able to associate freely at the personal, workplace, and societal level without overt hostility toward those who differ politically. This is particularly unsettling given the country’s past racial divisions, and party support that remains largely divided along racial lines. This needs to be overcome in order to achieve social cohesion and to build a united nation. This was the fifth principle finding of the Institute’s survey. 3.5.1. No party instils trust amongst a majority of South Africans Evidence suggests that South Africans do not trust fellow compatriots who do not share the same political conviction as themselves. This appears to hold true across all demographics, be it gender, age, income, or race. In examining the attitudes of South Africans drawn from the three largest political parties in parliament, it was found that, across all parties, the majority did not trust fellow South Africans who did not share their own political convictions. Only 43,26 percent said that they could completely or somewhat trust people who supported the ANC, whilst this dropped to 33,2 percent for the DA and 32,39 percent for the EFF. Based on gender In all instances, as is indicated in the table below, generally speaking, there was little differentiation to be drawn between the attitudes of South African men and women in this regard. Slightly more of those who could completely trust or somewhat trust supporters of the EFF, were men. Table 3.5.: Trust in people from other parties – based on gender Based on age, education, race, and income In terms of age, whilst older South Africans were marginally more inclined to completely or somewhat trust their fellow South Africans from the ANC and DA, their willingness to completely or somewhat trust people from the EFF dropped significantly. Figure 3.18.: Percentage of people willing to trust compatriots from other parties – based on age The more educated they were, the less they completely or somewhat trusted their fellow South Africans from the ANC. On the other hand, the more educated, the more they were prepared to completely or somewhat trust people from the DA. For the EFF, there were more South Africans with matric who could completely or somewhat trust people who support the EFF, than those with either only some education or with higher education. Figure 3.19.: Percentage of people willing to trust compatriots from other parties – based on education In terms of race, the ANC and EFF continue to suffer a material trust-deficit amongst the minority communities, whilst the DA continues to enjoy high trust amongst them. Whilst an outright majority of white and coloured South Africans indicated that they completely or somewhat trusted people who supported the DA, they do not trust supporters of the ANC or EFF in any significant numbers. Indian South Africans nudge towards a majority trusting DA supporters. However, most blacks indicated that they did not completely or somewhat trust their fellow South Africans who supported any of the parties. 48,35 percent of black South Africans indicated that they completely or somewhat trusted people who support the ANC. The DA and EFF were way off the mark with only 26,71 percent of black South Africans indicating that they completely or somewhat trusted people who support the DA, whilst for the EFF it was 36,63 percent of black South Africans. Figure 3.20.: Percentage of people willing to trust compatriots from other parties – based on race In terms of income, the same trend of not trusting people from the ANC or EFF was, to a large degree, evenly spread amongst all income groups, whilst it appears that the higher the income of South Africans, the more they were able to trust DA supporters. Figure 3.21.: Percentage of people willing to trust compatriots from other parties – based on income 3.5.2. All parties enjoy a high percentage of trust amongst their own supporters All three of the parties can take solace from the fact that they enjoy high trust (that is complete or somewhat trust) amongst those who support them. More than two-thirds of those South Africans who indicated that they support either the ANC or DA, also indicated that they completely or somewhat trust their fellow DA supporters. Whilst the EFF fell short of the two-thirds mark, at 63,61 percent they came close. Figure 3.22.: Percentage of people trusting supporters of the same party 3.5.3. But inter-party trust is completely lacking From the responses recorded, it would appear that South Africans who indicated that they support a particular party, completely or somewhat trust other people from that same party, but they do not completely or somewhat trust people from either of the other two parties. Trusting people from a party other than one’s own appears not to be a feature of the South African political environment. Figure 3.23.: Percentage of South Africans willing to trust those from other parties 3.5.4. Conclusion There appears to be a high level of distrust between the supporters of the various political parties, with the majority of supporters from all parties not being able to completely or somewhat trust their fellow South Africans who supported a different political party. Social cohesion requires citizens to work together and live contently and peacefully amongst their fellow citizens, regardless of their political, religious, or other differences. To this end, a high level of community trust in one’s fellow citizens is required. The survey results suggest material distrust amongst the supporters of the various political parties in South Africa. This poses a risk to social cohesion which political and civil society leaders should take note of and urgently act upon, by factoring it into a more reconciling national narrative. 3.6. High sense of community provides solid foundation on which to build social cohesion Social cohesion requires a high sense of community. It is when a community is socially invested in each other that they will come to the defence of its people, its institutions, and infrastructure in times of need, threat, or tragedy. Furthermore, economists find a positive relationship between social cohesion and economic growth, on the basis that social cohesion improves formal and/or social institutions, which causally drives economic growth (DIE, 2019). In the survey, the sixth principal finding was that there is a high sense of community prevailing in South African society. This positive finding provides a solid foundation on which to build social cohesion in individual communities and the country as a whole. 3.6.1. People are involved in the communities 75,07 percent of South Africans agreed that it is important to get involved in the community where one lives. This sentiment was shared across all demographics, that is gender, age, education, income, political party support, and race. Gender Male and female South Africans were within one percentage point of each other, with 75,49 percent of males and 74,68 percent of females agreeing that it is important to get involved in one’s own community. Age Across all age groups there was a high degree of agreement that it was important to get involved in one’s own community. The commitment to get involved increased as people got older. In the age group 18-24, 72,29 percent agreed, for the 25-34 age group it increased to 74,66 percent, further rising to 75,88 percent for the age group 35-49, and peaking at 77,13 percent for the 50 years and older group. Figure 3.24.: Percentage of South Africans getting involved in the community – based on age Education 68,69 percent of South Africans with a higher education agreed that it was important for people to get involved in their local communities. Although high, this was significantly lower than those with no schooling to matric, amongst whom there was little differentiation. For those with no schooling, 77,44 percent were of the opinion that it is important to get involved in one’s community. For those with some high schooling it was 78,35 percent, and for those with matric, it was 77,48 percent. Figure 3.25.: Percentage of South Africans getting involved in the community – based on education Income The lower the income, the higher the belief that it is important to get involved with one’s community, although the difference was marginal. For those South Africans in the low-income band, 79,93 percent were in agreement, for those in the middle-income band, it was 77,83 percent, which came down to 73,32 percent within the high-income band. Figure 3.26.: Percentage of South Africans getting involved in the community – based on income Race Whilst white and black South Africans were neck-and-neck at 74,14 percent and 74,04 percent respectively, the Indian and coloured South Africans in turn were neck-and-neck, but to a significantly higher degree. Indians recorded 82,92 percent agreement and coloured South Africans 82,16 percent agreement with the belief that they should get involved in their communities. Figure 3.27.: Percentage of South Africans getting involved in the community – based on race Political party Supporters of all parties recorded a high level of agreement with the notion of getting involved in their communities. 90,38 percent of the IFP supporters agreed therewith; and the ANC (80,69%) and DA (81,31%) supporters, also agreed with a significantly higher margin than did those from the EFF (75,38%) and FF+ (71,22%). Figure 3.28.: Percentage of South Africans getting involved in the community – based on party support 3.6.2. Money or active involvement? 50,22 percent of South Africans said they donated money to welfare and/or community organisations, whilst 44,69 percent opted for active work within those welfare and/or community organisations. Gender, age, education There was little differentiation to be made between the giving patterns of the various gender, income, and education groups. Race Here, in terms of donating money to local welfare and/or community organisations, the minority communities gave to a significantly greater extent than their black compatriots. The Indian community placed a particularly high premium on this. In terms of working actively for the welfare and/or community organisations, the white, black, and coloured South Africans also tracked each other at a significantly lower level than their Indian compatriots. This is illustrated in the table below: Table 3.6.: Comparative chart on giving patterns of the different race groups 3.6.3. Community organisations should get more support from local government 67,38 percent of South Africans indicated their belief that community organisations should get more support from local government. There was little differentiation between all demographic groups. 3.6.4. Conclusion A high sense of community is as important for the economy as it is for social cohesion. The result of this survey suggests that this is indeed a feature of South African society. Communities across the country are highly involved in their local welfare and/or community organisations. The trend also holds true across all demographic groups, be they based on gender, age, education, income, race, and/or political party support. The Indian community in particular seems to be highly committed to supporting their local communities, both in terms of donating money and getting involved in the work of the community organisations. In fact, according to the principles of the Quran, Muslims are expected to make a contribution to welfare and donations – it is part of their religion. In terms of the importance placed on getting involved in community life, older people seem slightly more committed than younger people, possibly due to them having more spare time. On the other hand, the wealthier and more educated people are significantly less involved in the local communities, which one could speculate is due to time pressures. Wealthier individuals of course also make a considerable contribution to social wellbeing as taxpayers through the fiscus. What has not been tested, is the extent to which community work takes place across community lines. In terms of social cohesion this is an important element that will need to be tested in future surveys. Given the far-reaching in-bedded potential of working with community organisations, public policymakers will be well-advised to explore deeper ways of partnering with local community organisations in the execution of their social programmes. In the community there is a sense that in this regard, more can be done. 4. Further discussion, assessment, and recommendations In this section we discuss in a summarised manner the findings of both the literature review into the elements, determinants and obstacles of social cohesion from the desktop study and that of the extensive GovDem Survey undertaken by the Inclusive Society Institute towards the end of 2021. In Table 4.1. below, we evaluate social cohesion mainly from the perspective of the characteristics of social cohesion as discovered in the literature review. In certain respects, we have added the findings of the survey as further motivation for our interpretation. Where the evidence, in our view, points to conditions that are conducive to promoting social cohesion, it has been recorded as a positive (+). And where the evidence, in our view, points to conditions that are not conducive to promoting social cohesion, it has been recorded as a negative (-). The interpretation may be somewhat subjective in nature but is adequately corroborated within the detailed findings reported on in section 2 and 3 of this report. None of the elements or determinants required for social cohesion are being adequately met, and only one of the eight obstacles to social cohesion is being met (albeit that the detailed findings suggest room for improvement). Table 4.1.: Assessment of conditions that promote social cohesion In Table 4.2. below, we evaluate social cohesion from the perspective of the three foundational requirements for social cohesion as identified by the Institute: demographic integration, a sense of connectedness to the country, and a sense of community. The basis for the interpretation is the findings from the aforementioned GovDem Poll. Once again, where the results of the survey, as it relates to demographic integration and sense of community, where the majority sentiment was positive, it was recorded as a positive (+). And where the majority sentiment was negative, it was recorded as a negative (-). In terms of a sense of connectedness, the only test was that of emigration. In this regard any loss of skills and capital should be avoided. Whilst single digit percentages may be argued one way or the other, double-digit percentages in an environment lacking skills and capital, will certainly be an indication of a problem. In terms of demographic integration, two of the four criteria tested were recorded as positive. In terms of a sense of connectedness to the country, 11 percent of skilled and high-income workers indicated that they were considering emigrating, thereby attracting a negative score. And in terms of a sense of community, two out of the six trust tests secured a positive finding, one was borderline and three were negative. Table 4.2.: Evaluating social cohesion in terms of demographic integration, connectedness and community The empirical evidence provided through the GovDem survey, in particular, should provide little comfort to those tasked with promoting reconciliation and nation building in South Africa, be they public policymakers or civil society. The bedrock on which to grow a successful economy, and to build a just and secure society, is social cohesion. In many respects, this is, in large measure, lacking within South African society. It is hoped that this report will motivate the country’s policymakers to prioritise programmes aimed at improving social cohesion in South Africa. It requires a concerted, ongoing, focussed and sustainable effort, equal to those efforts deployed, for example, to grow the economy or to improve the country’s safety and security, all of which will come to nought in the absence of social cohesion. In an effort to focus heightened attention and energy on the nation’s quest to overcome its deeply divided past, it will be important for the authorities to continuously evaluate the state of play. To this end they will need a reliable measuring instrument. After all, the economy, social services, and most other deliverables, are measured and dissected on an ongoing basis. And so too should the foundation on which it is all built – social cohesion. The Inclusive Society Institute is committed to develop such a Social Cohesion Index, or Radar, which will assist public policymakers in their task to assess, monitor, and progress social cohesion more effectively. In tracking such cohesion, they would gain the capacity to, on an annual basis, determine the level to which social cohesion has either progressed or regressed; and to establish the degree to which the elements and determinants needed to underpin such cohesion, require attention. References Allie, M. 2021. 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Inequality is fuelling racism in South Africa, says Human Rights Commission [Online] Available at: https://www.sahrc.org.za/index.php/sahrc-media/news/item/2724-inequality-is-fuelling-racism-in-south-africa-says-human-rights-commission [accessed: 28 March 2022]. Statistics South Africa (Stats SA). 2021. Erroneous reporting of undocumented migrants in SA. [Online] Available at: http://www.statssa.gov.za/?p=14569 [accessed: 5 January 2022]. Tau, R. 2021. The only way to stop this spiral of violence and racism is to act decisively on poverty. [Online] Available at: https://www.dailymaverick.co.za/opinionista/2021-07-19-the-only-way-to-stop-this-spiral-of-violence-and-racism-is-to-act-decisively-on-poverty/ [accessed: 4 January 2022]. Tänzler, N. & Grimalsa, G. 2018. Understanding and fostering social cohesion. [Online] Available at: https://www.g20-insights.org/policy_briefs/understanding-and-fostering-social-cohesion/ [accessed: 5 January 2022]. The Presidency. N.d. History and Political Context. [Online] Available at: https://www.thepresidency.gov.za/content/historical-and-political-context [accessed: 4 January 2022]. Trading Economics. N.d. South Africa youth unemployment rate. [Online] Available at: https://tradingeconomics.com/south-africa/youth-unemployment-rate#:~:text=Youth%20Unemployment%20Rate%20in%20South%20Africa%20averaged%2054.21%20percent%20from,the%20fourth%20quarter%20of%202014 [accessed: 5 January 2022]. Warah, R. 2021. COVID-19 has exposed South Africa’s glaring and enduring inequalities. [Online] Available at: https://www.one.org/africa/blog/covid19-exposed-south-africa-inequalities/ [accessed 5 January 2022]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

18 April 2022     Hon. M.L. Dunjwa Chairperson of the Portfolio Committee on Employment and labour   For attention : Ms Esther Tloane Esther.Tloane@labour.gov.za   Mr Bobani Mantombi Mantombi.Bobani@labour.gov.za   Dear Hon. Dunjwa,   WRITTEN SUBMISSIONS ON THE DRAFT EMPLOYMENT SERVICES AMENDMENT BILL   The Inclusive Society Institute   The Inclusive Society Institute (ISI) is an autonomous and independent entity which strives to promote multi-party democracy in South Africa. It does so by conducting policy research and analysis, driving education on democracy and hosting dialogues on relevant topics. Furthermore, the institute cultivates relationships with like-minded local and international organisations to exchange ideas on how to best promote social democracy. The ISI advocates for steps, legislative or otherwise, which support these ideals while voicing its concerns on any measures that encroaches on democratic freedoms.   Background   On 28 February 2022, the Department of Employment and Labour (DoEL) published the Draft National Labour Migration Policy and Employment Services Amendment Bill, 2014 (the draft Bill) in the Government Gazette No. 45962 (GG, 2022). Interested persons were invited to submit comments on the draft Bill within 90 days of publication of the notice.   The ISI welcomes the opportunity to share its comments. In the event the DoEL decides to host oral hearings on the matter, the ISI would like to request that it be given an opportunity to share its comments on the proposed amendments.   The Bill   The draft Bill is an important document seeking to regulate conditions of employment within the borders of South Africa as well as foreign employment of citizens elsewhere in the world. It will have an impact on the livelihoods of millions of South Africans, employees and business owners alike, and on foreigners seeking opportunities in the country. The DoEL is therefore urged to proceed with caution in how the legislation is amended.   Concerns   The ISI’s concerns pertain to the following particular proposed amendment (pg. 10,11 of the Bill):   “2. (b) by the deletion in subsection (2) of the term “and” at the end of paragraph (d) , the insertion of the term “and” at the end of paragraph (e) , and the addition of the following paragraph: “ (f) providing a framework to facilitate and regulate— (i)  the employment of foreign nationals in South Africa; (ii)  the employment of South Africans abroad; and (iii) the reintegration and employment of South Africans residing or working abroad into the South African economy”.   Points (ii) and (iii) of the amendment suggests facilitation and/or regulation of the employment of South Africans abroad and the reintegration and employment of South Africans residing or working abroad into the South African economy.   The Draft National Labour Migration Policy for South Africa 2022 (DoEL, 2022) provides insight to the DoEL’s possible intentions with the proposed amendment:   Regulating the recruitment of South Africans for employment abroad   The overarching intention is to protect South Africans looking for employment abroad against malpractice by recruitment agencies. This includes the regulation of but is not confined to, the fees charged by recruiters.   Providing the necessary legislation to support a coordinated programme through which to retain critical skills and assist the diaspora seeking to return to South Africa in finding employment.   The NLMP suggests a programme which may include incentives for the retention of critical skills.   The amendments will give support to the possible creation of a centralised employment system.   The system will provide a one-stop-shop for both work-seekers and recruiters. It will provide services for South Africans looking for an opportunity abroad as well as a dedicated unit for the placement of South Africans working abroad looking to return. A centralised system will also provide government, and other relevant parties, with necessary data on the country’s labour dynamics and the skill shortages which may exist. This in turn can be used to better direct government investment in specific sectors for example.   The NLMP therefore illustrates the intent of the proposed amendments and how it supports the DoEL’s efforts to assist government in streamlining South Africa’s migration policy. From the ISI’s interactions with experts, concerns however exist that the wording of the amendment does not clearly reflect this. The amendment is vague, ambiguous and contains no link to the draft policy as set out in the NLMP. This leaves the amendment open to future different and possibly damaging interpretations.   It could lead to the following adverse scenarios:   The legislation could be used to limit or prohibit individuals with specific skills from seeking employment abroad. For example, government could use the amendment as a blanket to force medical personnel (doctors and nurses) to work within the country’s borders for a specified period following the completion of their studies. Such a measure is in contravention of Art. 21 of the South African Constitution which affords citizens freedom of movement and residence; and Art. 22 of the same Constitution that states that “Every citizen has the right to choose their trade, occupation or profession freely” (Const.,1996). Therefore, any measure which inhibits South Africans from seeking employment abroad may be interpreted as infringing on their right to choose freely.   Passing regulations which forces South Africans working abroad to adhere to special taxations like contributing to a social fund.   It could allow for strict control over and, to an extreme extent, government interference with recruitment agencies. Limiting their capacity in such a way they are unable to provide the available services to South Africans looking for opportunities outside the country’s borders.   Burdensome regulations could discourage international corporates, who regularly transfer skills between different countries, to invest in further employment in South Africa.   Adding further migration legislation could overlap with work being conducted by other governmental departments. This in turn expands the already bloated civil service without adding extra value.   The proposed amendments further contradict Government’s stated objective of cutting red tape in that it saddles business with more administration and regulations it needs to adhere to. In the 2022 State of the Nation address, President Cyril Ramaphosa announced the establishment of a special unit with the sole mandate of exploring ways to reduce unnecessary bureaucratic systems (Pres,2022). The goal is to support business and employment growth. The proposed amendments will counter these steps. Recommendations   The ISI recommends the following:   Scrap the amendments in its entirety. The benefit the DoEL seeks to gain by implementing the legislation pales in comparison to the dire consequences it may hold for the strained labour market. The vague wording leaves it open to various interpretations and therefore could be utilised for nefarious, or even unconstitutional, purposes. Furthermore, expanding the bureaucratic burden on business in the current economic climate should be avoided.   or;   Adapt the amendment to reflect the DoEL’s specific intentions as set out in the NLMP.   Conclusion   Sweeping amendments to South Africa’s employment legislation will have far reaching consequences. The DoEL should be wary of further burdening the South African labour market which creates obstacles to much-needed job creation. If the department finds it necessary to proceed with the amendments, it should be noted that vague and ambiguous legislation could present dangerous pitfalls for generations to come. Sincerely yours, D.W. SWANEPOEL CHIEF EXECUTIVE OFFICER   ________________________________________________________________________ PO Box 12609, Mill Street, Cape Town, South Africa, 8010 Spaces ▪ 1006 One Thibault, 1 Thibault Square, Cape Town, South Africa, 8001 Tel: +27 (0) 21 201 1589, Email: admin@inclusivesociety.org.za, Website: www.inclusivesociety.org.za, 235-515 NPO PBO 930069173 VP Khanyile (Chairperson), Z Ndevu (Deputy Chairperson), K Millard, K Khoza, S Muller, D Swanepoel (CEO)

Occasional Paper 4/2022 Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute. DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. APRIL 2022 Source: dailysabah.com by Prof William Gumede Associate Professor, and former Convener, Political Economy, School of Governance, University of the Witwatersrand; and former Programme Director, Africa Asia Centre, School of Oriental and African Studies (SOAS), University of London; and author of South Africa in BRICS (Tafelberg Introduction Russian President Vladimir Putin appears to be seeing his historical mission as repositioning Russia as a major global power, taking the mantle from the old Union of Soviet Socialist Republics (USSR). A key part of this mission involves reintegrating parts of the former USSR into Russia. Another is for Russia to re-engage with Cold War allies of the former USSR. This re-engagement is a central element in Putin’s attempt to break Russia out of its isolation from the West – with the country hoping to trade with its former Cold War allies to escape this cut-off state of affairs. Russia has tried to source finance, technology and investments – and buyers for their products – from these new allies. It has focused on selling technology, arms and machinery developed during the Soviet Union-era and now further built on during the Putin era, to these renewed partnerships. Since the end of the Cold War, and the collapse of the USSR alliance, the US-European Union-led Western alliance has dominated global power, institutions and ideas. Putin has been working with other emerging powers, such as China, India and Brazil to foster an alternative global power alliance to that of the dominant US-European Union-led Western alliance. Russia also sees these new allies as critical partners in international organisations such as the United Nations, World Trade Organisation and World Bank. The US-led global hegemony wilted in the aftermath of the 2007/2008 global financial crisis; unilateral military interventions in developing countries, without seeking global consensus; and the often manipulation of multilateral organisations for self-interest, rather than for the greater good of the world. Furthermore, during the 2007/2008 global financial crisis, some of the neoliberal economic thinking that underpinned the US post-Cold War ideology hegemony lost its lustre, when, in order to save economies, companies and livelihoods, Western countries used decidedly un-neoliberal tools, such as state investment in private businesses. Expanding Russia’s borders back to Cold War era Putin believed that the end of the Soviet Union in 1991 was tantamount to the “disintegration of historical Russia”. Putin wants the North Atlantic Treaty Organisation (NATO) – the defensive military alliance – to close military formations stationed in countries that used to be part of the USSR and allies in Eastern Europe, Central Europe and the Baltics, who are now NATO members. Essentially, Putin is arguing for a return to the pre-1997 NATO boundaries – the Cold War country borders. Putin in the past has described Russia and Ukraine as “one nation”. Before the Russian invasion, Putin questioned Ukraine’s right to exist as an independent country. In 2014, after Ukraine deposed the pro-Russian leader in a coup, Russia annexed Crimea, Ukraine’s southern peninsula. Putin has now attacked Ukraine, a country of 44 million, after having amassed troops on the Ukrainian border. Initially, Putin sent troops, which he described as “peacekeeping” missions, to Ukraine’s eastern regions – where two “republics” have been declared by Russian-supporting separatists backed by Russia – but then launched a full-frontal attack on the country. The Russian attack has unleashed the biggest conflict in Europe since the Second World War. Russia opposes Ukraine’s ambition to join the North Atlantic Treaty Organisation (NATO) and the European Union. Ukraine’s President Volodymyr Zelenskyy has asked NATO for “clear, feasible timeframes” for the country to join the 30-country defensive alliance. As part of the strategy to reintegrate the old USSR, Putin, in 2015, reintegrated some of the former economies of the Soviet Union into a regional trade bloc between Russia, Belarus, Kazakhstan and Armenia, called the Eurasian Economic Union. Globally, Putin has also re-engaged with the Cold War allies of the USSR. In addition, Russia has allied with the rising emerging powers: Brazil, India, China and South Africa, in BRICS. Over the years, under Putin, Russia has also been re-engaging with sympathetic former African, Asian and Latin American Cold War-era partners of the USSR. During the Cold War, many newly independent African countries as well as independence movements fighting Western colonial governments allied themselves with the Soviet Union, in opposition to the US and Western countries. After the end of the Cold War, and the breakup of the Soviet Union, its successor Russia withdrew from Africa and other developing countries. Putin has worked hard to re-engage the countries with which it was allied during the independence struggles. Russia is now involved in more African peacekeeping operations than the US, UK and France combined – as the country moves to build its presence and influence, and to secure partners on the continent. Russia sees former Cold War allies in BRICS, Africa and the rest of the developing world also as key allies in international organisations such as the United Nations, World Trade Organisation and World Bank. Putin has attempted to position the post-Cold War world – based on resurrecting some of the Cold War allies of the USSR – as being dominated by a US-led Western alliance, now being challenged by a developing country global alliance including Russia. Breakdown of global rule of law Developed countries have increasingly manipulated global political, economic institutions and laws for purely self-interest, rather than for the global good. This has fostered a global climate where it appears dominant countries can get away with breaking global political, economic, legal and trade rules for selfish motives. Developing countries have less say within global institutions – which set the rules of the global market – whether it be the United Nations, World Bank, International Monetary Fund, International Finance Corporation (IFC) or World Trade Organisation (WTO). For example, since the Second World War, the US has always chosen the president of the World Bank “using the appointment as a vehicle to advance American economic interests, power and development priorities around the globe”[1]. Europeans have traditionally selected the head of the International Monetary Fund. These global development institutions have been criticised for being biased towards Western countries at the expense of African and developing countries, which have little say in the control, policies and ideas of these institutions. In the current global economic system, developing economies do not have the policy independence to use monetary and fiscal policies to stimulate their own economies – lest they face a market, investor and Western media backlash. Many unilateral monetary policies adopted by industrial countries to deal with their domestic crises often destabilise African and developing countries. Global trade rules and laws are stacked against African and developing countries. High tariff and non-tariff barriers in industrial countries block African countries from exporting value-added products – which create more jobs and more wealth for more people – to industrial countries. African free trade agreements with Western countries, such as the Partnership Agreements with the European Union and the African Growth and Opportunity Act with the US, are mostly disadvantaging African and developing countries. Global capital markets are also against many African and developing countries. Western countries regularly come up with unilateral monetary policies, which are destabilising them. For example, these governments often manipulate the value of their currencies to improve their export competitiveness. Following the past global financial crisis, the US Federal Reserve, the European Central Bank and the Japanese central bank introduced quantitative easing in 2015. However, these quantitative easing policies eroded the competitiveness of emerging market economies. The former Reserve Bank of India, Governor Raghuram Rajan, has rightly warned that the US Federal Reserve’s monetary policy was causing spill overs in emerging markets, with seesawing capital flows, volatility and the destabilising of financial markets. When African and developing countries object to global rules stacked against them, they are generally threatened with retaliation, whether that means blocking their products, withdrawal of trade, development aid sanctions, or the political isolation of specific countries. They have few recourses for trade, economic and political disputes with developed countries and are marginalised in the WTO’s Dispute Settlement Mechanism. Inequality between countries in international law Developing countries are also unequal in international law. A case in point being that the US, China and key industrial countries have not signed up to the International Criminal Court (ICC), and their leaders and citizens are not subject to its jurisdictions. Industrial countries’ security, intelligence and police forces commonly operate across the borders of African and developing countries, something which those countries cannot do. US-led coalitions, for example, have frequently used their power in the UN to push through invasions in developing countries’ regimes perceived to be anti-Western – in Iraq, Libya and elsewhere – under the guise of defending human rights. Ironically, these countries support equally evil regimes in other developing countries as long as they are pro-Western. Such decisions are frequently based purely on protecting industrial countries’ commercial interests. The UN was also absent in the descent into chaos last year of Afghanistan when the Taliban took over, and the government and citizens fled the country en masse. Moreover, the UN has been largely silent in the face of China’s continued claims against Taiwan, which the Chinese dragon views as part of it, and not a sovereign country. And in the absence of the UN, it has been left to individual country leaders, the European Union and the North Atlantic Treaty Organisation (NATO), and the G20 to desperately try to persuade Russia to end the war in Ukraine. The central weakness of the UN is the Security Council, which is limited to five permanent members – China, France, Russia, the United Kingdom and the United States – with outsized powers. The five have veto power on key UN decisions. The UN Security Council as it is, is simply not relevant to the changing world anymore. These five permanent members have often abused their power for their own national interests, rather than in the common interests of humankind. The UN’s credibility has been destroyed by those members’ abuse of the organisation for selfish reasons, forcing other countries to turn their back on the organisation as a place where they have a voice. The abuses include the invasion of Iraq, for questionable reasons, and with many countries outside the five permanent members opposing it, and the invasion of Libya, which was also opposed by many countries. The Security Council members have also dominated the election of UN General Secretaries, which means that general secretaries have mostly not gotten wider legitimacy among countries. The idea of a UN Security Council with permanent members is clearly outdated. So far, proposals for reform have been about increasing the number of countries on the UN Security Council – however, the idea of a limited number of countries having veto power should be abolished entirely. The UN should be democratised in such a way that a few countries – or regional blocs – do not dominate the organisation’s decision-making. The collapse in credibility of the UN has given countries such as Russia and China the opportunity to act unilaterally. Unless something is done about reforming the UN, the rule of law at global level will collapse. The decline of the UN has raised the spectre of more copy-cat Russian-like incidents of aggression by powerful countries against more vulnerable ones, making the world even more unstable. The international conditions that made Russia act now The success of US-led coalitions, to use their power in the UN to push through invasions in developing countries’ regimes perceived to be anti-Western – in Iraq, Libya and elsewhere – under the guise of defending human rights, appears to have bolstered Putin to contemplate acting in the same way for self-interests. The global breakdown in rule of law gave Putin the space to launch his invasion of Ukraine. Especially industrial countries regularly launching security, intelligence and police missions across the borders of African and developing countries – in many cases to defend their (industrial countries’) commercial interests – and getting away with it, made the Kremlin reckon that Russia will also similarly get away with it. Putin’s success in annexing Crimea, Ukraine’s southern peninsula, in 2014, without Western intervention emboldened him that a takeover of Ukraine would be grudgingly accepted by Western powers. The decline of the US-led Western global hegemony in the aftermath of the 2007/2008 global financial crisis and the emergence of a multipolar world where power is more evenly spread across the globe, have also emboldened Putin. Furthermore, many developing countries’ people harbour negative sentiment towards the US and allied industrial countries, who were former colonial powers, for their domination of global institutions, politics, markets and laws. The world has seen the economic and political ideas of emerging powers such as China, India, Brazil, Indonesia, Mexico and others rise, resulting in a multipolar global order, which has challenged the US and Western dominated global order. Following Brexit on 31 January 2020, when the United Kingdom left the EU after 47 years of being part of it, the European Union had become less cohesive. The retirement from political office of German Chancellor Angela Merkel, one of the most dominant global leaders in the post-Cold War era, in 2021, almost at the same time as the UK exiting the EU, brought a sense of drift within the EU itself. The US’ shambolic withdrawal from Afghanistan last year, when the Taliban took over, and the government and citizens fled the country in their masses, was interpreted in many industrial and developing countries as the US having lost its global hegemony. Strategists in the Putin circle were confident ahead of the invasion of Ukraine that Russia had built itself a formidable global coalition of supporters that would back them against Western criticisms. Apart from the BRICS trade alliance, Russia had reintegrated into a regional trade bloc in 2015 with former economies of the USSR, such as Belarus, Kazakhstan and Armenia, called the Eurasian Economic Union. Russia had also formed a critical partnership with former allies of the USSR, including many African, Latin American, Asian and Middle Eastern countries. In addition, Putin was emboldened by the fear of Western powers that Russia may unleash the country’s nuclear power arsenal against them – if he faces opposition. Finally, Russian strategists appear to have believed that after amassing more than 100 000 troops on its border with Ukraine before the invasion, the Ukraine leader would surrender quickly without a shot being fired – and that there would be an uprising by pro-Russian Ukrainians in favour of Russia. In fact, it does appear that Russian strategists calculated that the invasion would be quick with very little bloodshed or destruction, that Ukraine would capitulate very quickly, and the West would grudgingly accept the Russian takeover. But they did not reckon on the formidable resistance by Ukraine President Volodymyr Zelenskyy and his people, and the global outrage against the invasion. Unless peace mediation succeeds, the prospect of a guerrilla war looms, like the one that the Union of Soviet Socialist Republics (USSR) faced in Afghanistan in the late 1980s. The USSR was humiliated in that war – a factor which also contributed to the breakdown of the USSR. For another, Putin, a former KGB hardman, seems to have fatally underestimated Zelenskyy as a political operator, because he was a former comedian and actor before he took power. Putin refused to acknowledge Zelenskyy when he was elected president in 2019. Yet, Zelenskyy and his wife, Olena Zelenska, a former screenwriter, are in fact serious politicians. Together, they have built strong partnerships between Ukraine, the West, and the EU and NATO, although Ukraine is not yet a member of either. They have also built strong alliances with other developed and developing countries around the world – while enjoying strong support within Ukraine itself as they tried to reposition themselves, through a Russian satellite, towards the West. The West response: economic war against Russia The Russian President has threatened to unleash a nuclear Third World War if the US, or any European Union or Western country, comes to the military assistance of Ukraine. For fear of a nuclear war unleashed by Russia, a major nuclear power, Western powers have not rushed to the military aid of Ukraine. Instead, they have unleashed an economic war against Russia. French Finance Minister Bruno Le Maire put it succinctly: “We will provoke the collapse of the Russian economy.” Western powers have isolated Russia internationally, launched sanctions against them and impounded the assets of key Russian political leaders, oligarchs and figures associated with Russian President Vladimir Putin. The sanctions are likely to collapse Russia’s finances – which will ironically reverse any military success against Ukraine the country may have thought it scored. The Group of Seven (G7) industrial nations have also excluded major Russian banks from the Society for Worldwide Interbank Financial Telecommunication or Swift system. Furthermore, Germany has said it is ready to disrupt Russia’s giant energy industry, even if it harms Germany itself. Europe gets nearly 40% of its natural gas and 25% of its oil from Russia. Russia’s gas, oil and crucial metals export capacity is one of the main sources of its political and economic power. Germany said it will stop the certification of the Nord Stream 2 gas pipeline, the 1200km pipeline, through natural gas flow through the Baltic Sea from Russia to Germany. The pipeline was completed in September last year, but still requires final sign-off from German regulators. The pipeline, which is controlled by Russian state-owned company Gazprom, will deliver more than 50% of Germany’s yearly gas consumption, making Germany its biggest customer. The US, Ukraine and several European Union countries opposed the construction of the pipeline when construction started in 2015, saying it would give Russia enormous power over European economies. All these sanctions are pushing Russia towards plunging into a banking crisis, with many of its banks on the verge of collapsing. Its currency, the ruble, has collapsed. Russian companies are leaving in their droves or have stopped production. The country will fall into its worst recession since the collapse of the Soviet Union. BRICS have battled over how to respond Russia’s globally condemned invasion of Ukraine has not only stumped the BRICS (Brazil, Russia, India, China and South Africa) trade alliance of large emerging markets, over how to respond, but has also caused deep divisions within these countries. BRICS countries appear to have been left blindsided by the Russian invasion of Ukraine. Many of the BRICS countries have pegged their support for Russia or their neutrality on a likely scenario that the invasion would be quick, with very little bloodshed or destruction, that Ukraine would capitulate swiftly, and the West would grudgingly accept the Russian takeover. For another, the strong world opinion against Russia – even from supposedly Russian allies in African and developing countries – appears not to have been foreseen. Moreover, Western powers have unleashed an economic war against Russia, which is crippling the country, and making a war financially unsustainable. BRICS economies may also face collateral damage in the fallout from the war. The conflict could slash more than US$1.5 trillion off the world economy by disrupting global supply chains, pushing up inflation and driving many economies – including BRICS ones – into recession. Putin, in the lead-up to Russia’s invasion of Ukraine had either met in person or telephonically discussed with individual BRICS leaders, not to tell them specifically about an impending invasion, but to secure assurances of their broad political support or, at worst, neutrality, in a scenario where the Russian bear may fight with a third-party country or a Western power. While Western powers and many developing countries have rightly condemned Russia for invading Ukraine, a sovereign country, the BRICS countries have either refrained from criticising Russia or, like South Africa, have issued a neutral statement – neither endorsing nor criticising the Russian bear – or like India, have abstained from motions carried in the United Nations to censure Russia. China and India have similarly refrained from voting against Russia at the UN. In the BRICS democracies that refrained from supporting Russia, it has caused massive political fallouts between country leaders, from within governing parties and across broader society. In India, the opposition Congress Party, civil organisations and the media have been critical of the country’s “non-aligned” stance towards the Russian invasion. “The Government of India should stop its verbal balancing act and sternly demand that Russia stop immediately the bombing of key cities in Ukraine,” Palaniappan Chidambaram, a leading member of the Congress party, tweeted recently. Before Russia invaded Ukraine, the country’s leader Vladimir Putin had crucial strategic meetings with BRICS partner countries. On 16 February, when Russian troops were massing at the borders of Ukraine, Putin met with Brazilian President Jair Bolsonaro. Putin declared Brazil as Russia’s most important partner in Latin America; Bolsonaro declared that Brazil was in “solidarity” with Russia. Brazil exports more to the US, around US$31 billion in goods, than to Russia, around US$1.6 billion in goods, so Brazil’s “solidarity” pledge to Russia was mostly based on political alliances, rather than business alliances. Bolsonaro had to unprecedently slam his own vice president, Hamilton Mourao, who said that Brazil respects Ukraine’s sovereignty and compared Russia’s invasion of the country to the aggressive acts by Adolf Hitler in the late 1930s in Eastern Europe. The US and North Atlantic Treaty Organisation (NATO) countries have been critical of Brazil’s support of Russia. If Western countries launch sanctions against Brazil for its support of Russia, such sanctions will cripple the country’s economy, which is tightly linked to the US economy. The Russia-India relationship dates back to the Cold War under the USSR. Russian President Putin visited India in December 2021. The visit coincided with the delivery to India of a Russian-made S-400 missile defence system, with a range of 400km, and the ability to shoot down 80 targets simultaneously – one of the most sophisticated surface-to-air defence systems in the world. Around 60% of India’s weapons are Russian-made. The country has adopted a non-aligned stance towards the Russia-Ukraine conflict. India may depend on Russia’s arms, but its economy is tightly interwoven with that of the West. Isolation by Western countries because of India’s support of Russia, would be painful to the Indian economy. Chinese leader Xi Jinping and Putin met on 4 February this year and issued a joint statement in support of each other, which was unprecedented in the range of commitments between the two countries. Reliable sources say that Putin promised to move any armed action to until the Winter Olympics staged in China was over. The irony is, if that was true, the later invasion date gave Ukraine breathing space, not only to help Ukraine to prepare, but also because the post-Winter Olympics date fell in the muddy season, when the country’s roads are almost impossible to navigate, which has provided a hindrance to the movement of the Russian army. Analysts have suggested that China – who was at the start of the conflict deemed to potentially benefit the most out of it, depending on how the Western powers respond to Russia’s invasion – may use it as a cover to act in terms of their Taiwan assertions. China has always claimed that Taiwan is part of China. Now, of course, the global outrage that Russia’s invasion has unleashed, may temper China’s approach to the Taiwan question. Both the Russian invasion and the Western economic war against Russia could also have devastating economic implications for BRICS countries. Clearly, it is in the interests of all BRICS countries to intervene to end Russia’s war against Ukraine, which is not only causing devastation, loss of life and economic destruction to Ukraine, but is also damaging the world economy, and the economies of individual BRICS countries. This group of countries has the most influence over President Putin – and he is very likely to listen to them, rather than to leaders of Western countries. China has so far offered to mediate in the conflict. In a phone call with Putin last week, Chinese President Xi Jinping called for a negotiated solution. BRICS countries should get involved collectively. Source: Wikipedia.org BRICS Leaders (Xi Jinping (China), Vladimir Putin (Russia), Jair Bolsonaro (Brazil), Narendra Modi (India), Cyril Ramaphosa (South Africa) Russia–South Africa relations The ANC government’s support of Russia is based on a combination of factors, which includes being part of the BRICS (Brazil, Russia, India, China and South Africa) alliance. Although direct trade with Russia is important for South Africa, it has larger trade relationships with other Western, developing and BRICS countries. In the 2020 financial year, Russia and Ukraine imported products from South Africa, including citrus fruit, cars, manganese ore, platinum, grapes, apples, pears and wine, to the value of R4.1 billion. At the same time, South Africa imported wheat and mixed grains from Russia and Ukraine to the value of R2.3 billion. Many ANC leaders appear to believe South Africa is under obligation as a member of the BRICS (Brazil, Russia, India, China and South Africa) alliance to support Russia or at least remain neutral against it in the war against Ukraine. South Africa has at the United Nations abstained from voting for tougher sanctions against Russia for invading Ukraine – provoking criticisms from opposition parties, civil society and the media, and South Africa’s Western allies. Many ANC leaders, members and supporters are backing Russia for ideological reasons, as the successor to the Union of Soviet Socialist Republics (USSR) which supported the ANC during its liberation struggle. The ANC is in a tripartite alliance with the South African Communist Party (SACP) and the Congress of South African Trade Unions. The Soviet Communist Party directly supported the SACP during the liberation struggle. SACP leader Blade Nzimande was the first to pledge his support for Russia. The South African Democratic Teachers’ Union, the biggest union in South Africa’s public service and a key component of Cosatu, issued a strong statement slamming Multichoice for blocking Russian broadcaster RT from its DSTV channel 407. Yet other ANC leaders have personal relations with Russia, many of them, such as former SA and ANC leader Jacob Zuma, trained in the former Soviet Union. In the 1970s, Russian President Putin was a USSR military trainer in Africa for the liberation movements such as the ANC, Zimbabwe’s Zanu-PF, Mozambique’s Frelimo and Angola’s MPLA. Many ANC leaders are also deeply involved in Russia’s investments in South Africa – most publicly, for example, the agreement signed by former President Zuma to have Russia build nuclear power stations in South Africa. If that deal had been implemented, it would have benefitted many ANC leaders. A number of ANC leaders, such as Deputy President David Mabuza, have gotten personal largesse from Russian President Putin – in Mabuza’s case, access to medical treatment. Therefore, President Cyril Ramaphosa is under pressure to endorse the nuclear deal his predecessor Zuma signed with Putin. South Africa’s support for Russia risks its isolation as a global pariah, undermining local investment and, ultimately, economic growth – and at a moment when the country desperately needs new resources to tackle poverty, unemployment and stop the country’s rapid deindustrialisation. The problem is, because of South Africa’s close association with Russia, and its refusal to condemn the Russian invasion of Ukraine, a sovereign country, it could become collateral economic damage in the Western economic war against Russia. Western countries, global investors and ordinary citizens may now see South Africa as aiding and abetting Russia. They may turn this into negative market sentiment, withdrawing their investments from South Africa, or not investing here, just when we desperately need foreign investment to lift growth levels to tackle poverty, unemployment and reverse deindustrialisation. South African President Cyril Ramaphosa wants to raise R1.2 trillion in investments over the next five years. Given the perception that South Africa stands shoulder to shoulder with Russia, this investment target will certainly be a distant dream. In fact, the frightening prospect is that South Africa may see an investor and capital flight, if the country is isolated by Western economies because of its closeness to Russia. Russian war against Ukraine: impact on South Africa The war has and will disrupt global production, supply chains and increase logistic costs such as storage. This increases global inflation and therefore depresses global growth. Russia and Ukraine combined produce 28% of the world’s global wheat and 18% of corn. As a case in point, since the Russian invasion on 24 February 2022, the futures price of wheat jumped 27%. Ukraine produces around 80% of the world’s neon gas, a component of microchips used in computer screens and smartphones. Ukraine is also the world’s largest exporter of sunflower oil. It produced 45% of the global sunflower seed and safflower oil output – with Russia second, producing 23% of global output. Ukraine produced 19% of the world’s rapeseed. Russia produces under 20% of the world’s barley. Russia produced 14% of the world’s fertilisers – a crucial input in agricultural production. Russia is, most importantly, the world’s third-largest oil producer. The war in Ukraine has destroyed the country’s food production; and Western sanctions against Russia has meant that exports from there have been blocked. Before the Russian invasion of Ukraine, oil prices were already rising. The Russian invasion has hiked global oil prices further. Depending on how long this war rages on, it will directly and disproportionally impact on the livelihoods of poor South Africans, as it is leading to price hikes, putting pressure on the country’s already squeezed shambolic public finances and dragging down economic growth. The Russian war may bring about financial, political and social crises like the Covid-19-induced ones, which were among the root causes of the violent looting last year. The rise in food prices, depressed economic growth and likely austerity needed to deal with South Africa’s deteriorating public finances – combined with poor public service delivery, lack of action in dealing with corruption, and unresponsiveness from the governing ANC to tackle the country’s pressing problems – could trigger more large-scale violent unrests by the long-suffering poor across the country. The financial fallout from the war will squeeze South Africa’s already perilous public finances. And any post-Covid-19 economic rebound envisaged for South Africa will grind to a halt, or at least go at a slower pace, as the war slows down investments. When Finance Minister Enoch Godongwana tabled SA’s national budget last month, the financial impact on the country of the Russian invasion of Ukraine was not factored in. The war has and will disrupt global production, supply chains and increase logistics costs such as storage. This increases global inflation and therefore depresses global growth – which in turn will depress economic growth in South Africa as well as globally. An example of this scenario already playing out is that shipping delays, storage costs and increased security put on transported products have already increased wheat prices by 50% in South Africa. Prices of inputs to agricultural products have already increased 100% since January last year in the country. Western Cape Agriculture MEC Ivan Meyer said last week that major shipping lines were not accepting any bookings or commodities. Ports in Rotterdam, Antwerp and Bremerhaven were extremely congested due to the time-consuming scanning of containers for explosives, making it hard for South Africa’s agricultural products to reach Europe or Russia. A typical 23-day journey for fruit from Cape Town to St Petersburg in Russia now takes 93 days and damages South Africa’s exported agricultural products. The muti-billion-rand import/export relationship between South Africa and Russia mentioned earlier could come under threat as financial sanctions threaten payments. Oil is South Africa’s largest import. Higher oil prices will increase prices across the economy. Eskom is also likely to increase its electricity prices because of higher diesel prices. Jan Oberholzer, Chief Operating Officer of Eskom, said on Kyknet Verslag on Wednesday evening, 16 March 2022, that if the Russia Ukraine conflict-induced higher fuel prices were to be sustained, it would add R2 billion to Eskom’s fuel costs this year. And it is the poorer South Africans who are most affected by higher oil prices, not only because they spend the most on transport, but also because the rise in price of staple foods due to higher transport costs will disproportionally impact on them. Finance Minister Godongwana did not increase the fuel levy in the National Budget tabled in February. If global oil prices continue to rise, the government may have to decide whether to increase the fuel levy or provide a subsidy to cushion the record oil price increases. Fuel levies currently brings around R90 billion to the fiscus or 1.5% of GDP. The South African rand will also remain under severe pressure. A slump in global economic growth could mean that demand for South Africa’s commodities could be slashed, which on in its own will put pressure on the rand, as South Africa is a major commodity exporter. A dragged-out Russian war, and the resultant uncertainty, will increase the volatility of the rand. South Africa buys oil through the US dollar, the price of fuel depends on the exchange rate, therefore a weaker rand will make it more expensive. Further to this, the Reserve Bank may increase interest rates to curb possible rising inflation – which again may be felt across the economy, from bondholders to car owners. Because of the war, foreign investors are likely to put a brake on any new investments in South Africa or in other emerging markets. During global uncertainty, investors often move their positions from emerging markets. Western governments are also likely to divert development funding away from South Africa and other developing countries to Eastern Europe, which will impact on the critical services provided by many NGOs who have replaced government services in many areas of the country. Russia-Ukraine War: Impact on non-oil-producing African countries A protracted Russia-Ukraine war will bring devastating economic hardships to non-oil-producing African countries, increasing instability, leading to a new wave of mass popular uprisings, coups and terrorist insurgencies across the continent and mass migrations away from local conflicts. The Russia-Ukraine war is causing food price rises, food shortages, and increased energy and transport prices. It will also reduce development funds for Africa from Western countries. It has depressed economic growth in individual African countries. A slump in global economic growth could mean that demand for Africa’s commodities could be slashed – reducing the income of many African countries who depend on single commodities for most of their income. Steep food prices, food shortages and increases in living costs in African countries have often in the past lead to popular uprisings against African governments, as hunger makes people less tolerant of autocratic, incompetent and unresponsive governments. Africa may see devastating food riots. Hard-line religious organisations, populist and separatist groups will take advantage of popular anger against governments fuelled by high food prices, food shortages and diminished development funding, to stage coups, launch insurgencies and country break-ups. Many countries may see a rise in terrorist attacks, as terror movements see an opportunity in the rising economic hardships, to recruit members, serve as alternative service providers and to unleash terror campaigns. Nineteen African countries have consistently supported Russia in its war against Ukraine – this was reflected in the United Nations vote on condemning Russia for its invasion of Ukraine, in which 28 African countries voted in favour, 17 abstained and 1 voted against. Many African countries supported Russia because the former Union of Soviet Socialist Republics supported the independence and liberation movements of these countries during anti-colonial struggle. More recently, Russia has provided troops to shore up autocratic African leaders – countries militarily supported by Russia, has tended to support the country. Russia have also recently sold military hardware, nuclear power and technology, and invested in Africa’s oil and gas developments, often using loan schemes, in which Russia acts both as the vendor and financier – making the recipient of Russia’s largesse locked into Russia’s political sphere. These countries who have supported Russia, are inflicting self-harm on their own economies, unleashing domestic political instability and destroying the livelihoods of their citizens – raising the spectre of a new wave of mass uprisings, regime changes and mass migrations of the hungry to Western countries or to South Africa. African countries are still battling from the Covid-19-induced financial crisis when disrupted global logistical networks, supply chains and business collapses because of lockdowns caused food price inflation, food shortages and increased hunger. The Covid-19-induced African financial crisis reduced the income from Africa’s commodities, following Covid-19 contractions in industrial economies which import the continent’s commodities, causing African countries to experience large revenue losses, leaving up to 30 million people at risk of extreme poverty in Sub-Saharan Africa. The Covid-19-induced financial crisis and African governments’ autocratic responses to the pandemic, have already led to popular uprisings, coups and angry citizens voting out incompetent governments. During the Covid-19 period in 2021 there have been six coups or attempted coups in Africa. There were coups in Mali, Chad, Guinea and Sudan. There were attempted coups in Niger and Sudan. Unrest broke out in eSwatini, in Somalia, Democratic Republic of Congo, Nigeria and Cameroon. Early 2020 saw a jihadist insurgency in northern Mozambique. This year, there has been a coup in Burkina Faso and a failed coup attempt in Guinea Bissau. In a global scenario where there will be food shortages because of the Russia-Ukraine war, industrial countries with bigger purses will buy up most of the remaining food – leaving African countries without the buying muscle with nothing. Foreign investors and uncertainty about the duration of the war, is likely to put a brake on any new investments in emerging markets and Africa. Western governments are likely to divert development funding away from Africa and other developing countries to Eastern Europe – which will impact on the critical services provided by many NGOs who have replaced government services in many areas of the country. Russia-Ukraine War: Impact on oil-producing African countries Russia’s war on Ukraine could boost the economies of Africa’s oil- and gas-producing countries, but only if they tackle endemic corruption in their state-owned resource companies, stop outdated ideological opposition to private sector investment not connected to ruling parties, and equitably distribute the income of resources to local communities to prevent those feeling excluded from sabotaging production. African oil and gas producers have struggled with guaranteeing security of supply of their outputs, which makes them unreliable. It also undermines their ability to take advantage of Western countries and emerging markets seeking alternative sources of supply following global sanctions on Russia, the world’s third-largest oil producer and the largest gas supplier. Africa’s leading oil producers, such as Angola, Nigeria, Libya, Algeria and Egypt; and natural gas producers, such as Algeria, Egypt, Nigeria and Angola, could play a critical role in replacing Russian oil and gas hit by Western sanctions. However, African oil and gas producers will have to overcome their continual supply disruptions, operational inefficiencies and lack of infrastructure, new investment and capital. They will also have to tackle endemic corruption in their resource state-owned companies – which is undermining production, scaring off investors and causing public resentment. Foreign investors have also been reluctant in the past few years to invest in new African oil and gas infrastructure, as the focus, before the Russia-Ukraine war, has moved away from fossil fuels to clean energy. However, following the Russia-Ukraine war, more investment is likely to occur in oil and gas around the world because of global shortages of energy. Because of systemic corruption in the Nigerian state-owned oil and gas industry, many communities have been excluded from the benefits of oil and gas income – and have often actively sabotaged oil and gas production. Nigeria’s state-owned oil company, the Nigerian National Petroleum Company (NNPC), has struggled with corruption, mismanagement and inefficiencies. Investments in many of Nigeria’s oil and gas projects have stalled, as global investors in the recent past switched to cleaner energy investments. Angola’s oil production has declined almost 30% in the last six years, to a 17-year low, because of operational problems at its oil fields, governance problems at the cash-strapped state-owned oil company Sonangol, and lack of upstream investment. Angola has also seen a decline in gas production for similar reasons. The loss-making Sonangol, the country’s state-owned oil and gas entity, has contributed to Angola having Africa’s largest debt crisis. Both Algeria’s crude oil and liquified natural gas each declined exports by 30% in 2020, making the country’s oil output the lowest since 2017 and gas output the lowest since 2002. The decline in Algeria’s crude oil production was because of mismanagement, lack of investment, combined with Covid-19, low economic growth, and more local use of energy because of a rapid population increase. Algerian state-owned company Sonatrach has been riddled with mismanagement, corruption and inefficiencies. On current trends, Algeria may not be an oil exporter within a decade. The Algerian government is reluctant to allow foreign investment – neither help from global bond investors nor the International Monetary Fund – in the energy sector, fearing the country will lose sovereignty over the main income generator. Egypt has been seeking to turn itself into a regional centre for oil and gas trade. The Egyptian General Petroleum Corporation is the state-owned company responsible for oil and the Egyptian Natural Gas Holding Company the state-owned company that controls gas projects. Both state companies have been accused of corruption, inefficiency and patronage appointments – and of striking poor contracts with foreign companies. Tanzania is also strategising how to secure new markets. The Tanzania Petroleum Development Corporation (TPDC) is the state-owned company that manages the country’s oil and gas. Former Tanzanian Minister of Energy and Minerals Sospeter Muhongo alleged that staff of TPDC were incompetent, made corrupt deals and were “thieves”. Mozambique has the third-largest natural gas reserves in Africa. However, it has been systemically unstable politically, which is undermining its gas delivery. Corruption, failure to deliver public services and excluding local communities who are not supporters of the Frelimo ruling party from the benefits of oil, gas and mining investment, have led to widespread opposition against the government, which Islamic insurgents in turn have exploited to launch attacks in the northern Cabo Delgado region, close to the Total-led liquefaction plant being built. In April 2021, Total declared “force majeure” on its gas projects, suspended continued operations and contractors after Islamic militants attacked Palma, a port town in Cabo Delgado. If African countries want to take advantage of the oil and gas shortages brought about by the Russian war against Ukraine, they need to secure stable supply, invest in infrastructure and secure new markets. Corruption, mismanagement and ideological-based decision-making significantly increases the cost of business, inefficiencies and drive away investors. A prerequisite for this is better governance of countries and oil and gas state-owned companies, merit-based appointments in these organisations, tackling corruption and bringing in the private sector as an investor. Russia-Ukraine War: Opportunities for South Africa The Russia-Ukraine war offers new opportunities for South Africa in expanding renewal energy, diversifying local agriculture produce and export, and making military hardware for export. The war has and will lead to an explosion in energy nationalism around the world, as countries will try to ensure they have security of supply from diverse sources, rather than buy it from one source or country, and risk shortages if the outside supplier goes rogue, like Russia did. European countries are now scrambling to find alternative energy sources. This provides a new opportunity for South Africa to not only expand its energy resources for local use, but also for export. One of South Africa’s competitive advantages is that it can produce renewable energy, whether solar or wind, for domestic and export use. South Africa can become an exporter of green energy. However, the government will have to clear up regulatory obstacles, such as preventing companies which generate renewable energy power for their own consumption, from channelling excess power through the Eskom energy grid, meaning their power cannot be used to provide energy for other users. Furthermore, the ANC government must allow private investment to make investments in renewable energy. The governing ANC must ditch the ideological opposition to renewable energy among many of its leaders which has undermined the expansion of the renewable industry. South Africa is also perfectly positioned to take advantage of green hydrogen, generating power through renewable energy such as wind, solar and hydro, by splitting water into hydrogen and oxygen through electrolysis. Green hydrogen could help bring carbon emissions to net zero, “the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere”. Although South Africa has abundant renewable energy resources, we are behind countries such as Australia, Chile and Saudi Arabia in developing green hydrogen. Most of the hydrogen development in South Africa has been pushed by the mining sector, mostly by the platinum group metals, using PGMs in the catalyst plates of fuel cells. However, they are very mine-specific, for example, Anglo American Platinum’s fuel cell electric vehicle or Implats’ fuel cell forklift and hydrogen refuelling station at refineries. Le Riche Burger from PwC rightly said: “Traditionally, South Africa has been a net importer of energy, especially in the liquid fuels and gaseous sector – development of the hydrogen production sector will be pivotal in cementing South Africa’s position as a net exporter of clean energy and major earner of foreign currency to our economy, but also to secure clean domestic energy supply that is de-risked from supply chain disruptions and currency devaluation.” The other lesson from this war for South Africa is to diversify the country’s agricultural production to replace agricultural products imported from abroad. South Africa needs an industrial strategy that diversifies South Africa’s manufacturing and agricultural production, to produce agriculture and products that the country needs, but currently imports. Before the Russian war against Ukraine, many countries cut their defense budgets, redistributing these funds to combat the Covid-19 pandemic. In the post-Russia-Ukraine war world, many countries will also increase spending on military again. A case in point is Germany, who has decided to increase its spending on defense to more than 2% of its economic output – a big policy shift which has been prompted by Russia’s invasion of Ukraine. This offers opportunities for South African state-owned arms manufacturers Denel and Armscor, who have already prior to the Russian invasion of Ukraine increasingly focused on the export market. This means that South African arms manufacturers must aggressively focus on diversifying their markets, beyond the niche markets strategy they are currently focusing on and make their own operations more efficient. South Africa’s southern hemisphere are also seeking new markets following the Russian and Ukraine war. South Africa will have to beef up inefficiencies at ports and rail to help diversify exports – and imports to and from different markets. At the moment, South African companies wanting to diversify their exports, have to both change specifications and requirements for new markets, and deal with inefficiencies in our ports, rails and roads. Conclusion: Lessons for South Africa from the Russia-Ukraine War It is in South Africa’s self-interest to work with its global partners, particularly in the Brazil, Russia, India, China and SA (BRICS) alliance, to help persuade President Putin to end the Russian war in Ukraine – as the impact of the war is threatening an economic downturn, loss of investments and political instability in South Africa. In the new multipolar world, foreign policy is more complex, needs to be more strategic and tightly linked to domestic economic interests, political stability and our constitutional democracy interests. South Africa needs to seek alternative markets for products exported to both countries – and products imported from these countries, such as wheat, vital inputs, such as fertiliser. To support the diversification of South Africa’s exports, the South African government must pursue a diversified foreign policy, which focuses on multiple markets across the world, rather than a foreign policy – as is currently the case – based on ideology, past “struggle” alliances or personal friendships, to make it possible for the country’s producers to secure diversified foreign markets. In the post-Russia-Ukraine war world, South Africa must pursue foreign policy that is strategic to its own economic interests: which will stimulate economic growth, employment and stability at home. This means partnering with other countries not based on the past, ideology and personal connections, but on South Africa’s development, democratic and peace interests. References Addeh, E. 2022. Nigeria: 2022 - Daunting Task Before Nigeria's Upstream Petroleum Regulator. [Online] Available at: https://allafrica.com/stories/202201110225.html [accessed: 4 April 2022]. Africanews. 2018. 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[Online] Available at: https://www.nytimes.com/article/burkina-faso-africa-coup.html [accessed: 4 April 2022]. Meyer, I. 2022. The Impact of Russia's invasion on Western Cape Agricultural Trade. [Online] Available at: https://www.westerncape.gov.za/news/impact-russias-invasion-western-cape-agricultural-trade [accessed: 4 April 2022]. Middle East Monitor. 2020. BP invested $35bn in Egypt, despite widespread corruption. [Online] Available at: https://www.middleeastmonitor.com/20200213-bp-invested-14bn-in-egypt-over-5-years-despite-widespread-corruption/ [accessed: 4 April 2022]. Mitchell, J. 2021. LNG windfalls remain agonisingly out of reach for Mozambique and Tanzania. [Online] Available at: https://www.investmentmonitor.ai/sectors/extractive-industries/gas-windfalls-mozambique-tanzania [accessed: 4 April 2022]. Mwai, P. 2022. Are military takeovers on the rise in Africa? [Online] Available at: https://www.bbc.com/news/world-africa-46783600 [accessed: 4 April 2022]. Nwuke, K. 2021. 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[Online] Available at: https://carnegieendowment.org/sada/55126 [accessed: 4 April 2022]. Saadi, D. 2020. Algeria's 2020 hydrocarbons production to shrink 8% year-on-year: energy minister. [Online] Available at: https://www.spglobal.com/commodity-insights/en/market-insights/latest-news/natural-gas/122020-algerias-2020-hydrocarbons-production-to-shrink-8-year-on-year-energy-minister [accessed: 4 April 2022]. Salaha, M. & Kleinfeld, P. 2020. What’s behind the mass protests in Mali? [Online] Available at: https://www.thenewhumanitarian.org/news/2020/07/10/Mali-protests-Keita-Dicko [accessed: 4 April 2022]. Zumbrun, J. 2019. The U.S. Has Always Chosen World Bank Presidents—Will It This Time? [Online] Available at: https://www.wsj.com/articles/the-u-s-has-always-chosen-world-bank-presidentswill-it-this-time-11546989351 [accessed: 4 April 2022]. [1] Josh Zumbrun (2019) “The U.S. Has Always Chosen World Bank Presidents—Will It This Time?”, Wall Street Journal, January 8. https://www.wsj.com/articles/the-u-s-has-always-chosen-world-bank-presidentswill-it-this-time-11546989351 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute. DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. Authors: Percept and 71point4 Editor: Daryl Swanepoel 7 February 2022 Executive summary Almost three decades have passed since the fall of apartheid, and income inequality persists. Economic growth, equity and social cohesion in South Africa are generally considered poor or regressive despite considerable policy reform aimed at improving these outcomes. In this short report, we unpack and assess potential levers for change that could improve inequality in South Africa. In this document, we reflect on some of the most salient within-country factors for South Africa that could play a role in reducing inequality. The factors were identified through an earlier analysis of multidimensional inequality for the Inclusive Society Institute (see report 1). The within-country factors included in this report are: education; the markets that allow wealth accumulation; and, empowering policymakers (whether national or local) with data for building prosperous cities. Lower levels of education are associated with higher levels of unemployment. Education policies should be quality-focused, placing emphasis on shifts in outcomes (as opposed to inputs only). Financial investment alone may not necessarily improve education outcomes and innovative funding models such as social impact bonds and outcomes-based contracts could be used to incentivise quality. Roughly two-thirds of total inequality derives from inequality in labour market earnings. In the short- to medium-term, Government should continue to create employment through labour-intensive programmes that can absorb the excess supply of low-skilled workers (such as the expanded public works programme). Investment hub funding models where innovation is incentivised are also relevant for job creation. The Jobs Fund provides an excellent example of the effectiveness of targeted job creation funding. Lastly, a focus on supporting the conditions that enable job creation for the bottom 50% of the economically active in the income distribution would have a more direct impact on inequality than economic growth alone. Housing is the main driver of individual and household non-financial wealth today. Making entering the housing market easier (including a well-functioning Deeds Registry Office) is critical to improving housing inequality. Financial markets, namely the credit and long-terms savings markets also need to be better supported in enabling the type of activities that allow for the leverage of existing wealth (e.g., in the form of housing) and the gradual accumulation of wealth (through appropriate long-term savings products). Creative solutions in the areas we now know matter most for inequality, namely education and labour market access and progression, are needed if we wanted to reduce inequality in South Africa. We require both good, simple policies that support the potential routes out of inequality and better implementation of policies that have already been developed. Content Executive summary Contents page List of figures and tables List of information boxes Acronyms and abbreviations 1. Introduction 2. Drivers for growth and job creation 2.1 Improve access to quality education 2.2 Increase opportunities to enter and remain in the labour market 3. Leveraging what we have: capital markets and the facilitation of capital accumulation 3.1 Unlocking the value of the affordable housing market 3.2 Increasing access to developmental credit 3.3 Facilitate long-term savings 4. Growing sustainable cities and communities: Leveraging local government and data 5. How would inequality change if we had higher economic growth? 6. Conclusion References List of figures and tables Figure 1: Framework for assessing multiple dimensions of inequality using a capability approach[1] Figure 2: Real expenditure (in R billions) and growth trends: 2015-2021 Figure 3: Gains/losses to jobs (McKinsey & Company model, 2019)[33] Figure 4: Growth in backlog of title registrations in 2014 and later Figure 5: Cost and effort to obtain a title deed for a house of about R200,000 Figure 6: Credit origination for individuals earning R10,000-R15,000 per month, 2020 Figure 7: Household assets and liabilities in 2020 Figure 8: Developmental credit relative to the gross debtors’ book, 2021-2021 Table 1: Within-country mediators of inequality, drawing on Bucelli and McKnight’s framework[1] with inputs from authors List of information boxes Info Box 1: University of Cape Town's online high school Info Box 2: Investing in human capital to prepare for 4IR Info Box 3: Leveraging data to achieve SDGs Acronyms and abbreviations 4IR 4th Industrial Revolution BER Bureau for Economic Research CRDP Comprehensive Rural Development Programme ECD Early Childhood Development EOF Education Outcomes Fund EPWP Expanded Public Works Programme GAP Graduate Asset Programme GDP Gross Domestic Product GSG Global Steering Group ILO International Labour Organisation LER Learner to Educator Ratio MGSI Microsoft Global Skills Initiative NDP National Development Plan NGO Non-Governmental Organisation NIDS National Income Dynamics Survey NPO Non-Profit Organisation PSETA Public Service Sector Education and Training QLFS Quarterly labour Force Survey SACN South African Cities Network SDGs Sustainable Development Goals SGB School Governing Body UCT University of Cape Town UN United Nations 1. Introduction Almost three decades have passed since the fall of apartheid, and income inequality persists. Economic growth, equity and social cohesion in South Africa are generally considered poor or regressive despite considerable policy reform aimed at improving these outcomes. In a previous report we considered how inequality in South Africa has changed in the twenty-seven years after the end of apartheid. That report set out a diagnostic analysis of inequality in South Africa. In this short report, we turn to potential levers for change for inequality with a view to improving inequality in South Africa. We focus on the dimensions of the multidimensional poverty framework that can potentially provide pathways out of poverty and their relationship to within-country mediators of inequality as per the 2019 framework of Bucelli and McKnight.[1] The dimensions we’ve chosen to highlight here tend to be capabilities in the Multidimensional Human Development approach (Figure 1). Figure 1: Framework for assessing multiple dimensions of inequality using a capability approach[1] Apart from these specific capabilities, enabling conditions created (or not) by the global and local context also influence a country’s ability to reduce inequality. The impact of global factors on inequality can be mediated by within-country factors. For example, the global impact of technological change can be mitigated by a responsive policy environment. A responsive policy environment would enable a country to adapt its workforce as technology changes, to safeguard jobs and income. There are at least seven within-country factors that can mediate (positively or negatively) the impact of global level factors on inequality (Table 1). Table 1: Within-country mediators of inequality, drawing on Bucelli and McKnight’s framework1 with inputs from authors In this document, we reflect on some of the most salient within-country factors for South Africa that could play a role in reducing inequality, either implicitly or explicitly, and moving to a place of greater equality for all South Africans. The factors selected for discussion here were identified through an earlier analysis of multidimensional inequality for the Inclusive Society Institute. Specifically, education and the markets that allow wealth accumulation (economic inequality) offer pathways for the reduction of inequality in South Africa. At a more systemic level, empowering policymakers (whether national or local) with the data for building prosperous cities and communities can have a direct impact on everyday lived experiences of inequality in South Africa. 2. Drivers for growth and job creation “Economic growth since the 2000s has primarily resulted in an increase in income among the high income earners only.[2,3] Increases among the lower 90% have failed to rise substantially.” (ISI, 2021:13)[4] Understanding income inequality in South Africa is important because of its intrinsic link to economic growth and absolute poverty. The degree of initial (in)equality and changes in it during growth heavily determines the poverty reducing effect of growth. Thus, even when poverty is viewed as a more urgent problem than inequality,[5] addressing distributional issues remain critical for anti-poverty policies and interventions.[6] The COVID-19 pandemic has dramatically impacted economies across the globe, and South Africa has not emerged unscathed. The economic impact of the pandemic continues to reverberate throughout the country: In the third quarter of 2021, there was a ~660,000 reduction in employed people compared to the second quarter.[7] During the same quarter, both the narrow and broad unemployment rates increased to 34.9% and 46.6%, respectively. The narrow unemployment rate is at its highest since the start of the Quarterly Labour Force Survey in 2008 and approximately one out of every two economically active people are unemployed. The pandemic has amplified the already-urgent need for South Africa to stimulate its economy to prevent (and reverse) a further rise in poverty and extreme income inequality. The National Development Plan (NDP): 2030 (written in 2011) clearly lays out the need for robust economic growth in South Africa. It suggests that some of the ways this can be achieved is through (non-exhaustive list) (1) incentivising job creation (for example, making it mandatory for tenders over R10 million to include a job creation aspect); (2) building skills in the youth such that they are able to enter and thrive in the labour market (see MGSI in Info Box 2) and (3) by helping citizens to save money to provide a safety net during difficult times.[8] Another key suggestion was the improvement and building of infrastructure that would allow South Africa to increase its exports. In a compendium of essays published by the Bureau for Economic Research (BER), Fourie and Moloi (2020) show that progress on the NDP goals relating to economic growth and job creation have not been met. South Africa had an average economic growth rate of 0.8% between 2015-2019, whereas the NDP targeted 5.4% average annual growth rate between 2011-2030. Similarly, the NDP targeted an unemployment rate of 14% for 2020, while data shows the 2020 4th quarter unemployment rate to have been 32.5% - well off the stated target. The enabling conditions under which the benefits of the NDP would have been realised, even if the NDP had been fully implemented, have not occurred. Global factors like COVID-19 have created pressures on the South African economy that have made reach of the NDP targets very difficult. However, the dismal outcomes are largely a result of policy failures. The NDP speaks to many of the goals that the UN’s Sustainable Development Goals (SDGs), a global policy initiative, is trying to achieve. The SGDs were determined in 2015 and agreed to by all UN-member states. The intention was to create impetus behind core areas that would promote well-being (for humans and the planet), prosperity and peace.[9] South Africa is also a signatory to the SDG’s and has a commitment to report on its progress in this regard. All 17 of the SDGs will have a positive impact on inequality and the achievement of one (for example, SDG4: Education) will have positive knock-on effects on others (for example, SDG8: Decent work and economic growth). The most direct ways to increase economic growth are through improved education and increasing the employment rate. 2.1 Improve access to quality education “Of the 6.7 million unemployed persons at the end of 2019, 56% had education levels below matric, followed by those with matric at 34.7%. Only 1.9% of the unemployed persons were graduates while 6.8% had other tertiary qualifications as their highest level of education. This suggests that lower levels of education are associated with higher levels of unemployment.” (ISI, 2021:30)[4] As a key conversion factor that influences whether people are able to move out of poverty, improving access to quality education should be a key policy priority.[10] In Section 6 of the first ISI report on inequality,[4] we describe the major impact of poor early childhood development and low quality basic education on an individual’s chances of finishing matric and successfully entering the job market. The evidence provided makes it clear that education and access to jobs are intimately linked and that without good quality education, one’s job prospects – and therefore earning potential – are weak. Here we provide examples of models that demonstrate how education quality can be improved through initiatives in the public, private and public-private sectors. Novel funding models could remove financial barriers to accessing quality education during early childhood. Low household income is often a barrier to accessing quality early childhood development (ECD) centres.[11] In an effort to mitigate this barrier, the Innovation Edge, an investment hub for social entrepreneurs working in the ECD space, invested in a start-up called ‘Early Bird edu-care’ (“Early Bird”). Early Bird has a novel funding model which uses cross-subsidisation to bring quality ECD to children irrespective of income. The model works by using the revenue from their ECD centres situated in big corporates or middle-income housing estates to subsidise their ECD centres that are situated in affordable housing developments. Class size and assessment quality are pillars of this model: The ECD centres have fewer than 24 children per class and the children are assessed regularly using a standardised tool to ensure that their learning adequately prepares them for entry into grade 1.[12] There is value in innovation and investment hubs for education start-ups, as demonstrated in a technical report authored by van der Elst (2016) and funded by MIETAfrica.[13] The report highlights that the sector composition of the start-up funding source matters and specifically recommends that innovation hubs should be co-funded by the public and private sectors. Furthermore, the report stresses that emphasis should be placed on innovations that show potential to have large impact. The Innovation Edge, and the Early Bird Edu-centre example, provide evidence of the value of these models in improving access to quality education, and ultimately reducing inequality by levelling the education playing field. Low investment in the basic education space is a threat to South Africa’s aim to achieve equality and needs to be revisited. Even though the number of learners finishing matric has increased from 30% in 2011 to 45% in 2018, Government expenditure (real) on Basic Education (Grades 1-12) between 2015-2021 has shown average growth over the period of 1.07% and between 2019-2021, annual growth has dropped below 1% (Figure 2).[14] Figure 2: Real expenditure (in R billions) and growth trends: 2015-2021 Source: UNICEF 2019[14] Provincial variation in public sector education investment necessitates innovative learning and teaching models. The public-school learner to educator[1] ratio (LER) is lowest in the Northern Cape, at 28.5 learners per educator and highest in Limpopo (32.1). When only government-funded educators are counted, Gauteng (36.9) and Western Cape (35.3) have the highest LER. Because public schools in these two provinces have been able to supplement the government-funded educators with additional educators funded by the school governing bodies (SGB), they have been able to reduce their LER, which improves the quality of education.[14] Therefore, provincial income inequality (which would drive whether the SGBs are able to supplement the government educators), also has a bearing on education quality inequities. Info Box 1 describes a new initiative, spearheaded by the University of Cape Town (UCT), which aims to improve access to quality basic education through an online high school programme. Key features of this innovation include being scalable, using a subsidised fee structure and establishing micro schools where needed. Education policies should be quality-focused, placing emphasis on shifts in outcomes (as opposed to inputs only).[18] Financial investment alone may not necessarily improve education outcomes. Even if Government did provide more funding for the Basic Education sector, if that funding was not used to support initiatives that actively improve education quality and learning outcomes, the investment would not have the desired impact. Unfortunately, this has been the case in South Africa and hence the quality of education in its public schools remains a primary driver of inequality. In recent years, there has been interest by the donor community in outcomes based funding for education (the same has been tested in the health sector for over a decade).[19] The premise of these funding models (which include results-based financing, outcomes based contracting, social impact bonds and pay for performance amongst others) is that it incentivises stakeholders to focus on the activities that have the greatest impact on the desired outcomes. The incentives are financial and are given only if the outcomes are achieved. There is a substantial amount of evidence around both the value and the difficulties of introducing these types of funding models. Given the austere economic climate, Government should experiment with social impact bonds to improve learning outcomes. The international Education Outcomes Fund (EOF) provides funding for and facilitates partnerships to improve learning outcomes across the globe through social impact bonds. The World Bank has also recently advertised for a partner to support them on a social impact bond for ECD in Uzbekistan. In South Africa, the Bertha Centre (affiliated with UCT’s business school) is playing the secretariat role for the new ‘National Task Force for Impact Investing’.[20] South Africa has also joined the Global Steering Group (GSG) for impact investing, the first African country to join. The GSG aims to leverage Government, private sector, and donor funding to allow developing countries to experiment with social impact bonds to improve social outcomes. The time is ripe for South Africa to use its position in the GSG and the local National Task Force to test innovative funding models that may improve education outcomes. Public, private and NGO partnerships aimed at reducing education inequality are proving to be successful. Many private sector companies are working to reduce education inequality in South Africa by partnering with non-profit organisations, charities, or non-governmental organisations. One example of a private sector collaboration is Investec's partnership with Kutlwanong Centre for Maths, Science and Technology. In this partnership, Investec sponsors quality tuition and education to disadvantaged learners in South Africa, which is delivered by Kutlwanong.[21] This initiative helped to support 224 learners in achieving distinctions in maths and 459 learners with achieving distinctions in science in 2019. Liberty’s partnership with non-profit organisations (NPO’s) Nalibali, BookDash and WordWorks provides yet another example. This collaboration has brought about the Yizani Sifunde project, which is aimed at addressing literacy problems in the Eastern Cape through making English and isiXhosa books available for ECD centres.[22] Reaping the rewards of improving access to quality in education in South Africa will take time and is only likely to be realised in the long run. Yet the impact of unemployment, poverty and inequality are felt right now by all South Africans. For these reasons, government policies should simultaneously implement interventions directly targeted at the labour market, specifically increasing opportunities to enter and remain in it. 2.2 Increase opportunities to enter and remain in the labour market “Roughly two-thirds of total inequality derives from inequality in labour market earnings and that half of this is related to the very high levels of unemployment in South Africa.” (ISI, 2021: 13)[4] In ISI’s first report on inequality,[4] we described how high levels of structural unemployment drives poverty and income inequality. Therefore, one of the most impactful ways to decrease poverty and inequality is to increase job opportunities in South Africa. This has been a stated aim of the South African Government since the start of our democracy and yet, the National Development Plan’s 2030 target of 6% unemployment still remains far out of South Africa’s reach.[8,23] In the short- to medium-term, Government should continue to create employment through labour-intensive programmes that can absorb the excess supply of low-skilled workers. The expanded public works programme (EPWP) is one of the long-established government programmes aimed at improving employment rates amongst low-skilled South Africans through labour-intensive programmes.[24] The EPWP focuses on job creation across four sectors (infrastructure, non-state, environment & culture, and social). So far, the impact of the EPWP has been positive, improving multiple poverty metrics and increasing job opportunities for participants. In two studies, based in Ekurhuleni district (Gauteng) and KwaZulu-Natal province, participants indicated that their earnings, employability, and skills increased as a result of the EPWP programmes.[25,26] They were also able to purchase more non-consumables, technology, clothing, toiletries and accommodation- which produces a knock-on positive effect on economic growth. Investment hub funding models where innovation is incentivised are also relevant for job creation. In 2011, the ‘Jobs Fund’ was launched in order to address high unemployment rates in South Africa.[27] The Jobs Fund received R9 billion in capital to co-finance projects that resulted in the creation of jobs (another innovation and investment hub type of offering).[27] The aim was to overcome barriers by leveraging the networks of the public, private and NGO sectors to unlock opportunities for employment and investments that would create jobs down the line.[28] Jobs created through investment hub funding models should be targeted at the most disadvantaged. The Jobs Fund has successfully generated ~282,773 jobs, of which 98% went to previously disadvantaged individuals.[28] Furthermore, 57% of the jobs went to women and 64% to young people.[28] Several promising innovations have been created as a result of the Jobs Fund. Fetola’s Graduate Asset Programme (GAP) received R8 million from the Jobs Fund; they place graduates who are unemployed in internship programmes and provide them with support to ensure that they excel.[29] This allows early graduates to gain experience, and benefits companies by employing new employees (who are supported in their learning by GAP) at a lower cost. By 2015, approximately 24,000 graduates were placed in internship positions in 8,500 businesses, and 8,000 (30%) of these were later offered permanent positions.[29] The Government created and funded Jobs Fund, and initiatives like Fetola’s GAP, provide a useful case study for the value of targeted job creation funding. The Job Fund’s ~282,773 newly created jobs represent 2% of the 14.5 million employed people in South Africa. One of the Job Fund’s partners, Harambee, specifically focuses on unemployed youth (youth make up ~57% of the unemployed economically active group). Harambee’s research shows that between 2021-2026, there will be 3 million new young people who are actively seeking work. Supporting organisations like Harambee can help transform South Africa’s youth unemployment rate, and thereby decrease inequality. Given 4IR, South African youth need to be prepared for employment in a digital job market. The South African Government has acknowledged the ‘4th industrial revolution’ (4IR) and the changes this shift to a more digital and technology-centred environment may create for the country. In 2020, the Presidential Commission report on 4IR was made publicly available for comment.[30] The report lists the following recommendations for South Africa[31]: Invest in human capital development; Establish an Artificial Intelligence Institute; Establish a platform for advanced manufacturing and new materials; Secure and avail data to enable innovation; Provide incentives for future industries, platforms and applications of 4IR technologies; Build 4IR infrastructure; Review and amend (or create) policy and legislation; and Establish a 4IR Strategy Implementation Coordination Council in the presidency. The most pertinent 4IR policy recommendation in the South African context is to invest in human capital development. There are concerns that along with the 4IR, massive cuts to low-skilled labour jobs will come, deepening inequality in the country. The International Labour Organisation (ILO) has recommended a ‘human-in-command’ approach to the new job roles that are bound to arise. Given that South Africa is in its nascent phase of 4IR thinking, there is an opportunity to engage with workers, unions, public and private sectors to craft the 4IR workforce such that jobs are safeguarded and evolve with the technological change.[32] The 2019 McKinsey & Company report is often cited when considering the trade-off between technological change and jobs.[33] In their model, the authors suggest that the shift to digitisation that the 4IR brings could result in a nett increase of 1.2 million jobs by 2030 (Figure 3). Their model also shows an increase in South Africa’s GDP to 3.5% as a result of digitisation.[33] The ‘step-up’ jobs denoted in Figure 3, refer to jobs that are created if the Government decides to improve infrastructure (a pre-requisite) to ready itself for 4IR. Therefore, some of the new jobs are as a result of improving country-wide infrastructure, rather than the introduction of new digitised ways of working itself.[33] Having stated these estimates, we need to add this caveat: it is also likely that technological change in the context of a developing country like South Africa with chronic structural unemployment (surplus of low-skilled workers and scarcity of highly skilled workers) may see most of jobs being shed in the middle of the income distribution. Figure 3: Gains/losses to jobs (McKinsey & Company model, 2019)[33] Initiatives preparing youth for 4IR should target unemployed youth who have the least chance of accessing such opportunities. In Info Box 2, the Microsoft Global Skills Initiative (MGSI) is described. This global initiative is spearheaded by Microsoft, and in South Africa Microsoft has partnered with the Public Service Sector Education and Training Authority (PSETA) and the non-profit Afrika Tikkun to realise its goal of preparing unemployed youth for the digital job market. Joint public, private and non-profit sector collaborations such as these are crucial in preparing the labour market for the changes the 4IR will bring. 3. Leveraging what we have: Capital markets and the facilitation of capital accumulation “Housing is the main driver of individual and household non-financial wealth today.” (ISI, 2021:22)[34] South Africa has an exceptionally high concentration of wealth, with the top 10% earning more than 85% of the wealth.[35] Generational wealth, where wealth is passed down from one generation to another, perpetuates inequality through making it easier for young people of generationally wealthy families to enter the capital market and accumulate assets before their peers. Income is generated from these accumulated assets. Given South Africa’s apartheid history, those with access to generational wealth tend to be White- reinforcing the income inequality across racial lines experienced in South Africa.[35] Unsurprisingly, capital accumulation including housing and pension savings are very closely tied. South Africa is regressive in its facilitation of the accumulation of wealth for those previously from formal economic opportunities (evidenced by the demographic make-up of the unemployed population). However, there may be potential opportunities for unlocking the value of existing assets (like the affordable housing market), more opportunities for developmental credit through which South Africans can grow income generating capabilities and assets, and policy and market development work than can be done to expand capital accumulation through long-term savings and pensions. 3.1 Unlocking the value of the affordable housing market In ISI’s first report on inequality,[4] income in the affordable housing bracket was seen to be typically under-valued, leading to an under-estimation of households’ total wealth. Property prices in areas that have been overlooked are increasing, creating incentives for households, lenders and municipalities. In Khayelitsha, for example, median house price value rose from less than R200,000 in 2012 to R250,000 in 2015.[36] Having a title deed to a property, even a government built and funded property such as properties provided through local government housing programmes, is the only way households can leverage the value of their house to accumulate further wealth through borrowing. Effort and focus are required to eradicate the title deed backlog and prevent further title deed backlogs. The total title deeds backlog estimated at over 1.1 million units (Affordable Housing Institute, undated) is a significant challenge in enabling households to leverage the wealth of their housing. The Title Deeds Restoration Grant was established to eradicate the backlog,[37] but this has largely not been effective. At the same time, the backlog in finalising title deeds after 2014 continues to grow (Figure 4). Barriers to transfer include underlying township establishment and proclamation problems which can be difficult to resolve. In addition, beneficiary administration is complex. Given the progress of time, self-reported owners living in the properties are often not designated beneficiaries. Figure 4: Growth in backlog of title registrations in 2014 and later Source: National Treasury ENE various years, CAHF Beyond the primary title, the current legal processes and systems to maintain title over time are inaccessible for the poor and these should be simplified and reduced. For a house with a value of about R200,000, conveyancing fees can cost in the order of R9,000 (Figure 5), compared to a transactions cost of around R300 when the sale is done in the informal market. Other constraints in the formal sales and transfer market include the costs of municipal arrears (which can be extensive), a certified copy of the title need costing around R3,000 and various other search and travel costs. Figure 5: Cost and effort to obtain a title deed for a house of about R200,000 Source: 71point4 and The Centre for Affordable Housing Finance in Africa 3.2 Increasing access to developmental credit Levels of credit access in South Africa are high. It is a market that could be characterised as “Easy In”. During the first quarter of 2008, 57.7% of the total adult population (29.9 million at the time) were credit active. By the end of quarter 1 in 2021, the relative share of the credit active adult population had increased to 69% (of total of 39.9 million adults at the time).[38–40] Credit isn’t necessarily a problem. The question, however, is whether the nature of the credit allows adults to accumulate wealth over time. Most of this credit taken up by lower- or even middle-income households (in a relative sense) is not the type of credit that allows for wealth accumulation (Figure 6). Most credit extended to these households in 2020 was unsecured credit (R10.7 billion), followed by secured credit for vehicle financing (R7.8 billion). It is not clear what unsecured credit is used for but most of this is likely to go towards consumption purposes. Figure 6: Credit origination for individuals earning R10,000-R15,000 per month, 2020 Source: NCR Consumer credit report. Mortgage 12.5%, 240 months, vehicle 14%, 60 months, unsecured 25%, 24 months, facility 25%, 12 months Does credit serve the people? South Africans are over-indebted and under-leveraged at the same time (Figure 7 shows the under-leveraging), with the value of potentially wealth-supporting liabilities such as mortgages being much lower than the value of residential property (both registered and unregistered) and assets held in pension funds and life insurers. Figure 7: Household assets and liabilities in 2020 Source: SARB, CityMark Enable markets to provide more developmental credit for wealth accumulation. The markets and appropriate regulations need to provide individuals with access to credit for developmental purposes to grow their income generating opportunities. Developmental credit levels as a percentage of total credit are currently very low (Figure 8). It is here that the opportunities for wealth generation through credit markets lie. Figure 8: Developmental credit relative to the gross debtors’ book, 2021-2021 Source: NCR Consumer Credit Reports, 2012-2021 3.3 Facilitate long-term savings Another key determinant of poverty, and thus potentially inequality too, is the ability to save and leverage these funds for wealth accumulation. About half of the South African population do not have any retirement savings plan and only 6% of people are able to be fully financially independent at the time of their retirement.[41,42] A strong policy focus on the promotion of all savings, but especially long-term savings for retirement, is needed to expand the social security and wealth network for South Africans. The circumstances where more people can save and then leverage the value of assets they’ve built up, needs to be facilitated. Retirement savings are also almost exclusively accessed by those in formal employment. The following actions to increase access to savings for low-income earners and those in informal or erratic jobs could support greater capital accumulation through savings: [43] The means test associated with social grants is likely to deter long-term savings: currently one must be able to prove you have no savings or assets to access the government pension. This disincentivises any form of saving and removing the means test would encourage low-income earners to save what they can, when they can, without fear of being excluded from Government’s social grant system. Provide incentives to save: because low-income and informal workers do not have to submit tax returns, they also do not benefit from the rebates associated with savings. The South African Government could facilitate a scheme (similar to that in the United States) where any savings made are matched (or topped-up) by the Government, to incentivise saving in the same way that happens for tax paying citizens. Insurers should innovate to find low-cost ways to enrol low-income earners into savings plans - giving them viable options for saving. The incentives for insurers are that they will be able to grow their pool of clients, increasing revenue. Favour flexibility: given that many of these workers do not earn fixed salaries that arrive regularly, insurers could find ways to support more ad hoc contributions rather than the standard monthly payments. This may also reduce individual’s concerns of whether they are financially able to contribute the same amount each month. Promote financial literacy: the lack of understanding as to how to save, how much to save and why saving is important is preventing people from prioritising saving. Government and financial institutions can do more to promote financial literacy. 4. Growing sustainable cities and communities: Leveraging Local Government and data As shown in the previous report of the Inequality Society Institute (2022),[4] a multidimensional approach to inequality reveals areas for improvement in people’s lives at quite a local level, ranging from where people live and their access to transport hubs for travel to work and access to other services, water and sanitation, electricity infrastructure and even access to internet. The provision of many of these services and design of the required infrastructure is often decided at a local level. To enable the growth of sustainable cities and communities, much better planning using local level data is required. Here we consider some examples on how better data, whether more granular or spatialised, can enable better planning and, ultimately, the improvement of the lives of South Africans. Spatialised data can assist with economic development planning at a local level. Launched in May 2021, the City Spatialised Economic Data reports give fair insight into the inequality that is present in South Africa’s cities. The reports were created using anonymised income tax data from eight of South Africa’s biggest metropolitan areas.[44] In each of the 8 metro areas (Buffalo City, Cape Town, City of Johannesburg, Ekurhuleni, Mangaung, Nelson Mandela Bay, Tshwane and eThekwini), statistics like the number of firms and employees per metro, wage bands, Gini coefficient and the gender gap were measured.[44] In 2018, the Gini coefficient was found to be highest in Mangaung, which had a Gini coefficient of around 0.75, and in Johannesburg which had a Gini of around 0.71.[45] The metro’s with the lowest Gini coefficients were Buffalo City and Tshwane (around 0.6 and 0.67 respectively).[45] The report also showed that the Gini coefficient was generally the highest within the main cities in each metro, as well as in outlying business/tourist hubs.[45–48] The gender gap was found to be fairly high, with most cities showing a significantly lower median wage for females.[44–48] By showing in which areas poverty is highest and where gender gaps and the Gini’s variation is highest, the spatialised data creates the opportunity for local planning that can address these challenges. Community development workers can form the bridge between local governments and communities, enabling planning that better speak to community needs. In 2003, South Africa introduced the community development worker programme which aimed to facilitate a bridge between local government and its constituent communities. The intention was for the community development workers to communicate government policies and initiatives regularly and to feedback to Government any concerns brought up by the community.[49] The programme has had a positive impact on improving public participation. Local governments have taken on various initiatives and programmes to assist in combating inequality in South Africa. Initiatives like the National Rural Youth Service Corps Programme, the “One Household, One Hectare” Programme and the Comprehensive Rural Development Programme (CRDP) help to educate people in rural areas, improve rural infrastructure, and increase farming and food security in needy communities.[50–52] As of 2016, the CRDP had assisted in providing access to nutritious food to around 9 million students through its School Nutrition Programme.[52] Multiple farmers were assisted in accessing water to irrigate their crops, over 800 hectares of land had been distributed, and over 11 million people gained access to electricity due to the CRDP.[52] Public-private collaboration in generating ideas for how cities can be developed. An example of local government and private sector collaboration, the South African Cities Network (SACN) encourages cities to share knowledge, experience and best practice in urban development and city management. Its four pillars are Productive City, Inclusive City, Well-Governed City and Sustainable City.[53] In each of these four pillars, multiple issues are discussed and addressed. Thus far, the SACN has been able to produce a large knowledge base from which cities can draw information. It has also been involved in programmes and the initiation of task teams aimed at addressing unemployment, urban safety and environmental issues such as water management, waste management and sustainable energy.[53] Its future strategy, which aligns with various national and international development goals and agendas, focuses on Sustainable Development Goal 11 (Sustainable Cities and Communities).[54] In Info Box 3, the story of eThekwini’s data repository illuminates the catalytic role productive partnerships, good data (and evidence-based policy) can potentially have on inequality. More metro municipalities will have to take smart data-led approaches to local level planning if growth and development is to be successfully achieved. 5. How would inequality change if we had higher economic growth? A critical question to consider in identifying pathways out of inequality is whether it could be improved with higher GDP growth. As mentioned earlier in this report, South Africa had an average economic growth rate of 0.8% between 2015-2019, whereas the NDP targeted 5.4% average annual growth rate between 2011-2030. Growth rates in recent quarters have been volatile due to an initial severe drop in GDP at the start of the pandemic, with some recovery since then. However, data show that the economy is still (at the end of Q3 2021; the most recent data, released on 7 December 2021) 3.1% smaller than pre-pandemic (in real, inflation accounted terms).[59] The November 2021 Medium Term Budget Speech sheds light on the current picture, with the following summary also indicating some challenging cycles that are difficult to end: “GDP growth is expected to recover to 5.1 per cent in 2021 before declining to average 1.7 per cent over the next two years, a rate that is too low to meet the country’s development needs. Gross debt is forecast to grow from 69.9 per cent of GDP in 2021/22 to 77.8 per cent of GDP in 2024/25. Rising debt-service costs consume an increasing share of national income, crowding out spending on critical programmes necessary to alleviate poverty and create a foundation for faster economic growth. The long-term decline in South Africa’s GDP growth rate is the result of structural weaknesses in the economy – including poor education outcomes – and external shocks. Weak growth is compounded by the rapid increase in public debt, which has raised borrowing costs across the economy. Faster economic growth requires determined implementation of policy reforms to promote confidence, investment, competitiveness, entrepreneurship and job creation.”[60] From the above, a significant and sustained change in GDP growth rates does not seem imminent. However, even if it were, one should be cognisant of the fact that GDP growth will not necessarily translate into a reduction in inequality. This relationship, holding all else constant, will be very dependent on what types of jobs are generated, if at all, in the process of an increase in GDP (where in the wage distribution) and the types of skill levels required for different jobs. In fact, if growth is driven by the service industry (rather than agriculture or manufacturing), it may exacerbate inequality if an educational and skills shortage persists. The GDP-inequality relationship will also depend on how an increase in GDP is translated into more and better-quality basic services, either through public or private provision, and possibly even through items such as the topical basic income grant (BIG). And as indicated above, the GDP-inequality link will depend on factors such as debt (and servicing costs), alongside GDP. Ultimately, we need economic growth that lifts the bottom 50% of the income distribution and provides better access to jobs for this group and their families. There are endless ways to approach this, with nuances in every route. Technology, as just one example, could pose a threat to jobs as mentioned in our discussion of the 4IR, just as much as it could be the very solution to assisting quality education at scale. This same technology may be the driver of GDP growth, the relevant question is in which way? In short, the relationship between GDP growth and inequality is not straightforward. More GDP could mean more ways out of poverty, but details of the GDP growth – including where and how it is derived, and where and how it is used – will be central to the question. GDP is a necessary but not sufficient mechanism for a material change in inequality. 6. Conclusion Creative solutions in the areas we now know that matter most for inequality, namely education and labour market access and progression, are needed if we wanted to reduce inequality in South Africa. In doing so, but also in other areas examined in this report, namely financial markets that can support wealth accumulation, we need to work with what we have. We require both good, simple policies that support the potential routes out of inequality and better implementation of policies that have been developed. As a key conversion factor that influences whether people can move out of poverty, improving access to quality education should be a key policy priority. Models that demonstrate improvements in ECD education access and quality include features of innovative funding structures (cross-subsidisation in public-private partnerships), smaller class sizes, standardised assessment tools, and those that have the potential to have a large impact. Low investment in the basic education space is a threat to South Africa’s aim to achieve equality and needs to be revisited. Education policies should be quality-focused, placing emphasis on shifts in outcomes as opposed to inputs only. Outcomes based funding models (results-based financing, outcomes-based contracting, social impact bonds and pay for performance) may need to be considered to achieve the required shifts. Given the austere economic climate, Government should experiment with social impact bonds to improve learning outcomes. Public, private and NGO partnerships aimed at reducing education inequality are proving to be successful. In the short- to medium-term, Government should continue to create employment through labour-intensive programmes that can absorb the excess supply of low-skilled workers. The South African youth need to be prepared for employment in a digital job market. Initiatives preparing youth in this regard target unemployed youth who have the least chance of accessing such opportunities. The most pertinent 4IR policy recommendation in the South African context is to invest in human capital development. Any 4IR policy intervention should be co-created with workers, unions, public and private sectors to ensure that jobs are safeguarded and evolve with the technological change. We need to unlock the major source of non-financial wealth, housing, owned by many South Africans who have houses in the affordable housing bracket. The functioning of the Deeds Registry Office is not currently supporting households in having formal proof of this form of wealth and deeds registration backlogs need to be eliminated fast. Financial markets, namely the credit and long-terms savings markets need to be better supported in enabling the type of activities that allow for the leverage of existing wealth (e.g., in the form of housing) and the gradual accumulation of wealth (through appropriate long-term savings products). Much more granular data is required for the economic development of cities and local communities. Spatialised data can assist with economic development planning at a local level. Community development workers can form a bridge between local governments and communities, enabling planning that better speaks to community needs. Ultimately, much greater collaboration and dialogue between Government, civil society and the private sector are needed to develop cities and communities in a way that will enable them to thrive. While economic growth is likely to assist with poverty reduction, there are many factors that play a role in determining whether it will have an impact on a reduction in equality. As with population changes, GDP growth is a necessary but not sufficient mechanism for a material change in inequality. A focus on supporting the conditions that enable job creation for the bottom 50% of the economically active in the income distribution would have a more direct impact on inequality than only economic growth. References Bucelli I, McKnight A. Mapping Systemic Approaches to Understanding Inequality and Their Potential for Designing and Implementing Interventions to Reduce Inequality. 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Accessed November 10, 2021. https://www.itweb.co.za/content/DZQ58MVP1WbvzXy2 Africa Renewal. Youth dividend or ticking time bomb? Accessed December 10, 2021. https://www.un.org/africarenewal/magazine/special-edition-youth-2017/youth-dividend-or-ticking-time-bomb StatsSA. GDP data Q3 2021. Accessed December 10, 2021. http://www.statssa.gov.za/wp-content/uploads/2021/12/gdp1.jpg National Treasury. MEDIUM TERM BUDGET POLICY STATEMENT. Published online 2021:17. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Photo: newerk24.com The Inclusive Society Institute (ISI) was invited to participate in a panel discussion titled “Is South Africa advancing towards the Welfare State”, which was hosted by Die Burger during the Klein Karoo Nasionale Kunstefees. The ISI was represented by its Chief Executive Officer, Mr Daryl Swanepoel. Other panellists included the well-known sociologists, Professor Christie van der Westhuizen, who is attached to the Nelson Mandela Bay University, and Professor Erwin Schwella, who is attached to the Hugenote College in Wellington, Western Cape. Well-known community activist and former editor of the Cape Times, Ryland Fisher also participated. Some points made by Mr Swanepoel included: Responding to criticism that the welfare state is wrong for South Africa, he suggested it not to be so. Many welfare states, such as Sweden, he said had a flourishing private sector and their societies consistently count amongst the happiest nations on earth (according to Gallup’s annual Global Happiness Index). Whilst the ideal should be the welfare state, cognisance needed to be taken of the financing requirements therefore. He cautioned government not to introduce the expenditure side of the welfare state before the income side proved to be sustainable. South Africa does not currently have the money to fund the welfare state. Therefore, the focus should be on the economy “über alles”. The economy needs to grow, so that the tax-base is increased, so that the state has sufficient resources to implement its safety-net and other programmes attached to the notion of a welfare state. For example, in Sweden more than 70% of working age citizens contribute towards the tax-base. In South Africa this was only around 11%, with just over 5% contributing some 97% of the personal income tax. The welfare state depended on the civil service being competent. Taxpayers needed to trust the system. If Sweden was anything to go by, citizens do not object to paying higher taxes since they trust the state to deliver quality services. South Africa has a long way to go in this regard. High levels of corruption, maladministration and incompetence caused taxpayers to be wary of government’s ability to successfully implement the welfare state in South Africa. To this end government needed to act firmly against the scourge of corruption, ensure a people-centred civil service, and drastically improve the skills-set of public officials.

The Inclusive Society Institute hosted its second social democracy dialogue on Tuesday, 22 March 2022. The first dialogue focused on the meaning of social democracy in the modern world. It concluded that social democracy is not a cast in stone. It changes over time. While there are underlying values that remain, such as freedom, equality and solidarity, there are different ways and interpretations that depend on context and grouping. What has changed over time is the interpretation of these values and how to pursue them. Panelists also agreed that much more discussion is needed. They identified five themes around which a series of workshops will be developed to deep-dive the issues that were identified, which are that: Social democracy requires a strategic definition; Social democracy is about people; It requires an internationalist approach It must advance a credible alternative to neo-liberalism, and a persuasive narrative needs to be developed. In this second dialogue panelists responded to the question: What are the conditions that need exist in a country in order for it to advance towards the welfare state. The objective of the dialogue was: To share the experience of the panelists' countries’ own pathway towards the implementation of their sustainable welfare programmes. To get an understanding of the participant countries’ economic, employment and fiscal structure. For example, the introduction of welfare programmes to benefit the vulnerable in society may be quite feasible in a country with single digit unemployment, high numbers of taxpayers, high taxation rates, and developed economies. In South Africa unemployment stands at 46%, the upper margin personal tax rate already stands at 45%, and around 1.58 million people out of a population of nearly 60 million are shouldering the bulk of the income tax paid. And it is estimated that just 25% of those that pay income tax pay 80% of all the income tax that is collected. Therefore, panellists needed to consider what socio-economic and socio-political conditions are needed in a country to underpin the funding and sustainability of a welfare state. This is an important discussion within the South African context. Public policymakers in South Africa have recently introduced a suite of legislation that supports the advancement of the country towards what can be termed a welfare state. This includes legislative proposals aimed at introducing a National Health Insurance, Basic Income Grant, and National Social Security Fund. This comes on top of already approved and implemented social interventions such as free housing, free schooling and tertiary education for the poor, free water and electricity, school feeding schemes, and child and other welfare grants. What is of concern to many in the policy development fraternity is the impact that it will have on the fiscus, that is the long-term sustainability of the interventions. This discussion will hopefully help shape policy in this regard. Panellists participating in the discussion were: Lord Peter Hain, A former UK Labour Party Cabinet Minister and activist Hon Maria do Rosario MP, Workers’ Party, Member of the Chamber of Deputies of Brazil Dr David Masondo MP, South African Deputy Minister of Finance and Principal of the Oliver Tambo School of Leadership, South Africa Mr Johan Hassel, International Secretary of the Swedish Social Democratic Party Dr Michael Dauderstädt, who has previously held posts at the Friedrich Ebert Stiftung as head of the International Policy Analysis Unit, and director of the Division for Economic and Social Policy. Prof Chris Mullard, Author, former Professor of Education and Ethnic Studies at the University of Amsterdam, and Visiting Professor at the University of London and at the Royal Agricultural College. Co-founder of Focus Consultancy, UK. Mr Franz Knieps, Member of the Board, BKK Dachverband, Germany. Mr Mariano Schuster, Editor, Nueva Sociadad, Buenos Aires, Argentina Dr Martyn Davies, Managing Director, Emerging Markets and Africa, Dean, Deloitte Alchemy School of Leadership, Chief Economist The dialogue was moderated by Roelf Meyer, a former South African Minister, ISI Advisory Council member and Director of In Transformation. Sebastian Sperling, Country Representative of the Friedrich Ebert Stiftung in South Africa consolidated and closed the discussion. In closing the dialogue, ISI CEO, Daryl Swanepoel said: “Globally, social democrats need to define their message in a way that establishes clear blue water between themselves and those to the right. More than ever the world cries out for social justice, and greater equality. And the Russia Ukraine conflict also proves that an internationalist approach is crucially important, also now needed more than ever. An approach based on a value system that places the wellbeing of our citizens at the centre. But equally important is the need to develop the economy, because only if the economy is successful and growing will be able to fund programmes that are needed to deliver a truly just and equitable society. How to balance these two, is what is needed to be discussed”.

Occasional Paper 3/2022 Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute. DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. MARCH 2022 by Dr Motsamai Molefe MA (Developmental Studies), Phd (Philosophy) Introduction In 2011, the human population on planet Earth was just over 7 billion. A United Nations report indicates that this number could jump to over 15 billion by 2100, if the current growth trajectory continues unabated (UN, 2011; UNFPA, 2011). This would mean that by 2100 the population would have increased by over 100%. There is no doubt that population changes have serious social, economic and environmental consequences that require our earnest and urgent attention. Some of these issues are ethical in nature, as they relate directly to questions of human dignity, well-being, or even justice itself (Cripps, 2021). In relation to dignity, the question revolves around whether, as the population changes, individuals, cultures and institutions will provide conditions suitable for decent human habitation, where we can survive or even thrive. Or whether human beings will find themselves living under deplorable and dehumanising conditions. In relation to human well-being, the concern is whether human beings will have access to the basic needs and conditions required for their lives to go well. In terms of justice, the focus is on how we protect the interests and welfare of future generations. As the population grows, it throws out all manner of problems for policymakers and, in the instance of this paper, for ethicists too. The central concern then revolves around developing ethically robust “policies for reducing fertility rates and … stabilising human numbers” (Coole, 2021). The motivation for seeking to stabilise human numbers, or population, is informed by the observation that there is a direct relationship between population changes and consumption (The Royal Society, 2012). The idea of “population changes” is very broad. It encompasses more than just population growth; it also includes a variety of complex dynamics related to the population such as migration, urbanization, age structure, education structure, and so on. Human beings require access to resources – which they access from the natural environment – so that they can produce goods for consumption. The natural environment provides natural capital. And it is this natural capital, by use of technology, that is processed and converted into goods which human beings can consume to satisfy their basic and aspirational needs (Budolfson & Spears, 2021). As the human population grows, we need to extract and use more natural resources to respond to human needs. Bear in mind that it is not only the human population that relies on the natural capital of the planet for their survival, but also many other species. The complex ecosystem functions precisely to respond to the needs of other components of the natural environment, all things being equal. It is, however, human activity that has the most extensive impact and places extraordinary demands on Earth’s natural resources. The technical term “Anthropocene” is used to capture the extensive, fast-paced and pervasive human activity on the social, cultural and environmental components of the planet, and its demands and impact on planet Earth (Meybeck, 2013; Trevennon-Jones, 2022). One crucial consideration related to human activities and requirements associated with human existence, in relation to consumption, is the fact that the planet is finite (Meadows et al., 1972). In other words, as the population grows and changes, the demand for natural resources grows as a result of the increase in human needs, but the planet itself is not growing – the planet does not have a limitless supply of natural resources. To exemplify the point of the finite nature of Earth and the serious problems it presents for current and future generations in light of a growing population, consider the example of a soccer stadium. A stadium might have the capacity to carry 80,000 people. The human need to consume soccer, in this instance, can only accommodate 80,000 people. Should the population of soccer-lovers who want to go to the stadium exceed this number, the stadium would be put in a precarious situation, where it might collapse as a result of being forced to carry a number of people beyond its natural capacity. The ethical questions focussed on this paper pivot on the finite status of the natural resources provided by planet Earth. If it is a fact, as I suppose it is, that the planet has a set capacity and, therefore, its resources are limited, how should we ethically respond to this situation? In other words, what moral responsibilities are engendered by the limited nature of the natural resources of the planet? This paper provides some ethical suggestions on how we might respond to the challenges posed by population changes. Specifically, given that the problems of increased consumption have to do directly with extracting more resources from the planet, the solution will encompass suggesting means – ethical ones – to manage or reduce population growth. In pursuing the task of proposing ethical means to positively intervene in our relationship with the natural environment, its natural capital, this paper is divided into two major sections. The first section appeals to the environmental ethics framework, to inform our approach to the environment and our duties towards it, or, at least, some components of it. At the heart of the environmental ethics framework is the question of the boundary of morality. Specifically, the debate centres on whether we require an ethical framework that limits our duties to human beings or one that locates it beyond human beings. The consideration which emerges in this section is that robust ethical frameworks that could point us towards an ethics that requires us to be respectful towards the environment, are possible, which will have serious implications for our approach to the environment, how we relate to it, and what within it counts as a resource for human consumption. The second section focusses on the ethics of birth. It does so via the debate in moral philosophy regarding abortion and its direct relation to the question of contraceptives. It suggests practical ways, drawing from ethical perspectives, to reduce fertility. Section One: Environmental Ethics What is the relationship between human beings and the natural environment? One obvious answer is that human beings are located and navigate their entire lives, be it as individuals or through family, cultural groups and institutions, in the natural environment. It is our home, our only home, and we cannot begin to imagine or conceptualise human lived experience outside of it. It provides the very context for what is humanly possible. All that I have stated above is not controversial. We could ask – a somewhat controversial question – do we have ethical duties towards the natural environment, or at least some of the non-human components in it, like animals? In other words, should we think of ourselves as having duties towards mountains, rivers, forests, animals, oceans and so on? The answer we provide to this question is important for its own sake, as it will challenge both our influential ethical theories and our attitudes about how we ought to relate to the natural environment. But this question is also crucial because it has direct implications regarding how we ought to relate to nature at an “engineering” level. By engineering level, I mean we have to decide what technological means to use to produce goods in the world. This question is not a purely empirical or scientific question, it is also one that is deeply ethical. It involves what scholars in Development Ethics describe as “the ethics of means”. The underlying idea here is that “the technological, cultural and economical policies and actions” we exercise in the context of development must be ethically sound (Goulet, 1996; Crocker, 1991). The ethics of means accentuates a view which rejects the claim that the ends justify the means. Economic growth, and the means we employ to achieve it, must be subjected to ethical considerations, where ethics is primary and the pursuit of economic growth secondary (Sen, 1987). The means themselves, the “how part”, which involves the choice of technology we use to achieve our production-method-and-goals, must be ethically justified. The engineering aspect, do not forget, is crucial in the process of converting natural resources to goods which human beings can consume. So here, we are confronted by ethical reflection on two levels. On the one hand, we are asking questions about whether the whole or parts of the natural environment are objects of moral concern towards which we have duties of respect – it is this question that lies at the heart of environmental ethics. On the other hand, we have the question about how we ought to go about choosing and using technology to produce goods for human consumption – the ethics of means. Both levels of ethical reflection are crucial for how we relate to the environment. Do we relate to the environment merely as a resource? Or do we have to nurture respectful attitudes and duties towards it? In the rest of this section, I focus on the first of these two questions – the question of (1) “who else” in the natural environment is the object of direct duty other than merely human beings? and (2) what means are ethically justified to produce goods for human consumption? I hope it is clear how both questions are central in ethically relating to a finitely resourced planet. These questions have direct implications for human consumption. The first question involves concerns about what we may consume in the natural environment. The second question involves concerns about how we go about producing the things we may consume. Underlying these questions about how to relate to a finite planet and its resources are the values of dignity (respect), human well-being and intergenerational justice. These values are directly connected to human survival or even flourishing, for the current and future generations. For the sake of focus, in relation to the environmental ethics, I limit myself to the case of animals. The inquiry is centred on whether we are ethically justified to continue regarding them as a mere resource for human consumption. I select this question because it has direct implications for the environment and climate change insofar as the choice of what we consume and the methods of production we use have environmental costs. Some options have high and some low environmental costs. The question of environmental costs is crucial because it requires us to choose options that are sustainable. Moreover, my focus on animals might offer us a useful way to think about our duties to other finite resources in the environment as we proceed to search for a robust ethical framework in relation to managing finite natural resources. Our Relationship with Non-Human Components in Nature (Animals) The central question for our consideration here is whether we should see ourselves, being moral agents, as having duties towards non-human components in the environment, or even the environment itself. This question arises because of the negative consequences our attitudes and conduct has had on the natural environment. The large-scale degradation of the natural environment could be traced, in part, to our moral theories and the attitudes they foster in us towards it. The concern raised in the literature on environmental ethics is that many of our ethical theories circumscribe the enterprise of morality strictly to human-to-human relations. That is, ethical concerns are strictly limited to issues revolving around human well-being and/or dignity. The implication of such an approach to ethics is that it tends to exclude all other elements of the natural environment from the moral purview, and without a place in the moral community, they remain exposed and vulnerable to all kinds of use or, even, abuse. What is worse, such (ab)use of other non-human elements cannot be condemned, as it is not immoral, since the environment is not a proper object of moral obligations. There are at least two prominent ethical theories that have come to shape our relationship with the environment and its contents. One is religious: a Christian ethical perspective that accounts for the highest value in the world in terms of human beings as bearers of the divine image (Schroeder & Bani-Sadr, 2017). With this view, only human beings bear the divine resemblance which creates responsibilities of respect towards them. Since almost all of nature is devoid of the image of God, it is not an object of moral concern. Another theory is secular, and it explains the highest good in terms of rationality, where only entities with the capacity for rationality belong to the community of respect (Rosen, 2012). The upshot of such religious and secular ethical views is that we can “fill the earth” without any concern, and we can go on to “subdue it”, that is, extract as much as is possible from it – for our consumption – without any concern (Jamieson, 1996). These influential moral theories have tended to be human centred in ways that foster attitudes of total disregard towards the environment. Environmental ethics emerges as a concern and response to these human-centred theories and the negative attitudes they foster in society towards the environment (Brennan & Lo, 2002). The moral intuition behind many scholars’ criticism of and scepticism towards human-centred ethical approaches is that on the one hand, it does not tell us the whole story about the nature and scope of our duties towards the planet. The intuition is that surely our moral debts ought to go beyond human beings. On the other hand, human-centred moral theories reflect a false story about the environment and other non-human inhabitants in it. Theories and policies that limit the scope of morality to human beings and their well-being are described as “anthropocentric” (Grey, 1993; Almiron & Tafalla, 2019). The idea of “anthropocentrism” literally means the policy or ethical theory under consideration is human centred, which implies that only human interests, well-being and goals should matter in our moral calculus (Behrens, 2011). All other elements of the environment can be rightly regarded as a mere resource for human consumption, or tools to make such consumption possible. If all value is intrinsically connected only with the human good and the environment in its totality is reduced to a mere resource, then there is no ethical limit to the extent of the damage that can be done to it. Environmental ethics emerges precisely as an objection to this kind of theorisation about the environment and its non-human components. It is an attempt to elevate the imagination of our moral systems to carefully think about the place of the environment in our moral schemes. One way to appreciate the possibility that environmental ethics could challenge us to rethink the place and status of the environment in our ethical frameworks, policies, attitudes and conduct, is by focusing on animals for heuristic purposes. I focus on animals, and I include fish in the community of animals, for the sake of making a point about how environmental ethics could challenge us to rethink what falls within the scope of human consumption and our general attitudes towards the environment. The issue of animals (and fish) is crucial because they are an important aspect of our culture in terms of consumption, but we have tended to ignore ethical concerns around our duties towards animals. Notice that the Royal Society report on population and its impact on the planet make this point about animals and fish as a requirement for human consumption: A greater number of consumers exist than ever before because of population growth. Economic development has meant that the material needs of societies have become more complex, reflecting aspirations as well as basic needs. Over the last sixty years total fish production has increased nearly fivefold … and total world meat production fivefold ... (2012: 11). A serious ethical and policy implication related to such increases in the production of fish and animals is its environmental costs. Note, for example, that a recent study on the environmental costs of meat-and-fish production indicates that “the highest impact production methods were beef production and catfish aquaculture” (Hilborn, 2018). They used four metrics – energy use, greenhouse-gas emissions, release of nutrients, and acidifying compounds – to measure the environmental cost of meat-and-fish production, among others. At an environmental policy level, it occurs that we need to be intentional in terms of supporting the production of certain foods and we equally need to distance ourselves from others precisely because of their associated high environmental costs. Meat production, as indicated in this study, has a high environmental cost in as far as it has adverse consequences for the environment. In this light, environmental ethics could come in handy in relation to challenging our cultural, institutional and individual attitudes and conduct in relation to animals (and possibly fish) production and consumption. Environmental ethics operates with the moral intuition that our exclusion of animals, for example, from the community of respect, is premised on arbitrary and unjustified human prejudice and greed. Some scholars of ethics argue that animals do reach the minimum threshold for moral consideration warranting moral attention and respect (Regan, 1987; Singer, 2009; Behrens, 2011; Horsthemke, 2015; Metz, 2017). There are several ways to capture the minimum threshold for inclusion in the moral community, where “one” (whatever object or entity that might be referring to) may be worthy of moral recognition and respect. One influential model proposes “rationality” as a minimum standard for inclusion for moral candidacy. The problem with appealing to rationality is that it does not only exclude animals from the moral community. It excludes more than our moral intuitions and standards would permit, since it also disturbingly excludes infants and people living with serious mental disabilities (Kittay, 2013). Very few of us believe that people living with serious cognitive disabilities are not objects of ethical respect in their own right. However, taking rationality as a standard of being a member of the moral community has the unpalatable implication of excluding beings we would naturally include as objects of ethical concern, such as infants. Another influential moral theory proposes “sentience” as a minimum threshold for inclusion in the moral community (Singer, 2009). Sentience refers to the ability to experience suffering and/or joy. With this view, the worst evil in the world is pain and suffering, and the good involves joy or happiness (George & Lee, 2009). The implication of this view, which is more inclusive than typical anthropocentric theories, is that animals do have a moral standing, and, as such, deserve moral recognition, protection and respect. It is in this light that Tom Regan commented: I regard myself as an advocate of animal rights — as a part of the animal rights movement. That movement, as I conceive it, is committed to a number of goals, including: the total abolition of the use of animals in science; the total dissolution of commercial animal agriculture; the total elimination of commercial and sport hunting and trapping (1987: 179). I may not entirely agree with Regan regarding the first point on the use of animals in science. I do, however, believe many of us can agree with him on the points involving commercial animal agriculture, more so that we know its environmental costs, and the use of animals for hunting and entertainment. The underlying concern and objection informing animal ethics and animal rights movements is that animals, as components of nature, “are not merely a resource for human consumption”, but they warrant respect in their own right so they can pursue a good life according to the possibilities inherent for their species (Nussbaum, 2017). An animal free from unnecessary human interference can go and live its life to the fullest. To think of animals as objects of ethical concern, and not as mere resources for human consumption, has serious implications for human consumption and the environment. For example, Peter Singer, in his elaboration of animal liberation observes that the acceptance of the moral idea that animals are not a mere resource for human consumption – they can suffer or enjoy their own lives in their own-species-related way – has revolutionary implications for human beings and consumption tendencies. He observes that it will cause a massive change in our fridges, eating tables, restaurants, forms of entertainment, as animals and meat will no longer be a part of our diet. The entire meat industry would have to close down or drastically be reduced in respect of the rights of or duties we owe to animals. This ethical revolution in relation to our attitudes about animals would radically challenge us to rethink animals and fish as a resource for human consumption. The implication is that to mitigate the increasing consumption of meat and fish, which has a high cost on the environment in terms of energy use, greenhouse gas emissions, release of nutrients, and acidifying compounds, we may seriously have to consider promoting and educating about less costly food types and production methods. In this light, policymakers may have to promote more plant-based food choices, as they tend to be less demanding and costly on the environment, and they promise to have positive consequences for human well-being now and in the future. The one interesting conclusion we might draw from this rough discussion of environmental ethics, is that it offers us a positive way to approach the planet and the resources it offers. Environmental ethics requires us to abandon anthropocentric moral theories and policy options in relation to the planet. One consequence might be the promotion of plant-based foods and their accompanying low production costs in relation to the environment, which might have positive consequences for the environment and future generations. This means, our policy options in relation to consumption and production of food could be interpreted within a non-anthropocentric framework, which requires us to take a generally humble and respectful attitude towards the environment. The pressing implication gleaned from environmental ethics concerns what in the natural environment counts as a resource for mere human consumption. Here, we suggested that some interpretations insist on the general removal of animals as a resource for human consumption. One wonders what else an extensive analysis of environmental ethics might reveal in relation to what counts as a resource and the kind of attitude we ought to have towards the environment. There are two other useful moral-theoretical frameworks associated with environmental ethics, which might be helpful in terms of rethinking our attitudes towards the environment. Here, we might distinguish between weak anthropocentrism as opposed to the strong versions of it – the latter are represented by the religious and secular theories mentioned above. Bryan Norton (1984: 131) recommends weaker forms of anthropocentrism in as far as they “provide a basis for criticising individual, consumptive needs … providing an adequate basis for environmental ethics”. The insight here is that it is not only human interests that matter, we also need an approach to the environment that will be robust enough to identify and criticise greedy, excessive and often unnecessary human consumption, and that will foster respectful attitudes towards the environment (Passmore, 1974; Bookchin, 1990). This form of anthropocentrism is weak in that it recognises that some elements of nature, like animals, might have value in their own right, but it still assigns greater value to human beings. In other words, in a trade-off situation where one has to choose between saving a human being or an animal, all things being equal, one ought to save a human being because they have greater value. Very close to weak anthropocentrism is the “enlightened anthropocentrism”, which, like stronger versions of anthropocentrism, only locates value in human beings (Brennan & Lo, 2002). Unlike strong anthropocentrism, it recognises our general strong indirect duties towards the environment. This view requires us to be kind and respectful towards the environment because how we relate with it has direct consequences for human well-being. From this view, we might have to minimise our consumption of beef in order to manage its environmental costs and consequences. From this perspective, it is not wrong to eat meat per se, it is, however, imprudent to do so in large scale, which might end up harming the well-being of present and future generations. Weak anthropocentrism also has direct implications for the second question involving the means, or the how part, of producing consumptive goods. The general crucial point facing governments and policymakers is the awareness that we have an ethical duty to be critical and ethical when we exercise options for pursuing our goals of development or economic growth (Crocker, 1991). The Industrial Revolution was extremely costly, ethically speaking, for many aspects of the natural world. The most important goal of industrialisation was economic growth, but the growth came at a high cost to the environment and human beings. We saw in it the worst forms of environmental degradation and human exploitation. Efficient production plants were established everywhere in Europe and the Americas without any sensitivity to the environment and the damage done to it. The mantra was development or economic growth. Weak anthropocentrism promotes policies that require us to take approaches to economic growth that are sensitive to people’s cultures, by way of encouraging their participation in decision-making, respecting other non-human communities on the planet – animals, rivers, mountains – so that Earth remains habitable and beautiful. Section Two: Ethics of Birth This section focuses on another aspect that directly affects population growth: fertility rates. If we are serious about managing population growth and changes, it is absolutely essential for us to have clear ethical and policy thinking around matters relating to fertility. To properly situate the discussion of ethically reflecting on birth and fertility, I look to the debates in moral philosophy on abortion. I do not enter this debate for its own sake, I engage in it because it is directly related to the question of pregnancy, birth and contraception, which speaks to the theme of population growth. The discussion on abortion is important in contexts where you have unwanted pregnancies due to poverty, lack of economic opportunities, no access to contraceptives, and general lack of decent sexual education (Royal Society, 2012; Bongaarts et al, 2012). Reflecting on debates pertaining to abortion and contraceptives is vital if we are to make progress in addressing population growth, considering researchers predict that the human population might increase to up to 15 billion by 2100. It is also worth noting that as much as over 50% of this increase might come from Sub-Saharan Africa (Royal Society, 2012). We need to have policies grounded in clear ethical perspectives regarding how to reduce fertility rates. The first pressing ethical question focuses on whether abortion is ethically permissible or impermissible. The aim here is not to come up with a definitive or final statement on this debate, but to show how it might contribute on deliberations and policies aiming to manage population growth in ways that are ethically robust. The question pertaining to the permissibility/impermissibility of abortion (and contraceptives) is important for its own sake, as it will normatively guide us regarding our duties, or lack thereof, towards foetuses. This question is also significant as it relates directly to questions of population growth, where it might play a crucial role in informing robust family planning strategies and programmes that will speak directly to reducing fertility rates. To get a concrete sense of how abortion debates affect population policies, consider the implications of this debate. If abortion is morally justified, that is, if it is permissible to terminate a foetus, then a robust family planning policy might include the roll out of accessible and affordable, if not free, abortion clinics to manage population by responding to unwanted pregnancies. It might also require expanding access to reliable and healthy contraceptives. If, however, abortion is impermissible, then it also has direct implications for our strategies and programmes to manage fertility rates in the world. Thus, ethical considerations relating to abortion are crucial because we are informed that: Voluntary family planning is a key part of continuing the downward trajectory in fertility rates, which brings benefits to the individual well-being of men and women around the world (Royal Society, 2012). To get a sense of how ethics might help to reflect on issues of the ethics of birth and to reduce fertility rates, we have to explore ethical theories, albeit our exploration aims merely to be cursory. To begin, we can distinguish between religious and secular theories of abortion. It is worth noting that it is largely religious theories of value that usually forbid abortion. For example, Christian ethics tends to consider abortion to be immoral, and therefore impermissible. Catholic ethics considers abortion to be an instance of murder, which violates the divine commandment that forbids killing (Tooley, 1972). Many of these theories depart from the assumption that from conception, at the embryonic stage, we are dealing with a being that bears divine worth (Morgan, 2013). On the other hand, secular views generally consider abortion to be permissible, particularly before the first or second trimester, since the foetus has not developed crucial value-endowing properties like sentience (Metz, 2012). There are scholars, however, who consider abortion to be permissible throughout the entire pregnancy, thus granting women power to be the final arbiter over whether to abort or not (Warren, 1997). It is also interesting to notice that there is a continuity between a moral theory in relation to its recommendation, whether it permits or forbids abortion and its stance on the permissibility of contraceptives. If, for example, as most religious views tend to do, it does forbid abortion, it will also quite naturally forbid the use of contraceptives. If, on the other hand, as do many secular theories, it does permit abortion, then it will tend to allow individuals to use contraceptives. So, the debate on abortion should generally be understood to have serious consequences for our moral use – permissibility or impermissibility – of contraceptives, which has direct implications for implementing robust family planning education and programmes. With more societies, however, including those in developing countries, coming to embrace secular cultures, they are more open to abortion as a way to manage the problem of unwanted children. Moreover, it is very important to appreciate that questions of abortion and contraceptives can be mediated at a cultural level. Many African cultural beliefs, for example, tend to look unfavourably on abortion. Often, upon careful analysis, it will emerge that these cultural groups forbid abortion not so much on ethical grounds, but on the basis of controversial metaphysical commitments. I consider the metaphysics involved controversial not in a pejorative or patronising sense, but in light of our intuitions informed by science and the plurality of competing and contradicting views on such topics. To get a sense of controversial metaphysics, consider the case of an African practice which requires that those who are serving a king should be killed on the day of his burial and be buried with or around him, so as to accompany and continue serving him in the afterlife (Wiredu, 1996). What is controversial in this practice is the belief, a metaphysical one, that there is an afterlife. Note, my claim is not that the belief is false, I am simply claiming that it is controversial. It is upon this controversial belief of the afterlife – and that the king would still need his vassals around him to serve and attend to him in light of his status as a king – that the practice of killing people and sending them off as servants to attend to the dead king in the afterlife was justified and generally accepted. Analogously, some beliefs about the permissibility of abortion in some regions might rest on such cultural or metaphysical beliefs. Note, for example, that African scholars tend to construe an African community as constituted by three distinct members: the unborn, the living and the living dead (Magesa, 1997; Bujo, 1998; 2001; Ramose, 1999). The category of the unborn is taken to be an actual community of those that have not yet made it into the real world but will be joining it in the near future. We also have the community of the living, you and me. The third community consists of those who continue to live after their physical death as spiritual members of the community. From this African view, abortion is impermissible because it harms the unborn, who are living in a state of readiness to join the living (Molefe, 2020). It is upon this controversial view about the existence of the community of the unborn that many individuals and groups in Africa believe in the impermissibility of abortion and contraceptives (Tangwa, 1996; Bujo, 2001). Here, I wish to propose an approach which might assist us to resolve the challenge posed by cultural beliefs that may forbid abortion. This intervention does not suggest that we should not have robust discussions about abortions, its implications for family planning, and our strategies to manage population growth. These debates are important, but it is crucial to underscore the relation between religious and secular ethical theories and the inclination to forbid or permit abortion and contraceptives. My intention is to suggest ways in which conceptual clarity might be useful to distinguish proper moral and metaphysical issues. It is easy to conflate cultural or metaphysical for proper ethical issues. The examples of the practices of servants of the king being killed to accompany their king challenge us to separate pure ethical from metaphysical issues. I take it many of us might contest this practice, even among Africans, at several points. For starters, one might question the metaphysical presupposition that informs this practice – the belief in the afterlife. One must rightly ask critical questions, without being condescending toward those who embrace the belief, concerning why we should accept that there is an afterlife in the first place. Asking this question is important for its own sake because it might teach us a lot about what we believe about the world and our destiny as human beings. It might lead us to think critically about the implications of our deeply held beliefs. One might also question the ethical implications of such a belief in terms of whether they coincide or diverge from our deeply held moral intuitions. In other words, we might ask whether it is morally correct to kill another person so that they can accompany another one. Here our concern is to evaluate the ethical appropriateness of the practice of killing innocent persons and cutting their lives short for the sake of another. The point I am trying to make, in a roundabout way, is the importance of not only education in general, but also proper ethical education. Education about the debates inherent in our varied cultures and beliefs on issues that might affect policy and our goals for managing population growth. The theoretical challenge I am bringing to attention is the ability for us, as we evaluate cultures on controversial issues like those of abortion and contraceptives, to distinguish mere metaphysical from proper ethical issues. But although in most instances we should take upon ourselves a duty to be sensitive and respectful towards the diversity of human cultures and their metaphysical beliefs, we should never elevate cultures to be an ethical standard. We should also note that some cultural beliefs are objectionable on ethical grounds – killing servants to accompany the king, for example. Even in the debates on abortion, as societies adopt secular approaches like those anticipated in human rights policies, we will be able to set up proper family planning services that are compatible with rolling out abortion clinics and making contraceptives easily accessible. Moreover, in the evaluation of our cultural beliefs, in relation to abortion and contraceptives, we should be careful of the undue and continued influence of cultural norms riveted on the undemocratic values of patriarchy and unscientific basis (Gillighan and Snider, 2018). Often, human cultures frown on abortion and contraception because there is a tendency, sponsored by patriarchy, to reduce women to mere makers of children. It is for this reason that we need to imagine robust education contexts and programmes for both women and men, which are emancipatory in their orientation and empower women to take charge of their own lives, which surely ought to involve voluntary family planning options. The research clearly indicates that there is a relationship between access to education and women’s attitudes towards family planning, abortion and contraception, which will definitely have implications for population growth (Potts et al., 2009). The expansion of meaningful access to education for women, in particular those living in areas with high fertility rates, who have the potential to contribute greater proportions towards population growth, will have a telling consequence. As education and economic opportunities open and expand for women, we might expect positive developments in relation to our efforts to manage population growth. Martha Nussbaum (2004: 327 - 328) in an interesting paper, Women’s Education: A Global Problem, makes the following remarks: Women’s education is both crucial and contested. A key to the amelioration of many distinct problems in women’s lives, it is spreading, but it is also under threat, both from custom and traditional hierarchies of power and from the sheer inability of states and nations to take effective action. In this article, I shall try to show, first, exactly why education should be thought to be a key for women in making progress on many other problems in their lives. I think Nussbaum is correct to identify the education of women, or the lack thereof, as a global problem. Many societies and countries still fail to equalise women by empowering them through access to robust and meaningful education, and to create conditions through which they can liberate themselves from the shackles of traditional hierarchies of power. It is through access to education and economic opportunities that women can make progress in resolving many challenges facing them such as poverty and gender-based violence. The suggestion being made here is a macro-ethical-and-political one, where global and local policymakers need to prioritise the education of women, as a group, particularly those from poorer regions of the world. The prioritisation of women in education is decisive in as far as it has direct implications for solving many problems in the world. Two of those problems stand out in the context of our discussion on population growth: one is that between one to two billion people living in extreme poverty and the other is high fertility rates. With regards to the first, there is an urgent need to pull the over one billion people out of the absolute poverty they currently live in. This we need to do in ways that raises consumption without further depleting limited natural capacities. The second problem resonates with the observation that as we meet the sustainable development goals, and, as women gain access to education, fertility rates tend to drop (Royal Society, 2012). Hence, the macro-ethical intervention to prioritise their education will go a long way in our quest to addressing population growth, by addressing their access to education and economic opportunities. Conclusion This paper offered cursory ethical reflections on issues of population growth. Its discussion was situated within the context of seeking to achieve the goals of reducing population growth and understanding how to respond to the increasing depletion of our finite resources. To do so, it suggested that environmental ethics and the ethics of birth might offer useful ways to respond to challenges posed by population growth. In relation to environmental ethics, I suggested how it could point us to earth-friendly policies, which might challenge us to rethink some of our habits and cultures that rely on the production of meat and fish, which has relatively high costs for the environment. The weak and enlightened versions of anthropocentrism might also challenge us to take a humble and sensible approach to the environment for the sake of ensuring the well-being of the current and future generations. Such approaches could involve making more judicious choices in relation to how we relate to the finite resources of the planet, and how we might maximise them for the benefit of all, including future generations and non-human elements in nature. In relation to the ethics of birth, I pointed to the relationship between abortion and contraceptives. If a moral theory forbids abortion, it is also more likely to forbid the use of contraceptives. While if it does permit abortion, it is also more likely to permit contraceptives. In addition, I indicated that religious ethical theories and traditional societies tend to forbid abortion, whereas secular and more modern societies tend to permit it. This general awareness of the debates about abortion is important because it will inform how policymakers frame their efforts to promote a robust culture of family planning, which has direct implications for increasing or decreasing fertility rates. I concluded the last section by accentuating the importance of education, particularly for women, in addressing poverty and fertility rates. The more women have access to meaningful education and economic opportunities, the more they may adopt different family-life options, and this may drastically reduce fertility rates. References Almiron, N. and Tafalla, M. 2019. Rethinking the Ethical Challenge in the Climate Deadlock: Anthropocentrism, Ideological Denial and Animal Liberation. Journal of Agricultural and Environmental Ethics 32: 255-67. Behrens, K. 2011. African Philosophy, Thought and Practice and Their Contribution to Environmental Ethics. Johannesburg: University of Johannesburg. Bookchin, M. 1990. The Philosophy of Social Ecology, Montreal: Black Rose Books. Brennan A. & Lo, Y. 2016. Environmental ethics. In: Zalta EN (ed) The Stanford encyclopedia of philosophy. [Online] Available at: https://plato.stanford.edu/archives/sum2021/entries/ethics-environmental/. 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Niger: too little too late. International Perspectives on Sexual and Reproductive Health 37: 95-101. Regan, T. 1987. The Case for Animal Rights. In Advances in Animal Welfare Science 1986/87. vol. 3., edited by M. W. Fox and L. D. Mickley, 179-189. Dordrecht: Springer. Royal Society 2012. People and the Planet. Royal Society: London. Schroeder, D. & Bani-Sadr, A. 2017. Dignity in the 21st century Middle East and West. SpringerOpen, New York. Singer, P. 2009. Speciesism and Moral Status. Metaphilosophy 40: 567-581. Tangwa, G. 1996. Bioethics: an African perspective. Bioethics 10: 183-200. Tooley, M. 1972. Abortion and Infanticide. Philosophy and Public Affairs 2: 37-65. Trevennon-Jones, A. 2022. The Next Frontier: South Africa and Participatory Local Government in the Anthropocene. Journal of Inclusive Public Policy 2: 44-55. United Nations (UN) 2011. World population prospects: the 2010 revision. Department of Economic and Social Affairs. United Nations: New York. United Nations Fund for Population Activities (UNFPA) 2011. The state of world population 2011: People and possibilities in a world of 7 billion. United Nations Population Fund (UNFPA): New York, NY. Warren, A. 1997. Moral Status: Obligations to Persons and Other Living Things. Oxford: Clarendon Press. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. All records and findings included in this report, originate from a panel discussion on developing a new economic blueprint for South Africa, which took place in February 2022 Author: Mariaan Webb Editor: Daryl Swanepoel Content Abbreviations & acronyms Introduction Identifying weaknesses Bureaucratic impediments Central planning shortcomings Education, training and skills development Energy pricing and regulation Infrastructure backlog Restricted local opportunities Stagnant refining sector Sustainability of IPP model Uncertainty about end-state of energy Suggestions for fostering growth Conclusion References Abbreviations & acronyms Introduction South Africa’s well-documented electricity crisis is a binding constraint on economic growth and solving power supply challenges is one of the key interventions needed for faster, more sustainable and inclusive economic growth. Ageing power stations and underinvestment in maintenance, compounded by years of corruption and maladministration at State-owned power utility Eskom, have weakened the electricity system, resulting in debilitating load-shedding that has become the default in managing grid stability when demand exceeds supply. Plant availability, as evidenced by the energy availability factor has fallen to 62%, against a target of 70% (Eskom, 2022). At the same time, electricity prices have increased by 175% over the past decade, which, combined with unreliable supply, has constrained economic growth as customers lower their demand and adopt alternative sources of power (Nersa, 2021). The Council for Scientific and Industrial Research (CSIR) has published data that show 2020 and 2021 were the worst years on record for load-shedding. According to a 2020 report by the CSIR, load-shedding is estimated to have cost the economy between R60-billion and R120-billion in 2019, when the country experienced 530 hours of outages, amounting to 1 353 GWh. The total economic impact of load-shedding over the past ten years could be as high as R338-billion (Wright & Calitz, 2020). Government acknowledges that power constraints must be addressed, with several policy interventions and new energy generation projects set to come on line over the next few years to close a capacity shortfall that is estimated to be between 4 000 MW and 6 000 MW. Business Leadership South Africa has called for the accelerated procurement of additional electricity from independent power producers (IPPs), potentially doing away with ‘bid windows’ in favour of procuring “on an ongoing basis as the situation demands” (BLSA, 2021). While stakeholders agree that there are no simple solutions to South Africa’s energy crisis, there is a need to identify creative, short-term measures to help better manage and stabilise the situation, while simultaneously advancing South Africa’s low-carbon, clean energy transition. South Africa has secured an initial offer of $8.50-billion (about R131-billion) to fund a just-transition to a low-carbon economy by investing in renewable energy, green hydrogen and electric vehicles (European Union, 2021). Stabilising electricity supply will help improve business confidence, improving sentiment towards South Africa and making it more attractive to foreign and domestic investors. The Inclusive Society Institute (ISI) met with energy experts in February 2022 to gather sectoral insight for a broader research project that will culminate in a new blueprint for economic growth and development. This report is a summary of discussions with industry participants, whose expertise pertain mostly the electricity sector, as opposed to the energy sector. Identifying weaknesses Bureaucratic impediments Bureaucracy and overregulation are considered as structural impediments that make it difficult for South Africa to achieve meaningful economic growth. Officials are sometimes fixated on compliance requirements, instead of seeing the ‘bigger picture’. More rules and regulations are therefore not seen as the answer to subvert fraud and corruption, instead inhibiting delivery. Concern about the level of compliance necessary in undertaking the procurement involved in systemic power system maintenance has recently been expressed by top management of Eskom. Central planning shortcomings The energy sector lacks a centralised, coordinated approach to synergies in the value chain. For example, a lack of coordination in the energy value chain, made worse by security weaknesses, led to a situation where the Richards Bay Coal Terminal’s export volumes in 2021 dropped to the lowest level since 1996. That, at a time when global coal prices were at record levels, resulting in a missed opportunity for the country. Education, training and skills development The quality of South Africa’s education and training system has been highlighted as an area of concern. The basic education system is considered flawed, with poorly performing teachers, poor work ethic, a lack of community and parental support, and poor control by education authorities, all exacerbated by low levels of accountability. The result is learners that lack discipline, high levels of absenteeism and poor performance in essential areas of mathematics and literacy (Mouton et al, 2012). As the basic education system informs the tertiary sector, its shortcomings are widely felt. While there is an opportunity to draw South Africa’s unemployed youth into the energy sector, there is a risk that the country may not be able to fully transition into a new technological model and sophisticated value chains, if it does not have the requisite domestic capabilities. There is a view that South Africa is not imparting its youth with the correct skills for the transitioning energy sector. Energy pricing and regulation The entire regulatory regime needs to be rethought to consider the purpose it serves, the value that it adds and the capabilities it unleashes. The point was made that the National Energy Regulator of South Africa (Nersa), which sets and approves tariffs, must review its policies. Nersa’s determinations and tariff approvals could potentially have major implications for the fiscus and mispricing has been a major cause of Eskom’s unsustainable debt problem. Nersa released a consultation paper in September 2021 to develop a new price determination methodology, arguing that the revenue-based methodology has fallen short in providing stable prices. Infrastructure backlog There is a significant backlog in infrastructure investment, which is vital to economic recovery and growth (World Bank, 2022). The deficit cuts across many different sectors, including energy, water and sanitation, transport, digital infrastructure and housing, among others. The National Development Plan envisions the ratio of gross fixed-capital formation to gross domestic product to be between 25% and 30%. Currently, the ratio is estimated at 14% to 16%. While the deficit can be attributed to a shortage of funding, participants have noted that the issues run deeper. It is argued that, often funding, in a variety of forms, is available, but projects are not well planned, implemented or completed. Tenders are another area of concern, mirroring an issue that was raised by the construction sector during a previous ISI workshop. It is argued that the time that it takes to award a tender is too long and that the ratio of tenders that are awarded is too low. The tender process has been described as onerous and complicated, while political influence also plays a role. There is also a lack of people with the required skills and competency, especially at municipal level, to handle tenders effectively and to manage infrastructure throughout its life cycle. At municipal level, many people with valuable skills and experience are either leaving municipalities or are not in the right positions to make critical decisions that are needed for economic development. Restricted local opportunities South Africa does not focus enough on creating local opportunities and developing local supply chains. Too much work is outsourced to foreign contractors or companies, instead of using local expertise or accumulating the required skills and expertise. Eskom’s flagship Battery Energy Storage Systems project, which involves the development of a 360 MW storage system at a substation in Vredendal, in the Western Cape, has been cited as an example of a missed opportunity to develop the local supply chain. According to a participant in the ISI discussion, project criteria, in many instances, were not conducive to South African companies taking part. Competitiveness is a serious constraint to local manufacturing, with the country struggling to compete, for instance, with the cost of solar panel manufacturing in China, or other Asian manufacturing hubs. Powering up a competitive manufacturing landscape in which products that are used not only domestically, but also have export potential, are produced will be key to establishing local supply chains. Stagnant refining sector The crude oil refining industry has for years struggled with financial viability, ageing infrastructure, power interruptions and the need for massive capital investment to produce cleaner fuel. Many refineries have closed in recent years, including the Engen refinery in eThekwini, in December 2020, and the Astron Energy refinery in Milnerton, in mid-2020. The Engen refinery will now reopen as a fuel-storage facility, while the Astron refinery may restart “at some point” this year (Business Report, 2022). Sapref, South Africa’s biggest crude oil refinery, jointly owned and operated by BP South Africa and Shell Refining South Africa, is the latest to announce that it will “pause” refinery operations from the end of March 2022, for an “indefinite period”. Concerns have been raised about the refining industry’s preparedness for the future, especially in preparation for the roll-out of more electric vehicles in the country. Sustainability of IPP model The sustainability of the IPP model has been questioned, given that it is predicated on insulating the investor, to a large extent, by providing guarantees. Although it may be politically attractive, as private-sector funding is mobilised to shift green infrastructure investment off the national balance sheet, it has been argued that guarantees create mounting financial risks to the fiscus. The National Treasury contends that contingent liability risks for IPPs represent a low risk to the fiscus, although it is considering a reduction or elimination of guarantees to reduce the stock of contingent liabilities. Treasury states in the 2022 Budget Review that a government study is under way to explore alternative support for the REIPPPP. The value of signed IPP projects, which represents government’s exposure, is expected to amount to R177-billion by the end of March 2022, decreasing to R156.60-billion in 2022/23, R137.80-billion in 2023/24 and R120.80-billion in 2024/25 (National Treasury, 2022). Electricity produced by REIPPPP projects is bought by Eskom, which is the designated single buyer, after government has entered into power purchase agreements with the IPPs. The purchases are funded through a revenue allocation in the Eskom tariff, which is determined by Nersa. The IPP model is also considered to offer limited participation for local entities, because foreign investors tend to be selective about with whom they work, an industry participant argued, stating that the programme’s true impact on broad-based black economic empowerment must be further interrogated. Uncertainty about end-state of energy There is too much uncertainty about the vision for the end-state of the electricity sector, with political, economic, technical and regulatory challenges reported. For instance, South Africa previously pursued a now-abandoned model to separate the distribution division from Eskom and to merge it with the electricity departments of municipalities to form a number of financially viable regional electricity distributors. Instead, Eskom is now being restructured, set to be split into three divisions – generation, transmission and distribution. The legal separation of the transmission unit along these lines has started and will help open the grid to private suppliers. Suggestions for fostering growth Conclusion South Africa’s electricity crisis is a great threat to economic and social progress, thus resolving the supply shortfall and reducing the risk of outages is one of the most important interventions that will revive economic growth. President Cyril Ramaphosa has committed to reforms to transform the industry, including lifting the threshold for electricity generation projects for which a licence is not required for projects up to 100 MW, and bolstering energy supply with the ongoing massive procurement of utility-scale power. While these reforms will take time to bear fruit, implementing some of the ‘quick wins’ that the ISI energy sector roundtable discussion identified, could have immediate positive impacts and provide the economy with breathing space to catalyse some of the more complex opportunities that are presenting themselves. References Business Leadership South Africa. 2021. Press release: The impact of loadshedding, November 15, 2021. [Online]. Available at: https://hub.blsa.org.za/energy/press-release-the-impact-of-load-shedding/ [accessed: February 22, 2022]. Business Report. 2022. South Africa’s biggest oil refinery to ‘pause’ operations for an undetermined period, February 11, 2022. [Online]. Available at: https://www.iol.co.za/business-report/companies/south-africas-biggest-oil-refinery-to-pause-operations-for-an-undetermined-period-88a6b8b6-a3c7-4247-8426-f4702f313af0 [accessed: February 24, 2022]. Department of Mineral Resources and Energy. 2021. Renewable Energy IPP Procurement Programme Bid Window 5 announcement of preferred bidders, October 28, 2021. [Online]. Available at: https://ipp-projects.co.za/PressCentre [accessed: February 25, 2022]. Engineering News. 2022. Mantashe confirms some RMIPPPP projects won’t close, outlines six-monthly renewables procurement tempo, February 15, 2022. [Online]. Available at: https://www.engineeringnews.co.za/article/mantashe-confirms-some-rmipppp-projects-wont-close-outlines-six-monthly-renewables-procurement-tempo-2022-02-15 [accessed: February 22, 22]. Eskom. 2022. Media statement: Eskom makes major strides in its operational recovery process, cautions the path to sustainability will be long and hard, January 27, 2022. [Online]. Available at: https://www.eskom.co.za/eskom-makes-major-strides-in-its-operational-recovery-process-cautions-the-path-to-sustainability-will-be-long-and-hard/ [accessed: February 22, 2022]. European Union. 2021. Press release: France, Germany, UK, US and EU launch ground-breaking Just Energy Transition Partnership with South Africa, November 2, 2021. [Online]. Available at: https://ec.europa.eu/commission/presscorner/detail/en/IP_21_5768 [accessed: February 24, 22]. Mouton, N., Louw, G.P. & Strydom, G. 2012. Critical challenges of the South African school systems, December 2012. [Online]. Available at: https://www.researchgate.net/publication/297722032_Critical_Challenges_Of_The_South_African_School_System#:~:text=When%20analysing%20the%20school%20system,very%20low%20levels%20of%20accountability [accessed: February 24, 2022]. National Energy Regulator of South Africa. 2021. A consultation paper to determine a new pricing methodology, October 2021. [Online]. Available at: https://www.nersa.org.za/wp-content/uploads/bsk-pdf-manager/2021/09/Consultation-paper-to-determine-a-new-price-determination-methodology.pdf [accessed February 24, 2022]. National Treasury. 2022. Budget Review 2022, February 23, 2022. [Online]. Available at: http://www.treasury.gov.za/documents/national%20budget/2022/review/FullBR.pdf [accessed February 25, 2022]. Ramaphosa, C. 2022. 2022 State of the Nation Address, February 10, 2022. [Online]. Available at: https://www.gov.za/speeches/president-cyril-ramaphosa-2022-state-nation-address-10-feb-2022-0000 [accessed: February 24, 2022]. World Bank. 2022. Databank: Gross-fixed capital formation as a percentage of GDP, 2020. [Online]. Available at: https://data.worldbank.org/indicator/NE.GDI.FTOT.ZS [accessed: February 24, 2022]. Wright, J.G. & Calitz, J.R. 2020. Setting up for the 2020s: Addressing South Africa’s electricity crises and getting ready for the next decade, January 2020. [Online]. Available at: http://researchspace.csir.co.za/dspace/handle/10204/11282?show=full [accessed: February 22, 2022]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

The Inclusive Society Institute on Wednesday, 9 March 2022, hosted the first session of a consolidation exercise of the final phase of its economic blueprint research project. The meeting brought together several industry experts to discuss the Institute’s research with the aim to consolidate those findings into a comprehensive report to identify the themes that require public policy interventions as well as the structural reforms that need to be introduced to put South Africa’s economy onto a more acceptable growth path. The final report will include economic modelling to project the impact of such policy adjustments and structural reforms over the short to medium term. Some of the issues raised: The participants all agreed that the most pressing issue impacting South Africa’s economic growth is the energy crisis, with one pointing out that it “is a ceiling on South Africa’s economic growth potential.” An energy and infrastructure strategist noted that the private sector very often criticises government for not prioritizing the biggest challenges, and therefore trying to tackle everything at once and failing. He questioned whether a new approach should be deliberated, especially considering the severe impact of the energy crisis on economic growth. An economist also mentioned that transport and logistics have the same paralysing impact on the economy as the electricity crisis, which are all strongly interrelated. Another expert noted that while the discussions are arriving at good insights, the research needs to be refined to make it more precise and specific for the final report. A number of participants observed that general consensus exists around the importance of the pre-requisites for unlocking economic growth; however, the immediate action steps – identifying 'what' needs to be done to move the economy forward – must be prioritised and executed. What needs to be added to the narrative around these opportunities is the 'downside risk' posed by the disintegrating social fabric, lawlessness and the dysfunctional and ineffective criminal justice system. Perhaps modelling the downside and its impact on the outcomes might shift this perspective. A full report will be published in due course

Source: weforum.org The Inclusive Society Institute has embarked on an extensive economic research project, which will culminate in a comprehensive ‘Blueprint for rejuvenating South Africa’s economy’. The methodology includes a series of dialogues with various sectoral stakeholders and policymakers. These dialogues each have two parts to them: Gaining an understanding from the particular sectors perspective as to what the country needs to correct policy wise What new initiatives / policies should be introduced to shift the economy onto a higher growth trajectory. This dialogue with the agricultural sector was held on Tuesday, 1 March 2022. Some key points raised included, amongst others: Insufficient and deteriorating infrastructure was impeding development within the agricultural sector, especially as it relates to getting produce to markets. The great international potential was particularly vulnerable. Unreliable electricity supply was of specific concern. Public Private Partnerships (PPPs) needs to be embraced. This would, for example, help with the rapid development of current insufficient veterinary services. South African farmers receive little to no subsidies, as opposed to generous regimes abroad. This impacts the competitiveness of South African farmers. Vulnerable telecommunication infrastructure stands in the way of new data technologies that could enhance agricultural performance. The agricultural colleges need to be re-thought, re-jigged, and re-equipped, so as to ensure a pipeline of technically proficient workers in the agricultural sector. There is a need to assess the impact of mining on good agricultural land and water resources. Only half of animals are in the hands of commercial farmers. Fifty percent of animals from subsistence farm, provide only ten percent of protein on the table. They are also not geared to participate in sector, for example, the need for health and source tracking technology. Inadequate vaccine manufacturing in South Africa, and slow, complex and ineffective vaccine registration procedures and timelines. Government departments tend to be insular, working within silos. Greater cooperation and synergies need to be developed. The private sector stands ready to work with and help government. They feel they have the answers, but have to fight for access and acceptance every step of the way. A full report on the deliberations will be released in due course.

On 2 March 2022, the Inclusive Society Institute presented its proposed electoral model to the National Assembly Portfolio Committee on Home Affairs during the Public Hearings on the Electoral Amendment Bill. The institute appointed an expert panel, convened by Mr. Roelf Meyer, to undertake the work and mandated the panel to design an electoral model that will meaningfully give effect to the Constitutional Court judgement that declared the current electoral act unconstitutional, respect the boundaries set out in the Constitution, retain proportionality as a basis for representation in that it best promotes inclusivity, and which enhances representativity, accountability, and transparency. The outcome, which was a new electoral model, was presented to the National Assembly Portfolio Committee on Home Affairs by Mr Roelf Meyer, Prof William Gumede and the institutes' CEO, Mr Daryl Swanepoel. Written submission to the National Assembly Portfolio Committee of Home Affairs: Submission and comments on the Electoral Amendment Bill (B1-2022) Annexure A - Proposed electoral model for South Africa Annexure B - Boundaries for Amending Electoral Act Presentation video:

On 22 February 2022, H.E. Mr. Han Peters, Ambassador of The Netherlands to South Africa, hosted Mr. Daryl Swanepoel, Chief Executive Officer of Inclusive Society Institute of South Africa. During the meeting, the CEO acquainted Ambassador Peters with the work and experience of the Institute; and the current projects they are working on with the objective of working towards greater inclusivity within South African society. They also exchanged views about the opportunities of developing bilateral partnerships between The Netherlands and South Africa in various spheres, including Think Tanks, research and educational institutions.

On 22 February 2022, H.E. Mr Tobias Elling Rehfeld, Ambassador of Denmark to South Africa, hosted Mr. Daryl Swanepoel, Chief Executive Officer of Inclusive Society Institute of South Africa. During the meeting, the CEO acquainted Ambassador Rehfeld with the work and experience of the Institute; and the current projects they are working on with the objective of working towards greater inclusivity within South African society. They also exchanged views about the opportunities of developing bilateral partnerships between Denmark and South Africa in various spheres, including Think Tanks, research and educational institutions.

The Inclusive Society Institute (ISI) hosted a High-level Dialogue on the Establishment of a National Anti-Corruption Agency for South Africa on 19 October 2021. The dialogue was a response to the proposal by President Cyril Ramaphosa to establish a National Anti-Corruption Advisory Council (NACAC). The ISI and the Anti-Corruption Centre for Education and Research (ACCERUS) of Stellenbosch University, through its School of Public Leadership, has entered a partnership to research the realities of international and African Advisory Councils against corruption and to produce a report which will be handed to the public policymakers as a contribution to policy development in this regard. This dialogue aimed to give direction to the research to be undertaken by the ISI and the School for Public Leadership. The dialogue noted that corruption is antithetical to sustainable development, aggravating income inequality, reducing domestic and foreign investment and significantly lowering the quality of public sector services. Addressing corruption will support a more inclusive recovery from the Covid19 pandemic. The research is now proceeding towards finalisation. An academic panel discussion was held on Thursday, 17 February 2022 to consider the proposals made in the report, and to robustly engage the proposals made in the preliminary findings. The emphasis of the deliberations was on effective mechanisms to protect whistle-blowers and the final proposed organisational structure of the NACAC).

Copyright © 2021 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. All records and findings included in this report, originate from a panel discussion on developing a new economic blueprint for South Africa, which took place in October 2021 Author: Mariaan Webb Editor: Daryl Swanepoel Content Abbreviations & acronyms Introduction Identifying weaknesses Construction mafia Cumbersome licensing and permitting Infrastructure constraints Competency shortcomings Long project lead times Poor planning and budgeting Skills deficit Subcontracting requirements Tenders and procurement Weak partnerships Interventions for fostering growth Conclusion References Abbreviations & acronyms BER Bureau for Economic Research DPWI Department of Public Works and Infrastructure DWS Department of Water and Sanitation IDP integrated development plans GCI Global Competitiveness Index ISI Inclusive Society Institute PPP public–private partnership Safcec South African Civil Engineering Contractors Stats SA Statistics South Africa Introduction The construction industry is diverse and is involved in projects ranging from the development of civil infrastructure, such as roads, bridges and ports, to residential and nonresidential buildings, as well as small private projects. The last decade, and 2020 in particular, has been tough for the industry. Already in deep trouble before the Covid-19 pandemic, the construction industry contracted by 20.30% in 2020, marking the sector’s fourth consecutive year of economic decline (Stats SA, 2021a). Despite some improvement in 2021, construction remains severely affected by the Covid-19 pandemic and weak investor sentiment (Reserve Bank, 2021). The industry is a key employer, especially for low- and medium-skilled workers, providing jobs to about 1.22-million people. Between March 2020 and March 2021, the industry shed 264 000 jobs (Stats SA, 2021b). Due in the main to a post-Covidlockdown rebound the sector increased employment in the second quarter of 2021, with gain of 143 000 jobs (Stats SA, 2021c). Government spending has a material impact on the health of the construction industry as it accounts for more than two-thirds of civil revenue and about 40% of nonresidential construction revenue. As a result of weakening project flow and spending by the public sector in recent years, many civil construction companies have turned to foreign contracts to survive, and an unprecedented number of big contractors have gone into business rescue or liquidation. This is largely attributed to a lack of big government contracts, late payment and the shouldering of lossmaking contracts (DPWI, 2021). The National Infrastructure Plan 2050, a draft of which was released, for comment in August 2021, can act as an economic stimulus for the industry, provided that a credible pipeline of projects is put forward. It is estimated that the cost of delivering infrastructure to meet the country’s infrastructure development needs will be more than R6-trillion between 2016 and 2040. It is estimated that the finance gap that needs to be closed is about R2.15-trillion (DPWI, 2021). The private infrastructure investment sector will be called upon to help fund infrastructure, with public–private partnerships (PPPs) expected fill a finance gap of about one-third of the amount that needs to be invested by 2050. Amendments to Regulation 28 of the Pension Funds Act will assist to mobilise resources for infrastructure. The changes will seek to mobilise a higher proportion of retirement savings for infrastructure investment, as South Africa is currently behind other countries on this indicator (Business Times, 2021). This Inclusive Society Institute (ISI) report is a summary of themes that emerged from virtual discussions, held on October 19 and November 7, 2021, with construction industry participants to gather their views on what the country must do to place it on a path of higher, sustainable, and inclusive growth. The report identifies constraints to economic growth and development, from the construction industry’s perspective, and puts forward suggestions to improve the status quo. The report is one in a series of dialogues that the ISI has held with different sectors of the economy and forms part of the institute’s economic research project to develop a blueprint for rejuvenating the South African economy. Identifying weaknesses Construction mafia The violent disruption of construction sites is one of the biggest threats to economic activity. A so-called ‘construction mafia’ has been plaguing the industry for some years, with syndicates disrupting projects and causing damage worth billions of rand. These armed groups visit construction sites and demand a share of work. In January 2020, estimated losses owing to the disruption of construction projects amounted to R40.70-billion (IOL, 2021). Criminality is affecting not only the construction industry, but is also weighing on the electricity sector with serious allegations of sabotage of power group Eskom’s infrastructure, as well as in the rail industry with unprecedented theft of cables. Eskom believes the recent collapse of a distribution-line tower at its Lethabo power station, in the Free State, is a “deliberate act of sabotage” (Engineering News, 2021a). The theft of overhead cables and vandalism of freight utility Transnet’s property continues to be on a steep increase. From January to October 2021, Transnet Freight Rail lost more than 1 000 km of copper cable, while an average of 600 theft and vandalism incidents a month were recorded (Engineering News, 2021b). The criminal activity is a serious constraint on the economy and left unaddressed, will curtail South Africa’s growth prospects (BER, 2021). Construction projects are also disrupted when there is limited community involvement and support. The Mtentu bridge project, in the Eastern Cape, is but one example of a megaproject that has suffered severe delays owing to community protest. The former contractors, a joint venture of Strabag and Aveng, terminated their contract with the South African National Roads Agency Limited in early 2019, stalling the Mtentu project. At the time of writing, a new contractor was yet to be appointed (Engineering News, 2021c). A concerted effort is needed to ensure proper community engagement and redress to prevent the project disruptions. Investment in local skills transfer and training of local emerging contractors will enable communities to benefit more from infrastructure projects. The South African Forum of Civil Engineering Contractors (Safcec) believes “throwing the book of law at disruptors is not enough, so too must a book of opportunities be handed to them” (Webster, 2021). Safcec argues that thugs must be isolated from genuine grievances of communities and community-based entities that feel excluded from participation in local economic activities. Some business forums in the construction sector, whose members were in the past accused of violent disruptions, have transformed themselves and have started to undertake legitimate business activity. Cumbersome licensing and permitting The construction sector is highly regulated and requires permits in advance of construction. These processes can be slow and cumbersome, leaving many private projects trapped in an ineffective licensing and permitting system. The World Bank’s 2020 Ease of Doing Business Ranking places South Africa 98 out of 190 countries on regulations pertaining to construction permits and 108 regarding the registering of property. To build a R4-million warehouse in Johannesburg, Gauteng, it will take 20 procedures and 155 days to obtain licences and permits, to complete required notifications and inspections and to obtain utility connections. By comparison, sub-Saharan Africa’s average is 15.10 procedures and 145.40 days to do the same (World Bank, 2020). Infrastructure constraints South Africa faces serious limitations when it comes to basic infrastructure and services that are required for the successful execution of projects. The electricity supply issues are well documented, with the country having experienced intense periods of loadshedding in recent years. South Africa is also facing a water crisis, in part owing to a lack of skilled water engineers and insufficient infrastructure maintenance and investment. About 56% of the more than 1 150 municipal wastewater treatment works and about 44% of the 962 water treatment works are in a ‘poor’ or ‘critical condition’ and in need of urgent rehabilitation and skilled operators. About 11% of this infrastructure is completely dysfunctional (DWS, 2019). Road infrastructure is also deteriorating. More than half of the country’s unpaved road network is in ‘poor’ to ‘very poor’ condition, while about one-third of the paved network is in similar condition. The Eastern Cape, Free State, Limpopo, Mpumalanga and the North West, in particular, are struggling with the maintenance of their respective road networks (Frost & Sullivan, 2021). Competency shortcomings The lack of appropriate skills in strategic positions in government is a concern. Local government, in particular, grapples with low competency levels as municipalities battle to attract, retain and train and employees with the requisite skills leading to a deficit of experienced staff. There is a disparity between metropolitan and rural municipalities and their ability to attract talent. Each year, billions of rands are spent on wasteful expenditure, highlighting the lack of accountability, weak project management and the high level of vacancies in key positions across municipalities across the country. The Auditor-General’s report for 2020/21, however, paints a bleak picture of the state of local government, with only 27 (11%) of the 257 municipalities receiving clean audits. It also shows that the resourcing of 122 finance units (32%) was either ‘concerning’ or ‘requiring intervention’, owing to staff vacancies, inadequate skills or a combination thereof (Maluleke, 2021). Shortcomings in municipalities have a direct impact on project planning, execution and management. Concerns have been raised about whether municipal employees understand contracting or what contracting methods are used. The private sector should be called upon to assist municipalities in project management and project spend. Long project lead times The government infrastructure programme lacks urgency and adequate scale. Industry players participating in the ISI discussion argue that, despite pronouncements by government, actual projects are slow to materialise. Poor planning and budgeting Weak integrated and spatial development planning, misaligned government budgets and weak leadership and management are to blame for project failures. Government often operates in silos, which hampers the effective delivery of infrastructure. For example, an affordable housing development will be delivered on time, but a lack of coordination among government departments means that bulk services upgrades or social infrastructure, such as a school or a clinic, are not delivered at the same time. A development that should have been conducive to growth is relegated to a dormitory suburb. Municipalities also fall short in project management, despite being required to draft and present annual integrated development plans (IDPs), in which all projects that are planned and ongoing are listed. The failure to properly plan, present and implement IDPs results in failing infrastructure. For example, raw sewerage flowing into freshwater catchment areas or erratic water supply. It is argued that IDPs and other strategic plans fail when the task at hand is not appropriately quantified, resulting in faulty budgeting and a failure to measure and track progress. There is also a mismatch between policy and affordability. In housing for instance, the focus is on densification, but that is not necessarily affordable. Town planning failures exacerbate problems at municipal level, with buildings being erected on vacant land without consideration of complementary infrastructure. Political interference in planning and execution of projects, a lack of accountability, as well as corruption further stifle development. Municipalities are hamstrung by a short-term view, and they seldom look past the medium-term expenditure framework. The focus on this three- to five-year horizon is not conducive for multiyear projects or developments. Budget and funding decisions often focus on the capital expenditure for the creation of infrastructure and do not take into account the full life-cycle cost of infrastructure, resulting in poor maintenance planning later on. Skills deficit South Africa’s skills deficit is a widely reported concern. The country is not only losing engineers and other highly skilled technical people through emigration, but skills transfer and training are not keeping up with requirements. Training of skilled and semiskilled personnel in the construction industry is important to ensure that infrastructure work is of high quality. Subcontracting requirements Government has introduced a requirement that 30% of public procurement contracts be subcontracted to designated groups to advance transformation in the economy. Where feasible, subcontracting is compulsory for tenders above R30-million (National Treasury, 2017). While the industry considers transformation as imperative, the 30% subcontracting requirement is a contentious issue. There is concern that in a competitive market, adverse cost effects are mainly being borne by main contractors, which is not sustainable in the medium to long term. The requirements increase the risk for the main contractor and reduce its span of control over the delivery timeframe, budget and quality of work (Massey, 2021). The payment of subcontractors is also an area of concern. Smaller subcontractors must be paid within 30 days, but often the main contractor is under pressure as payment from the client is delayed. It is important that there be improved synchronisation of such payment cycles. Tenders and procurement Several issues were raised regarding tenders and a lack of trust between government and the private sector in the tendering process. Government’s inability to correctly determine the cost of infrastructure results in inflated tenders being awarded, or tenders that underestimate the true cost of delivering the infrastructure. There is frustration regarding the disqualification of bidders, which appears arbitrary and vague amid a lack of transparency in the tender adjudication process. To address these concerns, professionals who specify the bid should be involved in the adjudication process. The Gauteng Department of Roads and Transport’s open tender system is a model to emulate to restore confidence in public procurement. The open tender process includes public scrutiny of the opening of the tender boxes and imprinting of all documents, appointing external, independent probity auditors to scrutinise every phase of the tender evaluation process, and importantly, the public adjudication of the decision on the recommended service provider where bidders, the media and interested members of the public can watch the proceedings. It also takes too long to award tenders and the ratio of tenders that are awarded is low. Safcec has called out the City of Cape Town for its slow pace in awarding tenders. According to the forum, the City advertised a road rehabilitation project in May 2019 and gave contractors only one month to tender, while it took the city 16 months to assess the applications and appoint six contractors for the work in October 2020 (IOL, 2020). Further, a lack of trust between the public and private sectors in the tendering process results in more demands for performance bonds. A performance bond protects the client from a contractor’s failure to perform according to contractual terms. In the current circumstances, the low level of trust means that even smaller projects with contract values of under R5-million require performance bonds. Concern has been raised about the abuse of tender panels, comprising a selection of prequalified providers, who are considered preferred suppliers. Although a tender panel simplifies the procurement process, it may reduce competition and open the process to corruption. Weak partnerships Industry participants raised concern about partnerships between government and the private sector. There is a view that government does not consult the construction industry and contractors in early infrastructure planning and design. Early contractor involvement will mitigate many risks during the implementation phase of projects and will save government money. PPPs also need to be streamlined. Interventions for fostering growth Suggestions to enhance investor confidence Build leadership and management skills Leadership and management failures are arguably the greatest single stumbling block to effective service delivery and development. It is stated that it is often not the lack of capital that stops service delivery, but the inability by senior officials to activate and manage the process. Enhance private-sector involvement Move away from a public-sector driven economy to a PPP-driven economy, in which the private sector is more involved in driving infrastructure investments. The private sector will fund infrastructure if there is a return on investment and if corruption can be rooted out. The private sector must be treated as an equal partner to the public sector to foster real partnerships. Consult contractors and the construction industry early on in a project to save government money by mitigating risks during the implementation phase. Embrace PPPs where they deliver better value for money. PPPs will reduce demands on the fiscus and can be used to fill finance gaps for infrastructure development. Streamline PPPs to reduce complexity. Fix municipalities A new way of thinking is required regarding municipalities, particularly district and rural municipalities, where competency is lacking. Some of the suggestions to get municipalities working again are: Establish a model to allow for the private sector to partner with local government. This will speed up development. The private sector must be involved throughout the entire cycle, from budgeting, financial management, maintenance and supplementing professional skills. Professionalise local government to maximise its development impact. Municipalities need to conduct proper planning and improve the management of budgets and cash flow. Enforce accountability for qualified audits and take people to task for failures. Equally, promote clean audits and prioritise the eradication of corruption. Consider bonus-driven targets that incentivise better performance. Simplify management systems. Officials set themselves up for failure because of unwieldy procedures. Local participation and skills transfer Ensure skills are transferred to local communities surrounding big infrastructure projects. Increased local participation could assist, to some extent, with the problems that the industry faces regarding the so-called construction mafia and the disruption of project sites. Maintain infrastructure Abandon the ‘run-to-failure’ approach where maintenance is conducted only when infrastructure fails. Budget for the full life cycle of a project, including operations and maintenance, rather than considering only the cost of planning and construction. A focus on proactive, as opposed to reactive or emergency, maintenance will save costs and prolong the infrastructure’s life span. Remove bottlenecks to development Red tape and bureaucracy are slowing down development. Regulatory timeframes for approvals must be expedited. A suggestion is to establish a council overseeing the approval processes and to deal with any appeals. For example, should an application fail to be processed in the specified timeframe, the overarching body should determine the reasons for it – whether it be an apathetic official or an issue with bulk services. More land must be made available for development. A rapid land release for housing is needed and government has tracts of land that can be used for this purpose. Accelerate the planning for bulk services and invest in the provision and maintenance of services, such as electrical installations, water reservoirs and distribution networks, sewerage treatment works and roads. Dedicated spending is needed to get maximum delivery traction. Rework the tender process The tender process is cumbersome, expensive and an inhibitor for development. While the tender system should not be done away with, there is a need for government tenders to be more specific, streamlined and simplified. Tender submissions tend to contain a lot of duplicated information, which adds time and costs to the process. Bids out for tender must be awarded timeously. Industry participants are concerned that too many government tenders are issued for purely speculative or budgeting reasons with no intention or ability to follow through. Sharpen focus on sustainable developments A greater emphasis must be placed on planning and building sustainable developments – cities that are planned with job opportunities in mind, with fit-for-purpose infrastructure and that are built with materials that have sustainability in mind. Conclusion The discussions with the construction industry have highlighted that South Africa must move away from a public-sector driven economy to one in which PPPs play a more predominant role. Government must acknowledge that it alone cannot create the jobs that are required to place the economy on a path of faster economic growth. Instead, a conducive environment must be created for the private sector to flourish and to attract the investment that is required. There is also a unanimous view that failing municipalities, often run by staff and managers who do not have the required skills set or who lack ethical leadership, must be fixed urgently to unleash a new wave of development. To achieve this vision, the private sector should be roped-in to partner with municipalities to better leverage private-sector expertise, capacity and experience. The restoration of working municipalities is key to a working and growing economy. Overall, process must be kept simple and transparent. This must include keeping tender and approval procedures simple, and streamlining PPPs to maximise efficiency and remove bottlenecks to development. References Bekker, G. 2021. Municipalities’ project management falling short, July 23, 2021. [Online]. Available at: https://www.engineeringnews.co.za/print-version/municipalities-projectmanagement-falling-short-2021-07-23 [accessed November 27, 2021]. Bureau for Economic Research. 2021. Weekly Review, Number 45, November 22, 2021. [Online]. Available at: https://www.ber.ac.za/knowledge/pkviewdocument.aspx?docid=15053 [accessed November 27, 2021]. Business Times. 2021. Infrastructure investment set to get a leg up from new forum, November 28, 2021. [Online]. Available at: https://www.businesslive.co.za/bt/businessand-economy/2021-11-28-infrastructure-investment-set-to-get-a-leg-up-from-new-forum/ [accessed November 29, 2021]. Department of Public Works and Infrastructure. 2021. National Infrastructure Plan 2050, August 10, 2021. [Online]. Available at: http://www.publicworks.gov.za/PDFs/44951_10-8_ PublicWorksInfras.pdf [accessed November 27, 2021]. Engineering News. 2021a. Eskom officially declares Lethabo tower collapse an act of sabotage. November 19, 2021. [Online]. Available at: https://www.engineeringnews.co.za/article/eskomofficially-declares-lethabo-tower-collapse-an-act-of-sabotage-2021-11-19 [accessed November 27, 2021]. Engineering News. 2021b. TFR bemoans unprecedented levels of cable theft, vandalism, November 10, 2021. [Online]. Available at: https://www.engineeringnews.co.za/article/tfrbemoans-unprecedented-levels-of-cable-theft-vandalism-2021-11-10 [accessed November 27, 2021]. Engineering News. 2021c. President urges communities to support N2 toll road project, September 23, 2021. [Online]. Available at: https://www.engineeringnews.co.za/article/ president-urges-communities-to-support-n2-toll-road-project-2021-09-23/rep_id:4136 [accessed November 27, 2021]. IOL. 2020. City of Cape Town slammed by civil engineers for slow pace of awarding tenders. November 22, 2020. [Online]. Available at: https://www.iol.co.za/capeargus/news/city-of-capetown-slammed-by-civil-engineers-for-slow-pace-of-awarding-tenders-efab7ea5-4f48-4328-a27c48cf0491697f [accessed November 27, 2021]. IOL. 2021. Call for government to deal decisively with dangerous ‘construction mafia’, September 10, 2021. [Online]. Available at: https://www.iol.co.za/news/politics/call-forgovernment-to-deal-decisively-with-dangerous-construction-mafia-52388153-c811-4058-acde9eb73bad6345 [accessed November 27, 2021]. Maluleke, T. 2021. Consolidated general report on the local government audit outcomes 2019/20, June 30, 2021. [Online]. Available at: https://www.agsa.co.za/Portals/0/Reports/ MFMA/201920/2019%20-%2020%20MFMA%20Consolidated%20GR.pdf [accessed November 27, 2021]. Massey, I. 2021. Opinion: South African construction contract participation requirements appear to be out of touch with reality, October 28, 2021. [Online]. Available at https://www. engineeringnews.co.za/article/opinion-sa-construction-contract-participation-requirementsappear-to-be-out-of-touch-with-reality-2021-10-28/rep_id:4136 [accessed November 27, 2021]. National Treasury. 2017. Preferential Procurement Policy Framework Act, 2000: Preferential Procurement Regulations, January 20, 2017. [Online]. Available at: http://www.thedtic.gov.za/ wp-content/uploads/PPPFA_Regulation.pdf [accessed November 27, 2021]. Reserve Bank, 2021. Quarterly bulletin – no 301, September 28, 2021. [Online]. Available at https://www.resbank.co.za/en/home/publications/publication-detail-pages/quarterly-bulletins/ quarterly-bulletin-publications/2021/FullQuarterlyBulletinNo301September2021 [accessed November 27, 2021]. Statistics South Africa. 2021a.Gross domestic product, Q4 2020, March 9, 2021. [Online]. Available at: http://www.statssa.gov.za/publications/P0441/P04414thQuarter2020.pdf [accessed November 28, 2021]. Statistics South Africa. 2021b. Quarterly Labour Force Survey, Q1, June 1, 2021. [Online]. Available at: https://www.statssa.gov.za/publications/P0211/P02111stQuarter2021.pdf [accessed November 27, 2021]. Statistics South Africa. 2021c. Quarterly Labour Force Survey, Q2, August 24, 2021. [Online]. Available at http://www.statssa.gov.za/publications/P0211/P02112ndQuarter2021.pdf [accessed November 28, 2021]. Webster, M. 2021. SONA infrastructure pronouncements: Safcec suggested points of emphasis for 2021 Budget Vote, February 24, 2021. [Online]. Available at: https://www.safcec.org.za/ news/553366/SONA-Infrastructure-Pronouncements-SAFCEC-Suggested-Points-of-Emphasisfor-2021-Budget-Vote.htm [accessed November 27, 2021]. World Bank. 2021. Doing Business, November 2021. [Online]. Available at: https://www. doingbusiness.org/en/data/exploreeconomies/south-africa#DB_dwcp [accessed November 27, 2021]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

The Inclusive Society Institute is currently engaging various economic sectors as part of its extensive economic research project, which will culminate in a comprehensive ‘Blueprint for rejuvenating South Africa’s economy’. In a series of dialogues, the various sectoral stakeholders and policymakers are engaged in seeking answers to the all-important questions aimed at gaining an understanding, from the particular sector’s perspective, as to what the country needs to correct policy wise, and what new initiatives / policies should be introduced to shift the economy onto a higher growth trajectory. In the constructive dialogue with labour, which was held 15 February 2022, some important issues raised, including, amongst others: An acknowledgement that the economy is in crisis and needed all hands-on deck to place it onto a new growth trajectory. There were problems with the current macro-economics, which, in the view of labour, relied too heavily on neo-liberal values. There needs to be greater focus on positioning South Africa as a developmental state. The state is failing, or at least failing to implement policy. And the continual shifting of ideology is not helpful. Public policymakers need a wake-up call with regard to the state of social cohesion in the country. On corruption, there was a strong feeling that “the crooks must be jailed”, and that those from the political establishment need to be prioritised so as to set the example and create investment confidence. The place of immigrants in the economy needs to be thoroughly considered. Localisation and circulation of the Rand within the country was now more crucial than ever. The tax-system needs to be re-looked. Are the rich sufficiently taxed? Is there space for targeted solidarity taxes? Don’t keep changing policies every five years. Policy certainty is needed. There needs to be balancing between the needs of the financial sector and that of the real economy, for example, credit allocation to emerging manufacturing firms. Urgent policing of infrastructure is needed. Take home message: Dealing with the economic woes as a matter of urgency. Either leadership must do it, or society will do it for them.

Occasional Paper 2/2022 Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute. DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. FEBRUARY 2022 by Prof William Gumede Associate Professor, and former Convener, Political Economy, School of Governance, University of the Witwatersrand; and former Senior Associate and Programme Director, Africa Asia Centre, School of Oriental and African Studies (SOAS), University of London; and author of South Africa in BRICS (Tafelberg) Introduction Singapore’s People’s Action Party (PAP) offers valuable lessons for the ANC and other African liberation and independence movements, in how to turn themselves into effective developmental parties. This type of political body has the necessary capacity to govern diverse countries inclusively and manage the complex development strategies that are needed to turn ethnically diverse former colonies into highly industrialised, racially inclusive and peaceful countries. The PAP transformed itself from a party of independence – a typical broad front spanning trade unions, communists and small business – into a developmental party with pragmatic policies, merit-based leaders, and with honest, anti-corrupt and ethical governance. Unlike many other independence and liberation movements, especially those in Africa, once in power, the PAP did not wallow in victimhood, or blame colonialism or imperialism for everything that went wrong or for self-inflicted failures. Instead, it focused its energy firmly on the present, the future and on tackling problems pragmatically[1]. The PAP used its postcolonial hegemony over society better than Africa’s dominant independence and liberation movements. It transformed Singapore within one generation from dirt-poor at independence from Great Britain in 1965, into a highly developed economy. At independence Singapore had no mineral resources, no significant industries and imported its energy, food and water[2]. In 1965, Singapore’s nominal GDP per capita stood at US$500 – the same as Mexico at the time. In 2015, GDP per capita rose to US$56,000 – similar levels to Germany[3]. Singapore had caught up with industrial and former colonial powers. The country managed to make income distribution more equal on the back of concentrated focus on quality education, improving technical skills and fostering entrepreneurship in both the public and private sectors[4]. In contrast, almost all African countries within one generation became significantly poorer, more corrupt, more ethnically divided and more dysfunctional than they were at independence. By delivering industrialisation, widespread prosperity and racial peace, the PAP ensured its continued legitimacy[5]. With few exceptions, African independence and liberation movements have been successful in opposing colonial or apartheid regimes. However, they have failed to use their hegemony over their societies to make the transition as governing parties who can successfully manage the kind of intricate state-building, industrialisation and development so effectively implemented by the PAP. Most importantly, the PAP is the only party after independence that renewed itself while in power. It changed independence-era policies, ideologies and ideas for pragmatic ones, and forcefully retired veteran struggle leaders who were not competent, in spite of their “struggle” credentials. The party brought in new leaders, many of whom were never part of the “struggle” or, in some cases, were not even members of the party. The PAP dealt firmly with corruption within the party and state – jailing senior leaders in the party and government implicated in corruption, even if they were struggle grandees. The party introduced a strict meritocratic system and governed at all times in the widest public interest, not only in the interest of its struggle leadership elite, members or core constituencies. The shock therapy introduced by the PAP to renew itself offers many lessons for the ANC and other African liberation and independence movements, such as Namibia’s Swapo or Algeria’s FLN, who have backslid in government. PAP – an independence party of the Left The PAP was established in 1954 as a party to fight for the independence of Singapore from Great Britain. Lee Kuan Yew, the founding father of post-independence Singapore, was one of the founders of the PAP. The party was similar to many African liberation and independence movements, a party of the Left[6]. However, unlike many African liberation and independence movements who adopted either Marxist-Leninism, African variants of socialism and communalism, democratic centralism, and state-led development, the PAP pursued social democracy, adopted pragmatic market-based policies, and partnered with business, including multinationals. The Singaporean thinker, Chan Heng Chee says that the PAP ideology was that of pragmatism[7], meaning adopting policies based on whether they produce results, and if they do not, rejecting them, and not basing policies on dogma or the belief in an absolute truth. Lee Kuan Yew explained the PAP policy approach as “rational” decision-making[8]. Michael Hill and Lian Kwen Fee said that the PAP adopted ‘‘purposive rational policies’’, which “requires planning and considerable quantitative analysis to complement a very strong strain of empiricism. If the leaders find that a policy is not working or that it is producing unintended results, the PAP will jettison it without any sentimentality”[9]. Many African liberation and independent movements of both the left and the centre, often also pursued left populist social, political and economic policies, whereas the PAP consistently rejected populism. The PAP essentially almost became “non-ideological” in government[10]. The PAP has been exceptionally “responsive” to citizens’ concerns[11], contrary to most African liberation and independence movements, who often take for granted that their supporters will vote for them because they supposedly brought “freedom”. The PAP also focused on the long term, rather than the short term, whereas many African liberation and independence movements focused largely on the short term, undermining long-term sustainability. The PAP focused on making “things work”, delivering quality basic public services on time, making “basic utilities function efficiently”, and ensuring new “infrastructure is intelligently planned with a long-range vision in mind”[12]. PAP’s pragmatic policy turns away from liberation ideology At independence local and international business were alarmed by the rise to power of the PAP, because of its left-wing history. As a result, many local and international companies moved their head offices to other countries[13]. However, the PAP proved the market doubters wrong. The PAP cobbled together an industrialisation strategy, focusing on export manufacturing, unlike many African liberation and independence movements, who rarely focused on industrialisation, but rather concentrated on redistribution of colonial or apartheid-inherited assets, land and businesses as the main strategy. Ravi Menon, Managing Director of the Monetary Authority of Singapore, the country’s central bank, says that in 1965, Singapore made two strategic economic decisions which broke from accepted left-wing developing country independence ideology. Firstly, it moved away from a strategy of import-substitution to one of export-led industrialisation. Secondly, the country went all out to attract foreign multinationals – given the fact that it did not have its own industry players, to drive industrialisation. “The government developed industrial land, put in place infrastructure facilities, reformed labour laws to promote industrial peace, and invested in basic education with emphasis on technical skills relevant to industrialisation. Sound fiscal and monetary policies ensured macroeconomic stability and underpinned investor confidence.”[14] By 1975, the country’s manufacturing share of GDP had expanded to 22% from 14% in 1965 and the economy almost reached full employment[15]. The country’s manufacturing drive focused on making basic products that were needed by the population, such as fishhooks, matches and mosquito coils. When it reached a sizeable new manufacturing base, it changed track to focus on “moving up the value chain towards more capital-intensive and skill-intensive activities”[16]. The new capital- and skill-intensive strategy, by the late 1980s, yielded a large value-added sector in electronics, component and precision engineering and petrochemicals[17]. Such was the expansion of the electronics industry, which started from a zero-base, that in the 1980s Singapore became the world’s leading producer then of hard disk drives, the early method of memory storage used in computers[18]. “The first two decades of Singapore’s economic history could be described as the ‘take-off' phase. It was the period when the economic fundamentals of prudent public finances, sound monetary policies, co-operative industrial relations, outward orientation, and market-based strategies took root. The economy grew by an average of about 10% each year during this period, and Singapore emerged as a newly-industrialised economy at the forefront of developing countries”[19]. Private sector-led growth, rather than state-led growth The PAP encouraged private sector-led growth, rather than state-led growth, unlike many African liberation and independence movements, who discouraged private sector-led growth, prioritizing state-led growth. It focused on export-led manufacturing. It eschewed import substitution, the policy of replacing foreign imports with domestic production, to focus on manufacturing locally for export abroad. The party’s post-independence economic strategist, Goh Keng Swee, strongly pushed industrialisation as a way to foster growth and create jobs, rather than using redistribution of existing or colonially inherited wealth[20]. The state partnered with business – predominantly foreign multinationals. In contrast, African independence and liberation movements nationalised many local and foreign companies, or introduced indigenisation or empowerment programmes, where the state or local political capitalists close to governing parties get slices of local or foreign companies. The PAP used private sector individuals who had previously successfully managed large companies to lead the implementation of critical government policies. For example, the banker, Lim Kim San, was appointed to lead the government’s pillar redistribution and industrialisation strategy, its housing development programme, which he led spectacularly successfully. It is very unlikely that a PAP politician or activist who had never led a complex commercial organisation, as Lim Kim San had, would have been so successful in driving the housing development programme. The party sought out progressive outside expertise for help. They did not take on Marxist-Leninist or neo-liberal advisors. Instead, Singapore took lessons from Japan’s successful post-Second World War industrialisation, the Dutch and German industrialisation following the end of the Second World War, and the United Nations Development Programme, which is more sustainable development-orientated, than say the World Bank or International Monetary Fund. It particularly sought the advice of the Dutch social democratic economist Albert Winsemius, who became economic advisor for the country from 1960 to 1984[21]. The PAP uniquely used multinationals in Singapore to lead industrialisation – because at independence there were no large indigenous companies, international multinationals led the export manufacturing expansion[22]. The PAP government did not nationalise colonial-era local and foreign businesses – as has been the case in many African independence and liberation movement-led countries. The party’s government encouraged local and foreign investment, introducing tax holidays, low taxes, and establishing the Jurong industrial estate[23]. It also involved foreign multinationals in partnering with the government in industrialisation and partnered with local and foreign businesses to stimulate growth, industrialisation and development. The PAP government focused all-out on revamping the colonial education system, making the system fit for purpose for industrialisation. It put pressure on the trade union movement, aligned with the PAP to strike compromises to encourage economic growth, employment and business creation. Redistribution that focuses on industrialisation, infrastructure and education The PAP government-built redistribution strategies on industrialisation, infrastructure and education. It constructed its infrastructure programme around building low-cost housing – forging a manufacturing industry link to the inputs of the housing programme, fostering technical education and forming inclusive ethnic communities around the housing programme[24]. As stated earlier, the banker, Lim Kim San, was put in charge of the rollout of the housing programme – which he did very successfully. The government also used the housing expansion to integrate different ethnic communities, to foster multiracialism and common nationhood. The PAP’s land reform strategy was pragmatic, not ideological or vengeful or emotional. In 1966, the party enacted the Land Acquisition Act, which made it possible for the government to acquire private land for public purposes[25]. The Act provided for compensation to private owners of land acquired by government, which was land that was in “surplus”, vacant or that private owners wanted to willingly sell. Land in productive use remained largely untouched. Between 1959 and 1984, the government acquired around one-third of the total land area of Singapore. An Appeals Board was established, with independent members, to mediate in any disputes over the amount of compensation between private landowners and government. The Act fixed compensation at market value as of 30 November 1973. The PAP did not pursue affirmative action and empowerment programmes for previously disadvantaged communities, such as the Malay communities. They prioritised lifting everyone out of poverty, giving the poorest of all communities a leg up. They focused especially on education as a development, growth and empowerment strategy. In 1981, the Prime Minister established Yayasan Mendaki (Council for the Education of Muslim Children) to boost the educational performance of poor Malays and to promote a cultural change to make education a priority among the community[26]. To finance the Mendaki scheme, the government deducted 50 cents from every Malay-Muslim employee’s pension fund contribution – which the government matched[27]. Prioritising entrepreneurship After the Second World War, Singapore – like other successful East Asian economies such as South Korea, Taiwan and Japan – pushed entrepreneurship. This is the reason why the country is now more advanced than all African countries, which did not follow that route. By the late 2000s, Singapore had become one of the world’s leading countries for start-up ecosystems[28]. High-tech manufacturing is now the country’s main focus in its drive to ever-increasing manufacturing output. The PAP, after coming into power, ditched the rigid ideological view that almost all independence parties of the Left – whether in Asia or Africa – had during their independence struggles, that only the state should lead development (Gumede 2017). Rather, the party’s leadership under Lee Kuan Yew prioritised entrepreneurship[29]. The PAP’s focus was not on what is called “necessary entrepreneurship”, meaning “people who by necessity, the unemployed or the unemployable, resort to creating or starting their own business”[30], but on a whole-of-society entrepreneurship[31]. The PAP government initially focused on attracting foreign multinationals. But by the late 1970s it began to concentrate on transforming the local small business sector into an export manufacturing sector. A 1985 government report, the Sub-Committee Report on Entrepreneurial Development, proposed that the government foster a countrywide entrepreneurial spirit by inculcating entrepreneurship into the education system, into the country’s work culture, and by encouraging local companies to internationalise, to force them to become more entrepreneurial[32]. The Singapore government itself also played the role as an entrepreneur. Tony Fu-Lai You describes the term “state entrepreneurialism” and David E. Osborne and Ted Gaebler (1992)[33] called it “entrepreneurial government” for the way a state itself could function as an entrepreneur[34]. The PAP introduced merit-based appointments to the public service, rather than cadre deployment, which brought large numbers of entrepreneurial minded new public servants into government. Lichauco (1988) called such entrepreneurial minded public servants “entrepreneurial agents of the state”[35]. When the PAP’s left-wing, communists and trade unions opposed the new entrepreneurial direction, Lee Kuan Yew, like other leaders of independence movements did not try to hold the left and moderate factions of the party together for the sake of “unity”, which would invite policy paralysis, but instead encouraged them to leave. The far-left faction’s opposition to the party’s focus on driving the private sector to become prominent in leading industrialisation, combined with its opposition to securing a merger between Singapore and Malaya, caused it to eventually leave the PAP in 1961. The PAP leadership did not try to accommodate them by backing away from private sector-led industrialisation for the sake of unity. Most African governments and leaders have either actively discouraged or were indifferent to entrepreneurs, and rarely fostered supporting institutions, policies and environments for entrepreneurship. Since independence from colonialism, African industrialisation, development and growth have been stunted because most governments have not explicitly encouraged entrepreneurship. And not much has changed since then. Entrepreneurs change society[36]: they create new industries, new jobs and new wealth, which more people can benefit from. They increase the size of economies and fuel economic growth. They inspire a virtual cycle of others trying their hand at starting new businesses, developments and initiatives too[37]. The French economist, Jean-Baptist Say, who in 1800 coined the term entrepreneur, described entrepreneurs as being able to “shift economic resources from an area of lower productivity into an area of higher productivity and greater yield”[38]. The celebrated economist Joseph Schumpeter wrote that an entrepreneur is “an individual who introduces something new in the economy, a method of production not yet tested by experience, a product with which consumers are not yet familiar, a new source of raw material or of new markets”[39]. Researchers Robert Hirsch, Michael Peters and Dean Shepherd in their book, Entrepreneurship, described entrepreneurship’s role in economic development as involving “more than just increasing per capita output and income; it involves initiating and constituting change in the structure of business and society”[40]. There is a widespread wrong belief among many in the ANC – in fact, among many African left-leaning liberation movements – that entrepreneurship is something bad, that it will lead to capitalist “exploitation” and will take power from the state. Such movements minimise the impact of entrepreneurial individuals to bring developmental transformation. In African liberation ideology, the individual often does not matter, and everyone is lumped as part of the “collective” or the “masses”. This is one of the reasons for the misguided phenomenon that anyone can be appointed to run complex organisations, even if they do not have the skills, as long as they are a “cadre”, which has led to the collapse of many African countries, state-owned entities and agencies. For another, in South Africa, tenderpreneurship – getting a tender, or political entrepreneurship, being middle-men or women based on one’s political connections, rather than competence or skill – is often falsely seen as entrepreneurship. It is not. It undermines entrepreneurship. Repositioning the PAP from an opposition independence movement into a pragmatic developmental party that can govern effectively The PAP, like African liberation and independence movements, was also at its inception a broad church, or popular front, bringing together different ideological groups – from the left, centre to the right – trade unions, businesses and conservative religious leaders, under one umbrella to oppose colonialism. Communists and trade unions were aligned with the PAP, a left-wing nationalist party which had “a reasonably broad working-class base”, the “English-educated” middle class, the “Malay blue- and white-collar workers”, and “the Chinese clan associations, trade guilds, and blue-collar workers’’[41]. At the party’s inaugural meeting more than 90% of those present were from the trade union movement. At independence, the PAP was dominated by strands: one the central democratic wing, led by Lee, and the other, the communist grouping, led by Lim Chin Siong. When the PAP repositioned itself into a governing party, with pragmatic policies, rejecting fixed old independence movement-era ideologies, appointing leaders on merit and firing incompetent, corrupt and dishonest leaders, many struggle cadres rebelled. The party’s left-wing groups also objected to repositioning the party as a pragmatic developmental party. Lee pushed to realign the PAP to turn it into an effective governing party. In August 1961, Lee forced out the communists from the PAP broad church because of irreconcilable ideological, policy and leadership differences. The PAP communists then, in 1961, formed the Barisan Socialist Party and took 35 out of 51 branches of the PAP with them. Extraordinary for any independence party, the PAP actively discouraged populism among members and leaders – at the threat of expulsion[42]. The government established a social pact coordinated body, like the Dutch equivalent, to forge a consensus between organised labour, business and the government on growth, industrialisation and multiracialism strategies[43]. Importantly, business had equal power to that of labour, although the PAP started off as a party aligned to trade unions. Trade unions were compelled to compromise short-term interests in favour of the country’s long-term industrialisation[44]. For example, they had to agree to productivity targets, accepting lower wages and increases and not to strike, to foster an investor-friendly labour market. African liberation and independence movements aligned to trade unions often give preference to their labour allies above that of business. This results in these governments alienating business, and therefore losing out on having the support of business, with its resources, ideas and capacity for the industrialisation programme. Many African liberation and independence movements, when in power, still keep together the different and opposing ideological groups which were part of the broad church of the anti-colonial or anti-apartheid struggle. However, keeping such disparate ideological groups within one governing party in power causes continual paralysis in decision- and policy-making and direction. This undermines development, industrialisation and societal peace, which need clarity in decisions, policies and direction. Introducing the rule of law and tackling corruption regardless of leadership seniority The PAP was from the start very firm against corruption, prosecuting its own powerful leaders for such malfeasance, to show that liberation leaders are not above the law, as is the case in many postcolonial societies. No successful country development can take place amidst corruption, incompetence and lawlessness. Most of the postcolonial African development initiatives were carried out under leaders who were corrupt, incompetent and acting above the law – which predictably caused these efforts to fail. Corruption included elected and public representatives living beyond their means or being unable to explain wealth, property or assets. Very early on in power, the PAP came out hard on corruption within its leadership ranks. In 1959, Education Minister Chew Swee Kee was forced to resign after evidence emerged of his involvement in corruption. The PAP prosecuted a key leader, Phey Yew Kok, who was also the powerful leader of the National Trade Union Council (NTUC), sending him to jail for accepting bribes. The party was also more determined to establish the rule of law at independence – and making everyone equal before the law. When Singapore was granted self-government by Great Britain in 1959, not at independence, which came only in 1965, PAP won the 1959 general elections and Lee became Prime Minister. In the first thirty days of gaining power in 1959, the PAP government broke up criminal gangs, mafia networks and illegal activities. The government continued with enforcing the rule of law – bringing to book both party members and leaders and ordinary citizens who were corrupt – which entrenches the rule of law. When they get into power, many African liberation and independence movement governments often exempt party members and leaders from the rule of law, while they police ordinary citizens not connected to the liberation or independence movement leaders. This unequal treatment of citizens depending on their connection to the leaders of the governing party undermines establishing a culture of rule of law – crucial for industrialisation, growth and development. In addition, party members did party organisational work as volunteers – receiving no payment or benefits[45]. Ethnic inclusivity in party and government Singapore is a multi-ethnic and a multilingual state. It consists of 77% Chinese, 14% Malay, 7.7% Indian and 1.3% Eurasians. Within these individual groups, there is extensive diversity. The PAP went out of its way to represent all ethnic groups at ‘‘all levels of the state and in state institutions’’[46]. It adopted multiracialism, a respect for and equality of all ethnic groups, and tolerance of differences, as one of the post-independence country’s “founding myths”[47]. In its policy of meritocracy within the party and the state, the PAP rewarded performance, excellence and efficiency on merit, rather than basing it on ethnicity. It went out of its way to protect minorities. The PAP was scrupulous in electing and appointing leaders who came from diverse ethnic backgrounds in the multiracial country, making multiracialism a guiding ideology. In elections to the central executive committee, to Cabinet, and for candidates for parliament, the party took care to have ethnic diversity and gender equality. Ahead of every election, the PAP vigorously reviewed existing representatives in terms of their performance, and to make place for new talent. Many African independence and liberation movements were often dominated by and prioritised one ethnic group, colour or region, excluding others. And thereby, marginalising the talents, ideas and resources of other groups who could have been marshalled for industrialisation, development and nation-building. Furthermore, in many African countries, one ethnic, colour or regional group, has often been scapegoated for the lack of advancement of another community. Many countries in which this happens have been plunged into ruin, social disorder and economic stagnation. Diversity in government, political parties and private organisations brings different skills, experiences and ideas together, which collectively spark innovation, boost performance and unleash dynamism. Merit-based deployment system to bring talent and marginal ethnic groups into the leadership in government and party In 1958, the PAP introduced one of the most successful cadre deployment policies of any former independence party[48]. The system, where minimum educational standards were set to become a cadre and certain kinds of people were excluded, was initially used to raise the quality of new party members. The Singapore cadre system was only used for the party itself, initially to recruit quality ordinary members, and then later to recruit talented ethnically and gender diverse members from outside the party for leadership within the party. In addition, the party used the cadre policy to headhunt new leaders who were not members of the PAP for leadership positions in the party, parliament and government. The public service of Singapore was ring-fenced from cadre development and had an inclusive merit-based system. The PAP vigorously pursued the strategy of merit within its own party and within the state. Elections to party leadership were largely on merit, but also included all ethnic groups, which lifted the best talent among its support base to the leadership of the party. The PAP was “obsessive about co-opting talent”[49] and they “ ‘constantly’ replaced ‘older MPs’ with the ‘best and brightest’ young talent that can be recruited”[50]. Parliamentary candidates were selected after interviews, competency assessments and lifestyle audits[51]. The PAP headhunted new talent based on their performance record, educational background and values for leadership in the party. During the first years in power, when it faced fierce competition from opposition parties, Lee Kuan Yew made a case for the PAP to recruit the country’s top talent: ‘‘It is a battle of ideals and ideas. And the side that recruits more ability and talent will be the side that wins’’[52]. In 1976, the PAP modified Shell, the oil company’s system of testing new executives to evaluate new recruits for party leadership. The Shell system involves testing candidates’ ability to analyse, imagination and sense of reality[53]. Critics have slammed the rigorous selection process saying it promoted elitism[54]. However, the merit-based system in the party and government was a key reason for the country’s economic growth, racial peace and political stability miracle. The PAP also established a meritocratic public service, setting entry examinations for new entrants, to recruit the nation’s best talent, no matter their ethnic, political or language affiliation. No African liberation or independence movement has created meritocratic public services. Rather, most appoint only cadres of their parties, or in some cases members of the ethnic, language or regional group dominating the party, to public service positions. Bringing the best talents continuously into leadership, getting rid of corrupt and incompetent ones and ensuring ethnic diversity in leadership appointments, made the PAP a much more dynamic political party than most African liberation and independence movements. These entities often elected leaders based on struggle credentials, loyalty to the leader and ethnic, colour or religious affinity to the dominant leadership group. In contrast to the PAP in Singapore, in South Africa, the then general secretary of the ANC said the party will not do away with cadre deployment because the ANC do not want “graduates and businessmen and women who are competent, but who are hostile to the programme of the ANC”[55]. Lessons from the PAP for the ANC The ANC and other African liberation and independence movements would do well to learn from how the PAP, one of post war’s most effective former independence movements, transformed Singapore from a poor backwater into a prosperous, ethnically inclusive and peaceful society. The ANC is in deep crisis. It urgently needs renewal of policies, leaders and ideologies; to introduce merit in the party and state; and to make the party more racially, gender and youth inclusive. It needs to genuinely tackle corruption. African liberation movements like the ANC, in their fight against colonialism or apartheid build broad fronts, ranging from African traditionalists, Marxist-Leninists to free-marketers. But in power, governments need one set of policies, not a multitude of conflicting policies. To be an effective governing party, the ANC must have one set of coherent policies, and shed the groups that have ideologically different outlooks. Genuine renewal of the ANC necessitates realignment of the internal forces, groups and factions within the party. As the PAP got rid of the far-left, so too will the ANC have to rid itself of the populists. The ANC must also shed its ideological opposition to entrepreneurship, its dismissal of business, civil society and professionals, and instead genuinely partner with these social partners, in order to leverage the resources, ideas and capacity of these social partners to improve the capacity of the state. In fact, it needs to build new kinds of social pacts between itself, civil society, business and communities. Like the PAP, the ANC now needs to recruit new talented leaders from outside the party structures. The South African public sector must be fully ring-fenced from cadre deployment, which should be restricted to the ANC as a party deploying talent, ethnic, youth and gender diversity into their party ranks as part of deployment, not into government. South Africa’s public service must be an inclusive merit-based system – seeking out those from previously disadvantaged communities on merit also. The ANC leaders must restore the rule of law, by making everyone equal before the law. Top ANC leaders who have mass support, but who are corrupt, dishonest and criminal should not be shielded from prosecution. They must be expelled from the ANC. But the ANC government must also break untouchable parallel governments such as gangs, violent taxi associations and autocratic traditional leaders. The ANC must also firmly tackle the party’s own militia, such as the MK military veterans. Trying to renew, modernise and clean-up the organisational culture of any organisation, let alone the ANC, where corruption has become so entrenched, will meet with fierce resistance. When organisational cultures are deeply entrenched, leaders who want to change them are often deposed by members of the organisation. Serious reforms by President Cyril Ramaphosa to change the ANC organisational culture will likely cause a similar rebellion against him at the party’s December 2022 national elective conference, as happened against former ANC President Thabo Mbeki at the ANC’s 2007 Polokwane conference, when he tried to introduce overdue modernisation reforms of the ANC[56]. ANC President Cyril Ramaphosa will need to introduce shock therapy to shake up the ANC: be bold and lead, sack all corrupt leaders, and on merit bring in large numbers of new ANC leaders who have not been part of the current corrupt ANC structures. The party needs new ideas, new partnerships with business, civil society and professionals. If the ANC does not change, the party will lose the 2024 national elections. 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Tafelberg. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za