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Occasional Paper 3/2025 Copyright © 2025 Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8010 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. M A R C H 2 0 2 5 Prof William Gumede Former Programme Director, Africa Asia Centre, School of Oriental and African Studies (SOAS), University of London; former Senior Associate Member and Oppenheimer Fellow,   St Antony’s College, Oxford University; and author of South Africa in BRICS (Tafelberg).      Abstract Despite evidence from climate experts that 6% of the world’s coal use must be terminated every year until 2040 to prevent a climate disaster, global coal use continues to rise. The global challenge now lies in securing a just transition from coal. Developed countries – the biggest emmitters – have made funding promises to developing countries that fall far short of what these nations need to transition and adapt, and largely take the form of loans that leave these poorer nations heavily indebted and without any power over how the transition unfolds. In South Africa, about 80% of its power is generated by coal. Mine closure will have a severe impact on millions of already poverty-stricken people. At present, South Africa has no effective plan to mitigate the transition shock on the economy, which could destabilise its financial institutions. So, how can South Africa pursue a just transition from coal that takes into consideration local realities, energy security, development and economic growth, indebtedness, and poverty, unemployment and social stability? The country has well-developed infrastructure, abundant natural resources, and critical minerals, offering opportunities to create a formidable green economy. The way forward is global funding based on grants and investment funding, a focus on technology to clean coal, a massive step-up in developing renewable energy, and a manufacturing, skills and technology revolution. But most importantly, is the need for an industrial policy based on a compact between the state, private sector, and civil society.   Introduction   Following energy shortages generated by the Russia-Ukraine war, and the Middle East conflict, many industrial and emerging powers have either returned to the use of coal for power, whether temporarily, or slowed down on decommissioning of coal plants.   A new December 2024 report from the International Energy Agency (IEA) said global demand for coal is set to hit fresh records every year through at least 2027 (IEA, 2024a). Coal demand in 2024 was about 9% higher than a forecast made a few years ago. The forecast from the IEA sees demand for coal rising to nearly 8.9 billion tons by 2027, about 1% higher than 2024 levels.   While there has been a global rise in the deployment of wind turbines and solar panels, it has not slowed down the use of coal. The IEA states: “Coal is often considered a fuel of the past, but global consumption of it has doubled in the past three decades. At the height of lockdowns related to the Covid-19 pandemic in 2020, demand declined significantly. Yet the rebound from those lows, underpinned by high gas prices in the aftermath of Russia’s full-scale invasion of Ukraine, has resulted in record global coal production, consumption, trade and coal-fired power generation in recent years” (IEA, 2024a: 3).   “Separate to the rise in the use of coal due to energy supply shortages because of the Russia-Ukraine war and the Gaza conflict, accelerating demand for electricity around the world could give coal another boost. Our models show global demand for coal plateauing through 2027 even as electricity consumption rises sharply,” Keisuke Sadamori, the IEA’s director of energy markets and security, said in a statement (IEA, 2024b).   Climate researchers have pointed out that 6% of the world’s coal use must be terminated every year until 2040 to prevent a global climate disaster (GEM, 2023).   In 2015, global nations signed the Paris Climate Change Agreement, which outlined a long-term strategy the world must adopt to keep the rise of global temperatures under 1.5C, the temperature limit compared with preindustrial times (AP, 2025; UNFCCC, 2015). The Agreement proposed that all the world’s coal plants should be closed by 2040, unless they have carbon-removal technology.   A key challenge in the energy transition is how to make renewable energy fully replace coal generation, without imperilling energy security, development, and economic growth (Dresselhuys,   2024).   G7 countries battle to reduce coal usage   In April 2024, the Group of Seven (G7) countries pledged to end what they called, euphemistically, “unabated” coal power plants by 2035 (G7, 2024). It published a pledge to “phase out existing unabated coal power generation in our energy systems during the first half of the 2030s” to curb the rise in global greenhouse gas emissions (G7, 2024).   The G7 nations – the UK, US, Canada, France, Italy, Germany and Japan –had for years struggled to reach agreement on phasing out coal. These seven countries are collectively responsible for one-fifth of global greenhouse gas emissions (Fyson et al, 2022).   The G7 left space for members to continue to use coal beyond the deadline if plants are fitted with carbon-capture technology to prevent emissions from entering the atmosphere. Many G7 and European Union member countries have transitioned from coal to natural gas, which “has acted as a lower-carbon ‘bridge fuel’” (Dresselhuys,   2024).   Germany and the UK have nine coal-fired power plants each in the list of the top 30 CO2-polluting thermal power plants in the EU, according to a July 2024 report called “Europe’s Dirty 30” released today by CAN Europe, World Wildlife Fund, the European Environmental Bureau, the Health and Environment Alliance, and Climate Alliance Germany.   Germany uses more coal to generate electricity than any other EU country, while the UK comes third in absolute coal consumption for power after Poland, according to the “Europe’s Dirty 30” report.   Germany, Europe’s largest economy, was set to phase out coal by 2030. The German statistics office Destatis reported that during July and September 2022, more than a third (36.3%) of the electricity fed into the German power grids came from coal-fired power plants, compared with 31.9% in the third quarter of 2021 (Eckert & Sims, 2022).   In October 2023, to avoid winter power shortages and to replace scarce natural gas, after a sudden drop in Russian imports to Germany, the German Cabinet approved putting on-reserve lignite-fired power plants back online from October 2023 until the end of March 2024. Berlin reactivated coal-fired power plants and extended their lifespans.   In its bid to cut planet-warming  emissions  in the region  by 55% by 2030  from 1990 levels, the European Commission in 2022 proposed a 100% reduction in CO2 emissions from new cars by 2035 (Pole, 2022).   That means it would not be possible to sell combustion engine cars from then. However, the German government refused to accept the EU ban on new fossil fuel cars from 2035. The EU has stated ambitions to reduce carbon emissions, including a pledge to become carbon neutral by 2050 (Le Monde, 2022).   In 2023, France extended the life of its two remaining coal plants, located in Cordemais and Saint-Avold, long after they were initially due to shut down ( Cossins-Smith , 2023). Many countries only temporarily shut down coal-fired plants to be brought back online during high energy demands or crises. France brought back its coal plants “as a precaution” to “ensure reliable electricity production” during winter. The French government aims to completely phase out coal power by 2030 ( Cossins-Smith , 2023).   In March 2023, the UK called on its reserve coal capacity to manage increased demand following a colder than expected winter (Ambrose, 2024). The UK had in the past pledged to phase out coal by the end of 2024.   Italy, Austria, and the Netherlands in 2023 started up their coal power stations. Italy’s Energy Minister told the country’s Parliament that the country was committed to stopping electricity generation from coal by the end of 2025 nationwide, except on the island of Sardinia (Reuters, 2024a). Italy will move to gas-fired plants instead. It had initially targeted to abandon coal by 31 December 2025; however, Italy’s updated National Climate Energy Plan was revised to end the use of coal only between 2026 and 2028 (Reuters, 2024a). The country is trying to coordinate coal exits until it has brought on board new gas-fired power plants (Reuters, 2024a).   In 2022, Austria announced it would reopen its Mellach power plant in the southern Styria region of the country, which was closed in 2020, over Russian supply shortages because of the war in Ukraine.   The Austrian decision, taken by a “small crisis Cabinet”, was to convert the gas-fired power plant so that it can produce electricity with coal. The Mellach power plant had been shut down but kept on stand-by for coal use when needed.    Previously the Netherlands had capped coal power to 35% of the country’s power output. In 2022, the Netherlands activated an "early warning" phase of the country’s energy crisis plan when it lifted a cap on production by coal-fired power plants to reduce reliance on Russian gas following the war in Ukraine. 2011 Fukushima nuclear disaster pushed Japan to increase coal   Japan is the fourth-largest economy in the world. The 2011 Fukushima nuclear disaster, when a 9 magnitude earthquake caused explosions at the Fukushima Daiichi nuclear power plant, pushed Japan to increase the amount of coal and natural gas it used. Japan has increased renewable energy capacity, like solar and wind, however, shortage of land limits the expansion. Before Fukushima, nuclear power provided one-third of Japan’s power.   Coal makes up 32% of Japan’s electricity mix. Gas-fired power stations supply 34% of the country’s power. Nuclear power accounts for 10%. The country pledged that renewable energy would account for more than a third of its power generation by 2030 and it would achieve carbon neutrality by 2050 (Irfan, 2024).   Japan is the world’s eighth-largest greenhouse gas emitter. It imports 98% of its natural gas in the form of liquified natural gas. The country has large gas storage capacity, the world’s largest LNG storage capacity, which allows the country to use natural gas energy during periods of power downturns (EIA, 2024).    Although in 2023 two new coal power stations came on board (Jera, 2023),  Japan’s target is to reduce the share of coal in electric generation from 32% to 19% by 2030. The country’s policies over the past two decades have focused on “clean coal”.   The government not only intends, over time, to get rid of old and inefficient coal power stations, but it is also prioritising developing technologies that reduce emissions from coal. Since 2023, new coal-fired power stations must come with emission reduction measures (EIA, 2024).   It is also working on increasing the efficiency of coal stations through “integrated-gasification combined-cycle infrastructure, carbon capture and sequestration, and fuel blending with ammonia and biomass” (EIA, 2024).    To continue to keep 12 GW of coal-fired power capacity going beyond 2030, the government has proposed “adding 20% or more ammonia to the coal supply or blending 25% or more wood pellets into the coal boilers to help lower CO2 emissions and keep the plants open” (EIA, 2024). The government is offering, for 20 years, a feed-in-tariff (FIT) paying coal-fired power stations for every kilowatt hour generated by wood pellets in a coal boiler (EIA, 2024). To qualify, coal power stations must keep greenhouse gas emissions under specified limits. Trump ascendancy to the US presidency may increase coal use   The US Environmental Protection Agency in early 2024 set new rules requiring coal-fired power plants to either shutdown before 2040 or if they stay in operation, to capture nearly all of their climate pollution. It is likely that under new US Republican President Donald Trump, who says climate change is overhype, coal use is likely to rise. Trump in his presidential election campaign promised to deregulate the energy sector, cut environmental regulations, and drill for shale gas.   Coal makes up 16% of US power generation. The US exported more than $5 billion of coal in 2023, as they shipped out more than 32.5 million metric tons of thermal coal, the second highest since 2017.   In November 2024, Texas and 10 other Republican-led states sued BlackRock, State Street and Vanguard, alleging they conspired to curtail supplies to further “a destructive, politicised environmental agenda” (Reuters, 2024b). Texas and the 10 Republican-led states said the large asset managers violated antitrust law through climate activism that reduced coal production and boosted energy prices.   The complaint was filed in the Federal Court in Tyler, Texas. Texas and the 10 Republican-led states accused the companies of exploiting their market power and involvement in climate advocacy groups to pressure coal companies to slash output and reduce carbon emissions from coal by more than 50% by 2030, driving up consumers’ energy bills (Reuters, 2024b). Republicans have used US antitrust laws since 2021 to fight what they alleged is collusion among investment managers to combat climate change.   The lawsuit cites the defendants' investments in nine coal companies, including combined respective stakes of 34.2% and 30.4% in Arch Resources and Peabody Energy, the largest publicly traded US coal producers (Reuters, 2024b). The lawsuit tries to block the companies from making any shareholder decisions that will reduce coal production. Texas Attorney General Ken Paxton, whose office filed the lawsuit, accused the companies of promoting an “illegal weaponisation of the financial industry in service of a destructive, politicised ‘environmental’ agenda” (Reuters, 2024b).   In January 2025, the six biggest banks in the US all quit the global banking industry’s net zero target-setting group, ahead of the inauguration of Donald Trump as US president in anticipation of pushbacks against climate change action from his government (Gayle, 2025). The banks that left the UN-sponsored net zero banking alliance included JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and Goldman Sachs.   The banking industry’s net zero banking alliance (NZBA) was established by the UN Environment Programme finance initiative but is led by banks. Members commit to align their lending, investment and capital markets initiatives with net zero greenhouse gas emissions by 2050 (Unepfi, 2024). In 2022, a number of US Republican states threatened to launch anti-trust legal action against US banks that are members of the NZBA for their commitments to reduce fossil fuels. However, the NZBA group amended the guidelines for action to soften commitments to cut fossil fuels.   In December, the Republican-led judiciary committee of the House of Representatives, the US Congress’s lower house, in a new report attacked what it called “a cartel” of global financial firms and climate activists and civil society organisations of colluding to “impose radical ESG-goals” on US companies (US Congress, 2024).   Countries faced a February 2025 deadline for updated country climate change plans. The outgoing Joe Biden administration in December 2024 proposed a climate change plan for the US in which greenhouse gas emissions will be cut by more than 60% by 2035 (Daly & Borenstein, 2025). On 21 January 2025, US President Donald Trump signed executive orders directing the United States to again withdraw from the Paris Climate Agreement (Daly & Borenstein, 2025). Trump also signed a letter to the United Nations stating the US withdrawal from the 2015 Agreement. BRICS country coal consumption steady   Coal has dropped to only 4.4% of Brazil’s energy mix in 2023, with its use falling 5% between 2022 and 2023. Brazil ranks 25th in the world for coal consumption, accounting for about   2.4% of the world’s total consumption, and imports 89% of its coal.   Renewable energy sources account for 49% of Brazil’s energy mix, whereas the global national average for use of renewable energy is 15% (Argus, 2024). Natural gas has averaged around 10% of energy used.   Renewable energy – wind, solar, water, biomass, biodiesel, ethanol, green diesel, carbon capture and storage, sustainable aviation fuel and green hydrogen – is the largest energy component in Brazil’s new energy transition policy, making the country a leader in clean energy production.   Brazilian President Lula da Silva (2024) asked recently: “People respect us, because we can go anywhere and say: 80% of our electricity is renewable and 51% of our total energy matrix is already renewable and we can reach 100%. Who would have thought, 30 years ago, that we’d be talking about biomass, biodiesel, ethanol, that we are going to make the energy transition, that we are going to have wind, solar and green biodiesel?”    China enjoys new coal power construction boom   Fossil fuels now make up under 50% of China’s power generation capacity, whereas a decade ago, fossil fuels made up two-thirds. China’s share of coal power generation is around 60%, with its usage reaching an all-time high in 2024 (Slav, 2024).   Coal-fired power is enjoying a construction boom in China, the world’s biggest emitter may be turning a corner (Harvey & Hawkins, 2024). China constructed more coal-fired power plants in the first half of 2024 than any other country, presenting 90% of the world’s new coal plant construction last year (GEM, 2023).   China has been building the equivalent of two new coal plants per week, more than at any time in the past seven years, according to the Centre for Research on Energy and Clean Air and the Global Energy Monitor (GEM, 2023). In coal producing areas in northern China, such as Shaanxi, coal employs more than 8% of the workforce (Tridimas, 2024).   China repositioned coal as a source of continuing use following the 2022 drought the country experienced, which reduced the country’s hydroelectricity capacity, causing factory closures, and the war in Ukraine, which caused global energy shortages and price fluctuations. China sees coal as not only a backup for renewables during weather crises or high energy demand, but also as a form of energy security (GEM, 2023).   China’s grid has many inefficiencies – the country struggles to share power across regions during shortages, energy production is itself often inefficient, and it lags behind on storage capacity. However, the country has recently made big strides in building energy storage capacity (Xinhua, 2025). In China, some regions, cities and districts provide subsidies for energy storage power stations (WEF, 2024).   China’s energy strategy is based on the country’s leader Jinping Xi’s speech to the Chinese Communist Party Congress in 2022, when he said the government led by “the principle of building the new before discarding the old” (Harvey & Hawkins, 2024). This means that the Chinese government tries to reduce emissions in a way that will ensure energy security. India vowed to ensure its coal sector remains “vibrant”   Although India in recent times has expanded its renewable energy capacity, the country’s coal fleet is still the second largest in the world after China. More than 70% of India’s electricity needs are met by coal. India grew its renewable energy – wind and solar power – by 25 times in the past decade, to 195 gigawatts.   Peak electricity demand in May 2024 reached 250 gigawatts – and it is expected to rise to 300 gigawatts within two years. The Indian government wants to install 500 gigawatts of wind and solar power by 2030. However, the growth of renewable energy installation slowed after 2016. Between 2022 and 2023 the government only installed less than 15 gigawatts a year. It needs between 50 to 60 gigawatts of new wind and solar power per year to meet future demand. The decline has been due to delivery failures, policy inertia, and supply chain challenges (Arasu, 2024).   On the campaign trail in April 2024 ahead of the elections, Prime Minister Narendra Modi said India had achieved an “historic milestone” by reaching the production of one billion metric tons of coal and lignite. Modi said it was proof of the country’s “commitment to ensuring a vibrant coal sector” (Arasu, 2024).   India is planning to build even more coal plants. In 2023, India’s coal demand rose 10%, the biggest of any country. Coal demand in China in 2023 rose 6%, according to the International Energy Agency, and India’s electricity demand is projected to grow 6% annually.   India also suffers from a shortage of energy storage capacity to allow the country to use available energy more efficiently, with less than 4 gigawatts of power storage (Arasu, 2024). India subsidised fossil fuels to the tune of $350 billion per year, according to the IMF. The country exempted coal mining equipment from customs duty, gave knockdown rates for coal transport on long-distance rail, and provided low interest loans to build coal plants (McFarlane, 2023). South Africa’s coal use   South Africa in 2023 relied on fossil fuels for 83% of its electricity generation. The country’s coal value chain forms a large part of the domestic economy and energy generation infrastructure.   About 80% of South Africa’s power is generated by coal. Its well-developed infrastructure, abundant natural resources such as wind and sun, and critical minerals offer lots of opportunities for the country to create a formidable green economy. South Africa’s coal mining is 160 years old. It directly employs 100 000 people, and its ecosystem and indirect jobs and industries are multiples more.   Five coal-fired power plants and 15 coal mines will likely close by 2030 in South Africa, and another four plants and 23 mines by 2040. This will impact the livelihoods of 2.5 million people, most of them in Mpumalanga.    There are 66 operating coal mines in South Africa, most in Mpumalanga and KwaZulu-Natal, owned by 32 private companies, with the five largest companies – Seriti, Sasol, Exxaro, Thungela and Glencore – producing 77% of the country’s coal. Coal mines produced 231 million tons of coal in 2022, which translated into earnings of R28 billion and employment of over 91 000 people. And earnings would have been higher, if not for the crisis at state-owned entity, Transnet, which has resulted in lost export revenues of R22.7 billion in 2022.   Research published in the Journal of the Southern African Institute of Mining and Metallurgy  said the closure of 15 mines by 2030 will withdraw 29.5 million tons a year (mtpa) from South Africa’s coal production, followed by a further 106 mtpa as an additional 23 mines are closed by 2040. This will have an impact on 69 mining communities and 21 municipalities.   “The impact of mine closure on the 2.5 million residents of host communities will be significant, particularly as levels of income, employment, and education are already very low and many municipalities are in financial distress,” according to the Journal of the Southern Africa Institute of Mining and Metallurgy  article authors, Megan J Cole, Mzila Mthenjane and Andrew Van Zyl.   The Journal’s authors say coal mining communities are concentrated in the western part of Mpumalanga and north-western KwaZulu-Natal, where just under 40% live below the poverty line of R19 600 annual household income, and over 39% are unemployed. Mine closures will impact on these poverty-stricken communities; and will reduce the funds for municipalities, businesses and income tax depending on income from mine companies and employees.   Renewable energy investment around the world has produced double the number of jobs compared to fossil fuels. “Many of these communities have experienced mine closures and do not have the skills and opportunities to take advantage of the inevitable transition, let alone the transition to clean energy”.   A recent South African Reserve Bank paper warned that South Africa has no effective plan to mitigate the transition shock on the economy, the drastic cut in coal production and utilisation that the country’s commitments to climate change goals requires (Monnin, Sikhosana & Singh, 2024).   Six industrial sectors are disproportionately exposed to climate change transition risks: the fossil fuel, utilities, energy-intensive, transport, housing and agriculture sectors. Around R980 billion of corporate credit loans of South African banks are tied up in sectors, called “transition-sensitive economic sectors”, which are vulnerable to the global energy transition.   The South African Reserve Bank warned that the transition shock, unless it is mitigated with adequate policies, currently absent, could destabilise South Africa’s financial institutions.   “Losses in some segments of the financial sector, even compensated by gains in others, may affect the system at large and trigger a degree of financial instability,” said the Reserve Bank researchers.   Standard Bank, Africa's biggest lender of assets, has defended its investment in fossil-fuel projects, saying the continent's energy needs have to be balanced with climate concerns (Burkhardt, 2023). Africa accounts for only 4% of global greenhouse gas emissions. Standard Bank’s exposure to coal mining, oil and gas, and power generation from fossil fuels rose 21% in 2022. The bank’s lending to green-power initiatives rose 84% over the same period. Standard Bank’s lending to coal mining, oil and gas, and power generation from fossil fuels was still five times that of its investment in green power (Burkhardt, 2023).   “It is not possible for Africa and many of the African countries to ignore the shortage of electricity supply,” according to Kenny Fihla, Chief Executive Officer of Standard Bank’s corporate and investment banking unit, said in an interview in 2023 with Bloomberg news agency. “Today's challenges are not going to be resolved overnight and therefore a much more balanced approach is required.” Industrial countries increased fossil-fuel subsidies   Many industrial countries have also increased fossil-fuel subsidies for their domestic companies and households to reduce energy prices (Black, Parry & Vernon-Lin, 2023; IMF, 2023). The OECD (2022) found that total global subsidies for fossil fuels doubled in both 2021 and 2022.   Industrial countries and emerging powers collectively paid out $7 trillion in 2022, for producing coal, oil and natural gas, in the form of subsidies such as tax breaks and price caps (IMF, 2023). The fossil-fuel subsidies increased by $2 trillion over the past two years.   Fossil-fuel subsidies rose during the global increase in energy prices caused by Russia’s invasion of Ukraine and the country’s economic reboots following the Covid-19 pandemic. The subsidies were the equivalent of 7.1% of global gross domestic product. China is the biggest subsidiser of fossil fuels, followed by the US, Russia, India, and the EU. Climate change funding needs to be sustainable for recipient developing countries   The UN estimated that combined developing and emerging countries, including Africa, need $2 trillion annually by 2030 to deal with climate change. In 2009, in the New Collective Quantified Goal for climate finance, devised at the Copenhagen Climate Summit, developed countries promised $100 billion annually by 2020 to support developing countries to meet their climate change targets.   At the 2015 Paris Agreement, developed countries extended the commitment to 2025. However, developed countries only met the $100 billion yearly target in 2022. African countries have called on industrialised countries to “scale up climate finance to make up for the shortfall caused by failure to deliver $100 billion per year by 2020 and through 2025”.   If countries like South Africa are to make good on their climate target objectives, annual climate financing commitments from developed countries need to increase more than tenfold to “at least $1.3 trillion (R23.02 trillion)” annually, according to South African Forestry, Fisheries and Environment Minister Dion George, speaking at the National Stakeholder Consultation on South Africa’s negotiating mandate ahead of the UN Climate Change Conference (COP29) in Baku, Azerbaijan.   At COP29 in 2024, rich countries pledged $300 billion a year for climate finance, however, the funding promises from these nations were criticised by developing and African countries as too little. The climate finance that is available often does not include funding for climate adaptation – dealing with the floods, fires and hurricanes caused by climate change.   “Without a dramatic upscaling of international support, developing country governments may not be able to implement the necessary pace and scale of emissions cuts to keep 1.5°C in reach, nor to put in place adequate adaptation measures to cope with the worsening impacts of climate change” (Fyson, 2022:5).   The G7, for example, has been criticised for the fact that “none of the G7 members are providing sufficient support for decarbonisation measures in developing countries” (Climate Action Tracker, 2021).   However, even where promised climate change funding from developed countries has been given to developing countries, it has been based on the outdated development aid model of developed country loans with conditions, including using advisors, companies and plans from donor countries, which in an overwhelming number of cases are misguided.   Such climate finance allows donors to claim they have contributed, but the donor money is recircled back to the donor countries, with high interest rates, with companies, experts and ideas – with little knowledge of local needs – from donor countries used as part of the conditions.   This is the classic development model, which has caused developing countries so much harm, with little positive impact, and with massive loans to repay, while doing hardly anything for combating climate change. Very little of the funding is fit for purpose.   An Oxfam analysis of developed country funding for climate change concluded that only a small amount of the promised funding has been delivered. And where money was given, it was mostly in the form of punishing loans, with very few grants. Not much has been provided to help developing nations with adapting to climate change. Worse, many developed nations have been dishonest in the way they report their financial contributions, exaggerating the amounts they have given.   Oxfam uncovered that many developed countries are guilty of misleading accounting, reporting funding for climate change to developing countries, when the funding never actually reached the supposed beneficiaries. Rather, the funds were being used to pay donor country consultants, agencies and plans.   Global private companies are reluctant to finance high-risk climate projects in developing countries. Firstly, private investors demand that African governments, or private companies, provide ‘bankable’ projects, often meaning low-risk projects with high or immediate returns. International funding for climate change should prioritise high-risk, low-return climate projects, for which developing countries struggle to secure funding. For another, funding should also prioritise start phase project preparation and development, as many developing countries lack project preparation capacity, resources and funding. South Africa’s climate change funding from developed countries will leave the country indebted, without a sustainable transition     South Africa received $11.6 billion in climate change funding from developed country donors to shift to renewable energy, and to prevent economic decline during the movement away from coal. Sadly, the overwhelming majority of the funds were old-style development aid-type loans, with conditions including the use of consultants, organisations and ideas from donor countries. Grants make up only $676 million of the total.   This means that South Africa will be indebted, while the ‘funding’ is recycled to donor organisations, consultants, and to generate donor-country ideas. Very little of the money is likely to go to South African organisations, expertise or South African-generated ideas, or to local communities. Furthermore, by ‘giving’ donor funding to developing countries, donor governments dictate to developing countries how they should pursue their climate change transitions – often without consideration for the context of these countries.   Yet, developing countries do not have the same power to dictate to developed countries – the major emitters – how they should pursue their climate transitions. Global climate financing from developed countries to developing countries therefore entrenches the existing skewed power inequalities in favour of developed countries.   Of the money, so far, $1.9 billion has been spent, mostly as policy-based loans to the government; the other large proportion has gone to agencies, consultants and organisations from the donor countries. Even funding that ostensibly goes to projects to revive the coal belt province, Mpumalanga, went to consultants, donor development agencies, or to support donor-originated development ideas. A planned green hydrogen hub, skills training and community development similarly went largely to consultants, donor development agencies, and donor country origin ideas.   In 2019, South Africa enacted a carbon tax, which industry has criticised as too onerous. Furthermore, Eskom, the state power utility, has been criticised for passing the cost of the transition to renewables on to customers.   It was revised recently and will come into effect in 2026. A National Treasury policy paper released in November 2024, indicated that the carbon offset allowance for combustion emissions will be increased to 25% in 2026, from 10%. This will be counterbalanced by cutting tax-free allowances from 60% to half in 2026 and by a further 2.5% annually until 2030 (National Treasury, 2024). The amended National Treasury proposal in the policy paper replaced a 3.5c/kW levy on non-renewable power with the carbon tax. The big challenge will be how to prevent Eskom from passing on the cost of the transition to renewables to customers.   Way forward for South Africa   The challenge for South Africa is to secure a just transition from coal. A just transition “is a process aimed at ensuring the benefits of a green economy shift are shared widely, while supporting those who may lose out economically, whether nations, regions, industries, communities, workers or consumers” (Teixeira, 2022).   Global funding for climate change to South Africa must be in the form of grants and concessional financing that can be allocated to create enabling environments for climate change investments. The funding for the just transition must not be in the form of loans, as is currently the case, but rather, it must be based on grant and investment funding.   South African Forestry, Fisheries and Environment Minister Dion George said that by “de-risking investments and creating new asset classes for clean technologies, we can unlock and leverage greater amounts of public and private finance” for climate change.   South Africa must either renegotiate the terms of the $11.6 billion climate change loans it received from developed countries’ donors, or change them to grants, and change the provision that says donor country agencies, staff, ideas and ideologies must be used in the design of South African just transition projects.   Countries have specific timetables to transition from fossil fuels to renewable energy, based on their domestic circumstances. South Africa must identify a timetable that takes into account local contexts, one which ensures energy security, development needs, and stability.   “The South African approach to the just transition needs to take local realities into account, and the narrative must support an effective transition that does not undermine energy security and economic growth,” rightly argues the authors from the Journal of the Southern African Institute of Mining and Metallurgy .   South Africa must pursue a triple energy generation strategy: coal, gas and renewables. This can be done by collaborating with African neighbours to apply comparative advantages. Sadly, many of South Africa’s neighbours are politically unstable, with autocratic governing parties and leaders mismanaging their countries, meaning their economies are also unstable, so it will not always be practical to partner with energy producing neighbours to leverage comparative advantages.    Unlike many of the G7 countries, South Africa is struggling with gas resources. Mozambique, with its gas resources, has been run autocratically for years by the liberation movement Frelimo, and the country is facing a civil war. Sasol, the petrochemical giant, for example, has said the company will have to recalculate its carbon emissions target, set in 2021, for a 30% reduction in emissions by 2030, as it may not be achievable due to gas shortages (Faku, 2024).    Given South Africa’s coal bounty, there has to be more focus on technology to clean coal. Japan is a good example of a country that prioritised a policy of producing “clean coal” over the past two decades. South Africa can also fit its coal plants with carbon-capture technology, as many G7 nations have been given the option to do, to prevent emissions from entering the atmosphere.   There are lessons to be learnt from Japan’s “clean coal” strategy (Hakko & Petersen, 2024). Japan has focused on “efficient coal power”, which gets more energy from less coal through advanced technologies and coal plants (IEA, 2020). In 2007, Japan introduced the abatement technology of carbon capture and storage (CCS), which can secure 90% emission reductions. The country also introduced co-firing coal and ammonia, to reduce emissions.   Ultimately, for South Africa, there has to be a massive step-up in the development of renewable energy, wind and solar. Brazil is a great example of how to develop the full spectrum of renewable energy – wind, solar, water, biomass, biodiesel, ethanol, green diesel, carbon capture and storage, sustainable aviation fuel, and green hydrogen.   South Africa needs a manufacturing, skills and technology revolution linked to renewable energy. Green hydrogen is a key source of renewable energy in which the country must invest. Any laws or regulations, ideologies and policies inhibiting the development of renewable energy will have to be abolished.   The South African government must provide substantial incentives to families and business to install solar technology, like Vietnam did to kickstart its renewable energy programme (Govindarajan, Bin Mohideen Batcha & Bin Abdullah, 2023). Consumers who have excess power must be able to channel it back into the power grid and get compensated for it.   Coal power stations that have been decommissioned could also become sites for renewable energy generation and energy storage (Dresselhuys, 2024). Coal power stations can be adapted for renewable energy generation.   “These legacy coal assets offer an opportunity. Instead of abandoning coal-generating sites, many are good candidates for conversion to clean energy hubs where the large tracts of land and existing grid connections can rapidly connect renewable capacity without the need for new transmission infrastructure” (Dresselhuys, 2024).   South Africa will have to establish greater energy storage capacity. Kristen Panerali and Zhang Xun write that the industrial energy storage sector offers promising opportunities (WEF, 2024). “On the one hand, the market potential is vast, with an increasing number of industrial users recognising the importance of energy storage and showing a growing willingness to install storage systems. On the other hand, industrial companies are confronted with high costs of the procurement and deployment of energy storage systems, such as land acquisition, grid connection and financing” (WEF, 2024). In China, different levels of government provide subsidies for energy storage power stations (WEF, 2024). South Africa can learn from this.   To make it all happen, there has to be an effective industrial policy to make the shift from fossil fuels to renewables that involves the state, private sector, and civil society in a compact. Corruption, cadre-deployed state managers overseeing state implementation, and giving tenders to politically connected businesses based on patronage will have to be eliminated.   The just transition policy must be put together by local expertise, entities and groups, and with local ideas, not based on the outdated development aid model where foreign funding comes with foreign companies, foreign expertise and foreign ideas.   Conclusion   The challenge for South Africa is how to pursue a just transition from coal that takes into consideration local realities, which means not undermining the country’s energy security, development and economic growth, not leaving it highly indebted to developed countries, and not multiplying poverty, unemployment and society instability.   Many G7 and emerging powers have specific timetables to transition from fossil fuels to renewable energy, based on their domestic circumstances. 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China’s new energy storage capacity exceeds 70 million KW . [Online] Available at: https://www.macaubusiness.com/chinas-new-energy-storage-capacity-exceeds-70-million-kw/ [accessed: 10 March 2025].          - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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 Deputy Chairperson of the Inclusive Society Institute (ISI), Ms Buyelwa Sonjica, and the Institute’s Chief Executive Officer, Daryl Swanepoel, attended a prestigious gala dinner organised by the African Chinese Women’s Association in Johannesburg on Saturday evening, 15 March 2025. The event coincided with International Women’s Day.   The Gala Dinner was held in celebration and appreciation of South Africa’s diversity by showcasing cultural exchanges between South Africa and China in order to help build cohesion in South Africa. The evening featured a number of high level speeches and a concert with musical and dancing performances by local South African and Chinese performers.   Speeches were delivered by the Consul General of China in Johannesburg, Pan Qingjiang ,  who undertook to increase exchanges and cooperation between Chinese and South African women in line with the unprecedented bilateral relations between the two nations. Other speakers included the South African Deputy Minister for Tourism, Hon. Maggie Sotyu, the Counselor at the Embassy of China in South Africa, Liao Xiaoying,  Li Xinzhu, director of South Africa Chinese Community and Police Cooperation Centre, Jenny Wu, chairwoman of the African Chinese Women’s Association, who is also a member of the ISI’s Advisory Council; and the ISI’s Chief Executive Officer. Click here for speech by Ms Jenny Wu   Click here for speech by Daryl Swanepoel

Good evening ladies and gentlemen.   Firstly allow me to thank the organisers of the event for the invitation to be here this evening. I am joined by the Deputy Chairperson of the Inclusive Society Institute, former Cabinet Minister Buyelwa Sonjica.   The Inclusive Society Institute is committed to the pursuit of a just and equal South Africa that works for all who live in it. A nation built on non-racialism and non-sexism, and in which people from all cultural, religious and social groupings live freely, and build towards the common goal of a united country that rises above the troubles of its past,  and looks towards a brighter, better and more inclusive future.   This evening’s event is a perfect fit with our objective. The invitation says that tonight we appreciate and celebrate the diversity of our community. And we will witness tonight how working together, playing together and socialising together, strengthens our character and make us better and happier people.   As an Institute we recently released our South Africa Social Cohesion Index . At an event in Cape Town the Deputy President of the Republic, HE Paul Mashatile, launched the report. Jenny Wu, your chairwoman was also there. We are proud to have her on our Advisory Council.   The essence of the report pointed to a country that still needs to do a lot to properly reconcile and build our nation.   The index reflects an overall moderately high level of social cohesion. But the overall score of 53.3 index points does not tell the full story. There are areas of serious concern.   Acceptance of diversity in the country has steadily declined from an already low 47.1 index points in 2021 to only 46.8 in 2024; Trust in institutions has declined from 50.1 index points to 47.9; Perceptions of fairness has declined from 42.4 index points to a mere 42.7; and Respect for social rules has declined from 40.3 to an alarming 36.6   What distorts the perception that South Africa is doing ok in terms of social cohesion is that across all demographics identification with the country is very high. In 2021 it was 73.2 index points and in 2024, 72.2. Were this not so, it would be just above/just below the 50 index points level. It is indeed the strong identification with the country that is holding the nation together.   Unfortunately identification alone is not enough. When one domino falls, all dominoes fall. We must work on every dimension that is required for social cohesion.   But let’s recognise the fact that South Africans from all areas of life and all communities are proud to be South African, and love our country. And let’s use that as the foundation to strengthen the weaker areas that need attention. It must and can be done.   That makes an evening such as tonight so important. When we socialise together from all walks of life, we realise we are all human, we all have red blood, we all have moments of happiness and moments of sadness. In essence we all just want a decent life for our families and for those we love.   Thank you Africa Chinese Women’s Association  for this evening. And for the initiative to celebrate our diversity, and to bring communities together just to celebrate and appreciate being South African and being human. You will be surprised how initiatives such as this build and strengthen the nation. Keep it up.   As the Inclusive Society Institute we certainly learn from this. We will be launching our Good Relations Programme  this year, which also aims to do just that.   To the Chinese community of South Africa, thank you for your constructive involvement in the lifeblood of our nation, for the businesses you have set up, for the jobs you have created, for the community work that you do. Know that it is seen, and know that it is appreciated.   Thank programme director.

Honorable Deputy Minister of Tourism of South Africa, Ms. Maggie Sotyu, Honorable Consul General of the Chinese Consulate-General in Johannesburg, Mr. Pan Qingjiang, Honorable Counselor of the Chinese Embassy in South Africa, Ms. Liao Xiaoying, Honorable Chairperson of the Inclusive Society Institute, Mr. Daryl Swanepoel, Honorable Director of the South Africa Chinese Community and  Police Cooperation Center, Mr. Li Xin Zhu, Distinguished community leaders, esteemed guests, dear friends, Good evening! As we gather here in this vibrant month of March to celebrate International Women’s Day, I would like to extend my highest respect to every woman present. Today is not only a time for women to shine but also an occasion to honor resilience, wisdom, and dedication. On this special day, on behalf of the African Chinese Women Association, I extend my sincere gratitude to the Chinese diplomatic missions, local government officials, community leaders, and friends from all walks of life who have continuously supported us. I also send my heartfelt best wishes to every woman here—may you continue to thrive and inspire! As the 7th Executive Council, we are deeply aware that every step forward for our Association has been made possible by the strong support of the community. Tonight, I would like to express my sincere appreciation: To the Chinese Embassy and Consulates in South Africa, thank you for your continuous guidance and support. The Chinese government and its diplomatic missions have always been our strongest pillar overseas. To Deputy Minister Maggie Sotyu, your steadfast support over the past three years has been invaluable. Your commitment exemplifies responsibility and leadership, affirming the South African government’s recognition of our work and inspiring us to keep moving forward. To our fellow Chinese community organizations, your respect and support have given us the strength to continue our journey. To the esteemed experts and artists from the Chinese Minority Music Academy, thank you for traveling across continents to bring us a magnificent cultural performance. To the generous sponsors, entrepreneurs, and friends who support our events, your kindness and generosity have made it possible for us to shine on this stage. To the members of our Cheongsam team, Hanfu team, dance troupe, and choir, your relentless rehearsals and sacrifices of family time to perfect each performance are truly admirable. To the event planners, program directors, technical teams, and videographers—words cannot fully express our gratitude. It is this spirit of unity and mutual support that has allowed us to create a remarkable chapter for Chinese women in South Africa. This year marks the third year since our 7th Executive Council took office. Staying true to our mission of “uniting Chinese women to promote social integration and development,” we have made significant progress across various fields: Cultural Confidence Every March, we celebrate International Women’s Day, providing a platform for women to shine and express themselves through art and culture, spreading confidence and strength. Social Responsibility With warm hearts, we continue giving back to local communities—visiting nursing homes, supporting underprivileged neighborhoods, and funding over 400 students in disadvantaged communities for six consecutive years. We have helped build schools and sports facilities, bringing hope to those in need. Integration into Mainstream Society As part of the Chinese women’s community, we actively engage with South African society, participating in social science research and African think tank forums to contribute insights for Africa’s development and deepen China-Africa cooperation. Mutual Support On this journey, we remain committed to supporting Chinese women in South Africa, providing assistance to those in difficulty and ensuring that every sister finds a sense of belonging and warmth, even far from home. Educational Support Education is the foundation of social progress. We are committed to promoting educational equity, sponsoring underprivileged university students, and helping them change their destinies through knowledge. Building Harmony We actively support the South African Chinese Police-Civil Cooperation Center and the cause of peaceful reunification of China. We participate in Chinatown cultural events, fostering dialogue and collaboration to enhance the safety and development of the Chinese community. Dear sisters, today’s achievements belong to all the resilient, dedicated, and hardworking women in this room. Looking ahead, we will continue to uphold our mission, embrace new opportunities, and work together to showcase the intelligence and brilliance of Chinese women on a broader stage. We will strive to contribute more to China-Africa friendship and social progress! May today’s celebration inspire us for the future, and may every woman shine brightly in the tides of our time! Wishing you all a wonderful Women’s Day, filled with happiness and prosperity! Thank you!

Copyright © 2023 Inclusive Society Institute PO Box 12609 Mill 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 D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or its Board or Council members. Author: Percept Actuaries and Consultants Editor: Daryl Swanepoel JANUARY 2023 This research has been enabled through the generous support of the Embassy of Denmark in Pretoria, South Africa Content Executive summary Introduction Defining youth and youth agency The youth unemployment crisis A life course approach to inequality Perinatal Early childhood Adolescence Early adulthood Transitions into post-school education Transition into the labour market The experience trap Young women’s disadvantage in the labour market Financial exclusion Social exclusion Pathway support The young workforce Young people in the informal sector Key interventions to alleviate youth inequality over the life course Perinatal Advance the Maternal Support Grant Schools must implement national policy by supporting pregnant learners and young mothers to stay in school Early childhood Government must invest in the ECD workforce and quality ECD services Adolescence: basic education Implement early warning systems Open access to psychosocial support Adolescence: post-school education Support alternative pathways to a matric qualification Improve TVET education in terms of access and quality Early adulthood: transitions into work and between jobs Employer readiness Matching Social protection The young workforce Enabling environments Public employment Youth citizenship and political participation Executive Summary Policy discourse in South Africa is preoccupied with the country’s vexing ‘triple threat’ of poverty, unemployment and inequality. What remains comparatively muted in these discussions is the reality that many South Africans have the odds stacked against them well before they reach their second birthday. Young people’s vulnerabilities rarely emerge out of a single crisis. More often, they reflect the cumulative effects of multiple events and pressures, which unfold in young people’s homes, institutions and communities, as well as in wider society. This report takes a ‘life course’ approach to youth inequality [1] that focuses on five critical life stages: perinatal, early childhood, adolescence, early adulthood, and the young workforce. Young South Africans (aged 15-34) make up over a third of the country’s total population. They should be the engine of the economy, society, and democracy. But instead, nearly half of these young people are without work, education or training opportunities. While the working-age population is growing, the South African economy has struggled to keep pace. A key driver of youth inequality arises at the intersection of income levels, access to quality early learning programmes, and child outcomes. Children from contexts characterised by poor access to nutrition, inadequate living and infrastructural environments, and a lack of security and social protection have few opportunities for quality early learning and stimulation. They therefore enter school on a significantly uneven footing, vulnerable to worse health and developmental outcomes. Without the right support and intervention, this can impact their success in school, their future economic and social participation, and ultimately contributes to deepening inequality. South Africa’s inequality is intergenerational and cyclical. Despite expanded access to health, education and social security in democratic South Africa, the livelihood prospects of children often remain tied to those of their parents. Two-thirds of Black children live below the poverty line compared to 2% of White children, which illustrates the racial dimension of entrenched inequality. Hence, youth inequality is locked in place by stubborn racial and class inequalities that limit access to quality schooling, propel learner dropout, and obstruct transitions into post-school education and employability. Furthermore, gender discrimination means that women bear the brunt of social reproduction, with many young women forced to participate in unpaid care work. Regardless of their level of qualification, women also earn less than their male counterparts. The knock-on effects of these racial, class and gender inequalities show up profoundly in infant and children’s lives, which is why the recommendations propose a maternal support grant to safeguard perinatal outcomes. By improving mothers’ wellbeing and nutrition, the wellbeing and nutritional status of their children will be positively impacted too. This report draws attention to the important relationship between early influences and later outcomes in young people’s lives, while exploring their life trajectories in social, political, economic and cultural context, as youth are not a homogenous category. The analysis draws on transdisciplinary evidence to show not only how youth inequality accumulates over the life course, but also critical moments where policy and programming might intervene to alleviate inequality and safeguard more just futures for young people. This includes interventions that support pregnant women, invest in early childhood development, reduce school dropout, bolster alternative routes to matriculation and better match young people and employers. Introduction South Africa is widely regarded as the most unequal country on earth.[2] By January 2020, the top 20% of the population earned over 68% of income[3]; while the bottom 40% of the population earned just 7% of income.[4] The country’s inequality is multidimensional,[5] transcending income and wealth to include matters of land, capital, and access to quality public services. This multidimensional inequality also intersects with gender, race, and geography in ways that entrench historical fault lines. The country’s inequality is also viciously circular. It is both characterised, and reproduced, by a reality in which only four out of 10 young people have work.[6] While the working-age population has grown, job creation has not kept pace. This has given way to a backlog of young people without work, whose livelihoods are uncertain and whose opportunities of entering the labour market are narrowing. While there is stark inequality between young people and other generations in the labour market, there is also inequality between youth: young women have less access to employment, earnings and job security than men; and race and income remain tightly bound. Policy discourse in South Africa is preoccupied with the vexing ‘triple threat’ of poverty, unemployment and inequality. What remains comparatively muted in these discussions is the reality that many South Africans have the odds stacked against them, well before they reach their second birthday. This is because the inequality is intergenerational. Notwithstanding expanded access[7] to health, education and social security in democratic South Africa, the livelihood prospects of children often remain tied to those of their parents.[8] Any meaningful shift in the stark, and long-entrenched inequality will demand that we unlock the social and economic mobility of these youth. Defining youth and youth agency ‘Youth’ is a culturally constructed category, with different meanings in different places and times, and often involving contradictions[9]: The United Nations defines ‘youth’ as those aged between 15 and 24 years. In South Africa, youth consist of those aged 15 to 35 years,[10] as defined by South Africa’s National Youth Commission (NYC) Act of 1996. The essence of this categorisation, according to the act, is that because many older youth were disadvantaged by their role in the struggle against apartheid, they needed to be included in youth development initiatives.[11] Today, the extension to 35 years of age continues to speak to the ambiguity and dynamism of youth transitions in the country, where some markers of adulthood – like having stable work or attaining educational qualifications – might be delayed; while others, like parenthood or domestic responsibility may begin in early adolescence. Young men, for example, might be culturally assigned as adults while still remaining economically dependent. In South Africa, most young people in their early twenties have some work experience, and one third of women at this age are mothers. But they also move in and out of employment and education, and many continue to live with their parents, delaying marriage and cohabitation. The fluctuations between, and overlapping of, assumed ‘child’ and ‘adult’ roles is most powerfully symbolised in teenage mothers. South African youth undertake household chores, raise younger siblings, and are sometimes involved in paid labour. Yet, despite their participation in social and economic processes, they remain marginalised from the formal political and economic domain.[12] Dominant understandings of young people in South Africa have often reflected the political context of the time. In the 1980s and 1990s, researchers were preoccupied with young people as political activists.[13] Some positioned youth as irresponsible, irrational and uncontrolled opponents of apartheid, while others saw them as heroes of the liberation struggle. In both cases, ‘youth’ were treated as a homogenous entity, acting as one, with a unified set of motivations. In the early 1990s, a growing body of research sought to muddy constructions of youth as either ‘heroes’ or ‘villains’,[14] surfacing the complex range of motivations and circumstances that attracted young people to political action. Following the democratic transition, the militancy of adolescents who had boycotted against apartheid, stayed away from school, and challenged adult authority was rapidly recast as a liability. Nineties youth attracted labels like ‘the lost generation’ or ‘marginalised youth’ – a generation likely to threaten social stability. In the early years of democracy, the generation of young people who had left school to join the liberation struggle and were now seen to be ‘aimless’, provoked a sense of moral panic.[15] In the latter years of the decade, youth researchers adopted an increasingly policy-oriented focus, producing studies on ‘at-risk’ youth like AIDS orphans and street children. Some have argued that the dominant line of cleavage in post-apartheid South Africa has been that of ‘generation’, and that young people’s lives in particular have been at the heart of post-1994 change.[16] In the ‘new’ South Africa, youth are positioned amidst a range of overlaying tensions, as opportunities and constraints shift. On the one hand, democracy promises increased economic and social mobility for young Black South Africans, allowing them to aspire to possibilities previously denied to their parents. However, these new possibilities have emerged in a context of skyrocketing youth unemployment, a frequently dysfunctional education system, and other stark socio-economic inequalities that often make young people’s high ambitions unattainable. While the new constitution has protected the rights of children, especially in terms of independent access to healthcare,[17] this empowerment does not always translate into young people’s home or community lives. Instead, young people are especially vulnerable to physical, sexual and emotional abuse, and often take on a significant burden of unpaid household labour. To understand the lives of young people growing up in post-apartheid South Africa, one must appreciate both rapid change and oppressive continuity, which create stark ambivalences and contradictions in young people’s lives. [18] Post-apartheid South African policy has described the country’s youth both as the “greatest threat to social stability” and as a “demographic dividend”.[19] The former invokes a “ticking time bomb” of increasingly impatient, disillusioned and economically inactive young people. The latter anticipates the economic potential of a disproportionately large working-age population. Indeed, young people are viewed with both trepidation and tremendous expectation. These binaries have been symptomatic of political discourse for some time,[20] but fail to capture a much more ambiguous reality. By 2012, the South African Reconciliation Barometer[21] was showing that South African youth were optimistic about the future and confident in their ability to shape political decision-making, while at the same time being sceptical of political parties. Their expressions of agency and constraint were complex and varied, which was not reflecting in the dichotomies of policy discourse. Young people are all-too-often described as personifications of their circumstances – as instigators of violent service delivery protest, or as pawns in the political plays of organised labour, politicians and business. Rarely do we hear about young people as dynamic social and cultural agents. There is now a robust and growing body of ethnographic literature on the everyday lives of young people in South Africa, with the earliest antecedent being Burman and Reynolds’[22] volume, ‘Growing up in a Divided Society: The Contexts of Childhood in South Africa’. In the early 1990s, social anthropologists Mamphela Ramphele[23] and Patti Henderson[24] worked with teenagers from New Crossroads township in Cape Town. Both described young people’s everyday mediation of high ambitions and harsh structural constraints. This work has since been furthered by qualitative research on the gulf between youth ambitions and their ad-hoc plan-making in light of limited resources.[25] Acknowledging the “ambiguous agency”[26] of young people – as both vulnerable and virulent – might shift how we think about them, and how we intervene in their lives. The youth unemployment crisis South Africa is in the midst of a much-anticipated ‘demographic transition’: declining fertility rates and increasing life expectancy have meant that the ratio of working-age people to dependents is changing, giving rise to a growing, economically productive youth population and associated hopes for an economic boom (see Figure 1). This lower dependency ratio is unlike other upper-, middle-, or high-income countries, and represents an economic opportunity that other wealthier regions don’t have access to. Young South Africans (aged 15-34) make up over a third of South Africa’s total population.[27] They should be the engine of the economy, society, and democracy. But instead, nearly half of young people are without work, education or training opportunities.[28] While the working-age population is growing, the South African economy has struggled to keep pace: according to Quarterly Labour Force Statistics (QLFS), for example, the number of people employed increased by just under 2 million from 2007 to 2019, while the working-age population increased by 6.5 million over the same period.[29] However, in the second quarter of 2022, the expanded unemployment rate (which includes discouraged job seekers) was over 72% for young people aged 15–24, compared to 51% for those aged 25-34 years, while the overall rate stood at around 44% (see Figure 2). This reality doesn’t shore up with the large economic opportunity presented by the lower dependency ratio. Figure 1: Old-age dependency ratio across the globe An analysis of QLFS data between Q1 2017 and Q2 2022 (see Figure 2) shows that this is not a new phenomenon. Rates of youth unemployment have been stubbornly high throughout the five-year period, increasing with the effects of Covid-19 lockdown, before returning to 2017 levels. And indeed, high youth unemployment rates long precede 2017: the earliest estimates of youth unemployment originate from the 1996 National Census, conducted just after the country’s transition to democracy and reported that 53.2% of young people between the ages of 15 and 34 were unemployed.[30] Figure 2: Unemployment rate (expanded) by age group Table 1: Unemployment rate (expanded) by age group Among the working-age population, vulnerability in the labour market seems to decrease with age: youth in the younger age group are most severely affected by unemployment. Because of this, South Africa’s unemployment crisis is often framed as a ‘youth unemployment crisis’. Yet the root of the problem is the scarcity of quality jobs, the structural constraints within the South African economy, and the challenges of industrial change, rather than with young people themselves. Undoubtedly, young people are uniquely affected, and often uniquely vulnerable. Relative to older adults, they have less work experience and financial capital, weaker social networks and are prone to higher levels of informality and in-work poverty. Young people’s vulnerability in the labour market means they are particularly affected by job and earning loss when financial shocks hit. National survey data show that, among those who lost jobs in April 2020 as a result of Covid-19 lockdown, young people were least likely to have recovered those jobs by October 2020.[31] We know that South Africa’s youth unemployment rates are significantly affected by high levels of early school-leaving which translates into low access to post-secondary education, and ultimately higher levels of unemployment.[32] More so, economic wellbeing is often an intergenerational transfer, with a large part of earnings inequality explained by the educational attainment of one’s parents.[33] But ‘youth’ are also not a homogenous group; there are significant inequalities between them. In fact, this report shows that young people’s future chances often begin articulating in early childhood, setting in motion a range of inequities that tend to widen as children move through school and into the workforce. Race, geography and gender, all of which are outside of young people’s control, continue to constrain the possibilities available to them in profound ways. In 2022, 8.8 million young people (15-34 years old) in South Africa were not in employment, education, or training (NEET).[34] The majority of this group are Black, income-poor, without a qualification, and live in households with no employed members.[35] Figure 3: Educational status attained by race Moses, van der Berg, and Rich[36] suggest that there are a few primary routes through which young people from low-income households can achieve social mobility and ultimately access the upper end of the labour market: (1) by attending either moreaffluent schools or better-performing schools in poor communities; (2) by performing well in Grade 12, despite being in a lowerquality school, and acquiring enough resources to gain entry to university; or (3) by entering the labour market at the lower end and progressing upwards. This report will show the immense challenges entailed in all three paths: from undoing historic inequalities in access to quality education, to reaching and passing matric, to gaining university access, to gaining any momentum in the labour market (Figure 4). On their journey towards quality jobs, most of South Africa’s young people have the odds stacked against them, starting as early as their first years of life. Figure 4: Road to South Africa’s youth unemployment rate This report is about how those inequities play out over young people’s life course and what strategies we might take to interrupt them, both to improve their chances of social and economic mobility, and disrupt structural patterns of inequality. A life course approach to inequality This report takes a life course approach to youth inequality.[37] This approach draws attention to the important relationship between early influences and later outcomes in young people’s lives, while also exploring their life trajectories in social, political, economic and cultural context. Young people’s vulnerabilities rarely emerge out of a single crisis. More often, they reflect the cumulative effects of multiple events and pressures, which unfold in young people’s homes, institutions and communities as well as in wider society. What happens to a child at each developmental stage is influenced by what happened at earlier stages, which means that for young people to reach their potential, we need enabling environments across the life course.[38] For the purposes of this report, a life course approach entails four levels of analysis, which have also been used in global studies of youth vulnerabilities[39]: The life course model frames development as a cumulative and continuous process and cautions against approaches to youth programming that would silo risks or particular age groups. It also implies that interventions should be tailored differently for different youth populations, given the unique combinations of risk and protective factors to which they are currently, and have previously been, exposed.[40] To see a life course framing in action, let’s imagine the journey of the average South African child (Box 1). In a recent article[41] by Percept and the Inclusive Society Institute, we called them Nation. Box 1: Nation’s story ​While pregnant, Nation’s mother will almost certainly be able to access antenatal care at her neighbourhood clinic. But she will also have a nearly 3 in 10 chance of experiencing antenatal depression.[42] Once Nation is born, important aspects of their emotional, social, and cognitive development, as well as their future health, will already start to coalesce.[43] The stimulation, nourishment and care Baby Nation receives will lay the foundations for their future learning, school performance, health and wellbeing. This, in turn, will affect their ability to participate meaningfully in social and economic life as a young adult.[44] ​If Nation is lucky, they may be one of the 6 in 10 South African children to benefit from the Child Support Grant in their critical first year of life.[45] This type of support is critical, since, as a toddler, Nation will have a 3 in 5 chance of growing up in poverty, and a 2 in 5 chance of living below the food poverty line.[46] This will reduce their chances of nutritional stunting, which is estimated to affect 27% of the country’s children, with ramifications for their future health, learning and earning prospects.[47] ​When Nation grows up, and becomes more independent, and their mother needs to find, create or return to work, Nation might be among the 32% of children (under age 4) to attend an Early Learning Programme (ELP).[48] These critical early learning services are delivered by a women-led, non-state and largely informal sector, including sole-proprietors, microenterprises and Non-Profit Organisations (NPOs). Since Nation has a less than 30% chance of their fees being subsidised by government,49 early learning will be expensive for their mother. ​By the time Nation turns five, they will have a less than 50% chance of being developmentally ready to start primary education.[50] This setback will make it harder for Nation to stay in, and succeed in school – with knock-on effects for their ability to enter the labour market and build a secure livelihood. This may sound like a deterministic outcome: how can we possibly curb inequality if it has been set in motion from the womb? But, in fact, life course research tells us that intervening at critical points in a young person’s life course can radically alter not only their own trajectory, but also the trajectory of future generations. This report draws on transdisciplinary evidence to show not only how youth inequality accumulates over the life course, but also critical moments where policy and programming might intervene to alleviate inequality and safeguard more just futures for young people. We focus on five critical life stages (see Figure 5), as described below: a. Perinatal (period in-utero) b. Early childhood (birth to 6 years) c. Adolescence/basic education d. Early adulthood/post-school transitions e. The young workforce Figure 5: Critical life stages Perinatal A healthy pregnancy is essential to safeguard the health and wellbeing of children in the critical early stages of their lives. For example, maternal stress, depression and anxiety in pregnancy can lead to lower birth-weight, increased attention and behavioural difficulties and sleep disorders for children.[51] One of the greatest victories of the post-apartheid South African public health system has been its improved access for maternal and child health. Since 1998, Demographic Health Surveys have indicated that over 92% of women access Antenatal Care (ANC) services. But the timing of the first ANC visit, as well as the number of visits, are also important for child outcomes.[52] While availability of antenatal care has improved, pregnant women are still not accessing it early enough: only 67% of women have their first ANC visit before 20 weeks in South Africa.[53,54] Despite the victories of clinic-based maternal and child health services, pregnant women in South Africa remain inordinately vulnerable. Research suggests that pregnant women in South Africa are 45.6% less likely than other women of reproductive age to earn an income.[67] In a Western Cape study, 71% of pregnant women were unemployed, and 83% of those reported no prospects of future employment.[55] The overrepresentation of women in the informal sector[56] means that many pregnant women who do earn an income will not be granted paid maternity leave. Pregnant women’s unemployment and under-employment has significant implications for the health and wellbeing of both women and children, and can deepen pre-existing inequality. Robust research has shown that many life-long patterns of illness and health, as well as emotional and cognitive development, are catalysed in a child’s first years of life, especially during pregnancy.[57] The physiological and neurological capabilities accumulated in these early years influence not only child survival, but also their growth, learning and ability to rise out of poverty.[58] Just over a quarter (27%) of South Africa’s children under five are believed to be nutritionally stunted,[59] making them more likely to drop out of school, struggle to find work, and live in poverty. More recent data suggests significantly more conservative figures among children (aged 50-59 months, or between four and five years old) attending early learning programmes, where moderate and severe stunting was found to be at 5.7%.[60] Growth deficits at a young age have long-term effects on social and cognitive development.[61] Undernutrition, with stunting being one of its more severe consequences, is not only a manifestation of poverty, but also “one of the key mechanisms by which poverty – and its consequences – are transmitted intergenerationally”.[62] Stunting is driven, in part, by mothers’ mental health and nutritional status,[63] and research indicates that pregnant women in poorer communities are experiencing high rates of food insecurity and depression.[64] Nearly four in 10 of the pregnant women surveyed between 2020 and 2021 in the Western Cape reported going to bed hungry in the previous week, while six out of 10 had felt depressed.[65] Currently, there is low uptake of the Child Support Grant (CSG) among caregivers with 0-2-year olds who meet the criteria due to lags in registration. Surveys of more than 5,000 children conducted between 2018 and 2022 in nine food-vulnerable districts in South Africa, show that 44% of children under one year old were not benefitting from a child support grant.[66] As a result, the grant is not as effective as it could be. Early childhood There are about 6.5 million children in South Africa under the age of six; 4 million of them live in the poorest 40% of households.[67] This means that the majority of children are born into contexts that make it difficult for them to realise their potential. These contexts are characterised by poor access to nutrition, inadequate living environments, a lack of security and social protection, and few opportunities for quality early learning and stimulation.[68] Far too many children experience malnutrition and toxic stress. Research shows that across all developmental domains, outcomes were worst among the poorest children, and best among the wealthiest children.[69] This means that children from poor backgrounds enter school on significantly unequal footing, with impacts on their success in school, and their ultimate economic and social participation.[70] The relationship between income levels, access to quality early learning programmes, and child outcomes, is a key driver of South African inequality. To alleviate inequality, we must find ways to reduce this gap before it is widened in later years. Although adults are still more likely than children to live in urban homes, a significant majority (57%) of South Africa’s young children (below the age of six) now live in cities and major metros, and this proportion is increasing.[71] Meanwhile, 3 million children under six still live in rural areas, primarily in the former homelands.[72] Rates of poverty for young children are highest in Limpopo, KwaZulu-Natal and the Eastern Cape.[73] Whether urban or rural, children who grow up in poor living conditions – with inadequate water, sanitation or energy – are vulnerable to worse health and developmental outcomes.[74] Poor sanitation, in particular, has strong links to rates of childhood stunting.[75] In 2019, almost a third (29%) of young children live in households without piped water on site.[76] Young children who grow up in poor households are at highest risk of being excluded from early learning and health services because they cannot afford transport to clinics or government offices, or because the fees of early learning programmes are unaffordable. Early Childhood Development (ECD) services – including nutrition, early learning, healthcare and social services – can facilitate children’s development and future chances, increasing primary school enrolment, improving academic performance and reducing school dropout.[77] Although access to early learning programmes has expanded over time, there is still stark inequality in the distribution and quality of programmes, and the level of funding from the government.[78] Deeply entrenched inequality is also illustrated by the fact that two-thirds of Black children live below the poverty line compared to 2% of White children.[79] Currently, only about 1.5% of the country’s GDP is spent on ECD, most of which goes to child support grants. A mere 6.5% of this budget is allocated for early learning, nutrition support and supportive parenting programmes.[80] While early learning in South Africa is a heterogenous and predominantly informal sector, the current institutional framework for supporting Early Learning Programmes (ELP) is geared towards formal and registered providers. This means that the vast majority of ELPs are excluded from any government oversight or support. Of the estimated 70,000 ELPs, only around 16,000 – 20,000 are formally registered.[81] ELP attendance is partly a function of age: children under the age of two are least likely to attend an ELP. But it is also a function of income – Figure 6 shows ELP attendance for children age 3-5 years old by income quintile. Figure 6: Early learning programme attendance for 3-5 year-old children by income quintile Source: Hall, K. et al. 2017. South African Early Childhood Review[82] The ability of parents or caregivers to afford ELP fees will continue to be a driving factor for ELP access – and indeed inequality – without wider and deeper public financing.[83] The first step to giving children an equal start in life is to ensure that all young children have access to quality and comprehensive early childhood development services.[84] If not, these foundational setbacks become more and more difficult to overcome as they move through school and into adult life. Adolescence Access to basic education has improved dramatically in South Africa. By the early 1990s, the country had near-universal enrolment rates at primary school level. Between 1985 and 2007, secondary school enrolment had risen from 51% to 91%.[85] Despite arriving on unequal footing, almost every young person in South Africa starts school. But, from the moment they enter a Grade 1 classroom, most will have the odds of success stacked against them. Only four out of every 10 Grade 1’s reach and pass Grade 12.[86] Rather than being a once-off event, school dropout is a process, propelled by a range of factors in young people’s schools, homes and communities that serve to either push or pull them from school (Figure 7).[87] Figure 7: Predictors of school drop-out The school environment can either be a protective or a risk factor in driving learner dropout. School is a vital space for education. But beyond learning, a quality school environment can also play other important roles in young people’s lives, offering them safety, socialisation, freedom and community. This can deepen young people’s attachment to school and make it less likely that they will drop out. However, many learners continue to feel unsafe, uncomfortable and unstimulated at school. Bullying, absent teachers, irrelevant curricula and poor sanitation are just some of the factors that make learning difficult and often drive learners from school.[88] An obstructive learning environment can contribute to learners’ academic struggles, which are another important predictor of dropout, particularly for those who start to fall behind early on. The early years of school are about building a basic understanding of words and numbers. Without the basic tools to understand what is being taught, further learning cannot take place and it becomes very difficult for learners to progress through the curriculum.[89] Robust research suggests that the South African education system is failing children in these early years.[90] By Grade 4, less than half of the learners who started Grade 1 three years earlier, are on track academically, and many are older than the expectation for their grade. In the poorest schools (quintiles 1 and 2), only one in three of these learners are on track.[91] Grade repetition is the single greatest predictor of school dropout.[92] Over 1 million school learners repeat grades each year.[93] An estimated 20% of learners in Grades 10-12 are three or more years over-age, having repeated grades.[94] In 2018, the cost of repetition to the public schooling system was estimated at R20 billion – 8% of the annual basic education budget.[95] Government progression policy does not allow learners to repeat a grade more than once per ‘phase’, whether Foundation Phase (Grade R-3), Intermediate Phase (Grades 4-6) or Senior Phase (Grades 7-9), or Further Education and Training (Grades 10-12). Instead, learners failing for a second time simply ‘progress’ to the next grade, but often without the academic support they need to succeed.[96] Learners that are struggling academically can feel alienated and inadequate, deepening their sense of disengagement from school.[97] As they fall further behind, some might feel unable to catch up, or that they don’t have the academic ability to complete their schooling. In South Africa, boys are significantly more likely to repeat grades than girls, which is undoubtedly a significant driver of their higher dropout rates.[98] National survey data over the course of 2020–2021 showed that the Covid-19 pandemic had amplified disruptions to education: deepening learning losses, reducing access to school meals, and exacerbating learner disengagement from school.[99] Outside challenges in the learning environment and academic curricula can push young people from school. Young people can also be pulled from school by pressures at home or in their communities. Given that most young people across South Africa attend no-fee-paying schools, it may come as a surprise that many don’t have the financial resources to complete their basic education. Even those enrolled in no-fee-paying schools, or supported by government bursaries, often struggle to make ends meet because of the added costs of education, which include uniforms, learning materials, transport, and stationery.[100] In rural areas in particular, barriers to schooling extend beyond finances: many must travel long distances to the classroom. In his research in the Mpumalanga province, Lawrence Mboweni[101] found that young children aged between seven and 13 years walked a total of 16km each day to and from school. Along these journeys, children face many possible dangers. In KwaZulu-Natal, children have been reported to be crossing a lake with hippos in order to reach school.[102] Many learners undertake household chores and caregiving responsibilities that, in some contexts, can pull them away from their schoolwork. Girls and young women tend to carry a greater burden of caregiving and domestic responsibilities, which can limit time for homework and even keep them from the classroom.[103] In rural areas, girls and young women carry an especially heavy load of household duties, carrying water and fetching firewood.[104] Covid-19 and lockdown also exacerbated burdens for girls: when relatives fell sick or there were younger siblings at home and in need of childcare, girls were more likely to take on caregiving responsibilities than boys.[105] South African public discourse is gripped with moral anxiety over pregnancy among adolescent girls, partly because of its perceived age-inappropriateness, and partly because of the possible impacts on the wellbeing of mothers, families, and children. Notwithstanding the recent dramatic spike in young pregnancy over the Covid-19 lockdown,[73] South Africa’s adolescent fertility rates have been steadily declining over the years, dropping by 27% over the past 50 years.[74] Although adolescent girls are more likely to fall pregnant in South Africa than in other upper middle-income countries, the country’s adolescent fertility rate is well below the sub-Saharan African average.[106] Research[107] tells us that there is a mutually reinforcing relationship between pregnancy and school dropout: young women that leave school are at higher risk of falling pregnant, while pregnant youth are also at higher risk of leaving school. In addition to financial pressures, parenting learners carry the responsibility of childcare, which can affect their ability to stay in, and succeed at, school. What is often missing from the story is the role that schools, families, and policymakers play in determining whether a young mother returns to school or not. For many girls and young women, an unintended pregnancy means social stigma and isolation, along with major disruptions to schooling. Without the right type of support, the physical toll of pregnancy, regular antenatal visits, and caring for a newborn often come at the expense of young women’s schooling. Research into the effects of early childbearing on young people’s educational and economic attainment show that delaying childbearing can improve young women’s educational outcomes as well as their chances of employment.[108] In South Africa, young people without a matric year, or an equivalent qualification (Level 4 of National Qualifications Framework), are often cut off from pathways to tertiary education, employment and higher earnings. They not only struggle more than their peers to find work, they also remain unemployed for longer periods of time, and if they do find work, have less stable and lower earning jobs.[109] Figure 8: The Qualifications Hierarchy: Outcomes of the 2008 Matric Cohort Source: Spaull, N. 2016. Important Research Inputs on #FeesMustFall Levels of qualification also affect job security, which also means that in economic downtimes, those with fewer qualifications are disproportionately affected. From 2017 Q1 to 2022 Q1, overall employment decreased 8%.[110] Within that figure, employment among those with tertiary qualifications decreased 4%; matric-educated employment decreased 8%; and those with less than matric saw an employment decrease of 20%. School completion rates in South Africa are both a driver, and a reflection, of South Africa’s inequality. Dropout rates differ significantly by race. Black and Coloured youth are half as likely to complete Grade 12 as their White and Indian counterparts.[111] Young Coloured men appear to be at highest risk of dropping out: one survey showed that 29% of 16-18-year old Coloured men were not in school.[112] But across genders, it is Black youth who are at highest risk of dropout. This is certainly not for want of trying, since young Black learners also tend to stay in school for longer, repeat more grades, and leave school at an older age.[113] Because of the country’s history, race in South Africa is a proxy for other inequalities. Different races have different dropout rates because of how South Africa’s education system, together with its towns and cities, were planned under apartheid. Apartheid spatial planning gave White families privileged access to quality schools and urban infrastructure. These inequities have persisted in the post-apartheid context, such that poor, Black and particularly rural youth are disadvantaged in their access to quality education, which would otherwise improve their access to jobs and advance their social mobility.[114] In the poorest 80% of schools, only 1% of Grade 8 learners will go on to pass matric and be eligible to study maths and science at university (i.e. achieve above 60% for these subjects). In the wealthiest 20% of schools, nearly ten times as many learners will pass Grade 12 with these grades.[115] Early adulthood Transitions into post-school education Young people who leave school with a matric certificate have a labour absorption rate of 31.5% (see Figure 9 below), 13.8% percent higher than for those without one (17.8%). But chances of finding work are improved exponentially by a tertiary qualification, which increases absorption rates by a further 26.8%. Tertiary-educated youth have a labour absorption rate of 58.0%. Figure 9: Absorption rate by education status This is also borne out in the expanded unemployment rate for young people (aged 15–34) by education level (see Figure 10). While having a matric certificate marginally decreases young people’s chances of being unemployed, it is only when this certificate is used as a passport to a tertiary qualification that chances of being employed are exponentially increased. This is partly because the economy of South Africa has shifted to one in which higher levels of skills are increasingly in demand.[116] Figure 10: Unemployment rate (expanded) by education status We know that most young people who drop out of school do so between Grades 10 and 12. Despite having completed compulsory schooling, historically they have had no formal qualification to aid their transition into further training or employment. The proposed General Education Certificate (GEC)[117] is intended to address this problem, giving those who have completed Grade 9 a national certificate. While the Technical and Vocational Education and Training system (TVET) should provide young people with a Grade 9 or GEC qualification opportunities to further their education, very few young people without a matric access these institutions.[118] Among young people without a matric, only 1% have some other school certificate or diploma (from a TVET college for example).[119] Quarterly Labour Force statistics show that as many as three in 10 young people in this category (aged 15-24) are not only unemployed, but are also not enrolled in education or training.[120] TVET enrolment is low, in part because unlike university degrees, TVET qualifications are not perceived to improve young people’s employability.[121] There is further evidence that young people’s aspirations for a university degree, and for a professional career as opposed to a menial job, also contribute to them valuing university education over TVET education.[122] TVET education has therefore often carried with it assumptions of inferiority, which have been exacerbated by difficulties with the quality of teaching and learning at these institutions.[123] Research shows that, rather than acting as an alternative route to a matric-level qualification, TVETs have become ways for young people who already have a matric certificate to bide time, before qualifying for a university degree programme or finding a job.[124] Despite the important impact that a post-school qualification can have on young people’s future, most who start a tertiary level programme do not complete it: only 60% of university undergraduates, for example, complete their degrees within 6 years.[125] TVET students are even less likely to graduate.[126] Notwithstanding increased access to post-school education,[127] only 8% of 15-24-year olds attend a university or college, and even fewer complete their qualifications.[128] Culture shock, poor quality teaching, social exclusion, bullying, along with physical and mental illness can constrain young people in completing their qualifications, particularly if they are from vulnerable or rural homes.[129] In 2016, the Dell Foundation, which offers bursaries to students in two top South African universities, published a report about the types of support that students felt they most needed. 50% said psychosocial and community support made the most difference to their success.[130] Low rates of access to and completion of post-school qualifications contribute to stubborn racial and class inequities in youth employment outcomes.[131] An analysis of QLFS data between Q1 2017 and Q2 2022 shows marked, and continued, inequality in unemployment by race (see Figure 11). This illustrates the stubbornness of apartheid-era racial hierarchies, and reflects broad, historical patterns in educational attainment by race (see Table 2). Figure 11: Unemployment rate (expanded) by race In South Africa, 60% of young people either leave school before matric, or have failed their matric exam, and are left without any kind of recognised educational qualification. And yet, chances of finding work are improved exponentially by a tertiary qualification. Any meaningful shift in South Africa’s stark, and long-entrenched, inequality will demand that we unlock the social and economic mobility of these youth. Table 2: Youth education status by race, 2017 Q1 and 2022 Q2 Transition into the labour market South Africa’s fast-growing labour force presents both a tremendous challenge and an unprecedented opportunity. Over the past five years (Q1 2017 – Q2 2022), South Africa’s working-age population has continued to grow steadily: from 37.1 million in the first quarter of 2017 to 40.0 million in the first quarter of 2022. When they leave school, young people in South Africa enter a world of uncertainty, often unprotected. Many will lose the routine, daily meals, and adult mentorship that the school environment provided. When they turn 18, those who had benefited from a child support grant will stop receiving it, putting added financial pressure on their households.[132] Among those without a matric qualification, there are a variety of different pathways in terms of movement into and out of the labour market. An analysis of five waves of the National Income Dynamics Survey shows that over a 10-year period, two-thirds of young people who had not completed Grade 12 experienced some degree of churn in the labour market, with a smaller proportion remaining consistently in or out of employment and the education system.[133] But even within this group, there is significant inequality. The consequences of not having a matric certificate differ depending on young people’s connectivity to the labour market. Those from poorer households and disadvantaged schools are more likely to be long-term unemployed, which translates into poorer mental health and subjective wellbeing.[134] Between 2008 and 2021, the number of young people who had been looking for work for more than three years tripled.[135] The number who had given up entirely, tripled.[136] Figure 12 shows the composition of the working-age population across its four constituent categories over the period 2017 Q1 – 2022 Q2. Figure 12: Composition of the working-age population Table 3: Composition of the working-age population Over this time, the employed population shrunk from 16.2 million to 15.6 million despite the overall growth in the working-age population, while the other three categories all grew: unemployed from 6.2 to 8.0 million, discouraged job-seekers from 2.3 to 3.6 million, and other not economically active from 12.4 to 13.1 million. This underscores the size of the challenge for South Africa: in a period in which the working-age population has grown by over 8%, the economy was able to accommodate 4% fewer in employment. The rising number of discouraged job-seekers is a pressing concern for South Africa, reflecting not only the financial and psychosocial cost of job-seeking but also deepening chronic unemployment. Research suggests that the longer someone is unemployed, the more difficult it becomes to find work, not only because they become increasingly discouraged, but also because employers view them as riskier hires.[137] South African research[138] suggests that unemployment is also associated with stigma and shame, as well as stress, depression and anxiety, which in turn make it more difficult for people to seek and find work. Over the past five years, the number of young job-seekers (aged 15–34) who have grown discouraged (i.e. had not acted to find work in the previous four weeks) has increased by almost 40%.[139] The experience trap Part of the challenge of the job search is in how to gain, and then signal, experience as an entry-level worker. Qualitative evidence suggests that young people are frequently denied jobs or interviews on the basis of their ‘lack of experience’.[140] A Western Cape survey of middle-class youth showed that those who gained some work experience during high school transitioned more easily into the workplace than those without experience.[141] This is reinforced by national panel data, which shows that school learners and tertiary students who undertook part-time work were more likely to be permanently employed.[142] Indeed, after race and gender, being able to demonstrate some work experience appears to be the most important factor in finding work in South Africa, regardless of whether it is formal or informal, paid or voluntary.[143] But how does one gain experience if experience is often an entry-requirement for work opportunities? Indeed, part of the reason that unemployment is so high for young people is that many struggle to gain first entry into the labour market. The unemployment rate (using the narrow definition) is markedly worse (63.9%) for younger youth (aged 15-24) than older youth (aged 25-34). Some evidence suggests that, by the time they turn 24, 60% will have never had a job before.[144] Long-term unemployment, as well as an extended and unsuccessful job search, can lead to discouragement and depression among young people.[145] In 2019, the South African government relaxed requirements for prior work experience for job openings in the public sector. But the ‘experience trap’ has nevertheless remained a major barrier for young job-seekers. In a context where employers often receive large numbers of applicants, many continue to use level of experience (along with formal qualifications) as a sifting tool. Young women’s disadvantage in the labour market Young women are most likely to be stuck outside of employment,[146] owing in large part to domestic and childcare responsibilities.[147] South Africa has achieved parity in school enrolment, and although girls and women generally outperform boys and men as they move through primary, secondary and tertiary education, they continue to fare worse in the labour market. International research suggests that equity in education does not necessarily translate to workplace equity, often because of the motherhood wage penalty.[148] But women not only have worse wages, they are also less likely to be employed, despite often having higher qualifications. In the second quarter of 2022, 13.2% of women had tertiary qualifications compared to 11.2% of men, and 46.7% had completed secondary education compared to 43.5%. Yet despite being more qualified than men, women fare worse than men in the labour market. Figure 13 shows that young women (aged 15-34) are being absorbed into the workforce at a far lower rate than young men at all qualification levels. This can be partially explained by maternity, domestic and childcare responsibilities forcing women to opt out of the workforce. While their analysis was not particular to youth, Schoer and Leibbrandt[149] show that domestic responsibilities can also keep women from the job search. In the early months of the 2020 Covid-19 lockdown, women accounted for two-thirds of net job losses and have also been slower to recover employment since. This was attributed, in part, to inequities in time spent on childcare.[150] Figure 13: Youth absorption rate by gender and education status While women’s disproportionate caregiving responsibilities may be part of the story, Figure 14 shows that even for young women who opt into the workforce and are actively seeking work, young women with the same qualifications have higher unemployment rates than men, suggesting gender discrimination in the labour market. Gender discrimination in the labour market means that young women’s full economic participation remains untapped, and targeted policy and programmes are needed to redress gender disadvantage. Figure 14: Youth unemployment rate (narrow) by gender and education status This is further confirmed by looking at the proportional difference between male and female absorption and expanded unemployment rates. These statistics are calculated as female divided by male, and emphasise the magnitude of the gaps shown in the previous two graphs. In the first section, “Absorption rate”, the table shows how much less likely women are than men to be absorbed into the workforce. In the second, “Expanded unemployment rate”, it shows how much more likely women are to be unemployed. Overall, the gaps seem to be slowly shrinking over time. However, there is a long way to go. In 2022 Q2, a matric-educated woman is 20.9% less likely to be absorbed into employment than a man with the same education and 10.1% more likely to be unemployed. Table 4: Proportional gender gaps in select employment statistics by education level Financial exclusion In 2019, the Siyakha Youth Assets Study estimated that young South Africans spent an average of R938 a month looking for work[151]: about R558 for transport and an added R380 for internet access, printing, application fees, and agent’s fees.[152] The cost of job-seeking was more than young people’s monthly income (an average of R527), which meant that many could not look for work without becoming indebted. Nearly two-thirds of young people in South Africa relied on family members to help fund the cost of job-seeking.[153] Many have to weigh up the costs of job-seeking with basic necessities.[154] In 2021, a Youth Capital survey of over 2,000 young people across the country suggested that eight in 10 young people were choosing between looking for work and buying food.[155] Apartheid spatial planning exacerbates inequalities in the job search. Because poor youth typically still live either in townships on the outskirts of the cities, or in less economically-developed rural areas, they are often removed from where jobs and industry are located and lack reliable, affordable transport.[156] Ironically, it is then the poorest youth for whom work-seeking is most expensive. Even if these young people find work, the costs of getting to and from work, means that they ultimately make less income. And in fact, there are some jobs that would cost them money to accept.[157] It is perhaps unsurprising then that several studies have found that when households start receiving social grants, there is a positive association with job-seeking among working-age household members.[158] Even before Covid-19 lockdown, almost 90% of young people were using the internet to look for work, with mobile data being among their biggest expenses.[159] But with only 10% of South Africa’s population having internet access at home,[160] the majority of young people are dependent on local hotspots, internet cafés and mobile data. High data costs impact how young people access information on education and work opportunities, producing a digital divide between better-resourced and connected youth, and those with limited connectivity or resources. Given the financial and psychosocial costs of the job search, it is unsurprising that three out of four young people in a 2019 study reported having been looking for work for more than a year.[161] Nearly one in 10 had given up the job search altogether.[162] Social exclusion Most people in South Africa find jobs through friends and family, who either refer them to employers, tell them about work opportunities, offer start-up capital, or lend them money to fund the job search. Employers also often rely on employees to refer people they know and trust when there are job openings. In the early 1990s, researchers found two dairies in Gqeberha and Cape Town that had recruited all their staff from a single Ciskei village, propelled through a chain of referrals.[163] Indeed, a strong body of South African evidence[164] shows the power of social ties and social privilege in determining entry, stability and success in the labour market. This reality means that having social ties to people already in the labour market is critical to gaining entry. But as many as four in 10 young people find themselves on the margins of the labour market, living in homes with no employed members.[165] In the Eastern Cape, the proportion of young people living in homes where no one is employed increases to almost 60%, and in the poorest municipalities in the country, as much as 80%.[166] Because of the interplay between class privilege, social networks and economic power, some researchers[167] have argued that the South African labour market can be split into two camps: a wellconnected group of ‘insiders’, and a second (much larger) group of ‘outsiders’, whose social exclusion locks them out of quality work opportunities. Pathway support The South African labour market experiences a high degree of churn. This has been especially acute over the past few years as a consequence of Covid-19 lockdown. National survey data tracking employment dynamics between February 2020 and March 2021 showed that 23% of participants who had been employed in February were no longer employed the following year, while 30% who had been jobless in February 2020 had found jobs by March 2021.[168] But young people were experiencing this churn well before Covid-19 struck. Many of South Africa’s young workers will cycle through short-term training, jobs or self-employment opportunities, struggling to find a stable foothold in the labour market. Young people who do find jobs often battle to keep them. Instead, they find themselves moving in and out of training, informal work, and short-term positions, unable to translate their experience into stable employment.[169] Although chronically unemployed and transitory unemployed people in South Africa share many of the same characteristics – they tend to be Black, women and younger – transitory-unemployed people are 10 times more numerous than chronically-unemployed people.[170] This reality, coupled with the increase in part-time jobs, means that policy and programming must be designed to support those in transitory employment, bridging them to their next opportunity. The young workforce Like much of the rest of the world, wage labour has been a central economic, social, and political organising force in South Africa: first through colonial and then apartheid capitalist accumulation.[171] Both enforced the employment of Black men on the mines and attached urban residence with formal employment. Over the second half of the 20th century, the South African economy grew exponentially, shifting from agriculture to minerals, and finally to manufacturing.[172] But these structural changes in the economy were also attended with some of the widest unemployment rates in the world and deepening inequality. Since the final decades of apartheid, the economy has become increasingly capital- and skills-intensive,[173] while growth has stalled. Today, the services sector is the key to both growth and employment, while agriculture, mining, and manufacturing have contracted significantly.[174] South African youth face a future without the prospect of industrial waged work and uncertain possibilities for livelihoods in the agricultural sector. Despite skyrocketing unemployment, South African social protection is reserved for those presumed unable to work (children, the elderly, and the disabled), while there is no direct support for the young and unemployed. Structural change towards a service-oriented economy is reflected in young people’s rates of employment in key industries. Among those young people (aged 15-34) who were employed in the second quarter of 2022, 24% were employed in community, social and personal services; 24% in wholesale and retail; and 16% in financial intermediation, insurance, real estate and business services. In other words, the vast majority (about 64%) of young people who are employed, are employed in these service-driven industries. Between Q1 2019 and Q2 2022, the proportions of those employed in mining and manufacturing decreased across the board, but particularly for young people (see Table 5). Table 5: Youth versus overall proportion of employed across industries While some sub-sectors of the service industry are able to absorb low- and medium-skilled workers, the overall absorption capacity of the sector is severely restricted, particularly since most young job-seekers have limited formal qualifications. One diagnosis of the youth unemployment problem is a ‘supply-side problem’. Here it is argued that the primary driver of youth unemployment is that young people do not have the right qualifications, technical or ‘soft’ skills to meet the needs of a changing labour market. This includes the skills demanded by a growing digital economy, as well as the shift to a high-skill, service-oriented sector. As the economy becomes more service sector-oriented and digitisation and automation play a bigger role, some argue that South Africa will need to produce 1.7 million more tertiary graduates to take advantage of the opportunity that an increasingly digitising economy presents, and alleviate job losses.[175] Supply-side solutions work off a deficit model that positions young job-seekers as lacking the capacities that industries and employers need. In doing so, they arguably place the burden of responsibility on young people to equip themselves for work, with little guarantee that the labour market will be able to absorb them or that they will have the support, recognition and resources required to secure a job.[176] The previous section about transitions into the labour market suggests that skills deficits are not the only, or necessarily the primary, barrier to entry for young people. Indeed, young people’s experience of social and financial deficits are as, if not more, pressing. More so, young women may experience gender discrimination in the labour market regardless of their level of their qualification. While we know that more education and training generally equates to higher employment and higher earnings for youth, and demands proper investment, the relationship is not inevitable. There also must be livelihood opportunities to absorb these better-skilled young people. Young people in the informal sector Over the period Q1 2017 – Q2 2022, the proportion of young people employed in the formal sector shrunk by 16%, relative to 6.5% overall (see Table 6). While employment prospects for young people also contracted in agriculture and private households, the informal economy was the only sector in which young people experienced a growth in employment. This is all the more impressive considering the sector was also hardest hit by the Covid-19 pandemic. Among young people, informal employment increased 4% over the period, despite decreasing 23% compared to the formal sector’s 15% in South Africa’s first lockdown. Table 6: Youth versus overall proportion of employed across sectors Literature on youth employment in South Africa often falls into two camps with respect to its approach to the formal economy. For some, shrinking possibilities in the formal sector, both within South Africa and globally, compel us to think differently about work. They argue that ‘the prevalence and persistence of “informal”, “precarious”, and “non-standard” employment in so many sites around the world… requires a profound analytical decentring of waged and salaried employment as a presumed norm or telos, and a consequent reorientation of our empirical research protocols’.[177] Others argue that stimulating formal wage employment is the only way to transform the economy at the scale required to shift livelihood prospects. By looking to expand livelihoods for young people outside the formal wage job, those in the former camp might be accused of valorising ‘precarious work’ and placing the burden on young people themselves to transform their own prospects. Meanwhile, those who view job creation in the formal economy as the only solution to youth unemployment often invoke a false binary between the informal and formal sectors. Here, interventions in the formal economy are perceived as systemic and sustainable, while those in the informal economy are seen piecemeal and individualised; formal work is understood as decent and secure, while informal work is not.[178] Given the lower earnings and poor access to social protection for informal workers, we cannot romanticise the informal economy. But we also cannot ignore it. Nor can we continue to hold rigid dichotomies that fail to capture a much more complex reality. The lines between the formal and informal economies often blur, with connections and overlaps between them. Stereotypes that describe ‘decent, dignified work in the formal economy’ and ‘insecure, exploitative work’ in the informal economy often do not hold. Despite apparent job security, wage-workers in the formal economy can also be exploited, treated as ‘disposable’, and forced to work in unsafe conditions.[179] In South Africa, low-paid wage work has been coupled with colonialism and apartheid,[180] and relatedly forced migration, oppression and abuse.[181] This is part of why some young South Africans report opting for insecure selfemployment as opposed to the indignities of certain forms of wage labour.[182] Descriptions of work outside the boundaries of a formal wage job often rest on what it is not: informal, non-standard, unstable or insecure . This leaves us with far less research or description of what it is, and how we might meaningfully respond to it. In South Africa, young people in the informal economy are often understood in terms of ‘entrepreneurship’, with the assumption that young people’s innate entrepreneurial potential needs only to be unlocked through training and skills.[183] While some see young people in the informal sector as untapped vessels of entrepreneurial potential, others see them as a ‘ticking time bomb’. Outside of formal employment young people are regularly assumed to be lazy, idle and dangerous.[184] With persistently high rates of youth unemployment, post-apartheid South African has been awash with images of ‘waiting youth’,[185] pushed to the margins of society by under-employment and unemployment, and growing increasingly detached from their aspirations for their lives and livelihoods. But rarely are young people just waiting. Instead, research illustrates that young people without jobs are routinely creating new strategies to navigate changing labour markets. In a recent ethnographic study, Hannah Dawson[186] explored social connections among young men working in-and-around a car wash in Zandspruit informal settlement, Johannesburg. Rather than operating in isolation, the car wash business formed part of a web of informal business activity, connected to the taxi industry, informal mechanics and the ‘chesanyama’ (a buy-andbraai informal butchery). The car wash offered young men a place to socialise, pass time, and ‘hustle’ for work. In 2022, a survey conducted by Youth Capital[187] found that neighbourhood hubs, including train stations, schools, clinics and community centres, play a key role in linking young people to opportunity. By becoming visible to potential employers and business partners, young men at the Zandspruit car wash gained leverage in their local economy. Their livelihoods were created and sustained by “making plans with other people”.[188] Those who currently had money or work could support those who didn’t, offering a form of informal insurance that held them from one job to the next.[189] These relational and reciprocal aspects of self-employment are often muted in the literature on entrepreneurship, which has historically centred on individual agency and self-reliance.[190] As it turns out, entrepreneurship is a particularly limiting frame for the work that young people are undertaking outside the formal economy and in the interstices of formal and informal work. This work includes forms of self-employment, side-hustle and opportunism, and enterprises ranging from at-home businesses to sole-proprietors to sophisticated networks of employees. The vast majority of young South Africans will be forced, at some point in their lives, to create their own living through forms of self-employment. But only a small percentage will be able to create businesses that employ others. There is limited crossover between these two types of entrepreneur; not very many microenterprises will develop into Small and Medium-size Enterprises (SMEs). Yet both micro-enterprises and SMEs regularly operate in hostile economic environments with limited capital or networks. Programmes aiming to ‘unlock’ entrepreneurship through business training, financial literacy, access to finance, business plan development, and mentoring are widespread. What is less common are interventions to improve key infrastructure – like electricity, broadband, transport and other infrastructure – that would allow businesses to thrive. Key interventions to alleviate youth inequality over the life course To alleviate youth inequality demands that we attend to vulnerabilities and protective factors throughout the life course. This is particularly pertinent for their economic participation, around which most of the concern about young people’s vulnerability has circulated. Equalising opportunities at birth and in early childhood, for example, sets the foundation to allow for more merit-based systems later on. Similarly, by supporting young people to stay in school and attain formal qualifications, they might gain a firmer foothold in the labour market. If we fail to support young people in their early lives, inequalities only widen as they grow older. But we also cannot afford to fail young adults, who will in turn become the parents of future generations. The recommendations listed below are by no means exhaustive. But they do suggest critical interventions at key moments of the life course that can help alleviate structural inequality and ignite young people’s potential. Perinatal Advance the Maternal Support Grant Research shows that childhood stunting, together with other aspects of children’s physical and mental wellbeing, is driven in part by mothers’ mental health and nutrition during pregnancy.[191] Research suggests that in South Africa’s most disadvantaged communities, pregnant women are experiencing high rates of mental illness and food insecurity.[192] Yet these women will not be able to access any income support from the state until their child is born, and even then, access to the Child Support Grant within the first year of life is low. By extending social protection to caregivers, before they give birth, we can safeguard the health and wellbeing of both mother and child, and take the first steps to disrupting intergenerational poverty. Income support, together with affordable antenatal care, can improve pregnant women’s nutrition and psychological wellbeing, as well as the physical and cognitive functioning of their babies.[71] Research suggests that if stunted children receive extra nutrition and cognitive stimulation, their life-time earnings potential can increase by 25-40%.[72] Schools must implement national policy by supporting pregnant learners and young mothers to stay in school Pregnancy can disrupt young women’s schooling in a range of ways. First, pregnant learners often need to take leave from school for antenatal visits, as well during and after the baby is born. This can disrupt their learning and make it difficult to catch up later. Second, in addition to the physical difficulties of pregnancy, many pregnant learners also suffer shame and bullying in their homes, schools, neighbourhoods and health facilities. The admonishment pregnant learners face both on the journey to school and from their peers can discourage their attendance. Just as judgement and bullying might cause pregnant learners to drop out of school, those who fall pregnant after having dropped out might be discouraged to return, fearing hostility from teachers or classmates. Finally, having a child puts additional responsibilities and financial pressures on parenting learners, which can come at the expense of their schooling if they are not adequately supported.[193] In light of the interplay between pregnancy and dropout, policy and programming must support pregnant learners to stay in school and young mothers to return to school as soon as possible after giving birth. This has been the driving force behind recent (2018) national policy.[194] Indeed, evidence[195] shows that the longer a new mother waits to return to school, the more at-risk she is of dropout. But, even when they want to return to school, attitudes among school staff and classmates often keep young mothers from doing so.[196] But the implementation of new recommendations has varied across schools and provinces with some places completely ignoring policy in favour of expelling pregnant learners.[197] More often, schools have chosen to follow a more outdated government policy[198] that keeps young mothers from school for the first year of their child’s life. Schools remain hostile environments for pregnant women and young mothers, and very few have baby-changing or childcare facilities. Schools can also create other barriers for pregnant learners. In some schools, learners that are more than six months pregnant must submit a doctor’s note indicating whether they are fit to learn; in others, pregnant learners must be accompanied to school by a guardian.[199] At the level of policy and implementation, we must support both expectant and new mothers to stay in school. Pregnancy and early motherhood are critical moments, both in the life course of the pregnant learner themselves, and in the life course of children born to learners, affecting the future chances of both parent and child. Early childhood Government must invest in the ECD workforce and quality ECD services In the critical first 1,000 days of a child’s life, infants and caregivers are expected to receive Early Childhood Development (ECD) services at home, from community health workers, hired as part of clinic-based outreach teams. Community health workers form part of a cadre of about 270,000, mostly Black, women delivering ECD services across the country.[200] These women, who operate largely informally, are all-too-often underpaid, under-resourced and unprotected. The achievement of minimum wage for informal care workers (now R23.19 per hour) has been an essential lever in reducing the gender wage gap at the lower end of South Africa’s wage distribution.[201] As they grow older, children are most likely to receive care through an Early Learning Programme (ELP), but with limited government subsidies, access to these services is dependent on caregivers’ ability to pay fees. Research shows that investing in early childhood accrues benefits over the life course, with returns for schooling, tertiary education, employment prospects, and ultimately national budgets. Some models suggests that the elimination of stunting, alone, could generate an additional R62 billion a year,[202] which would be enough to subsidise a national early learning programme for 0–5-year-olds, while also reducing the funding shortfall at tertiary institutions. If universal access to early learning translated into better basic education outcomes and a fully-literate working-age population, some researchers suggest the country’s GDP would be expected to grow by a quarter.[203] But investing in ECD goes far beyond a return on investment, presenting an opportunity to radically shift intergenerational inequality in South Africa. This is not only because it unlocks the developmental potential of children, but also because it means supporting quality jobs in the community and social services sector, where women are heavily represented. Community, social, and personal services is the only sector that added jobs for young people from 2017 Q1 to 2022 Q2, most of which (over 60%) have been to women. Expanding quality, affordable childcare not only has benefits for young children and young women in the early childhood sector, it also enables more caregivers (usually women) to participate in the labour market. Given that caregiving responsibilities can often delimit young women’s labour participation, this is essential to unlocking their economic potential and alleviating gender inequality in the labour market. Key levers for the government to unlock the multiplier effects of early childhood development: Unlock public financing to pay and skill the ECD workforce through Sector Education and Training Authorities or Public Employment Programmes; and Develop more inclusive regulatory frameworks that allow unregistered sites to access funding and quality support. Adolescence: basic education Implement early warning systems For young people to reap the benefits of basic education, they must be supported to complete their schooling. This starts by developing and supporting thoughtful dropout-prevention programmes. Schools can implement early warning systems[204] for school dropout by tracking signs of learner disengagement, and then delivering the right support at the right time. Research suggests that three indices are critical to identify early signs of disengagement: academic performance, behaviour change, and chronic absenteeism. Academic performance: when learners’ grades begin to drop, it may mean they are falling behind in the curriculum. Without the right support, this can put them at risk of grade repetition, which research shows is a leading predictor of dropout.[205] Behaviour change: disruptive or disengaged behaviour can be an early warning sign, especially if it appears alongside other indicators. Chronic absenteeism: absenteeism usually increases over time. Documenting this can help to trigger support to absent learners before they drop out. Open access to psychosocial support Many children in South Africa are exposed to trauma, violence, loss of family members, hardships at home, inadequate living conditions and limited access to services. This can have both short- and long-term consequences for children’s emotional wellbeing, mental health, academic performance, and ultimate ability to finish school.[206] Evidence from South African longitudinal research shows that adolescents struggling with mental illness are less likely to have completed secondary school or be formally employed, and more likely to report psychological distress.[207] Psychosocial support services for children can include role modelling, mentoring and monitoring from trusted adults and peers. It may also involve individual and group counselling, life-skills training or referral to professional state services. These support interventions are reliant on early warning systems that help trigger the right support at the right time. Adolescence: post-school education Support alternative pathways to a matric qualification Recent research suggests that, at any given time, there are as many as a quarter of a million young people pursuing a matric outside the full-time school system.[208] That equates to a third of the annual matric cohort.[209] This includes young people who are seeking to rewrite their matric exams as well as those who left school before reaching Grade 12. Government must expand and support these alternative routes to a matric qualification, which include the National Senior Certificate, the Senior Certificate and the National Senior Certificate for Adults. As a first principle, this should include easily accessible application information, academic resources, and support services that help young people navigate second-chance matric qualifications. Improve TVET education in terms of access and quality To boost tertiary education rates and equip young people for the labour market, we must increase access to quality Technical and Vocational Education and Training (TVETs). Despite a radical expansion in access to tertiary education since democracy,[210] fewer than two in 10 young people who start Grade 1 will be eligible to attend university, let alone afford university fees or have enough support to finish their degrees.[211] Six out of 10 young people will not leave school with a matric certificate and will need to find pathways to further education where this is not a requirement. TVETs can help prepare young people for the labour market through targeted skills training and opportunities for workplace-based learning. When they work well, these colleges can equip young people with knowledge, skills, and professional know-how that improve their employability and open up networks to potential employers. High schools must educate Grade 8 and 9 learners about the learning pathways available, including TVET colleges and courses on offer. The Department of Basic Education’s (DBE) introduction of the General Education Certificate offers hope for a national qualification for Grade 9 graduates, but for this to serve them, the DBE must ensure that this is a meaningful benchmark qualification that is recognised by employers and tertiary institutions. More so, the DBE should work in collaboration with the Department of Higher Education and Training to help bridge learners leaving school in Grade 9 to a post-school environment. TVET colleges should build strong relationships with industry to ensure the relevance of their curricula, facilitate workplace-based training, and improve the industry reputation of TVET qualifications. These post-school approaches are about building young people’s qualifications and skills. But this, on its own, is not enough. Young people’s disadvantage in the labour market needs redress through wrap-around support, receptive employers, social security, and an enabling environment. These are addressed in the recommendations below. Early adulthood: transitions into work and between jobs As young people exit the schooling system, there are few readily accessible or reliable points of information about how to apply for jobs, how to compile a CV, or how to access further education and training opportunities. Instead, young people must often feel their way through the systems with little to no guidance, mentorship or knowledge-sharing in the process.[212] This means that many young people find themselves floundering in the job search, applying with masses of other applicants to jobs that do not match their qualifications or aptitudes, and with little knowledge of how to signal their particular skills to employers. Endless applications and trips to interviews can be time-consuming and extraordinarily costly, with little payoff, leaving many young people feeling discouraged.[213] Employer readiness Relative to the literature focused on building young people’s aptitudes and preparedness for the world of work, there is far less research about employer-driven drivers of youth unemployment in South Africa. This includes employers’ attitudes and practices with respect to hiring young people.[214] Employers can be supported and incentivised to hire young people through interventions like the Employment Tax Incentive and including youth employment as a pillar on the BB-BEE scorecard.[215] Employee hiring practices must shift from exclusionary norms that necessitate prior work experience and unnecessary educational qualifications. Instead, attention needs to be paid to alternative signals of a young person’s capability.[216] Matching Matching support is about building bridges between young people and employers, where there is often an information chasm, with both parties struggling to find the right people at the right time. Recent South African research[217] shows the impact of providing a young job-seeker with a documented assessment of their skills and capabilities, including not only their educational qualifications, but also their soft skills, experience, and learning potential. When job-seekers were able to provide employers with a summary skills report, their chances of finding work improved by up to 17% and their earning potential increased by up to 32%.[218] Matching is not only about making young people visible in the right ways to their first potential employer, it is also about linking them to their next opportunity, given the rate of churn in the South African labour market.[219] SAYouth.mobi offers one route to doing this. Through a zero-rated mobile site, SAYouth.mobi provides young people with workseeking content, from listings of available income-generating opportunities, to interview techniques and CV-building software. Because it is digital, young people can access and apply for work opportunities without incurring transport or printing costs. SAYouth.mobi also helps to directly link young job-seekers to employers seeking talent, combating inefficient work-seeking behaviours. Matching is based on a range of criteria, including socio-economic circumstances (household income and access to a social grant), geography (proximity to opportunity), capabilities (numeracy, literacy, and skills), gender, and disability. Social protection About a third of South Africans benefit from a social grant. The introduction of the Covid-19 Social Relief of Distress (SRD) grant over the past few years had added a further 10 million recipients, meaning that, by 2022, close to half of the country is supported by social welfare.[220] The rapid expansion of South African social welfare is informed by a robust body of evidence that shows the impact of social grants on poverty alleviation, labour participation, sustainable economic growth, and social cohesion. Quantitative analysis suggests that the introduction of the SRD has alleviated household poverty and inequality, while stimulating labour market participation. Access to an SRD increased the likelihood of looking for work by 25%.[221] In a 2021 Youth Capital survey of over 2,000 youth, nearly three in 10 young people said they had used grant money to support their job search.[222] Given this effect, the National Treasury is considering proposals to transform the SRD into a job-seekers support grant. However, both the South African Federation of Trade Unions (SAFTU) and the Institute for Economic Justice (IEJ) have slammed these proposals, arguing that the eligibility requirements currently being tabled for the job-seekers grant would exclude the vast majority of current SRD recipients, by imposing a range of unfounded conditionalities and ignoring non-financial barriers to job-seeking.[223] Welfare policy in both developed and developing countries, including South Africa, remains focused on providing social protection to those physically unable to enter the labour market: children, the elderly, the sick and the disabled. Everyone else is expected to rely on waged work or entrepreneurship, despite limited opportunities for either. The young workforce Enabling environments For young job-seekers, informal workers and entrepreneurs alike, mobile data is increasingly critical. Data-light platforms can help bridge the digital divide by functioning on low-end smartphones, slow and unreliable networks, and requiring very little data to operate.[224] Reliable electricity, telecommunications, and transport infrastructure are equally important for industry to thrive. The Presidency’s Operation Vulindlela, for example, recognises the energy shortfall[225] as a critical inhibitor to employment and growth. A number of additional key strategies have recently been identified by The Presidency to create a more enabling environment for employment.[226] These include enabling private sector employment, and small and medium enterprises, by reducing their regulatory burden, and shifting towards labour-intensive growth sectors. For young people, this will mean investing in the services sector in particular, with special focus on the social economy together with wholesale and retail. Global Business Services (GBS) is another sector showing significant growth potential in an increasingly digitised economy. Creating enabling environments for self-employed young people is particularly important in a South African context. Here, selfemployment represents just 10% of jobs, relative to 30% in most upper- and middle-income countries. Some suggest that by boosting self-employment rates, South Africa might halve its unemployment rate.[227] Public employment NIDS-CRAM survey data showed that between February 2020 and March 2021, young people experienced the largest employment-to-population ratio increase.[228] At this point industry-level data was already suggesting gains in community, social, and personal services (likely attributable to large-scale, youth-targeted public employment programmes), and wholesale and retail trade. Both industries also had a high level of youth intensity of employment. One such youth-targeted public employment programme was the Basic Education Employment Initiative (BEEI), launched in April 2020 as part of The Presidential Employment Stimulus Package, which sought to stimulate work in response to the economic effects of Covid-19. The BEEI is a large-scale public employment programme, ring-fenced particularly for young people (aged 18–35), who are recruited through the SAYouth.mobi platform and placed as education assistants or general school assistants in schools across the country, remunerated at minimum wage. Phase I of the BEEI was executed between 1 December 2020 and 31 March 2021, with the QLFS showing that the sector added some 115,000 jobs in the final quarter of 2020 and the first quarter of 2021. According to the Presidency, 65% of those placed were young women.[229] Recruiting through SAYouth.mobi enabled scale, because of the reach of its online network. It also meant democratised opportunity beyond employers’ social networks. Evidence shows that public employment can offer short-term earnings, a funded entry into the labour market, and valuable work experience for young people that can improve their long-term stability and success in the labour market.[230] But without transferable skills and supported pathways to their next opportunity, it risks being yet another stop-gap as young people trampoline in and out of the labour market. Youth citizenship and political participation Factors beyond the control of youth can cause huge inequality. Youth today must grapple with serious social, political, and environmental problems inherited from their elders. Even though they possess the energy, creativity, and passion to take on the intractable problems they have inherited, they are systematically excluded from policy decisions. Achieving youth equality requires active participation and involvement of youth in decision-making at all levels, starting in the home and extending to the highest levels of government. Yet youth are largely excluded from formal political processes and government policy. Participation equality implies political representation at national, provincial, and municipal level. The Ladder of Citizenship Participation (LCP) holds that representation and participation of all groups in society is key and fundamental to the existence of a vibrant democracy.[231] In other words, a vibrant democracy requires that all social groups have a voice in how they wish to be governed, while institutions tasked with the exercise of this civic duty must provide spaces that allow for full and effective participation. In spite of the growth in the number of political parties, there has been a noticeable decrease in voter turnout in South African elections since 1994. The poor and disjointed participation by the youth in particular is concerning. If the process of participation is skewed and twisted to benefit only a select group, then the electorate’s disenchantment with political processes becomes a threat to democracy. Reasons for voter apathy and political disengagement, particularly by youth, include a lack of political party membership and low levels of political participation, a disinterest in electoral politics, high levels of cynicism about politics and a low level of confidence in the country’s democracy.[232] References [1] A Hardgrove, K Pells, and P Dornan, “Youth Vulnerabilities in Life Course Transitions,” Occasional Paper (UNDP Human Development Report Office, 2014), https://assets.publishing.service.gov.uk/media/57a089eeed915d3cfd0004ca/youth-vulnerabilities-in-life-course-transitions.pdf. [2] Based on Gini Coefficient. The Gini is useful but limited, given its exclusive focus on income inequality. Adopting a wider scope that includes access to quality nutrition, health services, housing, education, water, and caring networks within the frame of inequity can offer us a better sense of its real effects on human life and flourishing, while still recognising the centrality of money, especially in circumstances where public services and infrastructure do not function well. [3] IMF, “Six Charts Explain South Africa’s Inequality.” [4] IMF, “Six Charts Explain South Africa’s Inequality.” [5] Inclusive Society Institute. 2021. Trends in multidimensional inequality and socio-demographic change in SA during 27-years of democracy. Available at: https://www.inclusivesociety.org.za/post/trends-in-multidimensional-inequality-and-socio-demographic-change-in-sa-during-27years-of-democracy [6] QLFS2022: Q1 [7] Access is not an indicator of the quality of these services, and in fact, access to quality services remains a key driver of South Africa’s inequality. [8] Inclusive Society Institute. 2022. Inequality & Demography; Von Fintel D, Richter L. Intergenerational transfer of health inequalities: exploration of mechanisms in the Birth to Twenty cohort in South Africa. BMJ Glob Health. 2019;4(e001828). [9] D Durham, “Youth and the Social Imagination in Africa: Introduction to Parts 1 and 2,” Anthropology Quarterly 73, no. 3 (2000): 113–20. [10] Stats SA, “Youth Still Find It Difficult to Secure Jobs in South Africa.” [11] Juta and Company Ltd, Electoral Act 73 of 1998. [12] A Honwana and F De Boeck, “Children and Youth in Africa: Agency, Identity and Place,” in Makers and Breakers: Children and Youth in Postcolonial Africa (Oxford: James Currey, 2005). [13] J Seekings, “Beyond Heroes and Villains: The Rediscovery of the Ordinary in the Study of Childhood and Adolescence in South Africa,” Social Dynamics 32, no. 1 (2006): 1–20. 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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 © 2023 Inclusive Society Institute PO Box 12609 Mill 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 D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or its Board or Council members. Authors: Daryl Swanepoel Editor: Olivia Main FEBRUARY 2023 Content Chapter 1: Background and introduction of the study Chapter 2: The literature review 2.1 The role of political parties in a democratic dispensation 2.1.1 Why are political parties important for democracy? 2.1.2 What is the role and functions of political parties in a democracy? 2.2 The need for party-political funding 2.3 How political parties are funded 2.4 The imperative to ensure transparency through the regulation of private donations 2.5 The rationale for state funding of political parties 2.5.1 Enabling parties to fulfil their democratic responsibilities 2.5.2 State funding of political parties to combat corruption and as mitigation for anti-corruption measures 2.6 The different forms of state funding for political parties 2.7 The relationship between private donations, disclosure regulations, state funding and the viability of political parties 2.8 The post-1994 history of party-political funding in South Africa 2.9 Conclusion Chapter 3: The legislative review 3.1 The Constitution of the Republic of South Africa, Act 108 of 1996 3.1.1 Section 19(2) 3.1.2 Section 57(2)(c) 3.1.3 Section 59(1)(a) 3.1.4 Section 236 3.2 Political Party Funding Act, Act 6 of 2018 3.2.1 Direct funding of political parties 3.2.1.1 Prohibited donations 3.2.1.2 Donations from juristic persons 3.2.2 Represented Political Party Fund 3.2.3 Multi-Party Democracy Fund 3.3 Appropriation Bill B7-2022 and Parliament’s Annual Performance Plan 2022–2025 3.3.1 Appropriation Bill B7-2022 3.3.2 Parliament’s Annual Performance Plan 2022–2025 3.4 Conclusion Chapter 4: Research design and methodology 4.1 Research objective 4.2 Research question 4.3 Research design 4.4 Research subjects 4.5 Measurement 4.6 Data collection 4.7 Analysis 4.8 Ethics 4.9 Limitation of the study Chapter 5: Findings 5.1 The public party-funding regime of Germany 5.1.1 Public funding of German political parties 5.1.1.1 Restrictions of private donations to political parties 5.1.1.2 The various forms of public funding that German parties are entitled to 5.1.1.3 Incentives to encourage individuals/corporates to make donations to political parties 5.1.1.4 Indirect public funding 5.1.1.5 Private versus public funding of political parties ratio 5.1.1.6 Quantifiable public funding to support political parties 5.1.2 Funding to party-aligned political foundations 5.1.3 Germany–South Africa Purchasing Power Parity (PPP) 5.1.3.1 PPP in relation to direct public funding to political parties 5.1.3.2 PPP in relation to funding to politically aligned foundations 5.1.3.3 PPP in relation to the funding of the German party-political dispensation as a whole 5.1.3.4 Public annual-spend per person on political parties and foundations 5.2 The public party-funding regime of Sweden 5.2.1 Public funding of Swedish political parties 5.2.1.1 Restrictions of donations to political parties 5.2.1.2 The various forms of public funding that Swedish political parties are entitled to 5.2.1.3 Incentives to encourage individuals/corporations to make donations to political parties 5.2.1.4 Indirect public funding 5.2.1.5 Private funding versus public funding of political parties ratio 5.2.1.6 Quantifiable funding to support political parties 5.2.2 Funding to party-aligned political foundations 5.2.2.1 Quantifiable funding to support political foundations 5.2.3 Sweden–South Africa Purchasing Power Parity (PPP) 5.2.3.1 PPP in relation to direct public funding to political parties 5.2.3.2 PPP in relation to funding to politically aligned foundations 5.2.3.3 PPP in relation to the funding of the Swedish party-political dispensation as a whole 5.2.3.4 Public annual-spend per person on political parties and foundations 5.3 The public party-funding regime of the Netherlands 5.3.1 Public funding of Swedish political parties 5.3.1.1 Restrictions of donations to political parties 5.3.1.2 The various forms of public funding that the Netherlands political parties are entitled to 5.3.1.3 Incentives to encourage individuals/corporations to make donations to political parties 5.3.1.4 Indirect public funding 5.3.1.5 Private funding versus public funding of political parties ratio 5.3.1.6 Quantifiable funding to support political parties 5.3.2 Public funding to political foundations 5.3.3 The Netherlands–South Africa Purchasing Power Parity (PPP) 5.3.3.1 PPP in relation to direct public funding to political parties 5.3.3.2 Public annual-spend per person on political parties and foundations 5.4 The public party-funding regime of South Africa 5.4.1 Public funding of South African political parties 5.4.2 Indirect public funding 5.4.3 Private funding versus public funding of political parties ratio 5.4.4 Quantifiable funding to support political parties 5.4.5 Public annual-spend per person on political parties Chapter 6: Discussion of findings 6.1 Comparative analysis: The amount of public funds allocated to the political parties in selected jurisdictions Chapter 7: Conclusions and recommendations 7.1 Conclusions 7.2 Recommendations References Cover photo credit: istockphoto.com – Jacques Kloppers Chapter 1: Background and introduction of the study Prior to 2019, donations to political parties in South Africa were unregulated. But in light of the growing scandals flowing from alleged illicit donations to parties, such as money for tenders, civil society began to agitate for private donations to political parties to be more transparent. It was, for example, alleged that the ruling African National Congress was being bankrolled by the now fugitive Gupta family and that the Democratic Alliance was captured by the so-called “white monopoly capital” (M&G, 2017). Donations to political parties, pre- and post-1994, have always been shrouded in secrecy, and therefore “it has never been possible to tell whether political parties act in the best interests of the public, or whether they act in the best interests of those who fill their pockets” (M&G, 2017). This led to the Institute for Democratic Alternatives in South Africa (Idasa) lodging a legal challenge in 2004, to ensure the introduction of legislation to limit private funding to parties and compel them to make public their sources of funding (M&G, 2017). Against this background, the High Court in Cape Town, in 2017, ruled that legislation needed to be introduced to regulate the funding of political parties (De Wet, 2017). This led to the passage of the Political Party Funding Act (PPFA), Act 6 of 2018 (RSA, 2019a). The Act was subsequently assented to by the President of the Republic and came into effect on 1 April 2019 (The Presidency, 2019). Since the introduction of the legislation, private funding of political parties has, to a large degree, dried up, with many – including the ruling party – finding it difficult to meet their operational obligations. It has, for example, been widely reported in the media that the ruling party is unable to regularly pay its staff their monthly salaries (Moichela, 2022). Parties have directly linked the evaporation of private funding to the disclosure requirements contained in the PPFA. Former ANC Treasurer General, Paul Mashatile, is reported to have said that the Act “is making regular donors reluctant to give” (Letshwiti-Jones, 2022). It is recognised that, in order for political parties to effectively conduct their democratic obligations, they need adequate funding so that they can carry out their core functions, and to fund their election campaigns (Venice Commission, 2020:56). State funding for parties is essential to guarantee parties’ independence from undue influence of private donors and to ensure that they “have the opportunity to compete in accordance with the principle of equal opportunity”. But private contributions are also a form of political participation. Therefore, a balance needs to be achieved between encouraging moderate contributions and limiting unduly large contributions on the one hand, and state funding on the other (Venice Commission, 2020:56). It is evident that the South African parties are struggling to keep afloat. Whether this is due to insufficient funding or because the available funds are not being appropriately applied, is an open question. Whether the balance between private funding and state funding within the highly regulated South African dispensation is adequate, needs to be assessed. This study aims to carry out such an assessment by benchmarking the South African party-political funding regime against a selection of European democracies whose election systems are similarly based on proportional representation. Germany, Sweden and the Netherlands have been chosen, since, as stated, their elections are based on proportional representation. In Germany it is a system of personalised proportional representation, where “each voter has two votes: the first for an individual constituency candidate, and the second for a party-list in a particular state” (Federal Ministry of the Interior and Community, N.d.). In Sweden the number of seats each party receives in the Riksdag is in proportion to the number of votes the party received in the election (Sveriges Riksdag, N.d.), and in the Netherlands citizens vote for a candidate on the candidate list, with parties represented in Parliament in proportion to the total number of votes they received in the election (Tweede Kamer. Der Staten-Generaal, N.d.). The study will attempt to settle the question as to whether our democracy is sufficiently funded. It will do so through the lens of political parties, the primary building blocks of our country’s parliamentary democracy. The theoretical motivation for the public funding for political parties is that it will have a positive impact on the role of money in politics and “ensure that all political forces have access to enough resources to reach the electorate, thereby encouraging pluralism and providing the electorate with a wider choice of politicians and policies” (International IDEA, 2014:22). However, as has been alluded to, the introduction of party-funding regulation in South Africa has led to financial instability within the political party environment. The level of public funding should therefore take into account the impact that high regulation has on party income from private sources. Should practice prove that such public funding be insufficient, the objective of bolstering democracy could very well be undermined. This study therefore aims to evaluate the South African party-funding dispensation against international best practice. It intends to make recommendations to the public-policymakers as to what adjustments are needed, if any, to ensure that sufficiently resourced political parties adequately underpin the country’s democratic dispensation. Chapter 2: The literature review The literature review aims to garner an understanding as to the role of political parties in a democratic dispensation, their need for income and how they are funded, and to understand the interaction between private and state funding of parties. 2.1 The role of political parties in a democratic dispensation Before we delve into the financing aspects of political parties, the review starts by asking two fundamental questions: Why are political parties important for democracy and what is the role of parties in a democratic dispensation? 2.1.1 Why are political parties important for democracy? The influential International Institute for Democracy and Electoral Assistance (International IDEA) argue that “political parties are crucial for the functioning of representative democracy”, since they produce a variety of policy options for the electorate to consider and choose from. They also provide the mechanism “through which citizens express diversity of interests and aspirations” (International IDEA, N.d.). Political parties bring people with the same political ideas together, for them to take part in elections collectively, in the hope of getting as many of those of the same ‘thinking’ as possible elected into legislatures, such as Parliament or a municipal council. And similarly, to hold as many posts as possible in the government (Government of the Netherlands, N.d.). In this vein, many prominent scholars have lamented the importance of political parties for democracy. They have said that parties are indispensable, make democracy workable, and provide a mechanism for the public to be represented in the legislatures through electoral competition (Ezrow, 2011). Political parties allow for broader societal participation in the drafting of coherent public policy, serve as an intermediary between members of society and the government, connect them and allow for the interpreted communication between government and society (Ezrow, 2011). Political parties make government accountable for its actions by helping the public identify the executives’ past performances, and by diminishing the power of dominating personalities. The existence of opposition parties also allows for non-performing incumbent governments to be challenged at the poll (Ezrow, 2011). Individuals attempting to challenge incumbent governments tend to be “fragile, fragmented and incoherent, with limited capacity to mobilise, organise and coordinate collective action”. When individuals group themselves into parties, they become more capable of overcoming coordination problems. And they create longer-term time horizons, since parties normally have long-term goals with a broader spectrum of priorities (Ezrow, 2011). They also help politicians solve these coordination problems, since they act in a collective manner and are able to present disciplined goals by keeping politicians in line with the goals of their parties, as opposed to individuals that can opportunistically manoeuvre their message as the wind blows (Ezrow, 2011). “Parties also enable the opposition to stand firm against divide and rules tactics by the incumbent regime”, something that individuals acting on their own accord will find difficult to do. So too, independent politicians may not be able to credibly commit to policies that do not coincide with their own preferences, whereas, by being a member of a party, they are put in a position where they can convincingly commit to policies that they normally would not support in order to win a larger support base (Ezrow, 2011). Furthermore, governments comprise collective leadership capable of carrying out cogent and coordinated policies. This requires likeminded individuals acting in unison. Parties play a role in creating such cohesive leadership through their internal recruitment, nomination and socialisation processes. Unlike individual politicians, parties, because of their diversified process of recruitment, are also able to create ways for individuals of diverse ethnic and economic backgrounds to rise to political power (Ezrow, 2011). And parties are more likely to be in a position to provide valuable training in negotiation, compromise and coalition building; and broader socialisation with regard to democratic practices (Ezrow, 2011). Whilst acknowledging the right of individuals to compete for political office, there seems to be broad consensus that political parties are, given their greater capacity to coordinate and function over a far wider sphere within the democratic machinations, an essential component of a functioning democracy. Ezrow (2011) quotes the authoritative American political scientist, E.E. Schattschneider, who argued that "democracy is unthinkable save in terms of parties”. 2.1.2 What is the role and functions of political parties in a democracy? Having, in the aforementioned section, established that political parties are indeed important for democracy to succeed, in this section we examine the role of political parties and the functions they carry out. Although somewhat dated, being written in 1950, it was then argued that political parties consist of individuals that hold common views on important public questions, and who promote their principles in order to gain control of government so that they can put their ideas into operation. These parties generally have three things: organisation, fidelity to certain principles, and they must follow constitutional means to reach their objectives (Singh & Singh, 1950). This remains true today. Similarly, the authors contended that political parties did not exist in Greek times, as citizens participated in the democratic processes in their own capacity. But in modern times, due to the complexity of government and the vast increase in the population, it is not practical for all to be directly involved in the democratic processes. Political parties now act as “brokers of ideas and carriers of government”. Indeed, they are the principal go-betweens in the constitutional process. Parties are the ‘people’ – the apex norm of all democratic constitutions – organising themselves. They therefore act as the organisational vehicle for the people, with the value proposition being that they can be better enabled if properly organised and through the sharing of resources (Kangu, 2001). Kangu affirms the 1950 assertion that political parties are in fact an “association of private citizens formed to promote certain political and economic beliefs … [with the purpose of having] … them adopted as government policy”. Political parties fulfil a range of important functions in a democracy, such as: Drawing together those people who share similar philosophies and ideas. They are vehicles through which those with broadly similar interests can organise and campaign. Since governments are composed of people who belong to political parties, political parties are in reality the way in which political power is exercised. Political parties therefore provide the government and the opposition. Parties select candidates to contest elections. It is therefore parties that provide the nation’s political leadership. Parties provide organisational support for organising and financing election campaigns, for recruitment and training of candidates, and for developing policy, all of which are crucial for the sustainability of the party’s elected members. Through the debating of issues and formulation of policies to be presented to the electorate during elections, parties articulate the shared beliefs, values and philosophies of its members. They then utilise these to determine their attitude to legislation, public policy, and the issues of the day. Parties are often an avenue for community groups to shape the decision-making process. Many civil society organisations, such as trade unions, organised business, advocacy groups, etcetera, have close ties with political parties. They interact with the parties in order to influence the development or implementation of public policy. Parties are one of the main avenues for political debate and discussion in the community. Given that statutory authority vests in the hands of government, parties are ultimately responsible for the structure of the machinery of government, in that, in practice, it is they who can make appointments to the public sector from the ranks of their members and supporters. (AustralianPolitics.com, N.d.) Parties also fulfil important ancillary roles in society that go beyond their own narrow interests. In many societies, including South Africa, they also fulfil the role of educating society on the role of politics and the political processes. For example, they provide political education for their members and broader society. This includes, amongst others, voter education – that is, the activities and processes designed to deliver a free, fair, efficient and cost-effective election, the value of democracy and human rights (Sirivunnabood, N.d.). And they contribute to the legitimisation of the political system, in that their activities help connect citizens and social groupings to the political system. In this, they anchor the political order in the consciousness of the citizens and in social forces (Hofmeister & Grabow, 2011). 2.2 The need for party-political funding Whilst much has been written on the shady influence of money in politics, the fact is that political parties need resources to effectively carry out their constitutional and democratic mandates. Money in politics is not a problem per se; it is whether that money has been ethically secured, legally applied, and fairly distributed amongst the political role-players. Should the nation aspire to a well-functioning and effective representative democracy, it must accept that political parties – lest the country is to slide towards authoritarianism – need to be well-resourced and that money is necessary for inclusive democracy and effective governance, for allowing candidates and parties to reach out to voters and for them to build long-term political organisations (Lee-Jones, 2019). Political parties need appropriate funding in order for them to carry out their core functions, activities and programmes, all of which involve expenses “which should be seen as the necessary and unavoidable costs of democracy”. Parties need to maintain their party organisations, employ staff, campaign in elections, and communicate with the electorate at large (Van Biezen, 2003). Political parties have at least eight spending needs (IEC, N.d.): Developing the political will of people. For this, programmes and actions need to be put in place to inform, empower and mobilise citizens. Shaping public opinion. This would, for example, include the costs attached to carrying out media and advertising campaigns, hosting public outreach programmes such as town hall meetings, etcetera. Inspiring and furthering political education, which will include activities such as voter education, informing the electorate with regard to their constitutional rights and the value of democracy and human rights. Promoting active participation of individuals in political life, for example, the identification and recruitment of young leaders, their training and equipping them for future political leadership roles. But also ‘foot soldiers’ training’ to ensure that the party has sufficient manpower to carry out campaigns, act as party agents during elections, etcetera. Exercising an influence on political trends, which could entail, for example, empirical research; policy and message development; and the carrying out of polls and surveys. Ensuring linkages between the people and organs of state, for example, through the maintenance of constituency offices to service the electorate, and to deal with their complaints. It may be necessary to arrange contact meetings with government and political leadership to engage the electorate on various issues as the need arises. Operational expenses such as staff, travel, administration, office rental, the hosting of meetings, running of programmes and publications. Election campaigns, for example, the hosting of rallies, media advertisement, posters and billboards, pamphlets, town hall meetings, etcetera. Access to sufficient funding for political parties is crucial to the overall vibrancy of an electoral and democratic system. Without funding, political parties would not be able to reach out to the electorate to explain their goals and policies, nor would they be able to maintain mechanisms for them to receive input from the electorate about their views. Similarly, they would not be able to run dynamic election campaigns capable of engaging citizens in the electoral process. Neither would they be able to maintain the democratic dialogue between elections (Ohman, 2014:1). What is therefore being inferred is that parties that lack organisational coherence and institutionalisation, and/or programmatic substance, will fail to perform. Neither will they be able to get much traction amongst the electorate (Cotón, 2008). Needless to say, poor performing political parties are counterproductive to the building of dynamic, responsive and inclusive democratic dispensations. 2.3 How political parties are funded This literature review has revealed that political parties are funded via a range of sources. Apart from passive income in the form of interest or dividends that parties may receive from investments lodged at registered financial institutions, at least six streams of funding have been identified. Direct state funding In many democracies, political parties receive funding via the national fiscus. Direct funding from the state may take on different forms, differing from jurisdiction to jurisdiction. Similarly, there may be different streams of direct state funding within the same jurisdiction. In Germany, for example, there is no distinction drawn between campaign funds and political party funds, since campaigning is considered part of the normal duties of a party. Campaign expenditure therefore forms part of the normal operation of a political party and is included in the party's total budget (DW, 2021). Germany’s state funding of political parties is votes-based, with further contribution-based funding dependent on the extent to which they are established in society. Whilst there are preconditions for entitlement and absolute limits set, the basic tenet of the funding is that parties receive an amount for each vote received. Section 18 (3) of the Act on Political Parties states that they are entitled to state funding in the amount of €0.85 per valid vote won at the most recent European, Bundestag and Land parliament elections up to a total of four million votes, and €0.70 for every additional vote thereafter. In other words, the financial rewards given by the state vary depending on electoral success (Deutscher Bundestag, 2012). These amounts may have been adjusted since 2012, the discovery of which will be made during the interviews envisaged by the research. For contributions given by natural persons, the parties receive €0.38 per euro donated per person per year up to a total of €3,300 (Deutscher Bundestag, 2012). Similarly, these amounts may have been adjusted since 2012. In other countries a distinction is drawn between regular annual funding of parties and reimbursement for election campaign expenditure. For example, after each federal election or by-election in Australia, the Australian Election Commission distributes money to eligible political parties, candidates and Senate groups to reimburse them for election campaign expenditure (AEC, N.d.). The current election funding rate is AU$ 3.016 for every first preference vote received. An automatic payment in the amount of AU$ 11,029 is made. Further funding of expenditure greater than the automatic payment can be claimed. The amount payable will be calculated as the lesser of the calculated election funding entitlement; or the amount of demonstrated electoral expenditure. The payment will be reduced by the amount that has been paid as an automatic payment (AEC, N.d.). Indirect state funding for parties In addition to the direct state funding to political parties, elected representatives and political groups receive varying degrees of support for their work as parliamentarians. For example, the House of Commons in the United Kingdom reimburse MPs for the costs of running an office, employing staff, and travelling between Parliament and their constituency (UK Parliament, N.d.) In South Africa, Parliament also provides allowances for the setting up of constituency offices. These payments are, however, made directly to the parliamentary party. Further administrative allowances are also made to parties to employ parliamentary support staff and to enable them to effectively perform their parliamentary function. The administrative allowances are distributed in proportion to the seats each party occupies in Parliament (Parliament of the RSA, N.d.). In addition, a feature of European democracies is the state-funded politically aligned foundations. Germany currently has, for example, six political foundations that receive funding from the government. Each foundation is associated to a party that is represented in the federal Parliament (Unmüssig, 2017). These foundations are tasked to, amongst others, promote civic participation, and support young academic talent with scholarships and support the development of democracies abroad. They offer socio-political and democratic education and provide information and policy analysis at home and abroad. Their purpose is to build on the principles of liberal democracy and to solidify the basic principles of societal solidarity, subsidiarity and tolerance (Unmüssig, 2017). Whilst the foundations act autonomously and are legally and financially independent, each foundation is “politically associated and close to a political party”. Their work therefore stimulates and indirectly underpins the work of political parties (Unmüssig, 2017). Membership fees, trade union and other voluntary contributions; and public representative levies Party membership subscriptions are normally not high, but can collectively can make up a material portion of a party’s income. In 2014, for example, membership income for parties in the United Kingdom was 23% for the Green Party, 15% for the Labour Party, 9% for the Liberal Democrat Party, but just 2% for the Conservative Party. In 2015 the Labour Party also introduced a registered supporters’ scheme by which people can pay £3 per annum, which gives them the right to vote in the leadership elections (Brit Politics, N.d.). In South Africa, the ruling African National Congress has uninitiated the Progressive Citizens’ Forum, a debit-order campaign aimed at soliciting regular contributions from its members and supporters (PCF, N.d.). So too, trade unions in the United Kingdom have been linked to the Labour Party since its foundation in 1900. Most charge their members a political levy, which can be used for campaigns, publicity on issues they are concerned with and so on. Some can affiliate to the Labour Party and pay the Labour Party for the number of members that they have. In 2014 this provided twenty-seven percent of Labour’s income (Brit Politics, N.d.). And in some countries, parties levy their public representatives a monthly contribution based on their earnings from their position as a public representative. In South Africa, for example, the ruling African National Congress collects levies from their public representatives. In 2009 they took in about R250,000 from their parliamentarians and cabinet ministers each month. MPs were then levied around R500, while cabinet members paid between R1,500 to R2,000 a month. Councillors are also levied (politicsweb, 2009). The DA public representatives pay around 2% of their salary, while the ID levies 10% per month. The IFP charged MPs R3,300 a month (politicsweb, 2009). Donations Direct donations and sponsorships from corporates and wealthy individuals also remain a feature of modern-day politics, albeit that jurisdictions are insisting on greater regulation to various degrees of late. This will be further explored later in this study. Standard Bank, for example, donated R5 million to political parties in 2009, split amongst political parties based on the IEC’s funding formula, “in terms of which funding is distributed to political parties in proportion to their representation in the National Assembly" (politicsweb, 2009). Commercial investments It is not uncommon for political parties to own companies as investments to augment their income. The SPD of Germany, for example, has a one hundred percent shareholding in German Printing and Publishing mbH (dd.vg, N.d.). Until as recently as 1997 the SDP of Sweden owned the advertising company, Folkreklam and Förenade ARE-Bolagen (Lakomaa, 2019). And in South Africa, the African National Congress set up Chancellor House as an investment vehicle to make the party self-sufficient over time (Jolobe, 2010). Fundraising events Parties also raise funds through hosting dinners, holding raffles, and so on (Brit Politics, N.d.). These events are sometimes organised on a national scale, providing a substantial stream of income. In South Africa, for example, the ruling party, under the auspices of its Progressive Business Forum, regularly hosts presidential gala dinners, business breakfasts and corporate exhibitions on the sidelines of its national conferences (Ticketpro, N.d.). In a similar vein, the UK Labour Party hosts exhibitions at their national conferences (UK Labour Party, N.d.). 2.4 The imperative to ensure transparency through the regulation of private donations It has been established that effective and functioning political parties are crucial for democracy. For them to be so, they need to be adequately resourced. This funding can be either via the fiscus or from private sources. Funding from the fiscus is open and transparent. From private sources, less so but needs to be. Why? Because a lack of information on how much money circulates in and around elections, where resources are coming from and how they are spent, makes it harder for the electorate to make informed decisions (International IDEA, 2019). Donations to political parties, be it direct or indirect, can materially impact, influence and distort both the electoral process and passage of legislation. And it has also proved to be a major motive for grand corruption (GSDRC, 2001; Bodede, 2022). Therefore, society needs to know who are funding the parties so that: The electoral process is fair and equitable. Parties need to be able to compete on an equal footing. Elections can be distorted should some parties be flooded with funds that are illicitly obtained, since it could create unfair advantage for them. In a multi-party election, there is often a spending rat race between the parties, where governing parties are often in a stronger position to solicit donations, thereby placing the opposition in a disadvantaged position (GSDRC, 2001). The passage of legislation can be unduly influenced should donors exercise financial coercion to manoeuvre certain policy and legislative outcomes, which may not be in the interest of the broader public. It may even sway elected representatives to either actively, or through inertia, go against their undertakings to the electorate (GSDRC, 2001). This is because when politicians become overly dependent on donations from a limited group of donors, the danger is that their policy programmes can be co-opted (International IDEA, 2019). It also facilitates corruption and erodes citizen trust in political institutions (International IDEA, 2019). And, as has been demonstrated in the South African context, shady donations to parties, for example cash for tenders, as has been highlighted in the Zondo Commission of Enquiry into Corruption. This led to corruption on a grand scale (Bodede, 2022). According to Webb and Drury (2020), “big political donations are intended to have political influence”. They say that there is a “sliding scale of influence” that is facilitated by such donations: Access: It can ensure the donor gets access to a public representative that ordinary citizens would not normally get. Clientelism: This is the kind of corruption where officeholders are influenced through large donations to decide issues not on the merits of the argument, or the interests and desires of their constituents, but according to the biddings of the donor upon which the officeholder may have become dependent. Quid pro quo: Where politicians make promises in exchange for donations. Pressure: The running of political parties and election campaigns has become very costly. Parties and politicians are accordingly being placed under enormous pressure to keep donors happy, lest they walk away with their support. Big money effectively builds inequality between the haves and the have-nots into the political system. There are at least four arguments in favour of transparency in party finance: The United Nations Convention against Corruption (UNCAC) considers it paramount for parties to make their funds transparent in order to prevent corruption. The objective of regulations aimed at making party funding more transparent is to, in the first instance, rebuild public trust amongst those that have disengaged from politics due to the marginalisation of the voter through the dominance of money in the political environment. And secondly, to prevent affluent and illicit donors from dominating modern politics. Transparency creates a mechanism through which the adherence to party finance regulation can be monitored. Where parties receive state funding, transparency ensures that parties can be effectively monitored in order to prevent the misuse of public money. It ensures that the electorate can be better informed as to who is supporting which political parties, thereby creating for them a tool to observe whether parties’ special interests may be motivated by external influences. (Tonhäuser & Stavenes, 2020) Thus, it is safe to conclude that the only way that the electorate can hold their public representatives accountable for their actions and make an informed vote in the knowledge that their representatives have not been unduly influenced by donor monies, is for them to know how the parties (and individual public office-bearers) have been financed and by who (Essop, N.d.). In conclusion: Clearly, money is needed to stimulate, maintain and enhance political competition, an essential component of any effective democracy. But if the quantum and source of that money is not transparent, it could pose a serious challenge to the democratic dispensation – should donors, for example, channel their resources to the political elite, essentially negating the ordinary citizens’ ability to influence policies and policymakers through their vote (International IDEA, 2019). 2.5 The rationale for state funding of political parties There are two overarching reasons that motivate for the state to fund political parties. The first being a mechanism to strengthen democracy by ensuring that political parties are empowered to fulfil their constitutional and democratic roles, and that they are able to do so within a system that is fair and equitable. The second is to combat corruption. A consequence of high transparency regulation as to who funds political parties, is a loss of private funding to political parties, as private funders shy away from being publicly exposed. This creates a funding gap, which public funding needs to address. 2.5.1 Enabling parties to fulfil their democratic responsibilities There are three central arguments in favour of the state providing political parties with financial resources for purposes of ensuring that they can effectively carry out their constitutional and democratic mandates. First, as has been repeatedly argued, political parties are critical to democracy. It is implausible to suggest that a functional democracy is possible without effective parties and party organisation. For them to be effective, they must be able to mobilise the electorate, socialise the citizenry, recruit and train future leaders and party workers, research and formulate policy, and fund their operational costs, such as rent, salaries, etcetera. Their mere existence offers support to the democratic process. And the character of the modern state depends directly on the abilities of the parties serving as integrative links between state and society. State funding can contribute to this. Secondly, parties are the vehicles through which the electorate express their political views, and they are the mechanisms through which citizens can become involved in the governing of society. However, there may be vast differences between interest groups and spheres of society – financial and otherwise – that could translate into the powerful having a disproportionate ability to mobilise the electorate behind their narrow cause. The provision of state funding helps safeguard political equality. It also mitigates against the problem of private and corporate funding potentially being channelled to only some parties, since this undermines the principle of equality in the parties’ ability to be responsive apropos their linkages and interactions with the citizenry. Thirdly, the costs of running a political party in a modern democracy is costly and they are competing against far better resourced external think-tanks and interest groups, who exert significant influence. Parties need to compete with them for the public mind. For this they need to develop and present to the public coherent policy proposals on a wide range of issues, which requires highly qualified staff and institutionalised expertise. State funding can help sustain the central role of political parties in the political system by providing funding support to enable them to develop and communicate their messages to the voters. (Pierre, Svåsand & Widfeldt, 2000:1-24) A further strong argument in favour of funding political parties, is that it is necessary to develop strong opposing political parties so that there is capable and healthy competition within the political system. And funding by the state guards mitigates against an incumbent party misusing the programmes and resources of the state to further its own interests (Marfo, Musah & Owiredu-Amankwah, 2021). 2.5.2 State funding of political parties to combat corruption and as mitigation for anti-corruption measures Once again, to fulfil their core functions, political parties need appropriate funding. When there is inadequate funding, political parties are ‘forced’ to adapt various strategies to fund their activities and programmes, which has to pay back in cash or kind. This often leads to “corruption and kickbacks and appointment of incompetent people to hold public positions” (Marfo, Musah & Owiredu-Amankwah, 2021). To minimise the danger of corruption, in particular state capture and influence peddling, best practice suggests that the funding of political parties ought to be regulated. In this regard, article 7(3) of the United Nations Convention against Corruption (UNCAC) requires states to improve transparency in the funding of political parties and public office candidates (UNODC, N.d.). A growing number of countries subsidise political parties through the fiscus, or direct provision of goods and services. This is primarily meant to help the parties perform their functions, but it is generally also considered to decrease the opportunities for corruption, since, having some form of sustainable funding, parties are de-incentivised from succumbing to the interests of private donors in return for donations (UNODC, N.d.). However, a consequence of high disclosure transparency regulations appears to be that corporates and wealthy individuals become more reluctant to give to political parties where there are high disclosure requirements. In South Africa, with the introduction of the PPFA Act in 2019, parties have been crying foul of its unintended consequences, with them receiving fewer private donations. Donors have become apprehensive knowing that their donations would be open for public scrutiny, as it may lead to either reprisal or an impact on their reputation (Pasensie & Clarke, 2021). The fear of reprisal and/or reputational loss is two-directional. On the one hand, as deliberated before, private donations to governing parties could be viewed as influence peddling, whilst donors may also be fearful of disclosing donations to opposition parties, for fear of the government blocking them from tenders (Pasensie & Clarke, 2021). And as discussed in the introduction of this study, it has, in South Africa, had a devastating impact on the parties’ ability to properly fund their operations. It should, therefore, be recognised that the probability is high that elevated transparency rules aimed at combatting corruption, will negatively impact the political parties’ ability to solicit donations from private funders. It is with this in mind that regulators promote state funding as a means to mitigate against the losses parties may incur as a result of high disclosure regimes. But, as illustrated, should the state funding not be set at an appropriate level, it could have the opposite effect of weakening the parties’ operational performance. In determining the appropriate level, governments will have to accept that democracy, and for that matter the fight against corruption, comes at a price and that, accordingly, the fiscus will have to provide the necessary resources. What that appropriate level is, is an open question, and will be for each country to make its own determination. But a 2021 study into money and politics did give some indication. It was found that in countries where high levels of spending had become an equilibrium outcome due to corruption and the influence of special interests, the setting of a spending limit may increase political competition and allow for new entrants into politics. In countries where political elites come disproportionately from more affluent and well-resourced echelons of society, it may also reduce the concentration of political power in the hands of the better off. These effects might have direct and indirect consequences for a country’s policy outcomes and, might I add, the depth of democracy in the medium to long term (Avis, Ferraz, Finan & Varjão, 2021). 2.6 The different forms of state funding for political parties A complementary approach to regulating donations is to give political parties access to public funding. The purpose of providing political parties with public funding is to: Promote pluralism and to stimulate the battle of ideas – that is, providing the electorate with a wider choice of policies – by ensuring that all the “relevant political forces” are sufficiently resourced. By giving all parties access to funds for campaigning, it also serves to equal the playing field by limiting the advantage that contenders with access to significant resources have. The levelling of the playing field will, however, only be achieved if the gap between the rich and the poor is addressed by complementing public funding with spending caps. Providing the extent of state funding is significant enough, it serves to incentivise obeyance to the election rules. This is because political parties will fear losing access to public funding should they not obey the rules. (International IDEA, 2014) The International Democracy and Electoral Assistance Institute (International IDEA, 2014), in their handbook on political finance, identify two types of state funding for political parties: Direct funding, that is, providing money Whilst it may seem fair that all registered political parties should receive state funding, such an approach opens up the danger of the system being abused, where parties with little or no support are formed just to collect the funding. Therefore, in most countries, a threshold is applied for parties to gain access to the state funding. This could, in a proportional representation system, be a minimum share of the vote obtained, or in a constituency system, a minimum number of seats. Different countries also follow different allocation criteria. Here too, whilst it may seem that the most democratic way is to give all parties the same amount – national election campaigns after all could cost as much for a smaller party as for a larger party – such an approach, it could be argued, goes against the will of the people. It could also be argued that it is a waste of taxpayers’ money, in that a lot of money will be distributed to many parties who may not materially alter the shape of party politics in the country. The more common option preferred by most countries is to allocate the state funds in proportion to the votes obtained by the various parties. In some jurisdictions this is done purely proportionally, in others, a percentage is divided equally amongst qualifying parties, with the balance allocated proportionally. Then again, a different form is to match the funding that parties manage to raise out of their own initiatives from donors, with an equal amount from the fiscus. This is, for example, the position in the United States and Germany. But this too is open for criticism, with detractors arguing that it favours parties with strong business links. Thus, whilst the overarching objective remains the same for whichever system is adopted, it is for each country to decide which of the systems is most palatable for their particular circumstances and environment. Indirect funding, that is, providing goods and services Most countries also provide indirect funding to political parties. This too can take on various forms, the most common being the provision of free or subsidised access to the public media for campaign purposes. But there are other examples as well, such as tax relief for parties/candidates and their donors, access to public buildings for campaign events and subsidised postage (International IDEA, 2014). Table 2.1. below captures the rationale and considerations regarding direct public funding as developed by International IDEA. Table 2.1.: The rationale and considerations regarding financial reporting requirements (Source: International IDEA, 2014) In addition to direct and indirect funding, in its broader interpretation, alternative state assistance that can help parties develop and improve their standing in society and within the array of parties, can also include measures other than funding. It can, for example, take the form of: Legislation placing spending caps on election campaigns In many jurisdictions, there are limits as to how much parties and/or candidates are allowed to spend on their election campaigns. The purpose is not to regulate the influence of money, but to reduce the advantages that political parties and candidates with access to large amounts of money have over those that are less resourced. Whilst this does not equate to income for the party and/or candidate, it does help level the playing field so that the different parties/candidates have a more equitable chance of selling their message. It also brings less pressure to bear on party treasurers, since it reduces the overall spending on election campaigns. In the South African context, as has already been highlighted in this study, where parties are finding it difficult to stay afloat, this can play an important role in stabilising the financial fortunes of parties and contribute to their sustainability and longevity (International IDEA, 2014). Funding of politically aligned foundations In many European countries there are political foundations that receive funding from the state. Whilst each foundation is close to, and ideologically aligned with a particular party, they are autonomous and legally independent. In Germany, for example, the Friedrich Ebert Foundation is associated with the Social Democrats (SPD), and Konrad Adenauer Foundation with the Christian Democrats (CDU). In fact, foundations can be formed and funded by the state for each political party that has been elected to the Bundestag for at least a second term (Unmüssig, 2017). They receive their funding from a number of ministries, such as the Federal Foreign Office, and the Federal Ministries of Education and Research and of Economic Cooperation and Development, who set and adopt the level of funding as part of the federal budget negotiations process (Unmüssig, 2017). There are similar arrangements in other European countries such as Austria, the Netherlands, Hungary, Finland, Greece and Spain, amongst others, as well as at the European level (Bértoa & Teruel, N.d.). As previously stated, they do work, amongst others, in the field of civic, democratic and socio-political education, as well as policy analysis and empirical research (Unmüssig, 2017). Whilst they are legally independent, determine their own programmes and are in no way accountable to political parties, they do do their work through the ideological lens of their associated parties. In so doing, individual political parties benefit immensely, since foundations underpin and complement the objectives of the party they are associated with (European Parliament, N.d.). As such, they should be viewed as part and parcel of the political party funding regime, in that their output motivates policy in favour of the particular party they are associated with, and they provide empirical evidence on which parties can develop policy and base their arguments on. In the absence of such foundations, such research and other activities would fall wholly to the political parties themselves. From the aforementioned, it is evident that a determination as to whether the democratic dispensation is adequately funded rests on more than just the financial income of parties, but so too the broader architecture of the particular dispensation. 2.7 The relationship between private donations, disclosure regulations, state funding and the viability of political parties Evidence suggests that many businesses and other clandestine interests support the bigger political parties with a view to influence public policy, and therefore the legitimate calls for greater transparency within the party funding regime. The public have a right to know who is funding the various parties, so that they can assess whether the donations play a role in influencing policy positions. Regulation is needed to prevent policy capture (Terracino & Hamada, 2014). However, as has already been pointed out in this review, an undeniable consequence of greater transparency is that donors become reluctant to donate to political parties. This is due to a fear of being victimised or penalised if their contributions were to be disclosed (Maphunye & Motubatse, 2017). And what the review has simultaneously revealed, is that well-functioning political parties are crucial for representative democracy. Thus, since “public funding is generally tied to stronger rules and controls”, it is argued that where disclosure regulation has been introduced, it needs to be complemented by state funding, lest the lack of sufficient funding becomes counterproductive by rendering the political parties ineffective due to them not being able to financially sustain themselves. In the process of reducing reliance on private funding to support themselves, public funding to political parties becomes necessary to sustain the institutionalisation of political parties in democracies (Terracino & Hamada, 2014). The literature implies, therefore, that there is a direct correlation between the flow of private money to political parties and disclosure regulation. The higher the regulation, the less private money will flow to political parties. The lower the regulation, the higher the prospect of parties receiving private donations. Consequently, a fair deduction would be that where the disclosure regulations of private donations to political parties are low, the necessity for public funding is reduced, whereas when the disclosure requirements are high, the need for public funding is increased. To illustrate: In a 2013 study by the International Institute for Democracy and Electoral Assistance (International IDEA) and the Netherlands Institute for Multiparty Democracy (NIMD), it was found that political parties in Ghana successfully managed to develop and assert themselves without any public funding. In fact, the study suggests that “Ghana is one of the most competitive and relatively stable democracies with a vibrant party system in sub-Saharan Africa”. Parties are free, without limitation, to raise funds through donations. There are also no requirements for parties to disclose the identities of their donors (Magolowondo, Falguera & Matsimbe, 2013). On the other hand, political parties in Mozambique are required to annually declare their donors and the extent of each donation. In this instance they receive regular contributions from the state for both their overall functioning and for election campaigning. But the study says that the Mozambique case shows that when funds are not disbursed timeously, it has a negative impact on the competitiveness of political parties (Magolowondo, Falguera & Matsimbe, 2013). To further illustrate: Prior to the passing of the Political Parties Funding Act in South Africa, similar to Ghana, there were no funding restrictions on parties, nor any disclosure requirements. But since the inception of the Act, donors have become reluctant to donate (Letshwiti-Jones, 2022) and parties are finding it difficult to keep afloat (Moichela, 2022). Parties are now crying foul. The ruling African National Congress’ Treasurer General has, for example, bemoaned the disclosure requirements, saying that it is causing donors to steer away from contributing to the party. He has called for a greater degree of public funding to fill the gap (Friedman, 2020). The South African experience underscores the argument that the higher the disclosure requirements, the greater the need for public funding, lest the parties are neutered from effectively fulfilling their constitutional and democratic roles. 2.8 The post-1994 history of party-political funding in South Africa When ushering in the new democratic dispensation in 1994, no laws, rules and regulations were in place, nor introduced, to regulate private donations to political parties. Parties were free to solicit donations from any source and of any amount, be it local or international, and in most any form. Of course, whilst laws did not prohibit private donations, the receipt of such donations would still be subject to the normal laws of the country. It did not mean that criminal activity would be condoned. Following a number of funding scandals – which involved parties from across the political spectrum – public and civil society opinion started to form in favour of some form of regulation to be introduced. It came in the wake of allegations of corruption levied against the French arms company Thales, and various ruling party heavyweights, dominating the media headlines. It was alleged that the then Deputy President and later President, Jacob Zuma, received large sums of money as a bribe in exchange for him protecting Thales from investigations into a multi-billion rand deal for supplying weapons to South Africa (Reuters, 2021). In the early 2000’s allegations of corruption started to emerge against leaders of other political parties as well. In 2004, for example, charges were laid against New National Party leaders, who then governed the Western Cape province, for planning permission irregularities in exchange for bribes (M&G, 2004). The official opposition, the Democratic Alliance, also did not escape scrutiny. In 2002 they were accused of corruption after a German businessman, Jürgen Harksen, told an official commission that he paid more than one million rand to the then Democratic Alliance mayor of Cape Town for both his party's and his own benefit (McGreal, 2002). In 2004 the first shots were fired, when the Institute for Democratic Alternatives in South Africa (Idasa) filed papers in the Western Cape High Court, seeking an order that legislation should be introduced that would compel political parties to disclose the details of all funding they received (M&G, 2017). They failed, but in subsequent court challenges, the Western Cape High Court ruled in favour of a motion brought by “My Vote Counts”, who challenged the constitutionality of the Promotion of Access to Information Act (PAIA) “insofar as it did not allow for the disclosure of information on private funding to political parties”. Parliament was given eighteen months to “remedy the defect in the PAIA to allow for disclosure of private funding for political parties” (Parliament, 2017). The Political Party Funding Act was introduced into Parliament in 2018. It was subsequently passed by Parliament and assented to by the President on 23 January 2019 (RSA, 2019a). Since the implementation of the Act, it has been a struggle for South African parties to survive financially. Bloomberg, in 2021, already reported that they are “in dire straits”. Most were unable to raise enough money to cover their operational costs (Cele, 2021). In a report released by the Independent Electoral Commission, it was reported that the ruling party, whose monthly wage bill amounted to R18 million, managed to only raise R10,7 million in the three months through to July 2012 (Cele, 2021). They were not alone. Of the country’s other 503 registered parties, it was only the ruling African National Congress, the Official Opposition Democratic Alliance, and ActionSA that received donations exceeding R100,000 (Cele, 2021). While the measure is aimed at curbing corruption, politicians have been complaining that corporates have been deterred from donating (Cele, 2021). The problem is that prior to the enactment of the PPFA, like other political parties, the ANC generated its revenue primarily from private donations. It has been reported that “between 2013 and 2017, the ANC collected R2.6-billion in donations” (Mahlaka, 2021). And as alluded to in the preceding paragraphs, these private donations have all but dried up. The drying up of private donations to the parties is in itself not a bad thing, for all the reasons elaborated on in the previous sections of this review. It is the fact that the public funding to political parties has not been materially adjusted pre- versus post-PPFA. Private funding has been cut off without the compensatory upward adjustment of the allocation to the Represented Political Parties’ Fund (RPPF), that is, the fund managed by the Independent Electoral Commission, out of which the public funding is paid over to the political parties. In Treasury’s Estimates of National Expenditure for the 2019/20 financial year (pre-PPFA), an amount of R157,8 million was allocated to the RPPF (Treasury, 2019:74). This rose marginally to R171,1 million for the 2022/23 financial year (post-PPFA) (Treasury, 2019:xiii), a mere R13,3 million per annum more three years on, amounting to no more than an inflationary adjustment. It seems, however, that some relief has been given in the 2022/23 Estimates of National Expenditure, which indicates an increase of around thirty percent on the previous year, to R342 million. In addition, the defunding has been exacerbated by the fact that funding to political parties by provincial legislatures needed to be cancelled as a consequence of the introduction of the PPFA. Some provinces, such as Gauteng Provincial Legislature, had such arrangements, but the legislation had to be repealed once the PPFA came into operation (Gauteng Provincial Legislature, 2021). 2.9 Conclusion This literature review gives rise to the question: Is South Africa’s democracy properly funded? It seems that whilst great strides have been made in improving the transparency regime, it has not gone hand-in-hand with the necessary concomitant increase in public funding. The improvement on the one hand, and not on the other, amounts to a defunding of the party-political environment, which may very well have damaged the democratic dispensation more than the transparency advancements might suggest. This requires serious and urgent contemplation, to which this study hopes to contribute. Chapter 3: The legislative review It is evident from the literature covered in the preceding Chapter that scholars, democrats, political analysts and experts consistently argue that the provision of public funds to political parties is a necessary part of a free and fair democratic dispensation. This matter has also been settled in South African law, which makes it clear that the provision of public funds to political parties for purposes of executing their constitutional and democratic responsibilities is not open for consideration and/or interpretation. Neither should it be considered a benevolent act of the Executive and/or Treasury. It is compulsory. In this legislative review, the two principal pieces of legislation reviewed are the Constitution of the Republic of South Africa and the Political Party Funding Act. The review will also examine the public funding afforded to the parties via the Appropriation Bill and the Parliament’s Annual Performance Plan 2022 – 2025. 3.1 The Constitution of the Republic of South Africa, Act 108 of 1996 3.1.1 Section 19(2) Section 19(2) of the Constitution asserts: “Every citizen has the right to free, fair and regular elections for any legislative body established in terms of the Constitution” (RSA, 1996). In this regard the emphasis is placed on the right of every citizen to a fair election. Law Insider defines fair elections to mean: “electoral processes that are conducted in conformity with established rules and regulations, managed by an impartial, non-partisan professional and competent Electoral Management Body (EMB); in an atmosphere characterised by respect for the Rule of Law; guaranteed rights of protection for citizens through the electoral law and constitution and reasonable opportunities for voters to transmit and receive voter information; defined by equitable access to financial and material resources for all political parties and independent candidates in accordance with the national laws; and where there is no violence, intimidation or discrimination based on race, gender, ethnicity, religious or other considerations” (Law Insider, N.d.). In terms of this definition, the delivery of a fair election is therefore considerably more than just the technical delivery of the election. It also envisages an environment in which ideas, policies and programmes are effectively communicated to the electorate, and that sufficient opportunities are created for them and parties to connect and communicate with each other. It also pre-supposes that sufficient finances and resources will be in place for parties to carry out their functions. And that the parties have an equitable access to such financial and material resources. It cannot be, therefore, that some parties, merely as a consequence of their incumbency or policies favoured by the business community and/or the wealthy, are advantaged. Such advantage can come in the form of using the parties’ incumbency to reach out and communicate with the electorate or relying on the favour of private funders. Thus, public funding: To level the playing field and to ensure that all participants in the election have a fair chance at putting their case forward. 3.1.2 Section 57(2)(c) Section 57(2)(c) of the Constitution says: “The rules and orders of the National Assembly must provide for … financial and administrative assistance to each party represented in the Assembly in proportion to its representation, to enable the party and its leader to perform their functions in the Assembly effectively” (RSA, 1996). In this regard, the emphasis is placed on the enabling of parties represented in Parliament to perform their functions. Parliament of South Africa’s Policy on Political Parties Allowances is meant to give effect to section 57(2) of the Constitution. The policy’s objective is to, amongst others, assist parties represented in Parliament to perform their parliamentary duties, and to enable the parties to establish and maintain infrastructure that enables them to serve the interests of their constituents, as well as to service them (Parliament, 2005). The allowances are meant to cover the parties’ expenditure in relation to their parliamentary functioning, and include: Party leader allowances Political party administration allowances, which are based on a determination of staff and other entitlements made by the Secretary to Parliament on an annual basis. Party constituency allowances, which are paid to the parties and not the individual members of Parliament. The Presiding Officers annually determine an amount per member. Parties receive a constituency allowance equal to the annually determined amount multiplied by the number of their representatives in Parliament. 3.1.3 Section 59(1)(a) Section 57(1)(a) of the Constitution states: “The National Assembly must facilitate public involvement in the legislative and other processes or the Assembly and its committees” (RSA, 1996). To this end, parliamentary and Provincial Legislature portfolios and select committees provide opportunities for public participation in debating the proposed policy or law (ETU, N.d.). Apart from political parties participating in the legislatures through their public representatives, they are principally civil society organisations that encapsulate the interests, views and ideas of a certain group (or groups) within society. They articulate and represent these groups by participating in democratic elections, but they also, as a civil society contestant, sometimes independently and sometimes in collaboration with other civil society organisations, present these interests to formal political representatives and institutions (Mexhuani & Rrahmani, 2017). This is necessary to ensure the timely exchange of information between the legislators, the government and the public about problems and their solutions. And for civil society to take part in the country’s public affairs, to contribute to the development of the government policy- and law-creating procedures and to exert influence on the decision-making that will affect them and broader society (Aitken, 2013:19). Given the constitutional weight afforded to public participation in the legislative and other processes of Parliament, it is fair to deduce that meaningful (as opposed to superficial) contributions are expected from the public (and civil society). The development of their contributions requires from them well-developed, consulted, and empirically researched proposals to present to the Legislatures (and might I add, Executive, who themselves follow similar consultative processes when developing policy and legislation). Well-researched legislation and policy requires accuracy (Aitken, 2013:5), certainty, predictability (Aitken, 2013:7) and detailed analysis as to the likely impact of the legislation/policy, and its ability to achieve the desired regulatory results (Aitken, 2013:6), which requires considerable participatory and transparent policy processes and (Aitken, 2013:7), might I add, research by well-qualified experts. Proper participatory processes comprise the holding of discussions, open dialogue participation, consultations, workshops and seminars, with input from government officials and agencies, parliamentarians, civil society, international advisers, independent experts, the private sector, academics and the public (Aitken, 2013:19). All of which require political parties to have adequate funding or networked collaboration, which collaborators, in turn, will require funding. 3.1.4 Section 236 Section 236 of the Constitution says: “To enhance multi-party democracy, national legislation must provide for the funding of political parties participating in national and provincial legislatures on an equitable and proportional basis” (RSA, 1996). The legislation envisaged by this section of the Constitution is the Political Party Funding Act, Act 6 of 2018, the details of which is deliberated on in paragraph 3.2 hereunder. 3.2 Political Party Funding Act, Act 6 of 2018 The Political Party Funding Act, Act 6 of 2018 (PPFA), was assented to by the President of the Republic of South Africa on 21 January 2021 (RSA, 2021). With its introduction, the political party funding environment was completely changed. It introduced a new era of transparency in terms of who is funding the political parties. It will also help guard against corruption and the misuse of state resources. All of which needs to be applauded in an open and free democratic society. What was not envisaged was the spectacular collapse of private funding to political parties. This has all but dried up to the extent, as has been discussed, that the official opposition has, for example, had to retrench a significant portion of its staff, and the ruling party has run up huge debts and is not able to regularly pay its staff; indeed, its operations have been hamstrung. The celebration with regard to the ushering in of transparency, now needs to be balanced against the danger to the country of a weakening democratic dispensation due to neutering of the parties’ ability to effectively carry out the work, due to a lack of financial and other resources. What does the Act say? For purposes of this review the focus is on the three areas in the Act that impact party funding, namely, the direct funding to parties and the imposition of prohibitions, the establishment of the Represented Political Party Fund, and the establishment of the Multi-Party Democracy Fund. 3.2.1 Direct funding of political parties 3.2.1.1 Prohibited donations Political parties may no longer receive donations from foreign sources, be they foreign governments and/or agencies, foreign persons or entities. There is one exception, namely that they may accept grants for the purposes of training and skills development, and/or policy development. But this is subject to an annual cap that an entity may contribute, which currently stands at R5 million (RSA, 2021). The parties may also not receive funding from any organ of state or state-owned enterprise, albeit that this was the case prior to the introduction of this legislation as well (RSA, 2021). They may also not receive any donations that they know, ought to have known, or suspect, originated from sources of crime (RSA, 2021). 3.2.1.2 Donations from juristic persons A political party must disclose any donation it receives from a natural or juristic person that exceeds the threshold. The current threshold is R100,000 received from any single entity within a financial year (RSA, 2021). Furthermore, no entity may donate more than R15 million to a political party within a financial year (RSA, 2021). 3.2.2 Represented Political Party Fund Section 2 of the PPFA provides for the establishment of a Represented Political Party Fund (RPPF). Its purpose is to promote multi-party democracy through the provision of public funding to those parties that are represented in Parliament (RSA, 2021). Money is appropriated annually by an Act of Parliament and is distributed to the parties by means of a prescribed formula that, in part, provides for a weighted equitable distribution to parties represented in the national parliament and provincial legislatures. The second part provides for a distribution to the parties represented in the National Assembly and provincial legislatures based on their proportional strength in terms of the numbers of members represented in both the National Assembly and provincial legislatures. Currently, one-third is distributed equitably to all parties that hold seats in the National Assembly or any provincial legislature; and two-thirds is distributed in proportion to seats held by a political party in the National Assembly or provincial legislatures (IEC, N.d.). Section 7 of the PPFA spells out what parties may and may not use the monies received form the RPPF for (RSA, 2021). They may use it for: Activities aimed at developing the political will of the people Shaping public opinion Political education Promoting the active participation of citizens in political life Influencing political trends Ensuring connectivity between the citizenry and organs of state Expenditure aimed at ensuring compliance with the PPFA They may not use it for: Remunerating any person that represents the party in any legislature or municipal council, or who receives remuneration for any appointment or service rendered to the state The financing of or contributing to anything that is in contravention of any code of ethics aimed at binding members of Parliament or members of a provincial legislature Establishing a business of any kind, or to acquire or maintain a financial interest therein, except where it is for the purposes of acquiring property to be used solely by the party and for party political purposes Defraying legal costs that relate to internal political party disputes 3.2.3 Multi-Party Democracy Fund Section 3 of the PPFA provides for the establishment of a Multi-Party Democracy Fund, the proceeds of which are to be distributed to represented political parties for purposes of promoting democracy (RSA, 2021). The fund may receive contributions in any amount from any private source within or outside of the country. It may, however, not receive any money from an organ of state, state-owned enterprise, foreign government or foreign government agency. In addition, interest earned by the fund and irregular donations made to political parties which are recovered, are also distributable to the represented parties (RSA, 2021). Donors making contributions to the Multi-Party Democracy Fund may request the regulator not to disclose their identity (RSA, 2021). The funds are allocated to the parties using the same formula as that of the RPPF. Similarly, the rules in terms of what the monies can and cannot be spent on are the same as those of the RPPF (RSA, 2021). 3.3 Appropriation Bill B7-2022 and Parliament’s Annual Performance Plan 2022–2025 The purpose of this section is to ascertain the degree of public funding given to the political parties in a financial year. It examines the Appropriation Bill B7-2022 and Parliament’s Annual Performance Plan 2022–2025, with specific reference to the amounts allocated to political parties. Direct public funding is channelled to parties through these two avenues only. 3.3.1 Appropriation Bill B7-2022 In the Appropriation Bill B7-2022 (RSA, 2022), there are two allocations that bear reference to the question posed in this study. Firstly, the Bill provides an allocation to Parliament, and secondly, it provides an allocation to the Independent Electoral Commission. It is these two institutions that transfer monies to the political parties. The following allocations were made in the Appropriation Bill: For the purposes of providing support services required by Parliament to fulfil its constitutional functions, and to assist the political parties represented in Parliament with facilities and administrative support, and to service their constituents, Parliament was allocated an amount of R2,212,234,000 (two billion two hundred and twelve million two hundred and thirty-four thousand rand). For purposes of providing institutional support and transfer funds to the Electoral Commission, the Represented Political Parties' Fund and the Border Management Authority, an amount of R2,762,584,000 (two billion seven hundred and sixty-two million five hundred and eighty-four thousand rand) was allocated. Of this, R342,077,000 (three hundred and forty-two million and seventy-seven thousand rand) was allocated to the Representative Political Parties’ Fund. 3.3.2 Parliament’s Annual Performance Plan 2022–2025 Programme 3 of Parliament’s Annual Performance Plan 2022/23 to 2024/25 provides for the transfer in the amount of R518,572,000 (five hundred and eighteen million five hundred and seventy-two thousand rand) during the 2022/23 financial year, the application of which has been spelt out in paragraph 3.1.2. of this review. The actual net amount transferred to parties in the 2022/23 financial year amounted to R511,869,648 (five hundred and eleven million eight hundred and sixty-nine thousand six hundred and forty eight rand) (Parliament, 2022). 3.4 Conclusion Direct public funding in South Africa is allocated to political parties via three avenues: the RPPF, Multi-Party Democracy Fund (of which there has been no distribution to date) and Parliament, the quantum of which is indicated in Table 3.1. below. The number of eligible and soon-to-be eligible voters – that is, citizens over the age of 15 – number around 43,587,000 according to Statista (2022a), whereas the number of registered voters number 26,046,612 (IEC, N.d.). This means than an amount of R19,59 per annum per citizen over 15, or R32,78 per annum per registered voter, is set aside from public funds to support political parties.   Table 3.1.: Transfer of public funds to political parties per citizen over 15 and registered voter *Note: These figures are in relation to the national sphere of government. See study limitation in Chapter 4. Chapter 4: Research design and methodology As already stated, the introduction of the new party-political funding regime seems to have negatively impacted the political parties’ ability to raise funding from private sources. This has made them far more dependent on state funding, which, according to reports, seems not to be adequate, in that parties are not being able to meet their financial obligations. Consequently, they are not empowered to carry out their democratic and constitutionally imposed responsibilities and obligations properly and effectively. The introduction of regulations with regard to the private funding of political parties may have improved transparency, but at the same time it may also very well prove to disable parties from carrying out their functions effectively. In order for parties to effectively represent the constituents in Parliament, they need to have the organisational infrastructure to regularly interact with the electorate, and the capacity to do research, policy development and the marketing of their policy positions. All of which requires money. This is deployed to, for example: Develop the political will of the people Bring the party's influence to bear on the shaping of public opinion Inspire and further political education Promote active participation by individual citizens in political life Exercise an influence on political trends Ensure continuous and vital links between the people and organs of state (IEC, N.d.) 4.1 Research objective The objective of this research is to examine the South African party-funding environment in comparison to a selected group of parties from the European Union. The purpose is to ascertain how the South African political party funding regime compares to these international jurisdictions. The purpose is to provide public policymakers with benchmark information to enable them to consider the appropriateness of the current funding regime and to motivate for adjustments thereto, should it be found that the current model is wanting. 4.2 Research question Primary research question What comprises South Africa’s party-political funding regime and how does it compare with the party-funding regimes of Germany, Sweden and the Netherlands? Secondary research question Compared with the public funding regimes of the other countries of this study, are the South African political parties sufficiently funded to effectively carry out their democratic and constitutional obligations? 4.3 Research design The research takes a pragmatic approach in which both qualitative and quantitative methods were deployed during the course of the research. Qualitative research – “that is, non-numerical examination and interpretation of observations” (Babbie & Mouton, 2017:646) – was, for example, deployed to discover and understand the elements and extent of state funding of the political parties in both the European dispensations chosen for the benchmarking, as well as that of South Africa. Quantitative research – that is, the numerical representation and manipulation (Babbie & Mouton, 2017:646) – was, for example, used to measure the financial variances between the different state funding models and to convert the various financial quanta to equivalent purchasing power parity (PPP) in order to equalise the purchasing power of different currencies, by eliminating the differences in price levels between the foreign countries and South Africa. It was also needed to determine the per capita cost of state funding in each of the jurisdictions. 4.4 Research subjects The research subjects were the political parties of the countries that formed part of this study. The objective was to obtain data as to all the funding streams for funding the activities of the parties, and the extent thereof. The countries were selected using matching selection – that is, by comparing the similarities between the subjects to be selected (Babbie & Mouton, 2017:213). In this study the similarities were the electoral system – proportional representation. Whilst it is also important to consider the bearing of the different socio-economic conditions between that of South Africa and the developed world, the overriding consideration was that the quality of democracy should not be undermined based purely on affordability, since such considerations could potentially undermine the democratic ethos in the country. Costs were, however, as mentioned, converted to equalise the buying power differences between the countries. 4.5 Measurement The study required three measurements. The first was to measure the extent of party funding in each of the jurisdictions. This was to ascertain all the types of funding and the financial extent of that funding in each of the jurisdictions. This called for qualitative data, given the descriptive nature of the data (OSU, N.d.). It was obtained directly from the political parties, foundations and electoral commissions interviewed. The second measurement was to determine what the differences were between the jurisdictions in terms of the various sources of funding. This too was qualitative in nature. The third measurement was to determine the comparative cost per citizen (15+) to fund the parties. This was quantitative in nature, since it required measurable numeric information (OSU, N.d.). There were two dimensions to this measurement: (i) the conversion of the quantum in each jurisdiction in terms of purchasing power parity (PPP) in order to ensure that an apples-for-apples comparison between the jurisdictions would be achieved, and (ii) to determine the per capita percentage differentiation between the various jurisdictions. This enabled an interpretation as to the adequacy of the South African funding regime compared with the practices in the benchmarked countries. 4.6 Data collection In-person expert interviews were undertaken in each of the benchmarking countries with the treasurers (or their delegated representatives) of a major political party in the particular country, and/or the electoral commission in the country. The purpose was to get a holistic understanding of the funding regimes in each country. It also served to identify all the elements of funding for parties in the particular country and the quantum thereof. To this end, both the qualitative and quantitative data were secured through open-ended questions, in order to allow for a holistic and comprehensive look at the issues being studied, since open-ended questions allowed for the respondents to provide all options and opinions related to the topic, thereby ensuring more diversity and elaboration than would be possible with a closed-question or forced-choice survey format (Allen, 2017). The questionnaire used in this regard is shown hereunder: 1) Questions to be posed to interviewees a) Are there restrictions of private donations to political parties, and if so: b) What are the laws governing those restrictions? 2) What do the restrictions entail? a) What are the various forms of public funding that parties are entitled to? b) Directly to the party c) Directly to elected representatives d) To the groups within Parliament e) Reimbursement for election expenses f) Any other 3) What is the monetary value of each of the aforementioned funding contributions? 4) How is the funding divided and distributed to the parties and/or elected representatives? 5) Are there any election campaign spending caps, and if so, what? 6) Are there any incentives in place to encourage individuals/corporates to make donations to political parties, such as, for example, tax incentives? 7) Is there any indirect funding in place, such as, for example, free media slots, and if so: a) What are the rules? b) What is the value? c) How is it divided and distributed to the parties? 8) Are there any public funds made available to institutions, foundations, etcetera, which stand independent from the political parties, but which are ideologically aligned with parties, such as the political foundations in Germany and other European countries who stimulate the public policy dialogue, democracy and human rights through the lens of the ideological orientation, and if so: a) What is the rationale behind those contributions? b) How does it work? c) From which government departments and/or institutions are the funds dispersed? d) How are the contributions divided/distributed to the various institutions, foundations, etcetera? e) What is the monetary value of the contributions from each department and/or institution? 9) In terms of private versus public funding of political parties, what is, in your estimation, the ratio between the two? Indicate by marking the correct statement: Note: Private finding includes membership fees and contributions by trade unions. (10) Are there any other factors that you believe should be taken into account? 4.7 Analysis Various multivariate tables were constructed, which comprised a number of independent variables (the different jurisdictions) and a range of dependent variables (the funding streams available in each jurisdiction) (Babbie & Mouton:435). This enabled the researcher to do a comparative analysis on the similarities and differences between the various systems. In some instances, the tables were simultaneously multiple in nature, since they, in addition to the qualitative data mentioned above, also provided for quantitative data – that is, the quantum of the various funding streams available in each jurisdiction. In the final instance, the researcher interpreted the table in terms of: the elements of state funding that are available in each of the benchmarking countries, including those elements that are not available in South Africa, together with an analysis of the amounts provided by the state to fund each of the elements the per capita cost of party funding by the state, based on PPP, for each of the countries whereafter: in that the researcher had been exposed to the implicit and explicit facts related to the various funding regimes (Babbie & Mouton, 2017:641), the researcher was able to make a determination through deduction reasoning as to the adequacy of the South African funding dispensation in comparison to the benchmarked countries the researcher developed recommendations for public policymakers to ponder. 4.8 Ethics Whereas the data, such as the types and quantum of state funding, are available in the public domain, formal ethics clearance was not required. However, since some financial information, especially that which relates to private funding or commercial activities, was confidential, the financial analysis was restricted to public funding only. 4.9 Limitation of the study This study has only examined the public funding of political parties at the national level. It has not ventured into public fund transfers to political parties at the provincial and/or municipal level of government. The assessment therefore relates to public funds transfers to the parties at the national and the national parliamentary levels only. That said, in the comparative analysis, all jurisdictions were treated in similar fashion, resulting in a like-for-like comparison. The author is therefore confident that the conclusions reached will be valid for the purposes of the study, that is, to draw conclusions as to how South Africa’s public funding of political parties compares with those of the other international jurisdictions against which it was assessed. 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Updated results from the Inclusive Society’s 2022 GovDem survey Copyright © 2023 Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8010 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 its Board or Council members. A P R I L 2 0 2 3 Author: Daryl Swanepoel Content Chapter 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 Chapter 2: Survey methodology 2.1. Desktop review 2.2. Survey 2.3. Assessment tools 2.4. Limitations of the study Chapter 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 9 percent 3.4. South Africans don’t sufficiently trust immigrants 3.5. South Africans deeply distrust their compatriots from other parties 3.6. Sense of community a solid foundation on which to build social cohesion Chapter 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: South Africans’ beliefs about race relations Figure 3.3.: Percentage wanting South Africa to unite Figure 3.4.: Percentage against association with other racial groups Figure 3.5.: Differentiation based on gender, education, or income considerations Figure 3.6.: Trust of neighbours based on race, age, education and income Figure 3.7.: Trusting those from other religions Figure 3.8.: Trust for black South Africans Figure 3.9.: Trust for white South Africans Figure 3.10.: Comparison with regard to in-group trust Figure 3.11.: Percentage of population considering emigration – by race Figure 3.12.: Top 5 reasons for emigrating Figure 3.13.: Percentage of population considering emigrating – by age Figure 3.14.: Percentage of South Africans not trusting African immigrants – based on gender Figure 3.15.: Percentage of South Africans not trusting African immigrants – based on party affiliation Figure 3.16.: Percentage of South Africans not trusting immigrants – based on provinces Figure 3.17.: Percentage of South Africans not trusting immigrants from outside of Africa – based on earnings Figure 3.18.: Percentage of South Africans not trusting non-African immigrants – based on party Figure 3.19.: Percentage of South Africans not trusting non-African immigrants – based on provinces Figure 3.20.: Percentage of people willing to trust compatriots from other parties – based on age Figure 3.21.: Percentage of people willing to trust compatriots from other parties – based on education Figure 3.22.: Percentage of people willing to trust compatriots from other parties – based on race Figure 3.23.: Percentage of people trusting supporters of the same party Figure 3.24.: Percentage of South Africans willing to trust those from other parties Figure 3.25.: Percentage of South Africans getting involved in the community – based on age Figure 3.26.: Percentage of South Africans getting involved in the community – based on education Figure 3.27.: Percentage of South Africans getting involved in the community – based on income Figure 3.28.: Percentage of South Africans getting involved in the community – based on race Figure 3.29.: Percentage of South Africans getting involved in the community – based on party support Chapter 1 Introduction, background on social cohesion and motivation for survey The struggle for economic, social, and political freedom has reached a defining moment in South Africa. Many who fought for and established a constitutional people’s democracy in 1994 are today, twenty-eight years after the end of apartheid, witnessing a nation that remains largely divided, with a contaminated moral environment. Racial, social and gender discrimination continue to fester and bedevil efforts towards creating ‘unity in diversity’ and a better life for all – the mantra of our current government. That is not to say there hasn’t been progress post 1994; there is plenty to be hopeful about. To date, approximately 2-3 million government-subsidised homes have been built (CAHF, 2021), 93% of the population has access to water supply services and 76% have access to basic sanitation (Bazaanah & Mothapo, 2023), the once racially segregated schooling system has been dismantled, to name a few. But from a broader perspective, overall welfare and progressive reform is lagging, with fragmenting social cohesion the consequence. This is of grave concern, as social cohesion is deemed to be a critical ingredient not only for people to co-exist harmoniously and for their personal social progress and well-being; it is also important for the economic growth and stability of a country. In the last ten years or so there has also been growing recognition globally and in South Africa that social cohesion in communities, and regions, can rebuild people’s trust in their political leaders. As it stands, South African communities are floundering and being driven apart under the pressure of continued inequality, corruption, and poor service delivery. There is still substantial social conflict, in terms of wealth, ethnicity, race, and gender. According to the World Bank, South Africa – the so-called rainbow nation – is still the most unequal country in the world (Warah, 2021). More than 50 percent (30 million people) of the population are living in poverty and 25 percent are experiencing food poverty (World Bank, 2020), whilst the richest 10% of the population gobble up more than 85% of the wealth (Al Jazeera, 2022). There is also the racial tension that continues to brew, as in the recent rioting and looting in KwaZulu-Natal between the Indian and black communities in Phoenix (Naidoo & Nkosi, 2021), and 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). Over the years, many have attempted to measure the socio-economic conditions within the country, but deficient historical data sets that often excluded black South Africans who were severely impoverished and often unemployed, skewed results. More recent attempts, however admirable, evidence 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 depends on a holistic approach, dealing with all the above factors simultaneously. With this front of mind, the Inclusive Society Institute has committed to generate an extensive Social Cohesion Index or Radar, as a social cohesion progress tracker for policymakers. This annual GovDem report is a prelude to such an index. The struggle for economic, social and political freedom has reached a defining moment in South Africa. Many South Africans fought for and established a constitutional people’s democracy, but today, we live in a contaminated moral environment. Nevertheless, the struggle for socio-economic and political freedom pursued by the ANC is enshrined in the Constitution and should continue to drive transformation (Fubbs, 2020). 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 amongst 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 amongst the community residents, and ineffective police response to crimes (Manaliyo, 2016). Young people: Youth unemployment currently stands at 61 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 previous 2021 and this 2022 GovDem 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 updated 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. Chapter 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, which is undertaken on behalf of the Institute by IPSOS. 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 2022. 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. Whilst 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. Chapter 3 Findings 3.1. South Africans remain committed to ‘unity in diversity’ Almost 50 percent of the South African population harbour doubts about the feasibility of various groups within the country coming together to form a cohesive nation. However, they expressed a strong desire for a unified South Africa where everyone can join forces and coexist as equal fellow citizens. This was the first principal finding of the Inclusive Society Institute’s GovDem survey. 3.1.1. Doubt as to whether one nation can be formed from amongst the different groups 47,18 percent (previous poll: 47,96 percent) of adult 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 Indians now being slightly more inclined to believe it possible and coloureds being the most doubtful. 35,86 percent (previous poll: 54,55 percent) of Indians thought it is not possible to form one nation, as opposed to 42,55 percent (previous poll: 42,7 percent) of whites, who were the most positive in the last poll. 43,63 percent (previous poll: 47,45 percent) of blacks and 51,48 percent (previous poll: 55,77 percent) of coloureds also thought so. The change in Indian sentiment may be explained by a lapse in time since the July riots in KwaZulu-Natal in 2021 (during which period the first GovDem Poll was carried out), where the Indian community proved exceptionally vulnerable. On the opposite side of the divide, 20,11 percent (previous poll: 31,44 percent) of adult South Africans disagreed with the notion that it is impossible to form one nation out of the different groups in the country. Stated otherwise: these respondents, therefore, believed that it is possible to form one nation in South Africa. 17,13 percent (previous poll: 15,36 percent) of the surveyed South Africans did not express an opinion either way. Overall, therefore, there is a marginally more positive sentiment than reflected in the previous poll. Figure 3.1.: Percentage of South Africans who are doubtful one nation can emerge Based on the level of South Africans' education, there was little differentiation to be made. 46,64 percent (previous poll: 40,45 percent) of those South Africans with higher education are 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: 45,45 percent (previous poll: 49,85 percent), some high schooling: 49,62 percent (previous poll: 50,95 percent), and those with Matric: 46,21 percent (previous poll: 51,09 percent). Similarly, there was little differentiation between gender and age groups. However, this does not mean that various race groups were not willing or did not want 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 28,07 percent (previous poll: 29,63 percent) of South Africans were of the view that the relationships between the different races in the country were getting worse. 71,93 percent (previous poll: 70,37 percent) of South Africans were of the view that the relationships either remained the same (48,87 percent – previously 47,64 percent) or were improving (23,06 percent – previously 22,37 percent). In this regard, 72,64 percent (previous poll: 73,55 percent) of whites believed that the relationships either remained the same (46,73 percent – previously 47,04 percent) or were improving (25,91 percent – previously 26,51 percent). 71,46 percent (previous poll: 70,57 percent) of black South Africans believed that the relationships either remained the same (49 percent – previously 47,76 percent) or were improving (22,46 percent – previously 22,81 percent). And amongst Indians, it was 77,11 percent (previous poll: 67,66 percent) of the view that relationships were either remaining the same (50,54 percent – previously 50,77 percent) or improving (26,57 percent – previously 16,89 percent). 73,77 percent (previous poll: 66,11 percent) of coloured South Africans said that relationships either remained the same (49,51 percent – previously 46,38 percent) or were improving (24,26 percent – previously 19,73 percent). Here too, it appears that the previous poll’s more negative Indian community sentiment has recovered to be more or less in line with the other communities. Figure 3.2.: South Africans’ beliefs about race relations Therefore, the survey seems to suggest that whilst across all races two-thirds or more of South Africans did not suggest a regression in race relations, they were also not convinced that race relations were improving. 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. 65,76 percent (previous poll: 70,53 percent) of South Africans either agreed or strongly agreed with this notion, whilst only 12,69 percent (previous poll: 13,15 percent) of South Africans either disagreed or strongly disagreed. 4,94 percent (previous poll: 2,75 percent) did not know how they felt. In this regard it was the Indian (75,74 percent – previous poll: 80,75 percent) and coloured (74,80 percent – previous poll: 80,76 percent) South Africans that, in terms of agreeing or strongly agreeing, registered the highest need therefore, followed by whites at 69,76 percent (previous poll: 75,65 percent) and trailed by blacks at 63,91 percent (previous poll: 68,24 percent). Figure 3.3.: 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 that do agree do outnumber those that don’t by a significant margin. 43,47 percent (previous poll: 44,97 percent) of South Africans agree or strongly agree that it is moving in the right direction, as opposed to 22,57 percent (previous poll: 27,54 percent) that disagree or strongly disagree. 24,31 percent (previous poll: 21,27 percent) neither agreed nor disagreed, and 9,65 percent (previous poll: 6,22 percent) did not know how they felt about it. In terms of racial breakdown of the responses, 43,35 percent (previous poll: 43,39 percent) of whites felt positive about the direction, 43,31 percent (previous poll: 46,06 percent) of blacks felt positive, and 46,41 percent (previous poll: 40,51 percent) of coloureds felt that reconciliation was moving in the right direction. At 38,37 percent (previous poll: 35,62 percent), Indian South Africans trailed somewhat in this regard. Apropos reconciliation moving in the wrong direction, at 18,54 percent (previous poll: 27,48 percent) and 22,94 percent (previous poll: 26,92 percent) for white and black South Africans, respectively, there was not much between them. Indian and coloured South Africans, who in the previous poll were slightly more negative, were now more or less in line with their white and black compatriots. They registered 22,53 percent (previous poll: 33,05 percent) and 23,63 percent (previous poll: 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 to be forced integration but rather of a voluntary nature, as can be deduced from the table 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 The table shows that across the various activities, the majority of the population is starting to integrate as it relates to everyday life activities. Even more encouraging is the trend that largely replicates itself across all racial groups. It tells us that the majority of South Africans have commenced the journey towards reconciliation, nation-building and social cohesion, even though there is still a long way to go. 3.1.5. But, whilst on the decline, racial bias is still alive and kicking Nearly a third (33,12 percent – previous poll: 33,44 percent) of all South Africans still do not like associating themselves with people from other population groups. This would suggest that the country still has 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 that the survey statistics suggest are committed to building a united, non-racial South Africa. 30, 99 percent (previous poll: 28,3 percent) of whites indicated that they do not like associating with people from other population groups. Similarly, 33,44 percent (previous poll: 33,88 percent) of blacks, 24,01 percent (previous poll: 41,73 percent) of Indians and 35,22 percent (previous poll: 33,05 percent) of coloureds indicated that they do not like to associate with people from other population groups. The softening of attitudes amongst the Indian community is probably the result of a recovery of relationships in KwaZulu-Natal in the wake of the July 2021 riots in the province. Figure 3.4.: 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 result from this survey, in line with the previous survey, shows, however, that much progress has been made, with more in the country committed to uniting the country, as opposed to dividing it. There has, however, been a slight hardening of attitudes amongst people from different population groups since the last survey. 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 to some effect, 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 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 different groups and the overwhelming desire to unite the nation. This is a concept worthy of finding national consensus 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. Among South Africans, there is a notable lack of trust in their fellow citizens that spans various dimensions such as race, gender, age, education, and income. The only exception seems to be the family unit, which appears to maintain a high sense of trust. This was found in an extensive poll commissioned by the Inclusive Society Institute late last year. 3.2.1. High trust in family It is safe to say that South Africans trust their families. 86,18 percent of South Africans (slightly down from 87,42 percent last year) trust other members of their family. This holds true across all racial groups, with more than 85 percent of respondents of all racial groups indicating that they completely trust or somewhat trust members of their family. There is little differentiation to be made between the various race groups: 87,78 percent (previous poll: 85,47 percent) of coloured respondents, 86,52 percent (previous poll: 90,68 percent) of white respondents, 85,64 percent (previous poll: 88,19 percent of Indian respondents and 85,98 percent (previous poll: 87,21 percent) of black respondents indicated that they either completely of some what trusted their family members. There was little differentiation based on gender, education or income considerations. 85,68 percent (previous poll: 87,82 percent) of men completely or somewhat trust their family members, whereas 86,64 percent (previous poll: 87,04 percent) of women do. 87,22 percent (previous poll: 83,14 percent) of those with no schooling, 86,04 percent (previous poll: 83,97 percent); 85,28 percent (previous poll: 89.93 percent) of those with matric and 88,76 percent (previous poll: 85,55 percent) completely trusted or somewhat trusted their family. Those respondents with no income were slightly less trusting of their family than those with income. 74,89 percent (previous poll: 82,54 percent) of those respondents with no income indicated that they completely or somewhat trusted their family members, 86,64 percent (previous poll: 86,89 percent) of respondents in the lowest income band indicated that they completely trusted or somewhat trusted their family, for the mid-income group it was 88,66 percent (previous poll: 87,75 percent), and for the highest income group 88,53 percent (previous poll: 86,73 percent). Figure 3.5.: 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 65,89 percent (previous poll: 62,27 percent) of respondents indicated that they either completely or somewhat trusted their neighbours. However, there were sharp differences amongst the various demographic groups. Racial demographics Whites have a higher level of trust in their neighbours as measured against their black, Indian and coloured compatriots. In this regard 83,96 percent (previous poll: 72,95 percent) of white respondents indicated that they completely trusted or somewhat trusted their neighbours. This against 65,39 percent (previous poll: 60,6 percent) of black respondents, 63,31 percent (previous poll: 77,54 percent) of Indians and 71,06 percent (previous poll: 60,1 percent) of coloureds indicated such. Age demographics The older people get, the more they trust their neighbours. Whereas 61,79 percent (previous poll: 58,33 percent) of those respondents in the age group 18 - 24 indicated that they completely or somewhat trusted the people in their neighbourhoods, this rose sharply to 70,05 percent (previous poll: 67,74 percent) for those respondents in over fifty years of age. For the respondents within the age groups 25 - 34 and 35 - 49, the percentages came in at 62,95 percent and 66,01 percent (previous poll: 59,84 percent and 63,44 percent) respectively. Education demographics In general, there is little difference in the level of trust of neighbours whether the respondents are educated or not. For those respondents with no schooling 73,19 percent (previous poll: 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 63,56 percent (previous poll: 56,75 percent), it again rose to 65,10 percent (previous poll: 63,6 percent) amongst those respondents with matric and 66,74 percent (previous poll: 63,56 percent) amongst those respondents with a higher education. Income demographics 68,57 percent (previous poll: 59,5 percent) of lower income earners trust their neighbours somewhat or completely. For those in the middle-income and higher income groupings, it was 67,73 (previous poll: 61,48 percent) and 69,48 percent (previous poll: 65,58 percent) respectively. The outliers were those in the low-income group where only 51,25 percent (previous poll: 55,17 percent) of respondents indicated that they either completely or somewhat trusted their neighbours. Figure 3.6.: 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 the respondents continued to indicate that they completely or somewhat trusted people from religious groups other than their own. Overall, only 46,65 percent (previous poll: 47,1 percent) indicated that they did – 46,63 percent of males (previous poll: 48,68 percent) and 46,66 percent of female (previous poll: 45,70%). Figure 3.7.: Trusting those from other religions 3.2.5. Distrust between races still worryingly high Just over 50 percent of those respondents from the minority communities indicated that they completely or somewhat trusted people from the black community. For those from the white and coloured communities trust in their black compatriots was 54,53 percent (previous poll: 50,69%) and 53,03 (previous poll: 51,21% ) respectively. The distrust was alarmingly higher amongst the Indian respondents, where only 23,83 percent (previous poll: 43,92 percent) indicated that they completely or somewhat trusted black South Africans. It should be noted that the tensions between the Indian and black communities in Kwazulu-Natal could still be lingering post the looting and rioting in 2021. This stark differences may require some deeper investigation. More alarmingly was the high level of distrust that the black respondents have for their compatriots from the minority communities. In this instance, only 39,74 percent (previous poll: 41,07 percent) of the black respondents completely or somewhat trusted their white compatriots, which deepened to only 38,37 percent (previous poll: 38,93 percent) completely or somewhat trusting their coloured compatriots, and a mere 35,51 percent (previous poll: 34,84 percent) their fellow Indian South Africans. Complete or somewhat trust for black South Africans from: Figure 3.8.: Trust for black South Africans Complete or somewhat trust for white South Africans from: Figure 3.9.: Trust for white South Africans It is worth noting that the trust-deficit between the minority communities are 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 55,50 percent (previous poll: 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 55,07 percent (previous poll: 59,97 percent) of the Indian respondents indicated that they completely or somewhat trusted their fellow Indian compatriots, whilst this grew to 64,46 percent (previous poll: 62,97 percent) within the coloured group. The biggest change since the previous poll was registered within the white community, since only 57,92 percent (previous poll: 74,51 percent) of white respondents indicated that they completely or somewhat trusted their fellow white South Africans. Click here to continue

Copyright © 2023 Inclusive Society Institute PO Box 12609 Mill 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 D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or its Board or Council members. Author: Percept Actuaries and Consultants Editor: Daryl Swanepoel MARCH 2023 This research has been enabled through the generous support of the Embassy of Denmark in Pretoria, South Africa Content Executive summary Introduction Focusing on families and the caregiving role Gender-equity policy context Global gender-equality policies South African gender-equality policy South African families Family composition The role of labour migration in family composition Culture, tradition and changes in marriage trends and women-headed households Social grants as a major source of household income Women as caregivers and care receivers Unpaid care work and its relationship to gainful employment The type of paid work performed by women The mental, physical, and emotional toll of unpaid care work amid paid work Men as caregivers and care receivers Men’s employment in the care sector Loss of ‘breadwinner’ status Male-headed households, social grants and extended family forms Perceptions of gender and gender-based violence The road to a more gender-equal South Africa List of Tables Table 1: Household types with children List of Figures Figure 1: Framing care and caring Figure 2: Structure of report Figure 3: World Economic Forum gender gap indicators Figure 4: Number of civil marriages by year 2011-2020 Figure 5: Household head by household size Figure 6: Women’s employment in post-apartheid South Africa (total and as a share of total) Figure 7: Employment absorption by gender Figure 8: Labour force participation rate by sex and presence of children 2022 Figure 9: Employment absorption by gender and education status Figure 10: Unemployment rate by gender and education status Figure 11: Gender representations by industry Figure 12: Female domestic workers in South Africa Figure 13: Infographic of the ‘glass elevator’ in men’s occupation of female caring jobs Figure 14: Unemployment rate by sex Figure 15: SASOF 2021 survey participants’ perceptions of fatherhood and employment Figure 16: Household heads by income proxy Figure 17: Attrition of rape cases in South Africa Figure 18: Recommendations arising from this research report List of Boxes Box 1: Sustainable Development Goal 5: Goals Definition of Terms Family Following Hall and Richter[6] we argue that “families are not just about biological relationships, and parenting is not simply about reproduction: the family serves a social function as ‘one of the great, enduring institutions of organised human life’”. Hence we refer to families as a network of kin relationships that might reside within a single or multiple households. A family might be tied together through blood, marriage or co-residence, and the organisation of families and households might change according to social, economic and political factors. Gender Gender is the socially determined rather than biologically determined notion of ‘femininity’ (what it means to be a woman) and ‘masculinity’ (what it means to be a man). Gender is an identity that is leant through socialisation and changes across time and place and in different cultures. Although it is a social construct, it has real-life consequences as it is lived as real. Gender is relational, and in a patriarchal society this relationship is unequal. Gender is based on a complementary and hierarchical relationship of patriarchal domination and subordination; thus it delineates power and influence. “In personal or individual terms, gender refers to the specific roles, personality traits, attitudes, behaviours and dress that individuals use to express their personal gender identity, and this is influenced both by social ideas of gender, and personal feelings about oneself and how one wants to be and be seen in the world. For this reason, even though society tells us that there are only two genders, there are in fact many different ways to express one’s gender that fall between or outside of man/boy and woman/girl”.[7] Cisgender This term refers to people whose gender expressions and gender identities fits the sex they were assigned at birth. Transgender “This term can refer to trans men and trans women specifically. It can also be an umbrella term for all people whose gender identity or gender expression differs from the social expectations for the sex they were born with”.[8] Non-binary People whose gender identity is neither male nor female and do not confirm to the ascribed gender binary. Also known as gender queer folks who use they/them as pronouns. Executive Summary South Africa is the most unequal country on Earth.[1] Its inequality is profoundly gendered. Women represent slightly more than half (51%) of the South African population,[2] and more than 40% of the country’s homes are headed by women.[3] Still, their share in household income and expenditure is significantly lower than that of men. Although women’s participation in labour has expanded since 1994, they continue to fair poorer than men in employment, earnings, and job security. In 2022, women were 18% less likely to participate in the labour market, and 9% more likely to be unemployed (see Figure 7). This is exacerbated by the concentration of women in informal, precarious labour, that presents limited opportunity for social and economic mobility. Women represent most of the workforce in only two industries: private households and community and social services (see Figure 11). The undervaluing of care work – often understood as ‘women’s work’ – pervades both private domestic spaces and the public care economy. South African women spend eight times the amount of time on unpaid domestic and care work than men.[4] Because of women’s disproportionate caregiving role in families, and their impact in safeguarding household wellbeing, women’s poorer labour market outcomes have extraordinary ripple effects. Affecting the nation, the future chances of children, and intergenerational cycles of poverty. Underlying gender inequality are complex dynamics around family formation, childcare and financial responsibility, as well as questions surrounding women’s wider participation in education and labour markets. This transdisciplinary report explores the roots and effects of South Africa’s gender inequality, with a particular focus on care and families. The report discusses changes in South African household structure over time, including declining marriage rates, and rising numbers of women-headed households. These changes have increased the number of impoverished homes in South Africa and forced women to juggle their unpaid care work with paid work to make ends meet – reducing their ability to give freely and fully to both. The role of caregiving and care receiving for men and women is different, yet it is precisely that difference, which indicates gendered inequalities in paid care work and the undervaluing and lack of recognition of unpaid care work. For example, as industries which traditionally employ men have downsized resulting in greater rates of male unemployment and a narrowing gender gap in unemployment, there has been an increase of jobs in feminised care roles. Where men take up these new work opportunities, they experience a ‘glass escalator’ in their advancement to senior and more managerial roles. Thus, unequal outcomes result from men and women’s participation in care work, with patriarchy, the underlying system that privileges men, remaining in place. During the HIV/Aids epidemic and Covid-19 pandemic, men’s relationship to caregiving and care receiving changed. This suggests that gender arrangements during times of crisis might encourage more fluid, flexible gendered care regimes. The recommendations stemming from this report (see Figure 15) are neither new nor novel, but they accurately display where South Africa sits in its trajectory toward a gender-equal society. The foundational recommendations relate to the value and visibility of care work specifically and the care economy more generally It also suggests increased accountability for South Africa’s poor policing of gender-based violence, and an introduction of a rebate or financial incentive for businesses and industries that employ more women, while providing appropriate childcare and parental leave policies. Despite the well-researched and thought-through National Strategic Plan on Gender-Based Violence & Femicide: 2020-2030,[5] much more needs to be done. This report recognises the structural inequities, discrimination, and targeted violence borne by trans, non-binary and gender non-conforming South Africans, but limitations of scope and data have meant that this report focuses largely on the experiences of cisgender women and men. Introduction Prior reports published by the Inclusive Society Institute (ISI) have revealed the profoundly gendered nature of South Africa’s inequality. To further explore this, we have drawn on a framework of care used to discuss ‘The State of South African Fathers’,[9] ‘Children, Families and the State’,[10] and gendered perspectives of ‘Care in Context’.[11] In this way we situate our discussion of gender inequality in relation to families. We link the unpaid care work that ensures the wellbeing of families, to continuing forms of gender discrimination inside and outside the home, with the undervaluing of both care and those most closely associated with it. In this report, we use Tronto’s “interconnected caring phases” to discuss different aspects of the work involved in caring processes (Figure 1).[12] While seemingly interchangeable, the terms and definitions described help to separate out the different phases and forms of caring and we use this language throughout for clarity. Figure 1: Framing care and caring[13] The gendered nature of care and caring work makes women disproportionately responsible for care, an association that diminishes their social power given the undervaluing of care work generally. For example, by June 2020, two months into the Covid-19 lockdown, women were more than twice as likely as men to be taking care of children, preventing them from going to, or looking for, work.[14] Gendered and unequal patterns of giving, receiving, and seeking household care are significant features of South Africa’s inequality, both reflecting and reproducing larger structural inequities. Understanding care as a lever that drives and entrenches gender inequality helps illuminate women, girls, and other marginalised identities’ systematic disadvantage, from a transdisciplinary perspective. Focusing on families and the caregiving role One of the core intuitions of feminist theory has been to argue that what happens in the private sphere of the home has public and political implications, and vice versa. In this report, which aims to unpack the gender dimensions of inequality in South Africa, we have chosen to focus specifically on the roles that women and men play in families – whether their own or others. Because families remain the primary providers of care in society, caring patterns within the home have profound effects on the education, health, and economic participation of their members. In other words, structural gender inequality lands heavily on families, and can also be reproduced there. At the same time, more just, equitable caring relations are central to redressing inequality and furthering human flourishing. Care is central to maintaining, repairing, and ensuring the wellbeing of all who live in our country. Care is also central to social and economic development and yet the cost of caregiving is largely invisible to policymakers and planners, and unaccounted for in measures of GDP.[15] Because women are more likely to invest higher shares of their income in the wellbeing of their families, and because of their caregiving roles, investing in women’s empowerment and increasing their labour force participation is also an investment in the next generation and in today’s economy. It is for this reason that care ethics is increasingly being used to speak about and action our moral and political obligation to reduce gender inequality in our homes, communities and socio-political contexts. “Care is a way of framing political issues that makes their impact and concern with human lives direct and immediate. Within the care framework political issues can make sense and connect to each other. Under these conditions political involvement increases dramatically”. Tronto (1993: 177) By placing care within the family at the centre of experiences of gender injustice and inequality, we also shine a light on intimate, interpersonal relations. While South African households are by no means homogenous, in many we find men and women along with children and older people. High levels of violence, crime and victimisation within families require further examination of where the care and caregiving systems in families have become dysfunctional. Caring processes also show up the uneven way financial and decision-making powers are spread across families and between men and women. Power at the level of the family influences: Who or what is cared about, and how caring needs are met Where the resources for care are procured and how they are shared What support for care exists and who is responsible for care This report begins with the foundational policy context. It is meant to provide orientation to where gender inequality sits within the policy environment but we focus much more on the lived experience and reality of gender inequality in this report (rather than stated policy intentions). We then describe how South African families are composed, and how historical and current changes in the political environment have changed family power dynamics. Next, we explore care and caring in South Africa, followed by two sections that focus on women’s and men’s caregiving roles and responsibilities in their families, respectively. The following section pulls together how this nexus of gender and family contribute to South Africa’s high gender-based violence and violence against women and children (VAWC), proposing that care, or the lack thereof, has a material influence on gender-based violence and experiences of masculinity and femininity. We conclude with a section that focuses on pragmatic and achievable recommendations for South Africa as it tries to shift itself to a more gender equal world. Figure 2 shows the structure of this report. Figure 2: Structure of report Gender-equity policy context Given the global impetus to improve gender equity, there are hundreds, if not thousands, of gender-related policies in place from a global, country, funder and local perspective. This section provides a brief overview of the material - global and South Africanspecific policy environment - which we use to guide our analysis of how South Africa is performing against its own, and the global, gender-equity targets. Global gender-equality policies The 1948 Universal Declaration of Human Rights (UDHR) stipulates that there can be no discrimination on the basis of gender, including that there should be equality in how men and women are paid for the same job.[16] Although a milestone for the human race, in 1948 there were still many countries (across the high- and low-income spectrum) which did not afford women the right to vote - a most basic of human rights. South Africa was one of the last to introduce full voting rights for all women, which only happened at the dawn of its democracy in 1994. In 2000, the Millennium Development Goals (MDGs) were introduced, which provided eight goals for which the 189 United Nations (UN) member states would work towards achieving by 2015.[17] Goal 3 was to ‘empower women and promote gender equality’. At the end of the MDG period, research found that many low-income countries (LICs) and middle-income countries (MICs) had achieved the goals focused on improving access to education for girls.[18] Women’s participation in the labour force (excluding the agricultural economy) also showed growth from 35% in 1990 to 41% in 2015. Furthermore, the proportion of women who were working in vulnerable employment decreased by 13% between 1990 and 2015. Politically, women also saw progress in their representation in parliament/government- but despite a doubling, women still only made up one in five members of government.[19] Despite this progress, there was still more to be done and the Sustainable Development Goals (SDGs) replaced the MDGs from 2016.[20] The SDGs timeframe for achievement was 2016-2030, and there are 17 goals - more than double those in the MDGs. Goal 5 is the achievement of gender equality and the empowerment of all girls and women. There are nine goals under Goal 5, shown in Box 1. We have emboldened the goals to which this report speaks directly. Box 1: SDG 5: Goals 5.1 End all forms of discrimination against all women and girls everywhere 5.2 Eliminate all forms of violence against all women and girls in the public and private spheres, including trafficking and sexual and other types of exploitation 5.3 Eliminate all harmful practices, such as child, early and forced marriage and female genital mutilation 5.4 Recognize and value unpaid care and domestic work through the provision of public services, infrastructure and social protection policies and the promotion of shared responsibility within the household and the family as nationally appropriate 5.5 Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic, and public life 5.6 Ensure universal access to sexual and reproductive health and reproductive rights as agreed in accordance with the Programme of Action of the International Conference on Population and Development and the Beijing Platform for Action and the outcome documents of their review conferences 5.7 Undertake reforms to give women equal rights to economic resources, as well as access to ownership and control over land and other forms of property , financial services, inheritance and natural resources, in accordance with national laws 5.8 Enhance the use of enabling technology, in particular information and communications technology, to promote the empowerment of women 5.9 Adopt and strengthen sound policies and enforceable legislation for the promotion of gender equality and the empowerment of all women and girls at all levels Lastly, since 2006, the World Economic Forum (WEF) put indicators in place to measure progress towards closing the gender gap (Figure 3).[21] This index tracks global progress towards gender equity and is the longest- standing of its kind. The indicators are tracked annually, and the latest report (July 2022) states that at the current pace of change, it will take another 132 years to reach gender parity.[22] The top 10 countries with the best performance feature two sub-Saharan African countries – Rwanda, an LIC at sixth place, and Namibia, an upper middle-income country (UMIC), in eighth place. This provides evidence that a country’s economic status should not be an inhibiter for progress on gender. Figure 3: World Economic Forum gender gap indicators Source: World Economic Forum[23] South African gender-equality policy South Africa subscribes to the above WEF global policies, and as such has created local policies to support implementation and achievement of the policy goals. South Africa’s own constitution upholds the right to equality for all persons, irrespective of gender, race, religion or sexual orientation. This has created a human-rights-based legal system that is able to redress and act on gender inequality in the country. In 2020, the National Strategic Plan (NSP) on Gender-Based Violence and Femicide was launched. In the foreword by President Cyril Ramaphosa, it states that South Africa is one of the most dangerous places in the world to be as a woman.[24] This was further exacerbated by the Covid-19 pandemic, with both services for those affected by GBV curtailed by the lockdown restrictions and an increase in GBV incidents as a result of the ‘stay-in-place’ orders that kept women in unsafe homes.[25] The NSP mentions a long list of national policies that are all related to gender equality in some way[26]: National Development Plan (NDP) Vision 2030; National Gender Policy Framework; National Sexual Assault Policy (Department of Health); National Contraception Policy; Guidelines Within a Reproductive Health Framework Strategy (2001); White Paper on Population Policy 1998; A Comprehensive Primary Health Care Package for South Africa (2001); National Youth Policy; National Strategic Plan for HIV, STIs and TB for South Africa (2012-2016); White Paper on Social Welfare Services; Strategy for the Engagement of Men and Boys in Prevention of Gender-Based Violence (2009); Department of Social Development, Policy on Funding Non-Governmental Organisations for the Provision of Welfare and Community Development Services (2013); White Paper on Families in South Africa (2012); Social Development Guidelines on Services for Victims of Domestic Violence (2010); Guidelines on Services for Victims of Sexual Offences (2010); Integrated Social Crime Prevention Strategy (ISCPS): White Paper on Safety and Security (WPSS, 2016). Without going into each one, it is clear that gender has been top of South Africa’s agenda, and at the same time, progress has been undeniably slow. The sheer number of policies, now culminating in the 2020 NSP showcase South Africa’s ability to write excellent policy, while simultaneously being unable to implement or execute these policies effectively. Therefore, as we delve into the literature, we are mindful of the strong legal and policy environment in South Africa and how that might be leveraged to effect change – it is the ‘wicked problem’ South Africa has been struggling with for decades. South African Families In this section, we outline some of the major trends in the composition and functioning of South African families. The intention of this section is to orient the reader to how the nature of families has changed, providing some background to how gender norms are seeded within the family. At their best and with sufficient support, families can be adaptive, responding to changing needs and finding creative ways to best care for their members. Under enduring and prolonged conditions of hardship, and without sufficient support, the positive caregiving functions of families can be eroded, showing up care deficits in the form of malnourishment, violence, and entrenched inequalities. Families are also ideological spaces in which there is contestation and negotiation around gender and age hierarchies, roles and responsibilities, social and cultural norms and practices that inform ideas about marriage and procreation. Families are a primary means of socialising youth into what is ‘right’ and ‘acceptable’ - and for the purposes of this report, are a key site where gender-related norms are learned. Therefore, where families are the main providers of care, they should be the key target of gender-related interventions. Family composition In South Africa, families do not always live in the same household. The definition of families offered in the revised White Paper on Families is inclusive of multiple family forms and defines a family as: “a societal group that is related by blood (kinship); adoption; foster care; or the ties of marriage (civil, customary or religious), civil union or cohabitation; and goes beyond a particular physical residence”.[27] Families are not homogenous, nor are they necessarily ‘nuclear’. This is particularly true in South Africa, with its history of forced migration, which meant that families were spread across diverse geographical areas. The disruption of family life has been identified as the most enduring consequence of colonial and apartheid policies and strategies.[28] As such, movement to and from urban areas has continued post-apartheid, both for labour migration and job-seeking, with grandparents (mostly grandmothers) remaining important sources of childcare support for working-age adults. A third of South African households are extended beyond biological parents and their children (the so-called nuclear family) and might include aunts, uncles, cousins, in-laws and grandparents.[29] Table 1 shows the variety of household types in which children reside. Distinct racial patterns make clear the legacy of apartheid on family and household dynamics. Nuclear families are most common among White and Indian/Asian families. African and Coloured children are more likely to reside in extended households. Table 1: Household types with children[30] Source: Hall and Posel (2019) The role of labour migration in family composition Under apartheid legislation, access to White urban areas was restricted for Black South Africans who were instead removed to ‘reserves’ or apartheid ‘homelands’, which functioned as labour reservoirs for the White-ruled state. Apartheid laws limiting Black mobility and related flows of migrant workers and job-seekers, have contributed to a long history of separation between parents and their children, producing many severed and stretched households across South Africa.[31] Black men travelled from the country’s ‘homelands’ to work in urban areas and were mandated to leave their families behind.[32] These migrant men were not only wage labourers for a racist capitalist system; they were also often patriarchs and proprietors of rural homesteads, and involved, through remittances and trips home, in maintaining rural homes in partnership with wives and relatives.[33] Political turbulence and high rates of mobility affected women as well, with many moving between rural areas where pre-existing gender norms meant women were solely responsible for childrearing,[34] to urban areas in search of remittances, where laws prevented them from settling.[35] In the post-apartheid period, women-centred homes have been further entrenched.[36] This has put survival of households with children under threat, given that women-headed homes tend to be more impoverished (see Figure 5). Poverty and hardships are disproportionately spread across geographical areas: there are more female headed-households, who are most vulnerable to poverty, located in rural areas. Large-scale migration to urban areas in search of work has forced mothers to separate from their children. Grandmothers have become the primary caregivers for children remaining in rural areas.[37] These mothers were often employed (formally or informally) in domestic service, looking after other people’s homes and children.[38] This further cemented the perception of women as carers. Culture, tradition and changes in marriage trends and women-headed households In many south African cultures and customs, cultural norms and practices require the payment of ‘lobola’ (or a ‘bride price’) to get married.[39] The practice entails the giving of gifts (usually money or livestock) by the groom’s family to the parents of a bride-to-be.[40] Lobola has been thought of as a way to ensure patrilineal (fatherly) ties and allow formal recognition and provision of intergenerational care and support. It is worthwhile to mention that the concept of lobola has come under criticism.[41] Many scholars have questioned its relationship to gender-based violence because of its (incorrect) perception as an exchange of ‘ownership’ of a woman, from her family to her husband.[42] This misinterpretation of having ‘paid for’ ownership has led to men believing they may do as they please to that which they own.[43] Even more worrying is the normalisation of abuse during marriage by women themselves who believe it acceptable for a man to beat his wife if he has paid lobola.[44] The reality of South Africa’s unemployment rate, coupled with the financial implications of lobola (where it is more recently being commercialised resulting in higher associated costs)[45] has contributed to the sharp decline in marriage (Figure 4).[46] However, this trend is not entirely new, and as early as the late 1930s, marriage rates in urban Black communities had started to decline in South Africa.[47] Without the formal process of marriage and/or lobola, the responsibility for caregiving and providing for children often fall to women (who become de facto single parents). This has contributed to the high number of women-headed households (WHH) in South Africa.[48] Figure 4: Number of civil marriages by year 2011-2020[49] Source: Marriages and divorces (2020). Statistics South Africa The rate of WHH has been increasing since 1995.[50] WHH in South Africa have been shown to be more impoverished than maleheaded households (MHH),[51] with some statistics showing that WHH are up to 40% more impoverished than their male-headed counterparts.[52] This is related to two main factors: firstly WHH often have more dependents, requiring whatever income there is to go further (Figure 6).[53] MHH are in the majority for household sizes of one to six people, but if the household size is greater than six, it is more likely to be women-headed.[54] Secondly, in WHH, women tend to be the only source of income – creating an imbalance between income and expenditure. Figure 5: Household head by household size Source: Own analysis of StatsSA General Household Survey 2021 data As women have become more responsible for financial provision due to this decline in marriage and increased dependents, their entry into the labour force has begun to climb. Figure 7 shows how the decline in marriage rate from 2011 dovetails with the increasing share of women as a proportion of the labour force in South Africa and how, between 1995-2015, the number of employed women continued to rise.[55] Figure 6: Women’s employment in post-apartheid South Africa (total and as a share of total)[56] Source: Msomi (2019). “Distributional changes in the gender wage gap in the post-apartheid South African labour market” However, unemployment across genders remains unacceptably high in South Africa. Despite this, the unemployed have – until very recently – received almost no support, from the Government nor private schemes. Social grants as a major source of household income The final trend related to the composition and dynamics within families relates to the introduction and expansion of South Africa’s social grant system. Half of South African households depend primarily on their social grant-recipients.[57] Whether it be the older person’s grant (because women live longer) or child support grant (because of women’s caregiving responsibilities), women tend to be the primary grant beneficiaries.[58] The post-apartheid shift in household income, away from migrant remittances towards social grants, has translated into a shift in many South African homes, in which women – as recipients of child support grants and pensions[59] – are increasingly central to domestic economies.[60] In some households, grandmothers have replaced wage-earning men as economic lynchpins. These ‘granny-focal’ domestic arrangements are further necessitated by a frequently missing middle generation, some of whom have been lost to AIDS and others to the perpetual search for work in cities and neighbouring countries.[61] In South Africa, nearly 5% of homes are skipgeneration homes, where grandparents (and mostly grandmothers) care for grandchildren. The South African social grants system has supported women in their care for families but has further entrenched gendered norms that associate women with care.[62] While elderly women receiving the older person’s grant have some ‘bargaining power’,[63] there are also strong intergenerational tensions in families with young under or unemployed persons which keep these women, whether as mothers or grandmothers, in a subservient role.[64] In Bangladesh, an LMIC, studies conducted on farmworkers have shown that women with a higher education status or who brought in higher income had more decision-making power.[65] However, in South Africa, where the increased income is coming from grants rather than educational attainment or gainful employment, these same changes in decision-making power are not evident. In South Africa, women’s primary grant status coupled with advances in women’s socio-economic, political representation and educational status have not impacted entrenched gender norms or high rates of gender-based violence in ways one might have expected.[66] Part of this story, relates to the caregiver roles women have been thrust into, and that men in particular, have sought to maintain. This combination of declining marriage rates, rising unemployment and mass distribution of social grants, have meant that men are increasingly peripheral to the South African family.[67] Women as caregivers and care receivers In this section, we unpack women’s caregiving roles in families. The systemic undervaluing of caregiving (whether paid or unpaid) is a global phenomenon, and the impact is seen in employment opportunities and associated pay. The position of women as caregivers who do the physical labour of caring – including washing, dressing, lifting, carrying, feeding – and the emotional labour of caring about and taking care of others, has commanded the most attention.[68] The road to becoming a caregiver within the family often starts in girlhood, where girls are more likely to be asked to assist their mothers or female relatives with household tasks, even if that requires missing or dropping out of school.[69] Unpaid care work and its relationship to gainful employment Unpaid care work refers to all unpaid services provided within a household for its members, including care of persons, housework, and voluntary community work.[70] These activities are considered work, because theoretically one could pay a third person to perform them. Care work (whether paid or unpaid) has been shown to improve wellbeing and contribute to economic growth in a country.[71] The answer is not to rid the world of unpaid care work but rather to democratise responsibility for it; unpaid work plays an instrumental role in family wellbeing and social and economic development.[72] It is sometimes termed ‘social reproduction’ because this care has such a profound impact on emotional, psychosocial and cognitive development of the population.[73] Globally, research has shown that women are responsible for 2-10 times more unpaid care work than men. [74] This has been given as a primary driver for women’s suboptimal access to, and participation in, the labour force.[75] It is most often referred to as the ‘care economy’, but some also refer to it as the ‘core economy’ or the ‘reproductive economy’. Whichever name, the purpose is to illustrate that whether this work is unpaid or not, it is still work.[76] Despite this unpaid care work burden, there have been significant gains in growing women’s education and labour participation since the early 1990s. But, women continue to fare worse than men in the South African labour market. Figure 7 shows the employment absorption rate by gender, which represents the number of people employed divided by the total population. It is a good measure because it shows movement in the labour market adjusted for population growth. Female employment absorption is consistently 10% lower than male employment absorption. Not only this, but in periods of negative economic shocks, females are more likely to lose jobs than males. Female employment decreased 14.7% in Wave 1 (April-June 2020) of Covid-19 compared to a 12.7% decrease for males.[77] Figure 7: Employment absorption by gender Source: Own analysis of StatsSA QLFS data 2017 Q1-2022 Q2 This can be partially explained by maternity, domestic, and childcare responsibilities (i.e. unpaid care work) forcing women to opt out of the workforce. For example, several American studies showed that there was an inverse relationship between the care economy and labour workforce participation for women (i.e. if women were performing unpaid care work, they were less likely to be in the paid economy), but this did not hold true for men. Looking at the South African case, we see in Figure 8 that labour force participation decreases as the number of children in the household increases. It also shows the disproportionate burden of childcare carried by women compared to men. Figure 8: Labour force participation rate by sex and presence of children 2022[78] Source: Statistics South Africa (2022) This effect is despite women being more educationally qualified than men. In the second quarter of 2022, 13.2% of women had tertiary qualifications compared to 11.2% of men, and 46.7% had completed secondary education compared to 43.5%.[79] Yet despite being more qualified, women fare worse than men in the labour market as shown by the persistent gaps in absorption rate between genders even when accounting for education status (Figure 9). Figure 9: Employment absorption by gender and education status Source: Own analysis of StatsSA QLFS data 2017 Q1-2022 Q2 While these effects are certainly present, even for women who opt into the workforce and are actively seeking work, women experience worse employment outcomes than men with the same qualification.[80] This is evidenced in Figure 10 where the rate of unemployment by gender and education status on a quarterly basis is more pronounced in women, showing the precarity of the work women are more likely to be employed in. Figure 10: Unemployment rate by gender and education status Source: Own analysis of StatsSA QLFS data 2017 Q1-2022 Q2 The type of paid work performed by women Women are not only less likely to be employed than men, they are also concentrated in low-skilled and less secure positions.[81] Drawing on 2012-2019 data, South African research suggests that women earn between 18% and 23% less than men, controlling for key explanatory factors such as age, experience, province, occupation, education level, degree of employment formality, type of contract and employer type, and accounting for maternity leave.[82] The gender pay gap is estimated to have widened from 29% before March 2020 to 43% in June 2020. [83] This gap is largely constant across incomes but widened substantially for quintiles one and two during the early months of the pandemic. This could potentially be explained by the higher burden of childcare for women, resulting in fewer working hours than for men. Gender norms link ideas of womanhood to caregiving and hence, women are disproportionately represented in caring professions in the labour market, which continue to be poorly paid. This is exacerbated by the concentration of women in informal, precarious labour, that often demands limited formal qualifications and, as such, presents limited opportunity for social and economic mobility. Women are only overrepresented in two industries: private households, and community social and personal services (Figure 11).[84] On the other hand, men are overrepresented in occupations such as mining, transport, and construction that often require extensive periods of absence from family life. Figure 11: Gender representations by industry Source: Own analysis of StatsSA General Household Survey 2021 data One of the more researched areas is on domestic workers, who often perform more than just cleaning roles. They are surrogate parents and carers to unwell children or adults in the home. The fairly recent shift has been to talk about decent work and a living wage, recognising that this work done by domestic workers supports the broader economy in a range of direct and indirect ways.[85] By remunerating this work better, it also supports the acknowledgement of the unpaid care economy as valuable and economically important. As seen in Figure 12, female domestic workers account for almost one million jobs and approximately one in seven employed women is a domestic worker.[86] Figure 12: Female domestic workers in South Africa Source: Own analysis of StatsSA QLFS data 2017 Q1-2022 Q2 The mental, physical, and emotional toll of unpaid care work amid paid work In discussions of the unequal, gendered distribution of caregiving, the additional burdens and occupational stresses endured by women is often emphasised.[87] The disproportionate expectation placed on women to conduct unpaid care work has been shown to have a negative impact on mental health and quality of life, evidenced through measuring cortisol (the primary stress hormone) levels.[88] The socioeconomic position of carers has warranted particular attention, with numerous authors citing the compounding pressures falling on poor women, who are often not only caregivers in their own homes, but in the homes of others too.[89] Research has shown that women suffer emotional, physical and financial burdens as a consequence of caregiving. Carers endure stress and stigma, poor health, a crippling lack of support, and desperate poverty. Gender norms are inherent to the reason women are unable to access the labour market; it is women’s caring labour that goes unpaid and unrecognised that hinders women’s economic participation.[90] Termed ‘the second shift’ (and more recently ‘the third shift’) women’s unpaid care labour is performed in addition to their paid labour, often taking place outside employment hours on week days and weekends.[91] The care work itself, and the expectation that this will be fulfilled by women, prevents them from working as long hours, or taking full-time roles, often in such a way that supports men to do exactly that which illustrates that unpaid care work is critical to family flourishing.[92] Because the caregiving burden is large, to achieve gender justice it must be shared. However, the paid labour market often rewards those who negate their caregiving responsibilities, hindering equal distribution.[93] The Covid-19 pandemic has offered an opportunity to again bring to the light the disparities in expectations. Research shows that it was women who bore the brunt of childcare and job losses, during the lockdowns.[94] Despite faring worse in the labour market, women were less likely than men to benefit from the Covid-19 Social Relief of Distress (SRD) grant or the Temporary Employee Relief Scheme (TERS), designed as a safety net for unemployed and furloughed workers.[95] Far more women than men in the NIDSCRAM surveys cited childcare responsibilities as a barrier to participating in the labour market.[96] There is urgent pressure from global bodies such as the United Nations for immediate action to prevent the fall-out from unequal caregiving responsibilities from becoming embedded, ‘post-pandemic’.[97] A common solution presented to the issue of invisible care work is for this work to be made visible in a way that shows the direct link between unpaid care work and a growing economy.[98] However, there are no countries in the world where this has been implemented, highlighting both the difficulties of measuring and quantifying this labour, but also the degree to which care and the labour it entails is part and parcel of human flourishing. Men as caregivers and care receivers In this section, we unpack disputes around men’s caregiving roles in families and employment. Can men care? We also discuss the way an undermining of care affects men’s work opportunities, gender stereotypes and family-life. Gender is relational, and care is relational, meaning that women’s strong association with caring is inversely related to men’s association with care. In times of crisis, for example during the HIV/Aids epidemic and Covid-19 pandemic, men’s relationship to caregiving and care receiving changed. Men’s willingness to engage in care work could be parcelled with broader movements to increase the value and visibility of care that could in turn, potentially improve the status of women and feminised care work. However, there must be a simultaneous willingness to address the link between gender and care so that binary positions are not merely repackaged, as the ‘glass escalator’ for men and ‘glass ceiling’ for women examples illustrate poignantly below and in Figure 13. Men’s employment in the care sector The gendering of care work means that where men do participate in paid care work, they are more likely to do higher-order care; the work of ‘caring about’ and ‘taking care of’, as opposed to caregiving and care receiving (see Figure 1).[99] This more abstract talking about and planning for care is associated with men as a socially determined rather than biologically determined construction of masculinity that aligns to gendered notions of power, strength, and male breadwinning status.[100] Few men work in the care professions as nurses, counsellors and therapists, nannies, or social workers, where women are overrepresented (Figure 11). However, the international literature shows that in cases where they do, they earn more than women, and are often promoted at a faster pace and placed more frequently in senior and managerial roles - a phenomenon known as the ‘glass escalator’ .[101] Figure 13 presents this phenomenon graphically showing the upward job mobility of men in industries and roles traditionally dominated by women. In theory, increasing the number of men in industries and professions traditionally dominated by women should be a tool to reduce inequality. However, when men enter these fields, they are often promoted significantly faster than women. Rather than reducing gender inequality, it increases it.[102] This is because the structural inequalities that favour men are merely reproduced and not transformed through men’s role in caring professions. Thus, while women are understood to reach a ‘glass ceiling’ that prevents their upward job mobility, where the opposite phenomenon is associated with men’s employment in fields traditionally dominated by women, it is the unequal basis of the gender order that promotes men at a faster rate than women. Masculine identities or the norms associated with what it means to be a man are at stake when men participate in feminised work, so despite their structural advantage, few men enter these professions.[103] Figure 13: Infographic of the ‘glass escalator’ in men’s occupation of female caring jobs Information Source: Hultin, Mia. “Some take the glass escalator, some hit the glass ceiling? Career consequences of occupational sex segregation.” Work and occupations 30.1 (2003): 30-61 Source: Own representation based on Hultin (2003) Loss of ‘breadwinner’ status Earlier, we described a new domestic terrain in South Africa: the role of adult men in domestic life has declined and marriage has rapidly disintegrated. Under apartheid migrant labour, absent men were still able to appropriate women-headed households under their name through the circulation of bride wealth.[104] The more recent decline of wage labour has meant that many men can no longer afford bride price, nor can they contribute wages to build the family homestead. As a result, many men no longer have access to the means they had historically, to be incorporated into such kinship arrangements. Figure 14: Unemployment rate by sex[105] Source: Statistics South Africa (2012) As shown in Figure 14, in the period from the first quarter of 2008 to the first quarter of 2012, female unemployment rates were, on average, 24% higher than male unemployment rates. However, in the period starting 2017 Q1 and ending 2022 Q2, female unemployment rates were 13.5% higher than male on average (own analysis, based on StatsSA QLFS 2017 Q1-2022 Q2). Over the same comparison period, male unemployment rates increased from, on average, 22% to 28%. Overall, this means that the shape of unemployment has changed and the gender gap in unemployment is narrowing, with more men unemployed now than in the past. Where men’s contribution to care is through the provision of wage labour, then we can deduce a renegotiation of breadwinner status. The erosion of this status has important socio-economic and political consequences, and could potentially allow for renegotiation of male gender norms. Figure 15: SASOF 2021 survey participants’ perceptions of fatherhood and employment[106] Source: State of South African Fathers Report (2021: 113) Figure 15 shows ambivalence amongst the 1377 survey respondents regarding the idea that you need to be employed to be a good father. 55% neither agreed nor disagreed or somewhat agreed and somewhat disagreed, suggesting that gendered norms might be changing given the reality of low employment chances. Persistent and deepening unemployment since democracy, combined with an absence of social security for the jobless, has further eroded possibilities for the archetypal male breadwinner. While democracy has legally and politically incorporated Black South Africans into the economy, jobs have become scarcer. Plummeting employment opportunities, particularly in the industrial economy, have made it increasingly difficult for men to fulfil their gender-normative role of ‘breadwinner’, one such manifestation being the ability to pay lobola.[107] Male-headed households, social grants and extended family forms Constructions of masculinity mean that men are seldom associated with the hands-on caring work of caregivers, and because of the associations of powerlessness with care receivers, they are also seldom the receivers of care, either in the form of social grants or as healthcare recipients. [108] Male-headed households make up 54% of the total households as compared to 46% in WHH. If you control for income, using the proxy of whether someone in those households is receiving any kind of social grant from the Government, the picture shifts (Figure 16). Households where no social grants are received were predominantly MHH (74%), whereas 56% of the households where at least one social grant is received, are WHH.[109] Figure 16: Household heads by income proxy Source: Own analysis of StatsSA General Household Survey 2021 data The trend of women being primary recipients of social grants shifted during the Covid-19 pandemic. Income support in the form of both the Social Relief of Distress Grant (SRDG) and the Unemployment Insurance Fund - Temporary Employer/Employee Relief Scheme (UIF-TERS) went primarily to men.[110] The SRD Grant was implemented in response to the loss of jobs and income for millions of South Africans during lockdown. To be eligible, one needed to be unemployed and not in receipt of other social grants. This meant that women (who are the principal receivers of the child support grant (CSG) on behalf of their children) were denied this type of state support.[111] Entrenched gender norms further penalise women for their role in direct care through government provision of the CSG as a grant for children that is only meant to be administered by the grant recipient. Thus, it makes invisible caregivers’ needs, and the work it takes to do care for young children by making zero provisions for the caregiver themselves. Hence during Covid-19 women were triply denied available forms of support because women’s receipt of this grant on behalf of their children made them ineligible to receive the covid relief grants. On top of which, because women sustained the greatest job losses during covid, this unequal pattern reinforced the gender-differentiated effects of the pandemic and increased overall gender inequality in South Africa.[112] A rapid assessment of the Covid-19 SRD Grant found that almost all male survey respondents used the grant to purchase food, which was unsurprising given that many households ran out of food. 53% stated that whatever was bought went toward household consumption.[113] This alerts us to the fact that men can and do perform caregiving roles in households. However, given that 39% of men were not living with children during Covid-19, the potential reach of this grant was limited by men’s primary receipt of it.[114] Studies of caregiving and care receiving in the context of HIV/Aids in South Africa have critiqued the sexgender binary by foregrounding the “relationality of care and the inevitability and value of human interdependencies”.[115] These studies have shown that in the face of immense needs for care within communities, family boundaries and parenting practices were redrawn, as seen in the phenomenon of child-headed households, and grandmother-headed households.[116] Furthermore, studies found that voluntary caregiving was performed by men, who understood and explained their caregiving practices as mothering.[117] This idea was upheld by caregivers without biological ties to the care receivers.[118] This is significant given the importance of and reliance on informal means of community-based caregiving in meeting the caring burden generated by HIV/Aids.[119] Gender fluidity encourages the adoption of more permissible and flexible caring arrangements. Overall, complex arrangements of gender and care require that we pay careful attention to the gendered norms and behaviours that are determining who cares for whom, in what ways, and the resultant economies of care. As important are those social determinants of care, which challenge and destabilise gender associations, especially in the case of gender nonbinary, trans and queer folks. Additionally, as shown in the section above, healthcare crises may force a reappraising of gendered norms and caring roles, but whether long-term positive shifts in men’s relationships elevate the status of care, is yet to be shown. Perceptions of gender and gender-based violence Gender-based violence (GBV) is rooted in patriarchal power imbalances and carried out with the intention to humiliate and make a person or group of people feel inferior and/or subordinate because of their gender.[120] Normative role expectations associated with each gender, as well as the unequal power relationships between genders, mean that gender inequalities underlie GBV. [121] Also, because GBV intersects with norms governing sexuality, other marginalised populations such as sex workers, gender minorities and queer communities are also targets of GBV. “GBV cannot be attributed to a single factor, but an interplay of … gender inequalities between men and women, social constructions of hegemonic masculinities, social perceptions of what it means to be a man, normalisation of violence, and cultural practices”. Centre for the Study of Violence and Reconciliation CSVR (2016: 2) This type of violence, which is influenced by social structures, cultural practices and the norms and values that govern society, mean that local inflections of this global phenomena give rise to situated forms of GBV.[122] In South Africa, for example, ongoing legacies of racism, dispossession, and enduring structural and interpersonal violence, have resulted in rates of femicide (which is the intentional murder of women because they are women) being five times higher than the global average. [123] The various forms of GBV most often noted in South Africa include: femicide, domestic violence, sexual violence, physical violence, emotional violence, and economic violence.[124] Examples of this violence include human trafficking, mutilation, rape, forced or child marriages, and even accepted customary practices like the bride abduction practice of ukuthwala,[125] and medicalised forms of obstetric violence during labour and delivery.[126] Violence against women occurs in critical sexual and reproductive healthcare services, and includes psychological dimensions of violence, for example the threat of violence, reproductive coercion and the denial of freedom and autonomy.[127] This means that GBV is not only rooted in gender inequality, but is also a driver of gender inequality as it targets women (and minorities) because they are women (and minorities). Not only does GBV have negative health effects, but even the institutions women approach for sexual and reproductive healthcare are implicated in its continuation. More than a third of women and girls experience intimate-partner physical or sexual violence in their lifetime.[128] It is often in their homes, and within their families. This is in stark contrast to the situation for men, who in general, are more likely to be attacked by a stranger or acquaintance.[129] GBV poses an enormous obstacle to the eradication of all forms of discrimination against women and girls and gender non-conforming persons. GBV undermines the health, dignity, security, and wellbeing of its victims, and is perpetuated within a culture of silence and denial. Less than 10% of rape cases opened in South Africa land in a guilty verdict (Figure 14). This is not due to untruthful accusations, but rather as a result of the severely underperforming police sector and how gender norms imbued the policing sector.[130] Figure 17: Attrition of rape cases in South Africa[131] Source: RAPSSA study, National Strategic Plan on gender-based violence & femicide (2020) The road to a more gender-equal South Africa Families are recognised by human rights agencies and watchdogs as key partners in realising the sustainable development goals.[132] The family is the primary level of socialisation where children learn the norms and standards of society. As such they are key to ensuring and promoting human rights, equality and dignity. “… the stability and cohesiveness of communities and societies largely rest on the strength of the family … the very achievement of development goals depends on how well families are empowered to contribute to the achievement of those goals. Thus, policies focusing on improving the wellbeing of families are certain to benefit development.” Richardson (2018: 5) In a recent publication, Cecile Jackson (2014) explores the feminisation of kinship under modernity.[133] She emphasises that one should not assume that gender equality is a linear binary and that each move shifts a country or policy to either a more or less gender-equal pole. Instead, she implores people to understand that gender roles and norms are constantly reformed and reconfigured, over generations, and are influenced by who holds power in these generational moments.[134] So it is important to consider power in its societal and individual manifestation when reviewing progress towards gender equality. In Figure 18 below, we list some key pragmatic recommendations that the findings in this report support. Please note the following: Recommendations in red focus on the sections on men and women as caregivers and care receivers. Recommendations in dark red focus on the interrelatedness of care and gender where care is an axis of gender inequality. Recommendations in grey focus on government and community interventions to decrease gender inequality and violence against women and children. Recommendations in light grey focus on overarching, systemic approaches to dismantling gender inequality. There are many other recommendations cited in South Africa’s National Strategic Plan (NSP) on Gender-Based Violence & Femicide. Figure 18: Recommendations arising from this research report We recognise that recommendations are often insufficient unless they are paired with real-life examples of how to implement these on the ground. As such, we offer suggestions for how to fulfil these recommendations according to the colour coded key provided above. 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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 © 2023 Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8010 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 its Board or Council members. June 2023 Author: Ilze-Marie le Roux Editor: Daryl Swanepoel Content Chapter 1: Introduction Chapter 2: Literature Review Introduction Electricity Usage Global EV Market vs South African Market Government Support SA’s Barriers to EV Uptake Climate Mitigation Foregoing the Valuable Fuel Levy SA’s Automotive Sector Conclusion Chapter 3: Methodology Introduction Source of Data Analysis Limitations Similar Forecasts Calculations and Results Eskom’s Conundrum Conclusion Chapter 4: Conclusion References List of tables Table 1: Charging Times of Different EVs Table 2: Region/Country EV target Table 3: Manufacturer EV target Table 4: EV Prices in South Africa Table 5: Eskom data List of figures Figure 1: Global sales and sales market share of electric cars, 2010-2021 Figure 2: EV Sales: SA vs China vs World Figure 3: EV Sales: SA vs Chile Figure 4: Sales of Battery Electric Vehicles Figure 8: Technology Cost Trends for Lithium-ion batteries Figure 9: Change in average price of new US electric vehicles and lithium-ion batteries since 2012 Figure 10: Effect of EV Charging on the National Grid in a 24-hour period Figure 11: Effect of all EV Charging during afternoon peak hour on the National Grid in a 24-hour period Figure 12: Effect of all EV Charging during off-peak hours on the National Grid in a 24-hour period Chapter 1: Introduction Since the arrival of the first combustion engine in South Africa in 1897, it has dictated the development of the country’s landscape: city planning, infrastructure locations and employment creation. Today, nearly 13 million vehicles are registered to operate on South Africa’s roads (Natis, 2022). This roughly equates to one vehicle for every five citizens. Moreover, the local automotive industry provides direct employment to 110 000 workers and supports an estimated 1,5 million indirect jobs, while contributing 6,4% to the country’s GDP (Del, 2019). Industry exports, mainly to Europe, totaled R175 billion in 2020. Now, the latest vehicle revolution is taking shape: electric vehicles (AIEC, 2021). There has been a global trend for greener sources, which has led to the rapid expansion in global usage of electric vehicles. The global electric passenger car stock boomed between 2015 and 2021 (IEA, 2021). In a move that could further bump electric vehicle (EV) sales, the European Union has tabled a proposal to ban the sale of new combustion engines by 2035 (Abnett, 2022). This holds significance for South Africa, as the European bloc receives most of the country’s vehicle exports. The National Association of Automobile Manufacturers of South Africa (Naamsa) has already expressed their concerns that other countries, like Egypt and Morocco, are gearing up to grab the country’s export market while government is dragging their feet in developing supportive EV policies (Barron, 2022). Worldwide governments are incentivizing consumers to purchase electric vehicles as they sprint to adhere to climate commitments. This, undoubtedly, will drive further expansion of the market in future, with some expecting that electric vehicles will account for 70% of all vehicle sales by 2040. South Africa lags far behind the global market trend. The slow growth has been attributed to, among others, high import duties – and therefore prices – lack of trust in electricity supply and inadequate infrastructure (GC, 2022). However, the market is set for an upswing. More and more vehicle manufacturers are announcing an end to combustion engine vehicles in their ranges, which will eventually leave consumers with little choice but to acquire an electric vehicle. Given the prominence of vehicles and the accompanying sector for South Africa, it is imperative for authorities, industry bodies and policymakers to ensure the country is fully prepared for the impending change. This includes ensuring sufficient electricity generation to support an electric vehicle market in South Africa. Chapter 2: Literature Review Introduction Countries worldwide are racing to combat climate change or at least slow down its effects. Strategies to limit carbon emissions are being implemented to limit the temperature increase to below two degrees Celsius, with 1,5 degrees Celsius as the ideal target (UN, 2015). Road transport contributes around 23% of all carbon emissions. An uptick in electric mobility, which includes electric vehicles, is therefore among the strategies being implemented. According to the International Energy Agency’s report, released in 2015, at least 20% of global road transportation must be electrically driven by 2030 to reach the world’s climate targets. This translates to 35% of all new vehicle sales in 2030 to be EV (UN, 2015). In 2020, a report by Climate Action Tracker, however, projects that to reach the 1,5 degrees target, fully electric vehicles will need to account for 75-95% of global annual passenger vehicle sales by 2030 and 100% by 2035 (CAT, 2020). Both reports set ambitious targets for the rapidly expanding EV market. Some experts have warned that EV adoption is currently not happening at a fast enough rate to meet these targets (Skibell, 2021; Econ, 2022). At the current adoption rate, the International Energy Agency (IEA) expects EV to represent only 30% of all new vehicles sold, which is well below the required target (IEA, 2022a). Electricity Usage Determining whether South Africa’s state-owned energy supplier, Eskom, is up to the task to support the impending market, we have to note the amount of charging EVs require. An electric source is needed to charge an EV battery. Standard home plugs are one option. This, however, provides Alternating Current (AC), while a battery requires Direct Current (DC) to charge (EVch, 2022). EVs are fitted with an internal switch that converts the current from AC to DC. A charging station can also be installed where the converter is located inside the charger, so the current is switched to DC before it enters the EV. These are also known as ‘superchargers’, as it cuts down significantly on charging time. There are currently three levels of chargers (EVch, 2022): Level 1 The charger can be plugged into a standard domestic socket and supply up to 3,7 kW of AC power. Although simple to use, it’s the slowest method of charging an EV. Level 2 A charger specially installed into an electric circuit by an electrician which can supply between an estimated 7 kW and 22 kW of AC power. This is the fastest source of at-home AC charging. Level 3 These superchargers can supply as much as 150 kW of DC power. They are mainly installed at charging facilities at public spaces, like malls. The time it takes to charge an EV from empty to full is dependent on the following aspects (Kia, 2022): Size of the battery: Charging takes longer for larger batteries Charging rate of the EV: There’s a cap on the amount of kW-rate an EV can accept. Charging Rate of Charger: The speed at which an EV can charge is also dependent on what type of charger is being used (Level 1, 2 or 3). Weather: Lower temperatures lead to longer charging times. PodPoint, an EV charging service, has compiled the charging times of different EVs from an empty to a full battery using one of the three levels of chargers. Charging Times of Different EVs *Not available in SA **Charging is measured up to 80%, as the charging time slows after reaching this point to protect the battery. Source: PodPoint, 2022 Global EV Market vs South African Market Since the launch of the first passenger electric vehicle in 2008, more than 10 million have since been sold (WRI, 2021). There has been an accelerated uptake of EVs from 2010, with a 43% growth in sales year-on-year between 2019 and 2020 alone (IEA, 2021). EVs now constitute 4,6% of all new global vehicle sales. Global sales and sales market share of electric cars, 2010-2021 Source: IEA, 2022 The EV market’s exponential growth is expected to continue as countries attempt to reach their individual targets. Europe, China and the USA have among the most aggressive EV targets, as they already enjoy the largest market share (IEA, 2021). Region/Country EV target Sources: Abnett, 2022; GSEP, 2021; UK, 2022; Wayland, 2021a In their attempt to align themselves with the abovementioned policy goals, vehicle manufacturers themselves have set some bold EV targets. Manufacturer EV target Sources: Wayland, 2021b; Fingas, 2021; Vol, 2021; BBC, 2021; Eisenstein, 2021 EV sales are expected to grow by between 24% and 29% over the next 10 years (Del, 2020; FBI, 2020). According to the 2020 Deloitte report, EV sales will reach 31,3 million by 2030 and constitute 32% of the total market share for new car sales. The EV market in South Africa is lagging far behind global trends. In 2021, two hundred and seventy-one EVs were sold in the country, of which 220 were PEV and 51 were HEV (IEA, 2022b). This is compared to 6,6 million EVs sold worldwide in the same year, with 3,3 million being sold in China alone (the biggest EV market worldwide) (IEA, 2022b). Source: IEA, 2022b Data represents combined sales of PEV and HEV. Even for a developing country and economy, South Africa is behind the EV curve. The developing Chile in South America has seen a steady increase in EV sales since 2013 (apart from a slowdown in 2020 due to the Covid-19 pandemic). In South Africa, EV sales went up by 697% between 2013 and 2021 (34 in 2013 to 217 in 2021). Compared to an 11 300% increase in Chile over the same period (5 in 2013 to 570 in 2021) (IEA, 2022b). Although sales in both countries pale in comparison to the markets in more developed countries, it is still indicative of the rapid rate at which EVs are expanding. Source: IEA, 2022b Data represents combined sales of PEV and HEV. Government Support The main reason for the rapid uptake in developed countries boils down to government support measures. Various governments have implemented one or a mix of interventions to boost support for EV growth as part of their strategies to meet their respective climate goals. Examples of these measures include: Zero Emission Vehicle (ZEV) Mandates Legislative requirements placed on vehicle manufacturers to reach a mandatory number of ZEV credits. These targets are met upon the delivery of a ZEV for sale. The number of ZEV credits varies between manufacturers based mainly on their respective total vehicles produced (ICC, 2019). The State of California, in the USA, has successfully implemented ZEV mandates since 1990. Although the program has been adapted many times over the years, with additional changes earmarked for the future, it seems to have at the very least contributed to California’s uptick in EV sales. In 2011, EV sales constituted 0,15% of all vehicle sales across the USA, reaching 2,1% in 2018. Over the same period, EV sales grew from 0,6% to 7,9% of all vehicle sales in the state. EVs therefore represent a much larger share of vehicles sold in California compared to the rest of the country (ICC, 2019). Sales of Battery Electric Vehicles Source: ICC, 2019 Other US states have adopted similar programs, as well as China and Canada. Purchase Incentives To promote the sale of EVs, some authorities have provided purchase incentives to EV customers, ranging from subsidies and tax savings to bureaucratic advantages. In Norway, EVs are exempt of import duties and value added tax. This in turn makes EVs more affordable, with prices on par with their combustion engine counterparts (Volk, 2022a). Norway is a leading EV market, with nearly every second vehicle registered in 2019 being electric. French authorities have placed a hefty surcharge on vehicles with the highest carbon dioxide emissions, with the aim to incentivize consumers to rather opt for an EV (Volk, 2022a). An ecobonus of up to €6 000 can also be claimed for purchasing an EV. In Germany, EVs are exempt from vehicle tax for up to 10 years while in the Netherlands, EV owners don’t have to pay registration taxes on pure electric cars (Volk, 2022a). In the US, a Federal Tax credit of US$7 500 is granted upon the purchase of an EV. Various studies have proven the direct positive result between fiscal incentives and the adoption of EVs (Alali et al, 2022). One European analysis states incentives may lead to a 5-7% relative sales share increase (Gnann et al, 2019). An American-focused study suggests an individual monetary incentive can lead to an average 2,6% increase in EV registrations per US$1 000 offered (Gopal, 2018). In 2020, governments spent US$14 billion on direct purchase incentives and tax deductions for electric cars – 25% more than the previous year (IEA, 2021). Other EV supportive initiatives Some cities have created zero-emission zones (ZEZ) allowing only EV (given they do not produce tailpipe pollutant emissions) to drive in the area and/or granting access to other vehicles at a prescribed fee. London, Rotterdam, Shenzhen and Oslo are among the metros with ZEZ (ICC, 2021). Other cities, like Dubai and London, opted for free parking spaces dedicated to EV drivers only (GoD, 2022). To appease consumers with charging-related concerns, policy-focus has been placed on developing charging infrastructure, which in some cases may even be provided free of charge. The EU has proposed legislation which, if adopted, would obligate new buildings and those undergoing renovations, to either install charging stations or provide the required infrastructure in parking spaces (Virta, 2022). Germany is on an ambitious drive to install one million charging stations across the country by 2030 (Volk, 2022b). Some countries have developed other measures, like charging station subsidies for companies and tax reductions on the electricity used to power commercial electric vehicle charging infrastructure (EVB, 2020). In the leading EV regions, mainly China, EU and the USA, a mixture of these measures in some format has contributed to the advancing market share of electric cars. SA’s Barriers to EV Uptake There may be various reasons for the slow pace of EV adoption in South Africa. In March 2022, then Transport Minister Fikile Mbalula pointed out that range anxiety (the fear that an EV won’t have sufficient electricity to complete the trip), a constrained power grid and EV’s high prices are the main reasons for the low EV numbers (BT, 2022a). Some of his assertions are corroborated by AutoTrader’s 2021 Electric Vehicle Buyers Survey report (AT, 2021). Respondents perceived the following to be the biggest drawbacks when owning an EV: Lack of National Charging Infrastructure (59%) Charging Time (57,8%) Initial Cost of Purchase (54,6%) Impact of Loadshedding (37,9%) Inconvenient Charging Options (34%) Range Anxiety (25,7%) Battery Life Deterioration (21,3%) Lack of Knowledge with Roadside Assistance Crews (9,6%) A Gauteng-focused study found the high price of an EV and battery to be the biggest constraints to EV market expansion in South Africa (Moeletsi, 2021a). Majority of the respondents in this study were not too phased by the range limits (although the author points out that this may be due to most travelling less than 100 km per day) or by a perceived lack of charging facilities. A study conducted in 2019 similarly found the high cost of an EV along with a concern about the inaccessibility of charging infrastructure among the top reasons why more electric cars aren’t being sold in South Africa (Manu, 2019). It further found a lack of public education on EVs as well as low levels of government support policies to also have had a significant role in the low uptake. The three common reasons cited in the literature for the low number of EVs on South African roads are the following: High Price tag of an EV relative to a combustion engine vehicle Real or Perceived lack of charging infrastructure Concerns about insufficient electricity supply 1. The High Price tag of an EV New Electric vehicles in South Africa continue to be on the high end of the price scale. EV Prices in South Africa *Not available in SA **Does not include import duties or any other South African taxes Sources: Tesla, 2022; Mini, 2022; Cars, 2022; BMW, 2022; Jag, 2022 Taking into consideration that the monthly earnings of a South African employee working in the formal non-agricultural sector amounts to R23 502 per month, it’s clear that at these prices the cars remain out of reach for most (Stats, 2022). Even the few available on the secondhand market retail at a relatively high price. A secondhand 2021 Mini Cooper SE sells for R688 000 and a used 2022 BMW iX3 Sport sells for R1 359 000 (AT, 2022). On average, the market price of an EV is more expensive than a comparable internal combustion engine vehicle (Moeletsi, 2021a). One report found a typical price differential between EVs and their respective ICE equivalent models to be 36% in high-income markets (Tips, 2022). The price difference is largely due to the high manufacturing cost of an EV battery pack. The technology costs for a lithium-ion battery (the battery technology used in most EVs), however, have declined significantly between 2015 and 2021 (IEA, 2022c). Technology Cost Trends for Lithium-ion batteries Source: IEA, 2022c Despite this decline, a report by the World Economic Forum found EV prices did not decline at the same rate (WEF, 2022). According to their data, the average cost of an EV battery declined by 80% between 2012 and 2021. Meanwhile, the average market price of an EV increased by more than 80%. The reason cited for this is the fact that EV manufacturers are developing luxury models before expanding into cheaper versions intended for the mass market. Change in average price of new US electric vehicles and lithium-ion batteries since 2012 Source: WEF, 2022 Global market forecasts before 2022 envisioned that the price of EVs would decline to such an extent that electric cars will be able to compete with the prices of their ICE counterparts in the near future (Del, 2020). While some expect the EV manufacturing costs to be cheaper than ICE vehicles before 2030, others found that EVs will only reach parity after 2030 (Partridge, 2021; Miller, 2020). In 2022, however, challenges linked to battery production may put a damper on these future EV predictions. Most EVs use Lithium-ion batteries, with Lithium as the main mineral component. The price of Lithium has reached record levels over the past year, with a 330% increase in August 2022 year-on-year (TE, 2022). The spike is largely due to a higher EV demand, mainly from China (Kurmelovs, 2022). Other factors include supply chain constraints due to the Covid-19 pandemic. The IEA estimates that the demand for Lithium will increase 900% by 2030 and 4 000% by 2040, as the various countries try and reach their climate policy goals (Blackmon, 2022). Locally, South Africa further pumps up the EV price by adding on a 25% Customs Excise Import duty as well as an Ad Valorem tax (calculated based on the EV price), which can range up to a maximum of 30% (GC, 2022). That’s compared to the 18% import duties paid on ICE vehicles coming into the country. A report commissioned by the Western Cape Government found the average Ad Valorem tax on the current EV products to work out at around 17%. Altogether, this then translates to an added average 42% in total taxes paid on an EV (GC, 2022). In its draft Green Paper 2021 on the advancement of new energy vehicles in South Africa, the Department of Trade, Industry and Competition (dtic) has suggested reducing or scrapping the Ad Valorem tax on EV to stimulate demand for EVs in the country (dtic, 2021). The Department proposed a standard rate per kWh using US$137/kWh as one example. The document further suggests lower- or zero-rated import duties on some specified EV components. Should these measures be implemented, it will only be valid for a specified number of years. The Green Paper is yet to be finalized. A study conducted by the Trade and Industrial Policy Strategies recommends a ‘temporary cash grant or innovative financial arrangement’ to stimulate demand. The data found R80 000 for PEVs and R20 000 for HEVs to be the most optimal amounts through which to reach this goal (Tips, 2022). The research further suggests complementary or extremely low interest loans to support EV uptake. Another proposed support measure is to introduce policies to assist in the development of locally produced EVs destined for both the local and export markets. A form of localization allowance credits, for example, can be used to support local manufacturers, which in turn can drive down EV prices on the South African market. The South African government has little fiscal room, as finances are constrained. Careful consideration will have to be given to where the funds will come from to support such an EV strategy. 2. Real or Perceived lack of charging infrastructure South African cities seem to be well serviced by charging infrastructure. According to the search tool, PlugShare, which assists users in locating public EV charging stations, there are currently 273 stations mapped across South Africa (PS, 2022). In its research, the IEA ranked the country as fourth globally when it comes to the ratio of public EV chargers to electric vehicles, at 6 EVs per public charging station (IEA, 2021). Most of the charging stations are located in major cities, with strategically placed stations along the N1 and N3 highways to connect Johannesburg with Cape Town and Durban. Other charging stations are provided by shopping malls, specific car dealerships or local municipalities. Charging stations outside city boundaries, however, are limited and motorists will struggle to keep their vehicles charged through publicly available infrastructure. The dtic’s draft Green Paper, recognizes a lack of charging infrastructure as a hurdle to the adoption of EVs in the country (dtic, 2021). It has called on the private sector to play a key role in such a development. If international trends are considered, which shows that the vast majority (80%) of EV owners charge their vehicles at home, then perhaps public charging spaces should not be the main focus of such an infrastructure rollout (Badik et al, 2017). 3. Concerns about insufficient electricity supply South Africans cannot be blamed for doubting Eskom’s ability to constantly provide sufficient electricity to meet EV charging requirements. Mismanagement and corruption have led to bouts of rolling blackouts sometimes leaving consumers without power for hours on end. The state-owned utility has struggled for more than a decade to keep its ageing coal fleet from total collapse, while the new built projects are delayed due to corrupt activities and shoddy construction. Meanwhile, South Africa’s renowned renewable energy program was also delayed, adding further pressure to the already constrained power grid. The Department of Mineral Resources and Energy (DMRE) released the latest Integrated Resources Plan in 2019 (DMRE, 2019). The document sets out the course for the country’s energy plans up until 2030, with cautionary scenarios provided for 2040 and 2050. According to these projections, Eskom should have installed a capacity of 44 GW in 2022 and projected capacity of 78 GW by 2030 and 120 GW by 2040. Although this may be South Africa’s best estimated roadmap, the document contains flaws and therefore these projections may vary from reality on the ground. The Medupi power plant is one such example. It is the fourth-largest coal-fired plant in the world and has an installed capacity of 4,8 GW (Eskom, 2022). It was scheduled to be fully operational by 2019. Various delays as well as an explosion at Unit 4 has left the plant unable to provide the total amount of electricity as anticipated in the IRP 2019 (Labuschagne, 2022). To address the crisis at hand, more renewable energy is being procured from private entities than initially planned (Omarjee, 2022). It is therefore expected that South Africa’s energy landscape may look vastly different than what is forecast in the IRP 2019. Climate Mitigation The drive for an increased EV-use compared to ICE vehicles stems from countries racing to meet their respective climate commitments to slow climate change. While the carbon emissions during manufacturing were addressed earlier in this paper, another related problem is the source of energy used to charge an EV. More than 90% of South Africa’s electricity is produced from coal (DoE, 2015). Should EV owners then largely rely on Eskom-supplied electricity to charge their vehicles, it would negate the reasons related to carbon emissions of owning an EV in the first place. A 2021 study found that charging from South Africa’s current electricity grid is more carbon intensive than driving a new ICE vehicle (Moeletsi et al, 2021b). Moeletsi et al further found that the carbon emissions mitigation impact of EV will increase from 2040 as the power grid becomes less reliant on fossil fuels and more decarbonized. EVs are projected to reduce baseline emissions of cars by 19% in 2050. Using embedded energy from solar plants to charge an EV could be an alternative to Eskom’s coal power. Charging stations powered by solar is already in use, like the one provided by the City of Cape Town (BT, 2020). Car dealer, Audi, is also now selling a solar home charging kit, along with full installation, to its e-tron electric vehicles customers (Du Toit, 2022). The installation of solar panels at home and small to medium businesses is also gaining in popularity as a way to mitigate against Eskom’s rolling power cuts. The regulations have been amended to ease this process further. Consumers now only require a license from the National Energy Regulator if they intend on generating more than 100 MW from their installed solar panels (Stoddard, 2022). This then also creates an alternative for home charging an EV, which, as opposed to using power from the grid, will assist in climate change mitigation. Foregoing the Valuable Fuel Levy South Africans pay both a general fuel levy (GFL) as well as a Road Accident Fund (RAF) levy per liter of fuel purchased. These serve as valuable income streams for the National Government. In December 2021, the GFL stood at R3,93 and the RAF levy at R2,18 per liter of petrol respectively (Stats, 2021). The GFL generated R80 billion in revenue in 2019/2020, accounting for about 6% of total tax revenue. The RAF levy generated R41,2 billion over the same period. This represents 99,8% of their total income and 93% of these funds were used to pay claims submitted to the Road Accident Fund. Thus, a decline in ICE vehicle sales due to an increased uptake of EVs will lead to a decline in tax income and RAF revenues. Other funding models will need to be developed to replenish the lost income. Some of the lost income may be offset by a balance of trade saving from reduced oil imports as the total ICE vehicles decline. A Green Cape report found that the introduction of one million EVs that drive 20 000km per year in South Africa, would collectively reduce oil importations by 58PJ/a (Petajoules per annum) (GC, 2022). This represents a potential R8,1 billion balance of trade saving for the economy. The savings from reduced oil imports is thus far less than the income generated by the fuel levy. It’s not a uniquely South African problem. Other countries face similar losses through their various tax structures. As motorists in the UK shift towards EV purchases, the government will lose out on the fuel duty and vehicle excise duty, which in 2019/2020 amounted to £37 billion and is equivalent to 1,7% of the UK’s GDP (UK, 2021). In the US, $36 billion was collected in federal fuel taxation in 2018 (Morris, 2020). This income will continue to decline as the EV market expands at the cost of ICE vehicles in that country. In his article, Morris argues that a global shift in car taxation is inevitable as the landscape continues to change at a rapid pace. In 2021, the South Australian government adopted legislation to tax EV owners 2,5 Australian cents per kilometer travelled, from July 2027. The law was passed while the Liberal Party was in power. The Labour Party has since taken over and the new government is attempting to repeal the measure (Sky, 2022). A report commissioned by the California legislature and released by the Institute of Transportation Studies at the University of California made a similar finding. It found a distance-based road user charge to be the most efficient way to recoup the funds lost on vehicle-related taxes that are not applicable to EV owners (Jenn, 2018). The South African government may consider a similar structure to supplement its income in the short to medium term as the country transitions and to ultimately replace the fuel levy in the long run. SA’s Automotive Sector South Africa’s vehicle and automotive component manufacturing is the largest manufacturing sector in the country (dtic, 2020). It accounted for 18,7% of manufacturing output in 2020. The sector contributes around 5% to the South African economy. Of all the vehicles locally manufactured, just over 60% is destined for the export market, with the European Union receiving the largest shipment. The EU alone receives three out of every four vehicles exported from South Africa. Any changes to the automotive legislation or policy by EU authorities therefore has a significant impact on South African operations. This was already evident in 2020. Due to stricter emissions legislation in the EU at the start of 2020, South Africa recorded record exports of automotive components due to the spike in demand for catalytic converters. (Catalytic converters fit into the exhaust system of a vehicle to reduce emission of gaseous pollutants (Milton, 1998).) Naamsa expects 40% of all European vehicle sales to be EVs by 2030 (BT, 2022b). If South Africa cannot meet their export vehicle requirements, the country could forego R201 billion in export earnings per year. Based on its draft Green Paper, government is aware of the implications of the changing automotive market, both locally and internationally. The document underscores the importance of a ‘just transition’ from manufacturing ICE vehicles to EVs. Among the proposals are the following: Transition the current ICE vehicle manufacturing infrastructure to incorporate EV production. Support local EV adoption, perhaps providing incentives for a specified period, expanding charging infrastructure and scrapping or reducing Ad Valorem on imported EVs. Increase international EV investment in South Africa to fund a transition to EVs. Stimulate local EV manufacturing from the required raw materials to possible battery production through EV supportive policies. Ensure the required skills development is being undertaken to support the transition. It is unclear what the status of the draft Green Paper is after it was released for public comment in 2021. The automotive industry is busy shaping up for the incoming EV future. Toyota invested R2,6 billion to develop the Corolla Cross – South Africa’s first locally produced HEV (Malinga, 2021). The vehicle has been available since 2021. According to an industry body’s sales report, the Corolla Cross has been doing well among South Africans, even outselling the local favorites, Polo Vivo and VW Polo (TA, 2022). The 2022 Green Cape report on EVs has found there is a lack of skills to drive EV development in South Africa (GC, 2022). It states the following insufficiencies relating to the EV value chain: Electrical engineering and mechatronics skills Regulatory compliance knowledge Advanced materials engineering Advanced ICT skills Research and development capabilities Robotics Vehicle maintenance and repair skills A few training programs have been launched to add the required EV skills. The Porsche Aftersales Vocational Education Training Centre, Retail Motor Industry Organisation, Automotive Remanufacturers’ Association and the Vehicle Testing Association are among those who have launched EV training programs (Malinga, 2022). Audi became the first Original Equipment Manufacturer in South Africa to train first responders on how to handle EV incidents (Audi, 2022). Utilizing a R30 million pledge by the UK government, the South African government launched the Yakh’iFuture. The program is aimed at upskilling engineering students to assist in the transition to new electric vehicle manufacturing in the country (BT, 2022b). Jobs at refineries and service stations will also be impacted by the shift to EVs (Tips, 2019). If service stations don’t pivot to support electric cars, thousands of jobs in the industry may be lost. These include petrol attendants, service kiosk workers and marketers. It again highlights the widespread impact that EVs will have throughout the value chain. Conclusion The changes brought about by EV expansion have many avenues. Manufacturing will have to adapt, future energy plans will be influenced by EV developments, the planning of cities and buildings will have to incorporate the technology at a rapid rate and eventually, EV charging may even influence how people structure their day. It is a technology tsunami that will wipe the automotive landscape as we know it, but with it comes a myriad of opportunities to boost jobs and the South African economy. Understanding the rapid EV development, how it operates, and the extensive influence thereof is also important for creating the context for the situation in which Eskom finds itself. Policies, together with technology and skills development, will impact both the local and international demand for EVs, which in turn holds significance for the country’s energy supply and demand. As South Africa’s main supplier of electricity, this will invariably affect Eskom’s future operations. Chapter 3: Methodology Introduction To establish whether South Africa’s current energy supplier will be able to generate sufficient electricity to support an EV market reliably, secondary quantitative data was used. The information was obtained from Eskom and includes both demand and supply scenarios for the three-year points: 2022, 2030 and 2040. Data on the EV’s future market penetration at three different levels (low, medium and high) was also supplied by Eskom (Eskom, 2019). The information was reworked by an electric vehicle and solar energy advisor to establish whether or not there will be enough electricity available to charge all the electric cars on South Africa’s roads in future. Source of Data The data was sourced from a 2019 Eskom presentation as well as the latest forecasts obtained from the utility in 2023 (the data provided is not publicly available yet) on the future of electric transportation in South Africa. The state-owned entity continues to generate the majority of the country’s electricity requirements. Eskom is therefore the best current source of information about future energy demand projections. It also has an in-house e-mobility research program and has been focusing on the development of the local EV market since the early 1990s. The electric vehicle and solar energy advisor used for this study was the Transport Energy Consultant at Eskom between 1992 and 2002, after which he continued exploring the e-mobility sector in South Africa through research and consulting work. Analysis The advisor provided data on the average amount of electricity required to sufficiently sustain an EV for one year of road travel. The data was then merged with Eskom’s projections on different EV market penetration levels at three-year points, to calculate the total energy demand stemming from EVs alone per year. These figures were then compared to Eskom’s future energy projections over the same period to establish whether sufficient supply will be available. Limitations Although Eskom may be best placed to provide details on South Africa’s energy needs and demands, there are limitations to their information. Seeing as the projections are for a long period into the future, slight changes in either the energy supply or demand side may have significant impacts on the results. These changes may include a different reality to the previous assumptions made by Eskom when calculating energy supply. This flaw is evident in the country’s Integrated Resources Plan 2019, where the forecasted electricity supply by the state-owned entity is yet to be realized as projected. This is largely due to faulty power generators and a delay in its renewable energy program. The economic growth assumptions the forecast is based on also never realized due to the Covid-19 pandemic and other factors. It also doesn’t consider how many EV owners may end up charging their EV using private renewable energy sources, whether at home, office, or a shopping mall (for example). The uptake of EVs may also evolve differently due to external factors. Some examples may include a rapidly increasing fuel price (as seen in 2022), which could prompt more motorists to buy EVs, expanding the market at a quicker rate than would have been otherwise anticipated. The implementation of government support policies to promote EV adoption could also spur market growth quicker than originally envisaged. On the opposite end, a continued economic slump may limit EV market growth. Despite these concerns, Eskom has been in existence for nearly 100 years. It is therefore the best possible source of information when it comes to South Africa’s electricity analysis. Similar Forecasts A study conducted by the American Government, examined similar forecasts to Eskom. Based on EV sales, future energy demand was modelled based on low, medium or high EV market penetration between 2020 and 2050 (USD, 2019). This was done to establish whether there will be sufficient electricity generation to support the increased demand brought by EV expansion. The document cites technological developments as one of the future uncertainties that could impact the end result of the study. Improved energy efficiency is one example. It further highlights the importance of off-peak charging as to not overpower the grid. The study therefore went further than Eskom’s data by providing different charging strategies. Another study about the impact of various projected levels of EV market penetrations on the electrical grid was conducted by the European Commission (EC, 2018). It considered the uptick in electricity demand by EV charging and whether sufficient electricity is expected to be generated to support the market. Like the US study, it too went further, taking the impact of the anticipated increase in demand per various charging strategies into account. The study recognizes that EV won’t just change the overall electricity demand, it may also change the shape of the hourly load curve of the power system. Calculations and Results The data provided by Eskom and the energy analyst have been assembled and calculated in the following Excel spreadsheet: Calculations Energy Potential Hours = Electricity (hrs/yr) x Projected Installed Capacity (GW) Total Energy Demand Hours = Electricity (hrs/yr) x Energy Demand (GW) Electricity need (GWh) = {[ average energy (kWh) required to travel 100km x average distance (km) travelled in one calendar year ] /100 } x (total registered EV/1000000) Percentage of Potential available electricity = Electricity need (GWh) / Energy Potential Hours Percentage of Demand = Electricity need (GWh) / Energy Demand Hours Findings Scenario 1 A Low EV market penetration in 2022 sees an energy demand of 0,44GW per year. This is equivalent to 0,0001% of the total energy potential and 0,0001% of total energy demand in 2022. The Projected Energy Demand for 2022 is 30GW, while the Projected Capacity is 44GW. Therefore, sufficient energy on average will be available to support the added EV demand in a low market penetration scenario. Scenario 2 A Medium EV market penetration in 2022 sees an energy demand of 1,324GW per year. This is equivalent to 0,0003% of the total energy potential and 0,0005% of total energy demand in 2022. The Projected Energy Demand for 2022 is 30GW, while the Projected Capacity is 44GW. Therefore, sufficient energy on average will be available to support the added EV demand in a medium market penetration scenario. Scenario 3 A High EV market penetration in 2022 sees an energy demand of 4,9GW per year. This is equivalent to 0,3% of the total energy potential and 0,002% of total energy demand in 2022. The Projected Energy Demand for 2022 is 30GW, while the Projected Capacity is 44GW. Therefore, sufficient energy on average will be available to support the added EV demand in a high market penetration scenario. Scenario 4 A Low EV market penetration in 2030 sees an energy demand of 325,94GW per year. This is equivalent to 0,048% of the total energy potential and 0,078% of total energy demand in 2030. The Projected Energy Demand for 2030 is 48GW, while the Projected Capacity is 78GW. Therefore, sufficient energy on average will be available to support the added EV demand in a low market penetration scenario. Scenario 5 A Medium EV market penetration in 2030 sees an energy demand of 371,3GW per year. This is equivalent to 0,054% of the total energy potential and 0,088% of total energy demand in 2030. The Projected Energy Demand for 2030 is 48GW, while the Projected Capacity is 78GW. Therefore, sufficient energy on average will be available to support the added EV demand in a medium market penetration scenario. Scenario 6 A High EV market penetration in 2030 sees an energy demand of 416,656GW per year. This is equivalent to 0,061% of the total energy potential and 0,099% of total energy demand in 2030. The Projected Energy Demand for 2030 is 48GW while the Projected Capacity is 78GW. Therefore, sufficient energy on average will be available to support the added EV demand in a high market penetration scenario. Scenario 7 A Low EV market penetration in 2040 sees an energy demand of 668,904GW per year. This is equivalent to 0,064% of the total energy potential and 0,141% of total energy demand in 2040. The Projected Energy Demand for 2040 is 54GW, while the Projected Capacity is 120GW. Therefore, sufficient energy on average will be available to support the added EV demand in a low market penetration scenario. Scenario 8 A Medium EV market penetration in 2040 sees an energy demand of 1971,624GW per year. This is equivalent to 0,188% of the total energy potential and 0,417% of total energy demand in 2040. The Projected Energy Demand for 2040 is 54GW, while the Projected Capacity is 120GW. Therefore, sufficient energy on average will be available to support the added EV demand in a medium market penetration scenario. Scenario 9 A High EV market penetration in 2040 sees an energy demand of 3274,344GW per year. This is equivalent to 0,311% of the total energy potential and 0,692% of total energy demand in 2040. The Projected Energy Demand for 2040 is 54GW, while the Projected Capacity is 120GW. Therefore, sufficient energy on average will be available to support the added EV demand in a high market penetration scenario. Eskom’s Conundrum The calculations are based on an increase in energy demand due to EV adoption spread evenly across the energy supply spectrum. Energy demand, however, is not a constant throughout a 24-hr period. Peak hours see a noticeable spike in demand. In its own research, Eskom raises its concerns about the impact of simultaneous EV charging during peak hours, as this may pose supply challenges. Concerns also exist about whether local infrastructure will be able to accommodate the influx of energy demand, especially during peak hours. The following Eskom graphs represent the electricity demand (MW) spread across a 24-hour period as indicated by the blue area. It assumes 3,2% of all registered passenger vehicles are EV (at 2019 passenger car figures) and the added demand, stemming from charging at different times throughout the day, is then added in red. In the first instance, the demand from EV charging is represented as being spread evenly throughout the day. Effect of EV Charging on the National Grid in a 24-hour period Source: Eskom, 2019 This, however, does not represent a realistic scenario. The second graph takes a look at the demand spike when all EV owners charge their vehicles during peak hour. This is considered a dangerous scenario, as it could easily overpower the infrastructure and out-demand supply at that current point in time. Effect of all EV Charging during afternoon peak hour on the National Grid in a 24-hour period Source: Eskom, 2019 To avoid this, EV drivers will have to be incentivized to charge at non-peak hours. As seen in both the European and US studies, an optimized charging strategy will have to be implemented to avoid demand outstripping supply during peak hours. The last graph is an indication of how little impact there would be on the grid should EV owners only charge during off-peak hours. Effect of all EV Charging during off-peak hours on the National Grid in a 24-hour period Source: Eskom, 2019 Conclusion In the scenarios explored, energy demand, including the added EV requirements, is spread evenly over the time period of a year. Based on the assumptions made by Eskom, the state-owned entity is expected to have sufficient energy-generating capacity to support a projected EV market over the next 20 years. There are, however, potential realistic factors that may derail Eskom’s support of South Africa’s EV market. The early establishment of an optimized charging strategy will be a key factor in avoiding a negative impact on the country’s electrical grid. A special thank you to EV and renewable energy expert, Carel Snyman, for his invaluable input and assistance in compiling the methodology. Chapter 4: Conclusion The global EV market is gaining traction at an accelerated pace. Unfortunately, South Africa is lagging the required development in the EV space (apart from some limited pockets of progress). The country currently does not have the skills or policy to ensure we limit fiscal and job losses that will accompany the incoming transformation from ICE to EV. At least, if current projections materialize, the state utility, Eskom will be able to provide sufficient electricity to support the added demand stemming from the uptake of EV by local consumers. Without meaningful change to the grid, however, increasing EV in South Africa will do little to mitigate against climate change in the short to medium term. The expansion of the Electric Vehicle market in South Africa will happen. It’s just unclear how long exactly it’s going to take to reach a significant level. What is certain is that the switch from ICE vehicles to EVs is happening at a much faster rate in developed countries, many of them being South Africa’s trading partners. This alone should incentivize government to actively drive EV expansion to avoid job, income and economic losses. It will further ensure the country can capitalize on EV opportunities, like battery development, while mitigating the possible damage brought about by the transition. Authorities will also have to work together with stakeholders in establishing a tax system that doesn’t kill EV adoption, while supporting the industry through a subsidy measure. Eskom is also changing, and chances are that South Africa’s energy landscape will look vastly different in 20 years’ time to what may be envisioned today. It’s understood that part of this change will be the incorporation of more green energy sources. More people are further expected to be capable of generating some solar power at home in future, which could decrease pressure on Eskom while providing cleaner charging. Electric Vehicles in South Africa is not a question of if, but when. It’s vital for the South African government, together with the private sector, to ensure every link in the EV chain is prepped for this tech take-over. 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Volvo plans to be fully electric by 2030 [Online] Available at: https://www.volvocars.com/intl/news/electrification/volvo-plans-to-be-fully-electric-by-2030/?navFromLatest=false [Accessed: 12 June 2022] Wayland, M., 2021a. Auto executives say more than half of U.S. car sales will be EVs by 2030, KPMG survey shows [Online] Available at: https://www.cnbc.com/2021/11/30/auto-executives-say-more-than-half-of-us-car-sales-will-be-evs-by-2030-kpmg-survey-shows.html [Accessed: 12 May 2022] Wayland, M., 2021b. Ford ups EV investments, targets 40% electric car sales by 2030 under latest turnaround plan [Online] Available at: https://www.cnbc.com/2021/05/26/ford-ups-ev-investments-targets-40percent-electric-car-sales-by-2030-under-latest-turnaround-plan.html [Accessed: 6 June 2022] World Economic Forum (WEF), 2022. Why electric cars are getting pricier even as batteries get cheaper [Online] Available at: https://www.weforum.org/agenda/2022/05/why-electric-cars-are-getting-pricier-even-as-batteries-get-cheaper/ [Accessed: 25 June 2022] World Resources Institute (WRI), 2021. Are We on the Brink of an Electric Vehicle Boom? Only with More Action [Online] Available at: https://www.wri.org/insights/what-projected-growth-electric-vehicles-adoption [Accessed: 13 May 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

A Report by the Global South Perspectives Network Contributing authors from the Inclusive Society Institute: Daryl Swanepoel & Dr Klaus Kotzé

Copyright © 2023 Inclusive Society Institute 50 Long Street Cape Town, 8001 South Africa Registration: 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without 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 August 2022 Author: Mariaan Webb, Creamer Media Writer Edited by: Daryl Swanepoel This report has been enabled through the generous support of ASLA Contents 1. Abbreviations & acronyms 2. Introduction 3. Market dynamics and trends 4. Mechanisms to support infrastructure investment 5. Challenges in infrastructure investment 5.1 Ineffective State institutions 5.2 Failure to implement programmes 5.3 SoE financial constraints 5.4 Budget underspending 5.5 Inappropriate SCM and procurement practices 5.6 Tardy tender processes 5.7 Delivery performance deficiencies 5.8 Construction mafia 6. Recommendations 6.1 Support rebuilding State capacity 6.2 Professionalise the public service 6.3 Elevate project leadership 6.4 Transform supply chain management 6.5 Reimagine procurement 6.6 Establish effective delivery management systems 6.7 Prioritise value for money 6.8 Delegate essential functions 6.9 Leverage the private sector 6.10 Boost construction confidence 6.11 Tackle the construction mafia 7. Conclusion 8. References 1. Abbreviations & acronyms GDP gross domestic product GFCF gross-fixed capital formation IRC Infrastructure Report Card ISI Inclusive Society Institute JSE Johannesburg Stock Exchange MFMA Municipal Finance Management Act MTEF medium-term expenditure framework NDP National Development Plan PFMA Public Finance Management Act PPP public-private partnership Sanral South African National Roads Agency Limited SCM supply chain management SoE State-owned enterprise 2. Introduction South African economic growth has languished in the aftermath of the 2008 global economic crisis, persisting in a state of fragility, owing to a combination of global and domestic factors. Globally, the past 15 years has seen long periods of low commodity prices and devastating shocks including the Covid pandemic and the war in Ukraine. Domestically, challenges such as chronic power shortages, a faltering transportation infrastructure, particularly within the freight logistics system, and alarmingly elevated crime rates, have collectively imposed substantial impediments to the investment necessary for sustainable economic growth. The construction industry ought to be a cornerstone upon which the foundation of the economy is laid. However, the current state of the sector in South Africa falls short of the vigour and vitality it has historically possessed. The contribution of industry – comprising mining, manufacturing and construction – to gross domestic product (GDP) has been declining steadily in the last three decades, from 31.2% in 1994 to 24.4% in 2022 (World Bank, 2023). The prolonged underperformance can be traced back to a range of factors, including subdued investment levels, diminished confidence, unsustainable undercutting on tender prices and a surge in organised crime activities (Treasury, 2023). As part of its economic research, the Inclusive Society Institute (ISI) has undertaken an extensive series of dialogues with various sectors of the economy, which reveal the need for attention to three areas to propel the nation towards economic prosperity. These areas are electricity; economic infrastructure; and the troubling issue of youth unemployment. Addressing these three components should act as a catalyst, setting in motion a chain reaction to rebuild the economy. Recognising the need for innovative solutions, the Institute is actively engaged in economic modelling to assess macroeconomic proposals for financing infrastructure development. South Africa’s current economic model falls short of delivering the quantum leap required to revitalise and upgrade infrastructure, especially in a country with a growing population, high unemployment and sluggish economic growth. The unemployment rate was recorded at 32.6% (narrow definition) in the second quarter of 2023, with 7.92-million people unemployed. According to an expanded definition of unemployment that includes those discouraged from seeking work, 42.1% of the labour force was jobless in April to June 2023. In a reflection of how the past decade’s anaemic growth has affected joblessness, nearly three-million more people have become unemployed since the second quarter of 2013 (Statistics South Africa, 2023a). Economic growth is hovering below 2%, a pace insufficient to make significant strides towards achieving economic objectives. Despite reaching a peak of R4.6-trillion in 2022, the economy has only managed 0.3% growth since the prepandemic figure of R4.58-trillion. This growth lags the 3.5% rise in the country’s population over the same period (Statistics South Africa, 2023b). According to Statistics South Africa, six industries are still struggling to regain their prepandemic production levels. Among them, the construction sector finds itself in the most dire situation, remaining 23.1% smaller than what it was before the pandemic. To compound its woes, the construction industry’s decline predates the onset of Covid-19. Indeed, 2022 marked the sixth consecutive year of economic contraction for the sector, rendering it a mere shadow of its former self (Statistics South Africa, 2023b). The persistent economic stagnation in South Africa is significantly exacerbated by infrastructural challenges, most notably within the beleaguered rail sector. Chronic underinvestment and mismanagement have contributed to a dramatic collapse in services. Statistics reveal the severity of the situation, with the volume of freight transported by rail plummeting by 31% since 2017. Inefficiencies stemming from these rail woes are estimated to have imposed a cost of R250-billion on the economy in 2022 alone. Passenger rail services have not been immune to the challenges plaguing the rail system. In 2015, there were about 500-million Metrorail passenger trips, a figure that had plummeted to a mere 8.56-million in 2021 (Swanepoel, 2023). The ISI’s research underscores a critical imperative: for South Africa’s economy to achieve meaningful progress, it must aspire to growth rates of at least 4% to 5%. The current status quo is untenable and simply relying solely on anti-corruption measures and basic reforms will not suffice to attain higher economic growth. The Institute is conducting dialogues with diverse sectors to glean insights and perspectives aimed at accelerating economic growth. During its recent summit with the construction industry, the ISI delved into the development requirements for both social and economic infrastructure, which are pivotal in reshaping the trajectory of the South African economy. Additionally, the summit explored strategies for positioning the construction industry optimally to meet the demands and deliver the urgency needed. 3. Market dynamics and trends The construction industry in South Africa has undergone a dramatic change in the past 15 years, transitioning from a powerhouse to a struggling industry. In the early 2000s, blue-chip construction companies were among the top performers on the Johannesburg Stock Exchange (JSE), raking in significant profits. However, the once-thriving sector has seen its fortunes decline sharply. Some companies have collapsed, while others exited the industry altogether. Basil Read and Group Five, once prominent names, have faced financial crises and eventually collapsed. Murray & Roberts shifted its focus away from construction and entered the oil and gas engineering services sector, while Aveng narrowly survived a financial crisis. Today, WBHO is the biggest construction company on the JSE. The sector’s downturn can be attributed in part to the government’s failure to deliver on promised infrastructure projects. WBHO says in its 2022 Annual Report that the rollout of the R800-billion infrastructure development plan announced in the 2021 Budget had gained little traction, particularly following the cancellation of major projects by the South African National Roads Agency Limited (Sanral) during that year. Sanral in May 2022 cancelled and ordered the retendering of construction projects worth R17.4-billion, owing to what it claimed was a material irregularity in the tender process. By November, four of the five tenders had been re-awarded, with tenders worth R6.65-billion going to joint ventures led by foreign contractors. Despite facing fiscal constraints, South Africa continues to increase the budget allocation for infrastructure every year in a bid to direct public spending towards productive capital investment. In the 2023 Budget, the Finance Minister detailed a R903-billion infrastructure plan for the medium term, of which R351-billion will be spent on transport and logistics infrastructure, including roads, and R133-billion on water infrastructure. High levels of capital investment, or gross fixed capital formation (GFCF), typically indicate a positive outlook for future economic growth, while low levels of investment can be seen as a sign of stagnation or declining confidence. Low levels of economic growth have dampened both public and private-sector fixed capital investment, including investments in the construction industry. Although GFCF recovered to 14% of GDP in 2022, from a low of 13% in 2021, investment remains well below the National Development Plan: Vision 2030 (NDP) target of 30% by 2030 (Masondo, 2023). Investment in infrastructure has a high output multiplier effect, or significant impact on the overall economy. The construction industry, in particular, has a strong ability to create additional economic output and jobs, especially for unskilled workers. Public and private sector capital investment as a share of GDP falls below NDP target Source: 2023 Budget Review Achieving the NDP objective hinges significantly on investments made by the public sector, including State-owned enterprises (SoEs). However, public sector spending has experienced a notable decline, plummeting from 7.3% of GDP in 2015, to a mere 5.4% of GDP in 2019 (Masondo, 2023). Beyond statistics, the gradual decline in GFCF, especially in public sector investments, has tangible repercussions. It is felt in a lack of investment in crucial areas, such as rail, ports, water infrastructure, sanitation, public transport, electricity and housing. This deficiency disrupts the synergy between public and private capital formation. An increase in public infrastructure raises the productivity of private capital, as public capital is a complement to private capital. Higher private capital increases the productivity of labour and leads to higher wages, which encourages more work and incentivise higher investment in private capital. ​ State of Public Infrastructure in South Africa: A Declining Trend The condition of public infrastructure in South Africa has seen significant decline over the years, as reported in the South African Institute of Civil Engineering’s (SAICE’s) Infrastructure Report Card (IRC). Sixteen years ago, the original IRC assessment graded the country’s infrastructure at a D+. Following heavy investments in new infrastructure for the 2010 FIFA World Cup, the grade improved to a C– in 2011. Subsequent years revealed a persistent neglect of maintenance, resulting in a decline to a D+ grade in 2017. In 2022, the IRC paints an even bleaker picture, awarding South Africa’s public infrastructure the lowest-ever grade recorded by SAICE, a D. In the current assessment, only three subsectors exhibit improvement, while a worrying 12 subsectors have witnessed deterioration. Of the 13 subsectors in which grades remained unchanged, ten were already at risk of failure or worse. When assessed collectively, it becomes evident that a significant portion of South Africa’s infrastructure is nearing a state of potential failure. While there are isolated instances of well-managed and excellent infrastructure, these have become the exception rather than the norm. The SAICE scorecard highlights that while economic infrastructure, with the exception of energy generation, generally maintains a satisfactory condition, social infrastructure presents a grim picture. The further degradation of social infrastructure, including access to basic services like water, sanitation, health, education, public transport and electricity underscores the challenges ordinary citizens face daily. Source: SAICE 2022 Infrastructure Report Card for South Africa The contraction in investment can be attributed to a range of factors, encompassing a general shortage of fiscal capacity within the government, underspending of allocated budgets for infrastructure projects, protracted delays in the awarding and completion of infrastructure contracts and the acute financial constraints confronting SoEs, such as power utility Eskom and freight logistics group Transnet. 4. Mechanisms to support infrastructure investment The statistics concerning gross-fixed capital formation (GCCF) present a sobering outlook for South Africa. Nevertheless, there are grounds for optimism regarding the potential resurgence of investment in the coming years. Deputy Finance Minister David Masondo has identified several mechanisms that could serve as catalysts for this revitalisation. Infrastructure Fund: With large-scale investment touted as the tried and tested way to boost economies in the short term, the Infrastructure Fund was created in 2019 to address the need for blended finance to enable the efficient execution of infrastructure programmes and projects in South Africa. Currently housed in the Development Bank of Southern Africa, the Infrastructure Fund’s aim is to transform public infrastructure through blended financing solutions by sourcing and blending capital from the private sector, institutional investors, development finance institutions and multilateral development banks. Pension investments: Regulation 28 of the Pension Fund Act has been amended to allow institutional fund managers to invest more in assets such as infrastructure. The aim of the amendment is to explicitly enable pension funds to invest in infrastructure such as roads, renewable energy and ports. To this extent, the amendments introduce a definition of infrastructure as an asset class and set a limit of 45% exposure in South African infrastructure investment. The setting of such a maximum limit was regarded as a more ‘market-friendly’ response to calls for the introduction of ‘prescribed asset requirements’, which would have set a minimum level for pension fund investment in infrastructure projects. Division of Revenue Amendments Act: Through the 2022 Division of Revenue Amendments Act, government has enabled provincial governments to pledge their infrastructure grants to leverage more financing to fast-track the rollout of infrastructure. Pledging effectively is a means by which a province secures a loan through borrowing with a view of using or issuing a guarantee, indemnity or security as the conditional grant for the repayment of that loan. The conditional grant or portion of the conditional grant for the current financial year’s allocation and future financial years’ indicative allocations for the province are committed towards the repayment of the loan taken. Public-private partnerships (PPPs): Following a slowdown of PPPs, government has initiated a review to consider lessons learned from the application of the current PPP framework over the past eight years. The review found that there are too many steps and multiple approval bottlenecks. A lack of capacity, especially at the municipal level, led to reduced uptake for PPP projects. PPP regulations also applied to all projects, regardless of size. At national level, an incongruency between budget cycle and the PPP planning time has been highlighted. Masondo has said that a uniform planning tool for all infrastructure will be implemented and that this will mainstream the PPP cycle to link up with the Budget process. Further, while the review found that there is no need for a complete overhaul of the PPP legal and regulatory framework, some lengthy approval processes will be changed to speed up project implementation. Budget allocation: Government uses Budget allocations to support fixed capital formation. Overall, R903-billion will be spent on infrastructure projects over the medium-term expenditure framework. 5. Challenges in infrastructure investment 5.1 Ineffective State institutions Despite substantial allocations, executing infrastructure programmes often have poor outcomes, owing to ineffective State institutions. Given the substantial mandate and resources at its disposal, the State’s underperformance raises serious concerns. The capacity and credibility of South Africa’s institutions were significantly undermined during the tenure of the Jacob Zuma administration. While the Cyril Ramaphosa administration is making concerted efforts to enhance various aspects of the State, the process of recovery is anticipated to be protracted. One of the detrimental outcomes of State capture is nepotism, resulting in the appointment of unqualified individuals, especially at municipal level. 5.2 Failure to implement programmes The government’s inability to effectively implement its own programmes, as is evident in the National Development Plan: Vision 2030 (NDP), is akin to a corporate CEO failing to execute any part of a strategic vision, a situation that typically results in career repercussions. The Public Sector seems immune from such repercussions. The NDP seeks to address the triple challenges of poverty, unemployment and inequality. A recent ten-year review of the progress made since the adoption of the NDP in 2012 indicates that the vision for the future expressed in the plan has not materialised over the past decade. Significant strides were made in poverty reduction between 2006 and 2011, with the poverty rate declining from 51% to 36.4%, but subsequent years have witnessed a troubling reversal of the trend, with income poverty resurging to 40% by 2016 (National Planning Commission, 2023). South Africa is also falling short of its targets for reducing inequality targets as outlined in the NDP. The NDP’s aim is to achieve greater income equality by decreasing the Gini coefficient (measured by income) from 0.69 in 2010 to 0.60 by 2030. Inequality rose substantially between 1994 and 2006, with the Gini coefficient expanding by about 0.05 points. Although millions were lifted out of abject poverty between 2006 and 2015, more substantial benefits skewed towards higher income groups. While there was a brief reduction in inequality between 2006 and 2009, no substantial progress has been made since then (National Planning Commission, 2023). Meeting the NDP’s unemployment reduction targets appears increasingly unlikely, mainly owing to persistently low and sluggish economic growth. The NDP originally aimed to slash unemployment from 35.4% in 2010, to 20% by 2015, 14% by 2020, and 6% by 2030. The initial goal for 2015 necessitated the creation of 2.2-million jobs between 2010 and 2015, equating to an average of 436 000 jobs a year. Achieving this would have relied on an average gross domestic product (GDP) growth rate of 4.6% a year. The rate of job creation between 2010 and 2015 was robust and created the required jobs. However, as GDP growth slowed, job creation dwindled, with only 364 000 jobs created between 2015 and 2017. The interim milestone would have required employment to reach 16.8-million, but instead, it only reached 16.2-million (National Planning Commission, 2023H). The challenges in meeting the NDP unemployment reduction targets are closely linked to the broader economic landscape in South Africa, including the construction industry’s employment-creation role. The industry is historically known for being a major employer, especially for low-skilled and semi-skilled workers. However, the prevailing sluggish economic growth in South Africa has had a detrimental impact. It has caused delays in construction projects or a reduction in scale, limiting the number of job opportunities available within the industry. Budget constraints in public infrastructure spending have further hampered industry’s ability to serve as a substantial source of employment. According to Statistics South Africa, there were 118 000 construction job losses between June 2017 and June 2020. The total number of persons employed at the end of June 2020 amounted to 473 000 – a 20% decrease when compared with the workforce tally at the end of June 2017, which stood at 592 000. Notably, substantial declines were observed in both the civil engineering structures and buildings segments of the industry (Statistics South Africa, 2022). In 2023, investment in renewable energy projects has begun to show signs of the situation beginning to turn around for the South African construction sector. 5.3 SoE financial constraints The financial constraints facing State-owned enterprises (SoEs) have a detrimental impact on infrastructure development in the country. These constraints limit the government’s ability to allocate funds to critical projects and maintenance, hindering the overall effectiveness of infrastructure development initiatives. While the recapitalisation of SoEs is a positive development, the efficacy of these institutions relies heavily on the appointment of competent board members and the establishment of clear roles and responsibilities. Failing to differentiate between the roles of board and Ministerial functions lead to confusion and overlap in decision-making. 5.4 Budget underspending Government has repeatedly expressed its commitment to expanding infrastructure delivery. In the 2023 Budget, it has increased expenditure across various facets of public infrastructure. A significant portion is allocated to national roads, amounting to R48-billion a year over the 2019 to 2024 medium-term expenditure framework (MTEF). Additionally, provisions for the maintenance of provincial roads amount to another R12-billion a year. It is important to note that this budgetary growth lags the inflation rate. The budget for local and regional water infrastructure has grown rapidly, increasing from R8-billion in 2019 to a planned R17.1-billion in 2025. Spending on national water infrastructure is smaller at around R3.5-billion a year on average over the MTEF. In ontrast, spending on human settlements infrastructure is stagnant. Provinces spent R20-billion on housing in 2017, yet by 2025, the Budget plans only R20.5-billion (Sachs et al, 2023). Despite increased allocations, SoEs and public entities consistently fall short of effectively using their budget. Although not a phenomenon unique to South Africa, as literature shows that other countries also struggle with the same issue, chronic budget underspending has far-reaching implications, contributing to project delays, stunted economic growth and diminished opportunities for the construction industry. Between 2015/16 and 2017/18, SoEs and public entities spent less than 75% and 65% of their infrastructure budgets, respectively. The State as a whole spent less than 85% of its available infrastructure budget (Altman, 2023). The core of the underspending issue lies in complex procurement processes, notably relating to noncompliance with supply chain management (SCM) policy and regulations, alongside insufficient monitoring and evaluation of SCM policy adherence (Jantjies, 2023). 5.5 Inappropriate SCM and procurement practices The challenges associated with SCM and procurement within the public sector have been widely documented, underscoring the urgency of addressing this issue. One of the biggest problems of procurement is its design. Under the Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA), an accounting officer or accounting authority is mandated to establish a SCM unit within the office of an institution’s chief financial officer for SCM implementation. The current system places a disproportionate emphasis on financial management, neglecting the critical aspect of efficient project delivery. It has downgraded procurement into an administrative function. The PFMA and MFMA view procurement solely as part of SCM. The current public procurement system emphasises compliance checklists. The focus should include delivering value for money, a strategy that inherently reduces the scope for corruption. This reframing of the procurement processes is important for building trust with suppliers. The current SCM system constrains procuring institutions from effectively managing the interdependencies between contracts. The lack of control over the procurement process, including appointments, creates challenges. This misalignment with the PFMA and the MFMA further exacerbates the issue. Additionally, the system separates institutional decision-making from specialised professionals, such as built environment professionals, allowing individuals with clerical roles to manipulate the entire process. A shift towards value for money and integrating professional expertise could significantly change the current circumstances. 5.6 Tardy tender processes Most of the public sector tenders issued are not being awarded, leaving them in a state of pending or cancelled. National Treasury’s database shows that between September 2022 and September 2023, 64 091 tenders have been published across all spheres of government and that 16 253 have been awarded (Treasury, 2023b). What compounds the issue is the prolonged period it takes for these tenders to be awarded, which poses significant challenges for resource planning. 5.7 Delivery performance deficiencies Alongside underspending, numerous instances of cost overruns, delayed delivery and subpar value for money have been observed. Examples of overbudget projects are well documented and include the Gautrain Rapid Rail System (original budget: R6.8-billion, final cost: R25.2-billion), Transnet’s New Multi-Product Pipeline (original budget: R12.7-billion, final cost: R30.4-billion) and the Medupi and Kusile power stations, among others. 5.8 Construction mafia The construction mafia, or so-called ‘business forums’, first reared its head in KwaZulu-Natal in 2014 and 2015, invading construction sites to demand a share of projects, or that companies employ specific people or subcontractors. By 2018 and 2019, the practice also emerged in other provinces, with these forums often touting heavy-calibre weapons as they made their demands. A similar model of extortion has since spread to other industries, most notably mining. Much of the violence has subsided in KwaZulu-Natal, but it does not mean that illegal activities have stopped. Rather, extortion has become normalised and yet another cost of doing business in South Africa (Venter, 2023). Different interpretations of laws and regulations regarding localisation have created room for this criminal element to develop. Business forums are demanding 30% of the contract value be allocated to forum members, or directly to the forum itself. This figure appears to be derived from the National Treasury’s Preferential Procurement Policy Framework Act. The Act states that 30% of public procurement contracts should be contracted to designated groups, as provided for in the Preferential Procurement Regulations. National Treasury has condemned this practice as illegal (Venter, 2023). While law enforcement undoubtedly plays a role in addressing the problem, it is equally imperative to acknowledge that the rise of these mafias can be attributed to the inadequacy of effectively empowering local communities. The situation has been exacerbated by the lack of robust local government institutions equipped to handle conflict resolution, compounded by the opportunistic actions of certain local political leaders. This complex dynamic mirrors the fragmented state of politics in South Africa, where not only is the ruling party, the African National Congress, facing internal challenges, but fragmentation is also prevalent among opposition parties. 6. Recommendations 6.1 Support rebuilding State capacity The construction industry must maintain its commitment to supporting government to enhance capacity and ensure its specialised involvement in initiatives such as certification requirements and institutional strengthening. The construction industry must actively participate in national drives, such as the CEOs Pledge, to help improve State capacity. It is a collective decision to make a difference and to focus on actions that can bring about change. Industry leaders are encouraged to actively engage, to adopt a positive mindset and to refrain from mere criticism. For those with extensive experience, it is an opportune time to lend a hand and assist in execution, provided such support is welcomed. Robust executive management and technical proficiency within the State and its entities will foster stability and empower them to lead and execute with confidence. A particular emphasis must be given to developing state capacity for project design and execution. 6.2 Professionalise the public service Professionalise the public sector by investing in skilled and experienced public servants to enhance delivery outcomes. Employ professionals registered with built-environment bodies and councils. A professional public service cohort will ensure projects are managed more efficiently, transparently and comply with best practices. Addressing the issue of unqualified employees, especially at municipal level, requires an independent forensic audit of CVs to ensure qualifications and experience are accurate. Swift action, such as immediate dismissal for falsified credentials, can remedy the problem and allow for the recruitment of qualified personnel. While skills shortages exist in many municipalities, this issue is fixable. 6.3 Elevate project leadership Client delivery managers, possessing the requisite certifications and expertise, should spearhead infrastructure projects. This will ensure not only streamlined execution, but also establish a single point of accountability. 6.4 Transform supply chain management Transform infrastructure supply chain management (SCM) into a strategic function, shifting its role from being merely a clerical back office or financial/administrative task. By recognising SCM as a strategic driver, it becomes a crucial element in project planning, execution and success. 6.5 Reimagine procurement Infrastructure procurement should be decoupled from centralised purchasing systems. Instead, it should be overseen by a dedicated chief procurement officer or a high-level office specifically designated and equipped with a team of built environment professionals. This approach ensures that procurement processes are tailored to the unique demands of infrastructure projects, fostering efficiency, transparency and optimal project outcomes. 6.6 Establish effective delivery management systems To effectively implement the National Infrastructure Plan 2050, clients must put in place procurement and delivery management systems that provide governance processes. Establish clear delegations of authority to enable timeous decision-making and individual or organisational accountability for infrastructure delivery. Provide for the assignment of single-point accountability to a suitably qualified and experienced built environment practitioner to provide executive level leadership in the planning, specifying, procuring and overseeing functions. Recognise that infrastructure procurement is a central competency of those responsible for delivering infrastructure. 6.7 Prioritise value for money Prioritise ‘value for money’ over ‘least-cost’ considerations throughout the project lifecycle, recognising that a strategic approach not only enhances the project’s immediate performance, but also ensures long-term sustainability and benefits for all stakeholders. This shift in focus allows for comprehensive planning, robust risk management and the creation of infrastructure that truly serves the country’s needs. 6.8 Delegate essential functions Government entities incapable of efficiently spending their budgets should be mandated to delegate essential functions to other capable organs of State. This approach is particularly relevant in instances such as municipal water management, where a monopoly function exists, but the existing State entity struggles to fulfil its responsibilities. 6.9 Leverage the private sector In a shift from outdated government infrastructure ideologies, it is suggested that private sector efficiencies should be leveraged. Although it may challenge prevailing government norms, privatising key infrastructure assets, such as the coal line from Mpumalanga to Richards Bay, KwaZulu-Natal, has the potential to accelerate much-needed improvements, potentially addressing issues within a shorter time frame. A framework should also be developed to facilitate large-scale private sector investment in the country’s electricity transmission grid. The public-private partnership model must be streamlined for improved feasibility and user-friendliness. 6.10 Boost construction confidence While government-led infrastructure projects play a pivotal role in stimulating the construction industry, the contribution of private sector capital formation is equally indispensable. Rebuilding confidence in South Africa, its leadership, and its economic prospects is imperative to catalyse growth in the commercial and residential building and construction sectors. 6.11 Tackle the construction mafia Differentiate between genuine community concerns and criminals involved in extortion for their own gain. While law enforcement must be mandated to deal effectively with criminal elements, it is essential that local government institutions step up to the plate and take responsibility for negotiating mutually beneficial solutions. 7. Conclusion The decline of the South African construction sector is symptomatic of broader economic stagnation, characterised by inadequate investment levels, dwindling confidence and a surge in organised crime activities. To move forward, a multifaceted approach is needed. Policy changes must prioritise development of State capacity, professionalisation of the public service and transformation of supply chain management and procurement practices. These changes will create an environment for efficient project design and execution. Further, addressing the challenges posed by the construction mafia demands urgent attention. Collaborative efforts between government, industry and community stakeholders, as well as law enforcement, are necessary to combat the problem. Efforts should also be directed towards enhancing economic infrastructure, particularly railway infrastructure, and effectively addressing the prevailing energy crisis. Embracing opportunities presented by ongoing large-scale investments in renewable energy projects can be a cornerstone for industry revival. The removal of the 100 MW cap on private energy generation has resulted in a strong uptick in construction activity, as would planned investment in the country’s national electricity transmission grid. Given that economic growth is stifled due to the lack of funding, creative and innovative funding mechanisms need to be developed to fast-track economic infrastructure development. Public Private Partnerships (PPPs) and Build Operate Transfer (BOT) need to be deployed at a far larger scale. The government should revisit its public debt to GDP policy, by being more flexible with regard to higher debt levels attached to infrastructure investment. Given the economic urgency, special legislation similar to that during the 2010 Soccer World Cup ought to be considered to fast-track a major overhaul of the country’s economic infrastructure. Further research and economic modelling in this regard is recommended. 8. References Altman, M. 2023. The infrastructure drive in SA and the potential for greater construction sector dynamism, August 5, 2023. Cape Town. Jantjies, D. 2023. Government underspending analysis 2011/12 to 2022/21: The case studies of the Departments of Health and Social Development, March 2023. [Online]. Available at: https://static.pmg.org.za/2300308March_2023_Government_underspending_analysis_2011_-_2021_the_case_studies_of_the_Departments_of_Health_and_Social_Development.pdf [accessed September 9, 2023]. Masondo, D. 2023. Remarks by Deputy Minister of Finance David Masondo at the Inclusive Society Institute Construction Summit, August 8, 2023. Cape Town. National Planning Commission. 2023. A review of the National Development Plan 2030: Advancing implementation towards a more capable nation, August, 2023. [Online]. Available at: www.nationalplanningcommission.org.za/assets/Documents/NDP%20REVIEW.pdf [accessed September 11, 2023]. National Treasury. 2023. Budget Review, 2023. [Online]. Available at: https://www.treasury.gov.za/documents/national%20budget/2023/review/FullBR.pdf [accessed September 7, 2023]. National Treasury. 2023. eTender, September 9, 2023. [Online]. Available at: https://data.etenders.gov.za [accessed September 9, 2023]. South African Institution of Civil Engineering, 2022. SAICE 2022 Infrastructure Report Card for South Africa, November 2022. [Online]. https://saice.org.za/downloads/SAICE-2022-Infrastructure-Report-Card.pdf [accessed September 10, 2023]. Statistics South Africa. 2022. Construction industry, 2020, June 27, 2020.[Online]. Available at: https://www.statssa.gov.za/?p=1548 [accessed September 7, 2023]. Statistics South Africa. 2023. Quarterly Labour Force Survey, Q2:2023, August 15, 2023. [Online]. Available at: https://www.statssa.gov.za/publications/P0211/P02112ndQuarter2023.pdf[accessed September 7, 2023]. Swanepoel, D. 2023. South Africa country brief: A socio-economic and political prognosis, September 25, 2023. Stockholm. Venter, I. 2023. Is SA Inc fighting the construction mafia, or adapting to incorporate it?,Engineering News, June 27, 2023. [Online]. Available at: https://www.engineeringnews.co.za/article/is-sa-inc-fighting-the-construction-mafia-or-adapting-to-incorporate-it-2023-06-27#:~:text=The%20construction%20mafia%2C%20or%20so,employ%20specific%20people%20or%20subcontractors [accessed September 11, 2023]. World Bank. 2023. National Accounts Data, and OECD National Accounts data files. [Online]. Available at: https://data.worldbank.org/indicator/NV.IND.TOTL.ZS [accessed September 7, 2023]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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 Chief Executive Officer of the Inclusive Society Institute, Mr Daryl Swanepoel, represented the Institute at the Commemorative plaque unveiling ceremony and the Martti Ahtisaari legacy seminar 2025, which was held at Freedom Park in Pretoria on Thursday, 6 March 2025.   The event was held in two parts: The inscribing of the names of seven Finnish anti-apartheid actors on the Wall of Names at Freedom Park, and the Martti Ahtisaari legacy seminar.   The seminar comprised an opening address by H.E. Nkosazana Dlamini-Zuma, former Foreign Minister of South Africa; and two panel discussion:   A high level panel discussion on Martti Ahtisaari’s legacy, South Africa’s past lesson learned, the role of mediation & dialogue in the broader anti-Apartheid struggle. An expert panel discussion on the future of mediation – what challenges do mediators face now, and, in the future, what can be drawn from South African lessons and experience, what requires novel approaches and what kind of alliances need building?   The event was hosted by H.E. Mr Pekka Metso, Finland’s Ambassador to South Africa. Co-hosts were Freedom Park, Martti Ahtisaari Peace Foundation and ACCORD.

Copyright © 2023 Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8010 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 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 August 2022 December 2023 Author: Mariaan Webb, Creamer Media Writer Editor: Daryl Swanepoel Content Abbreviations & acronyms Overview Construction mafia tactics Root causes & perspectives Law enforcement initiatives Recommended interventions & actions Conclusion References Abbreviations & acronyms DPP : Director of Public Prosecutions HDI : historically disadvantaged person ISI : Inclusive Society Institute PPPFA : Preferential Procurement Policy Framework Act SAPS : South African Police Services Overview South Africa’s construction industry, traditionally a key driver of economic growth and development, has been grappling with a significant challenge in recent years – the encroachment of criminal elements. Known as construction mafias, these illicit networks initially surfaced in KwaZulu-Natal about a decade ago. Their influence has since expanded across all provinces, resulting in significant losses to the economy. Construction sites, ranging from small-business driven to large-scale projects, serve as prime targets for these decentralised syndicates. Leveraging local connections, they employ tactics such as extortion, violence, intimidation and disruption to advance their objectives. Extortion has seeped into the fabric of the business landscape and is now considered an unfortunate cost of doing business (Venter, 2023). This report encapsulates key insights from a seminar conducted by Inclusive Society Institute (ISI), centred on the repercussions of construction mafias on the construction industry. The seminar served as a follow-up to a previous construction summit, during which the profound impact of these illegal activities on the industry was highlighted as a major concern. Addressing the challenges posed by construction mafias is imperative to revitalise this vital sector of the economy. Over the past 15 years, the once-thriving construction industry has experienced a sharp decline, in large part owing to the government’s failure to deliver on promised infrastructure projects. Re-establishing the industry on a solid foundation is crucial, given the powerful role that construction can play in poverty reduction. Construction has an inherent capacity to generate additional economic output and jobs, particularly for low-skilled and semi-skilled workers. Construction mafia tactics Construction mafias, often labelled ‘business forums’, are networks that employ violence and other illegal means of controlling access to public sector procurement opportunities. These groups typically invade construction sites, demanding money or a stake in development projects. In 2019, at least 183 infrastructure and construction projects worth more than R63-billion had been affected by the construction mafia. Since then, invasions have continued at construction sites across South Africa (Organised Crime and Corruption Reporting Project, 2022). The interpretation of the Preferential Procurement Policy Framework Act (PPPFA) plays a key role in the activities of construction mafias. The PPPFA, aimed at promoting economic transformation and empowering historically disadvantaged individuals (HDIs), designates that 30% of public procurement contracts should be allocated to designated groups. Construction mafias misuse this provision, demanding that 30% share of the contract value accrue directly to forum members or the forum itself. Despite portraying their actions as aligned with transformation goals, the National Treasury condemned this practice as illegal. Such exploitation undermines the intended objectives of the PPPFA, hindering uplifting of HDIs and small businesses (National Treasury, 2018). Often intertwined with this deliberate misinterpretation of the PPPFA are other causes that escalate violence on construction sites, including unreasonable community expectations, gangsterism, and the exploitation of high unemployment levels during community protests against infrastructure projects. According to the South African Police Services (SAPS), construction mafias employ a range of tactics, including threatening projects with violence and heavy weaponry, demanding a share without genuine interest in the job itself. Their criminal activities extend to terrorising, intimidating, assaulting, and in some cases, even killing employees or managers on site. The use of such disruptive tactics aimed at hindering progress on construction projects is also often accompanied by theft. In gang-infested areas, like Cape Town, in the Western Cape, gang leaders go further by registering companies. If their demands for the 30% share are not met, they employ mafia tactics to intimidate construction projects. Additionally, they may coerce constructors into paying protection fees to avoid rival gang interference. This tactic further underscores the complex intertwining of criminal elements with legitimate business activities in these regions. The construction mafia has progressively established political connections, aligning with specific factions within the governing party. This association provides protection and facilitates access to state procurement opportunities. The external interference has led to increased uncertainty in fulfilling contract obligation. Contractors must now navigate not only legal and contractual requirements, but also an environment fraught with demands and threats imposed by criminal elements. This interference has created a challenging environment for contractors, impacting their ability to meet project milestones and completion deadlines. Moreover, the interest in heading off the activity of such mafias has seen the selection of subcontractors and suppliers becoming a precarious process, resulting in compromised quality and delayed project timelines. Contractors are caught between honouring legitimate contractual commitments and addressing illicit pressures from the construction mafia. The criminal justice cluster is tasked with addressing this issue as per the National Development Plan Vision 2030. Root causes & perspectives Keynote speakers at the ISI’s Construction Mafia Summit shared their insights on the factors contributing to the emergence of the construction mafia, shedding light on the dynamics that fuelled its rise. Construction sites as symbols of economic freedom The discussion highlighted the symbolic importance of construction sites as potential catalysts for economic freedom. Unemployed youth and disenfranchised communities see these sites as avenues for brighter prospects. Emphasising the democratic route, this discourse rejected violence as a means to attain economic freedom and stressed adherence to democratic principles. Blurring public and private project lines The conventional distinction between public and private projects based on where the funding for projects is coming from, was challenged. Participants highlighted a shift in perceiving both public and private endeavours as entities to further broader public interest. This departure from the traditional dichotomy necessitates a renewed emphasis on transparency and accountability within the private sector. Communities are expressing a growing demand for active involvement in decision-making processes related to construction projects. This involvement extends to critical aspects such as land acquisition and the issuance of development permits. The call for transparency and accountability resonated as a means to ensure that both public and private initiatives align with the needs and aspirations of the communities they impact. Addressing economic inequality Persistent economic inequality in South Africa took centre stage in the discussions. According to World Bank statistics, the top 10% in South Africa earn more than 65% of the total national income and the bottom 50% just 5.3% of the total (Chancer et al, 2022). Historical legacies and insufficient addressing of social justice were identified as root causes. Businesses, especially within the construction sector, have been urged to embrace transparency, accountability and inclusive practices as means to address the widening wealth gap. The construction industry is consequently perceived as a battleground for economic inclusion and the addressing of racial discrimination, amid what is felt, by many, historically, to be a corruption-prone sector. A unified stance against economic disenfranchisement is needed, emphasising the need for the private sector to recognise transparency and accountability principles. Organised crime on the rise Organised crime, specifically within the construction sector, has witnessed a noticeable upswing since 2014/15. The rise in crime in general is attributed to a broader decline in State capacity, notably during a period of State capture. This era witnessed compromised integrity and capabilities in key State-owned enterprises, fostering corruption and diminishing law enforcement effectiveness. The decline in State capacity and inefficiencies within the law enforcement sector created an environment conducive to the flourishing of organised crime. Weak governance structures, including oversight mechanisms, contribute to a lack of accountability within law enforcement agencies. Criminal networks exploit this vulnerability in accountability and law enforcement, strategically targeting construction sites for financial gain. This trend has permeated throughout the country, resulting in significant economic repercussions. Organised crime is now an existential threat to South Africa’s democratic institutions, states the Global Initiative Against Transnational Organised Crime. It argues in a September 2022 report that a more strategic response is needed to organised crime to ensure a more stable future for South Africa. Left unchecked, organised crime and its associated illicit markets will continue to inflict serious harms (Global Initiative Against Transnational Organised Crime, 2022). Solutions to address the crisis in the SAPS, as identified in government policies and documents, are not being implemented, which cannot be blamed on a lack of resources as is often cited as the reason for the country’s crime crisis. The police budget has increased substantially over the last decade, yet its ability to solve crimes has significantly diminished. The Institute for Security Studies states that, over the last 11 years, the police budget has increased by 86%, but that its ability to solve murders has decreased by 55% and the ability to solve armed robbery has dropped by 53%. Addressing the crisis requires leadership reform within the police, reinforced governance structures, and the establishment of robust independent oversight mechanisms. A failure to share information and resources among government, civil society and the private sector also hinders efforts to combat organised crime. Law enforcement initiatives Law enforcement agencies have implemented targeted plans to combat the pervasive influence of the construction mafia. This operational approach is aligned with the national competence strategy, which is under the guidance of the national commissioner. This strategy is divided into two key components: the geographical approach and the organised crime approach. Under the geographical approach, intelligence operations are strategically positioned to gather information, identify hotspots and pinpoint problematic provinces. Police teams are deployed to these hotspots, with a clear mission to stabilise and normalise affected areas. Essential infrastructure teams are mobilised to address challenges in specific regions. The organised crime approach focuses on identifying individuals, syndicates and criminal entities involved in extortion within the construction mafia. Employing unconventional methods, law enforcement collaborates with the National Prosecuting Authority, engaging in prosecutor tutorial guided investigations. This collaborative effort extends to institutions like asset forfeiture and financial investigations, differentiating between major and project investigations. Cases are categorised as criminal groupings when individuals are not linked as syndicates. Since 2019, 712 cases have been reported, with 93 currently in court. A total of 722 suspects have been arrested and 96 cases are fully completed and referred to the Director of Public Prosecutions (DPP) for decision. The DPP has issued nonprosecution certificates in 34 cases. Moreover, 165 case dockets were closed due to a lack of further information. Of the completed cases, 50 were finalised after being received from court, leading to 52 convictions with a combined sentence of 89 years and seven months. The police’s multi-dimensional and multi-operational approach includes monthly stakeholder engagements in all provinces. These forums are co-chaired by the SAPS and the business sector. Recommended interventions & actions Promoting transparent project engagement Encourage transparent and inclusive engagement practices in both public and private construction projects. Emphasise the importance of involving communities in decision-making processes, particularly regarding land acquisition and development permits. Foster a culture of openness and collaboration to build trust between project developers and communities. Tackling economic inequality Implement policies that address economic inequality, drawing insights from the World Bank’s 2022 Inequality report. Advocate for businesses, especially in the construction sector, to adopt transparent, accountable and inclusive practices to bridge the wealth gap. Create initiatives that empower HDIs, ensuring equal access to economic opportunities. Addressing racial equality Develop a unified stance against economic disenfranchisement within the construction sector. Prioritise racial equality, diversity and inclusion initiatives to eradicate discrimination in workplaces. Rooting out corruption  Implement stringent measures against companies involved in corrupt practices, holding them accountable for unethical conduct. Task the Minister of Infrastructure and Public Works with leading a cleanup process and ensuring consequences for companies involved in corrupt practices, to the extent of suspending or blacklisting such companies from accessing public procurement. Tackling organised crime Advocate for the nonclassification of the national security strategy. This crucial document should be made public and updated every year to align efforts effectively across various sectors. Transparency is vital for informed collaboration between the government, civil society and the private sector, especially concerning public safety challenges associated with organised crime. Fix crime intelligence. Implementing police reforms Address the South African Police Service’s declining capabilities by eliminating automatic promotions without performance assessments, rectifying dysfunctional disciplinary systems, and curbing compromised officers collaborating with criminal networks. Advocate for recruitment, training, supervision and accountability reforms to empower law enforcement in the fight against organised crime. Emphasise the importance of accountability for officers involved in criminal activities, calling for the removal of compromised individuals who undermine public safety through corruption and brutality. Stress the importance of establishing an effective accountability system to counteract officers working against the public’s interests and to restore confidence in law enforcement. Government-led initiatives Initiate public hearings to address issues of racism, gender discrimination and bullying within the construction sector. Consider a firearms amnesty, in accordance with the Firearms Control Act, to reduce the proliferation of illicit guns contributing to site disruptions. Infrastructure development for inclusive growth Prioritise infrastructure development as a key strategy for poverty reduction. Recognise the critical role of engineering skills in economic recovery and competitiveness, emphasising the need to retain and develop these skills. Encourage collaborative efforts among social partners, including government, business, labour and communities, to ensure uninterrupted infrastructure delivery. Community and business forum collaboration Encourage construction contractors to cease paying bribes to business forums and instead focus on providing community members access to employment and local business opportunities. Implement a District Development System to ensure collaborative efforts between communities, businesses and government in the delivery of infrastructure. Foster constructive engagement between affected communities, business forums and construction companies to address concerns and ensure compliance with the rule of law. Leadership and accountability Promote leadership accountability at all levels, both in the public and private sectors, to foster an environment of responsible and ethical practices. Establish mechanisms to monitor and enforce adherence to principles of transparency and accountability within the construction industry. Address alleged police collaboration with criminal syndicates, ensuring serious consequences for those involved. Conclusion The challenges presented by construction mafias constitute a complex and multifaceted issue, carrying far-reaching implications for South Africa. The urgent task of dismantling the construction extortion economy, especially in regions where it has entrenched itself, is formidable. Yet, overlooking the issue will have repercussions for both the construction sector and the nation at large. The repercussions transcend projects delays and associated costs. The overall toll includes lost investment, as the high-risk environment acts as a deterrent for foreign companies considering large-scale projects in the country. This, in turn, hinders economic growth and development. The emigration of skilled technical personnel further exacerbates the issue, depleting the pool of expertise available for crucial infrastructure projects. The South African Forum of Civil Engineering Contractors of South Africa made a plea for urgent government action in 2019. Directed to then Finance Minister Tito Mboweni, the plea highlighted the urgency in addressing the construction mafia. It specifically noted that 110 engineers and other highly skilled technical personnel had either left the country, or were on the verge of doing so, owing to personal risk to their lives and the lack of work because of projects being disrupted at gunpoint (Mfebe, 2019). In summary, the construction mafia is not merely a challenge of criminality; it is a complex issue which increasingly overshadows legitimate concerns about inequality and significantly impacts on the country’s economic landscape. Urgent and comprehensive collaboration is imperative to mitigate the immediate and long-term consequences of this phenomenon, ensuring the stability and growth of the construction sector, and by extension, the economy. References Chancel et al. 2022. World Inequality Report 2022. [Online]. Available at: https://wir2022.wid.world/www-site/uploads/2021/12/WorldInequalityReport2022_Full_Report.pdf [accessed November 22, 2023]. Global Initiative Against Transnational Organised Crime. 2022. Strategic Organised Crime Risk Assessment: South Africa. [Online]. Available at: https://globalinitiative.net/wp-content/uploads/2022/09/GI-TOC-Strategic-Organized-Crime-Risk-Assessment-South-Africa.pdf [accessed November 22, 2023]. Mfebe W. 2019. Construction industry up in flames: Urgent action required. [Online]. Available at: https://cdn.ymaws.com/www.safcec.org.za/resource/resmgr/press_releases/SAFCEC_Letter_to_Minister_of.pdf [accessed November 22, 2023]. National Treasury. 2018. Media statement: Alleged abuse of the 30% subcontracting requirements provided for the Preferential Procurement Regulations, 2017. [Online]. Available at: https://www.treasury.gov.za/comm_media/press/2018/2018080701%20Alleged%20abuse%20of%20preferential%20procurement%20regulations.pdf [accessed November 22,2023]. Organised Crime and Corruption Reporting Project. 2022. Extortion or transformation: The construction mafia in South Africa. [Online]. Available at: https://globalinitiative.net/analysis/extortion-construction-mafia-south-africa/ [accessed November 22,2023]. Venter, I. 2023. Is SA Inc fighting the construction mafia, or adapting to incorporate it?, Engineering News, June 27, 2023. [Online]. Available at: https://www.engineeringnews.co.za/article/is-sa-inc-fighting-the-construction-mafia-or-adapting-to-incorporate-it-2023-06-27#:~:text=The%20construction%20mafia%2C%20or%20so,employ%20specific%20people%20or%20subcontractors [accessed November 22, 2023]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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 © 2024 Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8010 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 2024 Author: Olivia Main Editor: Daryl Swanepoel This report has been enabled through the generous support of the Embassy of Finland in Pretoria, South Africa Content Chapter 1: Setting the scene Introductory remarks by Ambassador Anne Lammila, Finnish Ambassador to South Africa Presentation by Daryl Swanepoel, CEO of the ISI, on the Institute’s latest poll on electoral support in South Africa Chapter 2: Input by Panellists Jenni Karimäki Professor Liisa Laakso Virva Viljanen Chapter 3: Discussion Chapter 4: Summary of Lessons to be learnt and gained from the Finnish Model Cover photo: istockphoto.com – Stock illustration ID: 1852275835 Chapter 1 Setting the scene   Coalitions is a hot topic in South Africa. With general elections looming in 2024, the ruling party’s power and support is ebbing, largely due to corruption and loadshedding. On the other hand, the opposition is gaining increasing support. It appears that the country is heading in the direction of a coalition government. In fact, a number of opposition political parties have already come together to sign the Multi-Party Charter 2024 – a landmark pre-election coalition agreement to share power if they cumulatively beat the ANC in the polls.   But some analysts have suggested that South Africa is not yet prepared for a coalition government. Its legislation is not ready, and it simply does not have that culture in place, with the parties’ tendencies towards stubbornly pushing party agendas and using bullying tactics in government negotiations. And with so many people still casting votes based on tradition, history and loyalty, rather than on the basis of informed, rational decisions. Also, polling in South Africa is often unreliable, which means much will come down to voter turnout. The bottom line is, trying to build democratic coalitions without the right attitude and political education is foolhardy and will not lead to stability.   In light of this, the Inclusive Society Institute (ISI), in conjunction with the Finnish Embassy in South Africa, hosted a high-level webinar on 8 October 2023 on lessons South Africa can draw from the Finnish experience on coalitions. Three expert panellists were invited to share their knowledge on the topic: Jenni Karimäki, University of Turku in Finland; Professor Liisa Laakso, Nordic Africa Institute; and Virva Viljanen, Demo Finland.   A key insight from the Finnish experience is that coalition governments are both a result and precondition of inclusive political systems and inclusive political institutions – which feeds the stability and legitimacy of the democratic system. In order to form a coalition government, and especially a majority coalition, a number of parties are required to cooperate. Even though it is a case of, the bigger the party, the more ministers and the more say they have in the government programme, it is still a negotiation, a coalition, and therefore, nobody gets all the power. And the discussions taking place within spending limits means parties cannot come with outrageous promises, they have to work within that framework.   The Finnish system of coalitions is very much reliant on the “rule-of-law” approach and mechanisms that sustain coalitions and make them viable, aspects that build trust between the political actors and among the civil society. This allows parties that have had very little trust in each other to make the necessary compromises in order to build healthy coalitions and move forward.   Finland also has long-held traditions regarding different types of civil society organisations, other than parties. In Finnish government negotiations, experts from various fields – from civil society to the ministries or administration and NGOs – are brought in to mediate, to help build common ground and level the playing field. Coalition is often thought of in terms of enabling a governing majority. However, coalitions might also be useful in diverse and fragmented societies, such as in South Africa, where it is not necessarily about forming a governing majority, but rather, it might be a way to increase social and political cohesiveness in the country – with the proviso of always guarding against the danger of co-option.   Introductory remarks by Ambassador Anne Lammila, Finnish Ambassador to South Africa    Finland achieved independence in 1917. In the beginning, the country’s parliamentary system was not ready for it, which resulted in often very short-lived governments, most of which were minority governments. The Social Democrats appeared in government for the first time in 1926, which also happened to be when Finland’s first female minister, Deputy Minister of Social Affairs Miina Sillanpää, was voted in.   In 1937, the Social Democratic Party (SDP) formed the first of the “Red-Earth coalitions” with the Agrarian League, bringing together the parties representing the two largest social groups. Then, in 1939, the Winter War between the Soviet Union and Finland broke out, which moved Finland towards building a firmer national government. Then came the Continuation War. This whole period marked the start of the coalitions. And since 1937, the country has had several of them.   First, there were two dominant parties, the Centre Party and the right-wing parties. However, since the Second World War, there have been many different kinds of coalitions in government – from the right, to the left and the far left parties. Nowadays, the Finnish people are so used to this tradition of coalitions that they sometimes forget it has not always been the case.   In terms of the current coalition, Finland had its elections on 2 April 2023. The Coalition Party – the conservative party – received most of the votes, winning 48 seats in the 200-seat Parliament. The party that came in second was the True Finns, a populist far-right party, with 46 seats. When the Chairperson of the Coalition Party started to build the government, the Social Democrats were omitted from the plans, even though they were also winners in the elections, with 43 seats.   It was one of the longest processes of building a government that Finland has experienced in its history. The process started in April, and the government was only finalised in Finland’s midsummer in mid-to-late June. The reason for this seemingly drawn-out process is that the government needed to negotiate its programme with four very different parties, and doing this effectively takes time.   The current government is going strong, and it has proved that the coalition mechanism works well. Those who win in the elections, get the chance to govern.   Presentation by Daryl Swanepoel, CEO of the ISI, on the Institute’s latest poll on electoral support in South Africa   This information is taken from a poll conducted by Ipsos – a global leader in market research that is known to deliver accurate polling in terms of how it matches up to the real world – on behalf of the Inclusive Society Institute. It is a very large poll of 3,600 participants, taken across all nine provinces in South Africa, and in their home languages.   In the poll taken in June of 2023, it was revealed that since 2015, the ruling party’s support has systematically been reduced from a high of 63% in 2015 to 33% in 2023. Whereas the opposition has been steadily growing to the point where the combined opposition has now overtaken the ruling party, coming in at 48%.   There are still the undecideds and don’t-knows of 19% to consider, therefore this does not reflect the full picture, however, it does show that the ruling party is systematically declining and the opposition party is systematically climbing. That said, the opposition is very fragmented, they do not conduct themselves as one cohesive instrument.   In the last year, the poll shows a big change in the ANC’s national position. The figure in the November 2022 poll was 39% support for the ANC, declining quite dramatically in the following six months to 33% in June 2023. The question is: Why the rapid decrease in support? In a previous poll, 65% of the respondents indicated that if loadshedding were to continue, it would impact their vote, and 45% said that they would not vote. It seems that if the government gets loadshedding under control, they could regain some support, but if it continues, they may lose even more support.   However, other factors also affect the numbers. There are three important words to consider: eligible, registered and turnout. Eligible voters are those citizens over 18 – in South Africa, anybody over the age of 18 has the right to vote. Then there is a separate registration that needs to take place for the voters’ roll. In other words, in order to vote, a person has to be eligible, they have to register, and then they have to turn out at the poll.   In South Africa, there are approximately 42.3 million people who are eligible to vote, but only 26.1 million are registered to vote. This means there is a huge gap between the number who are able to vote and those who are actually registered to vote. Applying the figure of 33% support for the ANC only to the registered voters, shows a very different picture. Support for the ANC then increases to around 43%, the DA to about 20%, and the EFF to about 18%. And this means the other smaller parties have to come into play, for example the IFP, which is an important player in KwaZulu-Natal.   There are different outcomes under various scenarios. A high voter turnout would mean that around 66% of the registered voters go to the polls. The last time those sorts of figures were seen was in the first and second elections, and that number has dwindled to approximately 55% in the later elections. On the opposite end of the scale is the low voter turnout scenario based on a dramatic drop in turnout, from 55% to 36%, which is also highly unlikely.   Realistically, what could be expected in the national election is a medium voter turnout. In such a scenario, the ANC will fall just below the 50% mark, which means that they will require a smaller party to help them form a governing majority. The opposition parties will battle to put a coalition government together, because that will only give them roughly 39% of the votes.   Although a lot can change before the elections in May 2024, from the above snapshot, and under the present circumstances, the ANC would most probably continue to be the leading party in government, albeit with the support of at least one smaller party. But there would certainly be coalition governments in many of the provinces.   In Gauteng, the ANC would only get about 36% of the support, the DA, 15%, Action SA, 12%, Freedom Front Plus and ACDP, 1% respectively. This would make it difficult for the opposition to form a coalition government on their own in Gauteng without the support of the EFF. The ANC will have the difficult choice of deciding between a number of smaller parties to form a coalition with them in Gauteng, or they will have to either take the EFF on as a coalition partner or at least have the support of the EFF to form a coalition in Gauteng. That is a worrying scenario.   In the Western Cape, it is believed that the DA will not win an outright majority. They will have to go into coalition with a number of other parties. They have already formed an agreement – the Multi-Party Charter – with the opposition parties Action SA, Freedom Front Plus and the ACDP and a number of other smaller parties. This seems to confirm suspicions that there will be a DA-led coalition in the Western Cape.   The scenario in KwaZulu-Natal is a particularly challenging one, because the ANC only have 22% of the support, whereas the DA have 13%, the IFP, 17%, and the EFF, 13%. It is too early to say what configuration will come into play, but it appears that, once again, the EFF will be the kingmaker in KwaZulu-Natal, either by siding with the ANC or by at least giving support to the combined opposition. That is not to say the combined opposition at the moment – being the DA, the IFP and Action SA – cannot still garner a majority in KwaZulu-Natal, it is a developing picture.   In conclusion, if an election were held tomorrow in South Africa, the outcome would most probably be a coalition government at the national level, one that is easy to form. And certainly, there would be coalition governments in a number of provinces, some coming together more easily than others. The EFF could play quite a kingmaker role in many of those provinces.   However, for coalitions to succeed, and to simply function, South Africa needs policy cohesiveness in setting up these coalitions, and there must be an acceptable culture of cooperation, etc. This is certainly new terrain for the country, and it will need to rely heavily on the advice of those who have gone before, such as Finland.   Chapter 2 Input by Panellists   Jenni Karimäki Finnish traditions regarding building and maintaining coalition government    Jenni Karimäki is a contemporary historian, currently working at the University of Helsinki, and is also a fellow at the University of Turku. Karimäki’s research expertise is in parties, ideologies, political culture, political systems and party systems.   This is a short historically and empirically inspired presentation on what the key elements and trajectories of the Finnish multi-party system are in order to understand the foundations on which the long tradition of Finnish coalition governments is built.   There are currently nine different parties in the Finnish Parliament, with altogether 200 seats. The biggest party, the National Coalition Party, has 48 of those seats. In order to form a coalition government, and especially a majority coalition, to which Finland is accustomed, a number of parties are required to cooperate. The current coalition government consists of four parties: the National Coalition Party, Finns Party, Swedish People’s Party and Christian Democratic Party. These four parties have altogether 109 seats in the Parliament.   In terms of elections, Finland has a proportional representation. It uses the D'Hondt method to calculate and count the votes. There are no electoral thresholds in Finland – if a party gets enough votes to gain a seat in an election district, then it gets the seat. In other words, there is no percentage of votes that a party has to win in order to get seats.   The Finnish party system has evolved from the late 19th century until the 21st century. Several parties that were established over 100 years ago are currently represented in the Finnish Parliament, and they still occupy over half of the seats in the Parliament. These long-held traditions not only reflect stability, but they also reinforce stability. The Finnish multiparty system has been able to endure over time and also over considerable turmoil, including crises like the Civil War, the radical right activism of the interwar period, and the Second World War.   However, the power dynamics between the parties have changed over time. Only once, in 1916, has one party, the Social Democratic Party, had a majority in the Parliament. Since then, it has been either the Social Democratic Party, the Centre Party or the National Coalition Party that has formed the biggest parliamentary group. In over 100 years, none of those parties have come even close to securing a majority of the seats in the Parliament.   This stability is in part due to the party system being born to accommodate several different societal conflicts, some of them present already before the unicameral Parliament that is in place today. And that has been the case since 1907 – Finland has had a unicameral Parliament for well over 100 years.   Conflicts between labour and capital, between urban and rural areas and between different languages – there are three native languages in Finland: Finnish, Swedish and Sami – are still relevant and they are still represented across the political spectrum, despite the fact that they have been present from the beginning.   This relatively unchanged party system is also a testament of the parties’ and voters’ willingness and ability to commit to the pluralist multiparty structure and its preconditions. In this regard, the Civil War has served as an example of the worst-case scenario of an extreme conflict that polarises a nation. It left deep divisions in society but also an understanding of never wanting to experience that again.   Even though during the interwar period, from the 1920s-1930s, Finland did not have one majority government or majority coalition, it still had coalitions. It was in 1937 that the first majority coalition was built in Finland.   The stability and legitimacy of the democratic system has also been, in part, guaranteed by including all parties in government coalitions. Radical ideas and those parties or actors willing to destabilise the status quo have been tamed through offering responsibility, and at the same time, willingness to take responsibility has been expected of them. And this has thus far worked quite well.   But it also means that the parties have been able to evolve over time, and with time. This is the third observation. From the 19th century onwards, Finland has evolved from an agrarian country into a post-industrial consumer economy, known for advanced technology and high levels of expertise. The parties have not only been able to sustain their original mobilising of societal conflicts and constituencies but have also been able to attract new audiences among upcoming generations and new professions.   The changes affecting the current politics and political situation the most have occurred during the 1990s and 2010s, when first the Green Party, in the 1990s, and then the Finns Party, in the 2010s, established their strong positions within the Finnish party system. This has caused the party system to fracture, but when it comes to coalition governments, both parties have adapted to the Finnish system and taken part in the executive.   The work of Professor James A Robinson, who has, together with Professor Daron Acemoglu, written books such as Why Nations Fail and The Narrow Corridor, focusses on, among other things, examining inclusive and extractive elements in societies, and how these elements contribute to economic and social welfare and practices of democracy. It can be deduced from their work that coalition governments are both a result and precondition of inclusive political systems and inclusive political institutions, at least from the Finnish perspective.   The strong legalistic tradition in Finland descends from the 19th century, when Finland, as an autonomous grand duchy of Russia, was born first as a nation, and subsequently, as a state. This created the foundation for the strong Finnish state. And this is how, alongside the strong state, the pluralist multiparty system created a basis for inclusive political institutions, among many other things.   The strong state and inclusive political system in some sense incarnated from the 1960s onwards in aspirations to develop Finland into a Nordic welfare state and enhance and strengthen the liberal democratic features. These aspirations and ideals were then embraced throughout the party system, resulting in a consensus and compromise-seeking political culture.   Even if the economic and social welfare of the Finnish state and nation has been a driving force behind the consensus on compromise-prone political culture, it is important to remember the geopolitical setting that has always had a significant impact on Finland and had an impact on why there have been strong aspirations for national unity. Being a neighbour to Russia and, during the Cold War, the Soviet Union, has been a key element contributing to the understanding that a small nation must be internally united in order to survive externally.   Regarding the institutional framework that has contributed to the long tradition of coalition politics in Finland, it is important to look at local democracy and local democratic practices. During the 19th century, Finnish citizens were united in the face of the common external adversary, which was then the Russian Empire. But after the Civil War, they came together in the newly independent Finland under the lowest common denominator: the rule of law.   After the war, previous bitter enemies had to cooperate, first and foremost, at the municipal level. In order to do that, the one thing they could all agree on was abiding by the law. Up to and during the 1990s, as an example, the law stipulated that decisions regarding especially important financial decisions had to be made with two-thirds majority in the municipal councils. In most councils, this meant that cooperation and coalitions were unavoidable.   This was one institutional key element contributing to coalition tradition being strengthened in Finland. Most politicians began, and still begin their careers, from the local level. Thus, the experiences gained there have an impact on how they relate to cooperation and coalitions in their later careers.   Nowadays, the so-called council agreements, based on coalitions, consensus and compromise, are negotiated after the municipal elections, and these agreements outline those actors participating in the agreement as well as the policies promoted during the term.   The last point is to outline very briefly, the constitutional framework and to elaborate a little on the coalition government negotiation process.   Before the promulgation of the current Constitution in 2000, government formation was a process led by the President of the Republic, who had significant power to influence the composition of the government as well as the content of the government programme. Even if the parliamentary groups took part in the negotiations, the President still had a lot of say in the process and the outcome.   This semi-presidential system and its presidential prerogatives began to dismantle at the same time as the Cold War came to an end. Presidents from the early 1980s onwards chose to encourage a more parliamentarian system. Even though they still could have resorted to their prerogatives, they instead wished to encourage broader distribution of power.   From the 1980s onwards, the negotiation process itself began more and more to resemble the current procedure, with the parties and parliamentary groups in charge of the process and outcomes. These developments towards a parliamentary system were then, in the year 2000, codified in the new Constitution.   Today, the process adheres to the election outcome, with the party chairperson of the biggest party leading the negotiations. The composition and the power dynamics of the government also resemble the election outcome in two ways: The bigger a party’s parliamentary group, the more the party has the ability to influence the contents of the government programme, and the bigger the share of the cabinet ministers they have. Simply put, the bigger the party, the more ministers and the more say they have on the government programme. Bearing in mind that it is still a negotiation to form a coalition, and therefore no party gets all the power. That is the key finding.   The negotiations have no time limit, and there is substantial variation as to how long the negotiations take. After the last elections, the negotiations took 46 days, whereas the previous negotiations of the Antti Rinne and, subsequently, Sanna Marin government took only 24 days.    Should the negotiations result in a stalemate, the party chairperson of the second biggest party is given a chance to attempt to form a government, and so forth. Only if there is no prospect of the parliamentary groups being able to form any kind of a coalition, be it minority or majority, are new elections arranged. However, this has never happened in the history of Finnish independence.   During the semi-presidential era, stalemate-like situations did occur, but they were resolved either by forming a caretaker government or with the then President Urho Kekkonen, using his leverage to persuade parties to cooperate, usually by appealing to Finland’s precarious geopolitical situation and the risks of not having a democratically responsible government.   In conclusion, the Finnish pluralist multiparty system as well as political system have a long legacy, with parties and voters committed to preserving the stability and legitimacy of the democratic system. And much of this has come as a result of the long history of Finnish independence putting substantial emphasis on these inclusive political and economical institutions.   Geopolitical position and pressures have, in good and bad ways, contributed to aspirations of unity. But all in all, internal and external factors, institutional arrangements and historical traditions have generated a political culture where ideological differences are, for the most part, deliberated through the political process. As a result, as well as a precondition, this tradition of coalition governments can be considered a key element.   Professor Liisa Laakso Multi-party government: sharing power or building coalition?    Prof Liisa Laakso is a Finnish researcher working at the Nordic Africa Institute, a 60-year-old institute based in Uppsala, Sweden, partly supported by the government of Finland. As a political scientist, Prof Laakso has also done empirical research on democracy and elections in Africa and on conflict resolution.   This presentation reflects on the topic of coalition governments from a comparative point of view and also from the point of view of the experiences on the African continent. The focus is on multiparty government. Is it about sharing power or building a coalition, and what is the difference between these two patterns?   First, is the question of power sharing as a solution for political divisions in divided societies. A map from Andreas Mehler’s book about power-sharing agreements in Africa, between 1990 and 2009, shows that this experience of bringing together different political sections from the society to share political power is common in Africa. And power sharing, usually, is the kind of arrangement through which peace can be reached.   Not all of these conflicts have been actual civil wars, but they have involved violence, for instance, in the case of Zimbabwe, where a coalition government emerged in 2008. A general observation of this arrangement is that there are short-term merits. The violent conflict can be solved. But what about the long-term prospects? Very often, that kind of power sharing does not, or has not, led to stable political cooperation.   Arend Lijphart, who has also written about South African political divisions, believes that the democratic future in South Africa should be based on consociational democracy, which, according to his theory, creates the possibility for fragmented societies to reach stable political systems. Lijphart’s theories are based on the experiences of the Netherlands, Belgium and Luxembourg – states which are all ethnically divided, and with linguistic and, in the case of the Netherlands, also religious divisions. Lijphart’s theory is that this kind of subcultural segmentation is neutralised by consensus mechanisms.   The experience of African states with fragmented societies in terms of ethnic, linguistic and religious divisions, has been an experience of one-party states soon after independence, the years of African countries becoming independent being in the early 1960s, and also of dominant party legacy, strong presidents and presidential systems. And all of this has made the distinction between the ruling party – or the dominant party – and the state a difficult one.   Within that setting, what power sharing in practice has often turned out to be, is co-option, if not direct repression, of the opposition. Nowadays, it is referred to as dominant party systems, because most African states – discounting those currently under military rule, or eSwatini, which is a monarchy, or Eritrea, which is a non-party system – are implementing multiparty systems.   The factions within that dominant party are quite remarkable. There are also the much discussed issues or patterns of patrimonialism or clientelism which, in one way or another, could also be linked to corruption. Currently, the biggest threat to democracy and democratic competence in Africa, and elsewhere in the world, is corruption.   In terms of the South African experience, immediately after the political transition, the Government of National Unity (GNU) was an example of power sharing. At that time, the strong parties were also very strongly ethnically divided, therefore being a case of what Lijphart would have called consociational arrangement. But the GNU did not last very long, and the National Party disappeared from the political map in 2005.   The critique of power sharing and consociational democracy or consociational models has been that it is very elitist and that it also, in a way, freezes the differences, ethnic differences in this case, in the political structures, which then also means that political competition is taking place inside of the party. Consequently, it can cause deep factionalism inside the parties instead of becoming a competition between different kinds of political programmes, which would attract different kinds of interest groups in the society. In that kind of setting, for a political party to participate in power sharing could damage its support among voters.   The threat of being co-opted is a real one. The critique, in a way, also shows the importance of strong opposition in a stable democracy. The Finnish experience of coalition governments and government-building is that there has always been an opposition playing a role. In addition, this opposition has been one which has had the possibility of becoming a partner in the coalition after the next elections. In other words, the opposition has always had the prospect of being able to form a government or being part of the government in the next round. This is why the role of presenting criticism to the current government and being active in policy formulation is so important for the opposition.   The opposition also has an important role in civic education, or political education, among its supporters and the wider public, and in the provision of information to its supporters. Therefore, one important element is that the opposition must be strongly institutionalised and must remain active between the elections.   Regarding political pluralism, some of the parties in the Finnish system have a long history, and their support base has been very stable in reflecting the divisions between urban and rural Finland and also the linguistic divisions. The country has one more or less ethnically-based party – the Swedish People’s Party – which represents the interests of the 6% of the population who speak Swedish.   Although Finland does have the kind of party system that is based on long-term loyalties, the idea of voluntary association and the ability of the citizens to form political parties and other interest groups freely is still an important component of political mobilisation. Sartori’s claim is very clear, that the mere existence of different groups in a society is not indicative of pluralism. What does create political pluralism is when there are cross-cutting cleavages, where people can be members of different groups and, in that way, learn how to find compromises and perhaps also learn what other people are thinking and what their interests are. This idea of adjusting different interests to changing coalitions is important in the political culture.   It is useful to highlight that, after Finland’s independence, the Civil War that the country fought in was a particularly bloody one – in fact, it is still regarded as one of the bloodiest in European history, relatively speaking. It was a war where, literally, brothers were fighting against each other. It was a very traumatic experience for a newly independent country.   Another highlight is that the presidential, or semi-presidential, system was exceptionally strong for a lengthy period of time. One element in Urho Kekkonen’s – who was president from 1956-1982 – position was, at least rhetorically, that he presented his leadership as one that was necessary for Finland to keep good relations with the Soviet Union. Some years during his rule were not ones in which Finland could celebrate democracy. Kekkonen even continued in the position of president without elections in the 1970s, as the majority of political parties in the Parliament at the time decided that there was no need to arrange presidential elections in Finland.   Other aspects that have been very important in Finland’s political stability include the consensus culture between employers, employees and government – they have negotiated and collaborated when agreeing on increase of salaries, on tax levels and social policies. The country also has a strong tradition of agreeing on the basic elements of the welfare system.   In addition, the state committees were very strong institutions, particularly previously. Nowadays, there are many arguing that Finland should go back to those kinds of strong committees, which do not exist in many sectors anymore. These were committees for the preparation of laws, where the government was involving different kinds of stakeholders and experts to discuss, openly and informally, different kinds of policy issues before the preparation and actual writing of the laws took place. This committee system – which Finland inherited from the Swedish system, and which has long historical origins – was in fact pushing civil society to get organised, which meant the skills and knowledge of citizens, through different kinds of interest groups and civil society groups, was also enhanced. That has supported political participation in the country and also the legitimacy of the political system.   To conclude, Finland’s parties are more or less medium-sized, and they are not dominant parties. It is not clear before the elections which party will be the biggest one. Particularly during the last few years, the elections in that sense have been quite exciting. And although there are party loyalties among the supporters, there are also swing voters, so the parties are actually competing with their programmes.   Finland has had a large variety of government coalitions. Despite operating within different coalitions and having to cooperate with very different parties, the parties have been able to exist. Sometimes, the coalition experience has led to parties losing their support. For example, the previous government experience of the Centre Party in Finland, which is the old Agrarian Party, was one which was regarded very negatively among its supporters.   Currently, on the political fora, the country has a relatively new populist party, the Finns Party. It is new in the sense that, although it is strong and big, this party is not as experienced and institutionalised as far as its programme and its working structures are concerned. But perhaps now, when the party is in the government, Finland will also see institutionalisation on its part.   Lastly, a few words on the minority right’s Swedish People’s Party. In the Finnish system, this is the party that has most often been in the government coalitions – both in the leftist and rightist coalitions. This is the party that during the latest government negotiation was called the kingmaker. Some of the politically heated discussions within the current government coalition have taken place between the Swedish People’s Party and the nationalist Finns Party.           Virva Viljanen Legal framework and best practices of coalition government in Finland    Virva Viljanen is the Dialogue Advisor for Demo Finland, a cooperative organisation of all nine Finnish parliamentary parties. She leads the programme working with Finnish politicians to facilitate dialogue between the political parties, and also organises training for the politicians.   Demo Finland enhances democracy by strengthening the political participation of women, youth and persons with disabilities, in particular, and supports dialogue between political parties. Demo Finland works not only in Finland but also in eight countries internationally – Ethiopia, Kenya, Mozambique, Myanmar, Somalia, Sri Lanka, Tunisia and Zambia in cooperation with local partner organisations – to implement Finland’s democracy support.   This presentation looks at examples of formal and non-formal practices of coalition governments and multiparty collaboration in Finland, as these two link to each other. Finland relies heavily both on legalist tradition, in other words, laws, and also the somewhat trust-based culture of working together between political parties.   The legal framework of forming a coalition government in Finland is based on the Constitution of Finland, which states that before the Prime Minister is elected, the groups represented in the Parliament must negotiate on the political programme and composition of the government. This means that all of the parties that are elected to the Parliament take part in the preliminary negotiations or formation talks. And then, usually, the winner of the elections and the biggest party will invite a group of political parties to the actual negotiations.   The parties then draft a government programme, and equally important is the central government spending limits, which is the ceiling budget expenditure for the four-year election term. There is the temptation to create several different policies, but these central government spending limits tie them to the actual decision-making. This means that what political parties promise has to be linked to the budget.   At the end of the negotiations, each political party represented in the government chooses its ministers – the biggest parties get more cabinet ministers than the smaller parties in the coalition government. The government needs the confidence, or the majority of votes cast in Parliament, and this is why Finland usually has a majority government, so more than half of the seats in the Parliament.   In Finland’s latest parliamentary elections, the government negotiations between the four political parties took over a month. There was a long list of party representatives and invited experts in different thematic groups negotiating during the discussions. This resulted in a government programme which was over 200-pages long, including central government spending limits.   The coalition governments are also based on the multiparty collaboration in the Parliament. There is also institutionalised dialogue between the government and opposition that is based on law. Both the Constitution of Finland and, under that, the Rules of Procedure of the Parliament ensure this kind of institutionalised dialogue between political parties in the Parliament.   The laws state that reports must be submitted to the Parliament. In other words, the government is obliged to hand over reports on its activities and policies to the Parliament. The Parliament also has the right to receive information, and this is especially intended for the opposition groups having access to information about what government is doing.   There is parliamentary question time every Thursday. There are also interpellations to the government or an individual minister and then several non-formal procedures. It is not stated in the law that shadow budgets need to be discussed in the Parliament, but this is something that is repeated every year. Opposition groups will present their shadow budgets, and then they are addressed in the Parliament discussions.   There are two of these law-based institutionalised dialogue methods in the Parliament that are worth highlighting. First is the parliamentary question hour: every Thursday, the government ministers will reply, unrehearsed, to the questions of members of Parliament, and especially opposition representatives.   The second one is also mentioned in the law, that the government must reply to an interpellation – this is a formal question presented by a group of MPs – in a plenary session within 15 days of being given the question. After receiving the reply to the interpellation, Parliament then debates on the matter and proceeds to vote on whether the government or this particular minister in question enjoys the confidence of the Parliament.   This is also an important way for the opposition to raise questions and issues on policy matters and then test the confidence of the government. Most of the time, the members of the Parliament that represent government political parties will then vote on the confidence, and the Parliament, the government, can continue its operations.   One key element that is also based on the Constitution and the Rules of the Procedure Law in the Parliament is parliament committees. The Parliament of Finland has 17 permanent committees, with a proportional representation of parliamentary parties. This means that all the committees have members from both government and opposition groups. These are thematic committees which work on legislation and committee reports. There are, for instance, finance, education and culture, social and health affairs committees. One worth mentioning here is the Committee for the Future, which is a 17-member committee that works on future-related questions. The aim is to rise above the day-to-day politics and talk about future issues that need to be resolved within the democratic process.   One aspect that the Finnish members of Parliament appreciate greatly is that meetings are confidential. The agenda is published, but all the discussions are private. This allows the members of Parliament to have discussions without heated debates that are shared by the media. The committees routinely hear from experts – the committee discusses which experts they want to hear on the policy matters. These experts can be representatives of the administration, for instance, ministries, or NGOs, researchers and so on.   One key element of coalition governments in Finland is that political parties also collaborate on the local level. Often, these are the same political parties that then operate on the national level, and frequently, the same representatives work on the local level as well as in the Parliament. In fact, most members of the Parliament begin their careers on the local level, meaning they already have experience of working together at that level. Finland has more than 300 municipalities and 21 regions. This local government is based on the Constitution and then on the Local Government Act, which states how municipalities must organise their administration. Basically, municipal councils choose the members of their municipality boards, which is the executive body, proportionally reflecting the election result and the number of seats each party holds in the council. The result is that there is no government and opposition on the local councils, because most of the biggest political parties do have representation in the executive party. Therefore, there is no need for opposition leaders.   In terms of non-formal best practices of political parties working together and forming coalitions: first, there is the matter of using parliamentary working groups on issues that require long-term decision-making. In Finland, if there is a difficult policy issue that requires long-term decision-making – for instance, election laws – then, often, all the parties represented in the Parliament are invited to a joint working group aimed at unanimous decision-making. The goal is to ensure that when the power changes between elections, there are no hesitant policy changes. For example, the new group in power would not change election laws, and they would have more legitimacy when they are passed into Parliament.   Another Finnish example of non-formal collaboration is campaigning during elections, side by side. It is customary in Finland for political parties to share, for instance, marketplace meetings and campaign side by side at marketplaces and other events. They also have election panel discussions and public debates together.   The third example, as with Demo Finland, is where there are other cooperative organisations for political parties. One influential example is the Coalition of Finnish Women’s Associations (NYTKIS), which is an umbrella organisation consisting of the women’s organisations of the parties represented in the Parliament, working together, especially on gender equality. In these organisations, such as Demo Finland and NYTKIS, there is often a common denominator bringing them together – for example, gender equality or, in Demo Finland’s case, democracy.   Briefly, in Finland, Demo Finland closely collaborates with the Parliament, with committees, with political parties and their suborganisations, such as political youth and women’s organisations. It organises seminars and training events, inviting all the political parties and representatives. And its work is based on the understanding that all political parties commit to the laws and culture of inclusive democracy.   Chapter 3 Discussion   Who sets the government spending limits during the negotiations in Parliament? The Treasury? The previous government?   The Finance Ministry prepares a budget, and then the government discusses the political aspects. There has been a very different approach to the spending limits in this government versus the previous one. This government is downsizing the budget, whereas the former government wanted to include more initiatives within the spending limits. Although the ministries prepare the spending limits, they are not set in stone.   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -   Is it correct to say they can downsize, but they can also shift monies between various programmes?   Yes, exactly. And this is something that is under a lot of heated political debate. Where does Finland invest, and where does it downsize? This is the question.   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -   What advice does Finland have for South Africa, where coalitions at local government level have been very unstable? The country is expecting coalitions in certainly some of its provinces and maybe even at the national level. What advice would Finland give to a country that is finding these arrangements very new and very unstable?   Looking at how it was possible that after the Civil War in Finland, when it is safe to say that the different political parties and different aspects of society were very much against each other and were very suspicious of each other, then, in fact, it was the minimum denominator that everyone agreed to. They believed that the law would protect them against each other. The “rule-of-law” approach has been central in Finland in how these parties that have had very little trust in each other have been able to build that trust and build coalitions and compromise moving forward. This has been one of the key elements. But, if the legislature and the laws do not promote these kinds of procedures or trust being built, it becomes highly problematic, when the law cannot be instrumentalised in this way.   What is very important is that the parties formulate political programmes, that they discuss with the members and activists and clearly write down what their main objectives are, and that the programmes are also, in economic terms, somehow feasible. If the parties have programmes, they can participate in the negotiations, and the coalition can also make compromises and develop a programme that makes the parties and politicians accountable. If the parties are institutionally weak, they could become very elitist and all about their leaders. And that is the most dangerous setting for co-optation – the parties losing support among voters if they are then not able to fulfil a very populist programme of the political campaigning, for instance. That kind of professionalisation of the political parties is very important, at the local level too.   Political parties need to have their own programmes and need to be democratic within the political party. For instance, local government coalitions need to write a joint programme that everyone is committed to. In Finland, the programme is usually very detailed, because then nothing is left unsaid or unsettled, which builds trust. An important part of the negotiation is what is left out of the programme. The programme is very detailed on policies that are going to be implemented, but the political parties can also agree on issues that they want to advance during the next four years, if they are very much in disagreement on certain policy issues.   Sometimes it helps to start the collaboration between political parties on some subtheme. For example, in Finland, women’s organisations from the political parties working together. This makes it somewhat easier, because these women’s organisations and women politicians often share the same problems, despite which political party they come from. There have been some similar issues raised by the youth representatives from different political parties, that they all, for instance, can collaborate on youth participation in politics. So, perhaps beginning from somewhere that is shared common ground would be helpful.   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -   The first question is: In South Africa, where there are 400-plus parties, how possible is it in as far as coalition is concerned, as compared to Finland, which has nine parties?   The second is: Except where there are elections, or at the polling booth, where civic society comes to vote, as they continue with their programmes and engagement, how far do these parties go to continue to ensure that civic society is involved?   Thirdly, on the economic front, given the type of coalition pattern in Finland, how is the country doing in terms of its GDP and economically? In South Africa, there are issues of unemployment, low levels of poverty, and so on to contend with.   And lastly, a very interesting point was made that there is a collaborative aspect during election campaigns, meaning that these parties come together to do campaigning for the elections. How possible, different as the parties are, is it for them to go together into the civic society, even to the communities, and do “a common electioneering campaign”?    How to combine the civil society aspect into the coalition government and the trust building, is very important. The Finnish system and the Finnish tradition of coalitions and coalition building is very much reliant on trust. All these methods and mechanisms on how to sustain coalitions or make them better or make them viable, all are aspects that are building trust between the political actors and among the civil society. Finland has long-held traditions regarding different types of civil society organisations, other than parties. That is something to build on. The parties themselves have been built on this from-the-ground-up mobilisation in many cases, which also builds trust in society.   Continuing on the subject of civil society, the labour unions are very important, as are the employer organisations and interest groups from the various economic sectors, agriculture, forestry, etc. They have a strong say in the preparatory work for laws. And although the level of the organisation of labour has decreased, it is still very high, at least when compared to other European countries. But the tradition, the culture, is that unions and economic interest groups are very strong. The Social Democratic Party or the Left Alliance, are closer to the labour unions. The more right-wing parties are closer to the employers’ unions. And the Centre Party, which very much represents the rural areas, is close to the interest groups from the agricultural sector.   In terms of the Finnish GDP, Finland is a rich country. It is currently about US$50,000 per capita. When it comes to the spending limits for the government negotiations, what allows room to manoeuvre and what is a political issue is the ability of the government to take on loans. And this is something that is very much debated in Finland: What is the level of its debt? In that regard, Finland is not doing as well as its neighbouring Nordic countries.   Finally, about collaboration in elections. There are indeed electoral alliances, particularly for the smaller parties in the regional setting. It is sometimes critical that they build alliances with other parties. This can be a way for them to get representation to the municipalities, for instance.   This is a good question, how complex is the South African situation compared to Finland? Finland has a population of 5.5 million people and has only nine political parties represented in the Parliament. The total number of political parties is currently approximately 20. To address the question of civic society, it is true that in Finland, the political parties are losing membership – they really have issues engaging people in party activities. There is an increasing need in Finland to know, how does one engage people, citizens, civil society between elections and outside of the representative democracy or, for instance, the Parliament and local governments?   This is done in several ways. The government has a very strong mandate or role for civil society organisations. Firstly, the Finnish state funds several civic society organisations. For example, Demo Finland gets its funding from the government of Finland or the Foreign Ministry. Then, the government also has, for instance, working groups, where there are experts from the civil society as well as politicians and government officials.   There is also the question of how to engage the ordinary citizens. For instance, on a local level, there have been several attempts at participatory budgeting, in other words, giving citizens the right to say where the budget is spent. An example would be giving them an amount of €3 million and then asking them to vote on what they want the local government to spend it on. In addition, for instance, youth councils on a local level could be brought in, to hear the voice of the local young people, and so on.   In terms of electoral alliances, political parties work together to campaign for the votes. But they also try to gain the same votes, campaigning side by side in order to engage more people. They invite people to these election debates or marketplace events to meet them and then compete for the votes by offering them their own policies. This is a very interesting example of how Finnish political parties are able to collaborate in this kind of competing situation.   Finland also has its own policy issues currently, as was raised, the debt issue. Another is the question of the war in Ukraine, and security policies in Finland, which have been a huge public debate in Finland. It changes, depending which policy issues are the most influential in which elections. A quick comment about the elections and how the parties collaborate. The parties do campaign side by side, but the rivalry is often more intense within the party than between parties, in a sense, because the Finnish electoral system is such that the vote is cast for a person. The person represents a party list, but it is not a list vote, it is a personal vote that is being cast. Therefore, the politicians on the party lists are often competing against each other more fiercely than the party lists are competing against another party list. This is something that is debated or discussed in Finland, whether this is the most effective or the best way. For example, in Sweden, they have the list vote, and that results in a less competitive campaign atmosphere among the party members, and the campaign is more driven between the parties than inside the parties.   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -   This phenomenon of coalitions is very new in South Africa and in South African politics. To understand the unique and complex scenario in South Africa leading up to the elections in 2024, what is bound to be seen and experienced, the following must be considered. South Africa comes to this position from the fragmented past of apartheid, versus Finland, which adopted this approach primarily as a result of World Wars. The country has a population of over 60 million, versus Finland, which has a population of roughly 5 million. Finland has three official languages, whereas South Africa has 12 official languages. Hence, South Africa is trying to solicit as much expert knowledge as possible in order to make sure that there is a transition that is smooth, and also a quick understanding of each and every political party involved in those coalition discussions and agreements, ultimately.   The idea of a government programme vis-à-vis the party programme or the party manifesto, is a good one. What ordinarily happens in South Africa, is that as the election approaches, each political party will come up with its own manifesto – a programme of action that expresses what the party’s priorities and implementation strategy will be once they are in power. The parties then sell that to the masses, the electorate, to secure their votes. The voters choose the one party that resonates with them, the one that represents their interests more than the others.   In South Africa, there are currently three predominant political parties right at the top, with 406 parties in total, and 14 political parties in its national government, in Parliament. And there are bound to be more than that, come 2024, after elections, because of the many new parties that have been formed recently, which of course brings a huge debate, or rather, a huge headache. The smaller the number of parties, the better – having too many parties causes confusion, especially among the voters.   Of the 14 political parties in the national Parliament, there are three big parties: the ANC, DA and EFF. Each one of them stands for something totally different; they are extremes, to a certain extent. And voters have to find themselves in these three. Come the 2024 elections, the likelihood is that none of them are going to have 50% plus 1%, which guarantees their creating a government, meaning that none of them will have a majority and they are bound to reach out to smaller parties, some of which represent a totally different view point, especially on policy formulation, because that is what drives the programme of action of every political party. Of course, South Africa is also dealing with three main challenges from its historical background: poverty, unemployment and inequality. In the current experience of the coalitions at a local government level, these three dominant parties have a tendency towards a bullying attitude. If that attitude persists, leading up to the 2024 elections, and permeates the process of forming a government – they are to a certain extent in the driver’s seat – and calling upon the smaller minority political parties, how will they understand that even though they have a higher percentage of votes than others, when it comes to sitting around a negotiation table, they are in fact equals with everyone? That kind of attitude will assist parties in being sober minded in their approach in negotiations and in how they agree upon a government programme of action vis-à-vis their own manifesto. With a bullying attitude, none of the parties will allow themselves to be imposed upon by another party’s manifesto. Therefore, there needs to be a new programme of action crafted as a coalition government.   The question is: How does South Africa deal with the bullying attitude of these parties, where they want to impose their policies, principles and standpoint on certain issues? How does South Africa get them to reach a particular compromise on very key, fundamental issues that must drive the coalition and, ultimately, succeed?   Is there not a delay in decision-making in Finland with regard to policy or even issues that deal with service delivery? Are coalitions not delaying decision-making because of too many protected negotiations of one kind or another? Secondly, what are the values that can hold the opposing parties together to the extent that they can work together? Looking at other old democracies, many have two dominant parties, and they name these parties on their value system – for example, in America, one is Democratic, the other is Republican, defining what participation is all about. In smaller democracies like South Africa, is the issue of coalition not one that is going to delay decision-making, leading to various challenges? What can be done about this? This could be a serious fallback issue, so it must be defined.   The third issue is that the level of literacy in the country, which is one that is fuelled by populism, does not allow for people to make informed decisions on matters that affect them going forward. Democracy, in essence, without political education, does not guarantee stability at all, because people must make choices on the basis of informed, rational decisions. And in most cases, that does not happen. What assistance can be forwarded in terms of assisting this conversation?   And finally, what are the levels of inequality, both social and economic, in Finland? South Africans are looking for a party that can deliver and close the gap between the rich and the poor, the haves and the have-nots, and access the economy and participation in the economy. All of these things are an amalgam of the challenges that the country faces.   In terms of the problem in negotiations where it is probable or expected that some of the negotiating parties might have somewhat of an aggressive tactic, and how the other parties could counteract that, in Finnish government negotiations they bring in many experts from various fields, from civil society to the ministries or administration and NGOs. This could be one way to mediate the negotiations or help the parties to build on common ground. That was analysed in Finland recently during the very long government negotiations, with one party that technically had not participated in government ever before. One explanation of why the negotiations took so long and why they invited several hundred experts to take part in the negotiations, is that because this one party had very limited experience in the negotiations, the use of experts and advice was a way to get all the parties onto a more level playing field, so that everyone had the same level of knowledge and the same picture of what was being discussed. That could be one way of pointing the negotiations in a more amicable direction.   With regards the delay in decision-making, in Finland, the main goal of the government programme is that what is negotiated must be executed during the four-year term. However, if there is a particular subject that is difficult and causes some disruption or disagreement between the government parties, then these are the issues that are often delayed. Despite having these very particular, meticulous programmes, there are issues that get pushed to the sidelines and that are delayed beyond the government term.   The values that all Finnish political parties share includes rule of law – meaning trust and relying on the Constitution of Finland – and the principle of democracy. But there are other policy issues that the political parties disagree on.   With regards the delaying of decision-making, this is certainly true, that in terms of more inclusive politics, it always takes more time. However, one trust-based practice that is in use in Finland is that each political party holds a cabinet minister seat, and the cabinet ministers or the government ministers have the right to prepare their own laws and policy proposals based on the government programme. They have the right to prepare, with their ministries and administration, these laws. Then, when these laws or policy proposals are brought to the Parliament, the government, the members of Parliament who represent government political parties, will vote for them. It is customary that then the government will not vote against its own laws. This is something that helps with the delaying of decision-making, that each cabinet minister has the right to prepare laws, and other political parties will not delay those if they are based on the government programme.   However, usually, when the elections come closer, the political parties tend to skip this rule, which means that at the end of the election term, often more laws are not being passed in the Parliament, especially the kind of controversial laws that have been delayed until the end of the term.   Then, the very difficult question of how to bring members of Parliament together, especially after heated discussions in elections. It is also the case in Finland, especially in social media, that the representatives might use, for instance, language that is hurtful. And the basis for collaboration is then quite difficult. In the Parliament, for instance, the Chairperson of the Parliament usually has authority over the rules for constructive dialogue, or a code of conduct in the Parliament. The kind of speech allowed in the Parliament is regulated by these non-formal rules. Also, new members of Parliament are trained by legal advisors on how to work in the Parliament. This training is organised by the clerks of the Parliament, so non-partisan workers in the Parliament.   Lastly, what Demo Finland works on is to bring the political parties to the same table, not to try and work on policies but just to understand each other better, which is also a good result in these kinds of situations. But this is a very complex situation, and the Finnish model does not apply in all circumstances.   What about making compromises or being in a coalition if the values of the parties are very different? In the Finnish political culture, because of this coalition-building, in addition to ideological commitments and strong political beliefs and values, there is also a certain kind of pragmatism. In the current government coalition, looking at the values of the parties and based on the views of the members of Parliament, for instance, the Swedish People’s Party and the populist nationalist Finns Party are very far from each other. It is a miracle, from the perspective of political values, that they can be in the same government. However, they have calculated it in a very pragmatic way, that for the smaller Swedish People’s Party, it would perhaps be more challenging to be outside of the government if, in the government, there is a strong party pushing for nationalist Finns Party’s values, which, for instance, include abandoning the status of the Swedish minority language in Finland’s schools. Consequently, perhaps the Swedish People’s Party calculates that it is better for them to be in the government coalition in spite of all the difficulties. And for the government coalition, it is an important member, because with that party, they get the majority in the Parliament. This kind of pragmatism is what then creates the compromises that make cooperation possible.   The issue of delays in decision-making is also a very important one. For instance, Finland has extremely expensive and important reform of the social and health services system. This is the third, if not the fourth, government that is dealing with the reform, because it has been so difficult. And now, this government, representing different parties than the previous government, has to implement what was decided before it. It is challenging, as this reform programme is vital for the whole society.   On the issue of political education, it is also so important in Finland, because of, for instance, the rapidly changing media environment. The country used to have a system where there was leading national media and big newspapers and a relatively homogeneous education system and population. But now, Finland is becoming more multicultural. There are more immigrants. There is much more media, social media, for instance. It is not known exactly what the most used sources of information for the young people are. During the last elections, TikTok was a key platform for political mobilisation. Some parties or candidates were very active on that medium, whereas other parties or candidates were not. The landscape is changing so quickly that this issue of political education or civic education is something that has to be thought about and worked very hard at. And indeed, in South Africa, where the challenges of literacy, for instance, are also huge, the issues of giving information and building trust are even more critical.   Chapter 4 Summary of Lessons to be learnt and gained from the Finnish Model    by Erwin Schwella    Prof Erwin Schwella is currently working comparatively with a host of politicians in South Africa on co-creating a Leadership for Coalition Government course, through Free State University.    On contextual sensitivity and comparability for relevance, reliability, and validity in comparative analysis and action    Drawing comparative insights, applications and lessons when comparing political governance and public administration systems requires awareness of and relevantly allowing for contextual sensitivity.   Contextual sensitivity is the awareness and appreciation of the different historical, cultural, social, economic, and political factors that shape and influence the political, governance and public administration systems of different countries. It is important to consider such contextual sensitivity sensibly when comparing political and governance systems such as coalitions across nation states, because it helps to avoid oversimplification, generalisation, and ethnocentrism.    For relevance, validity and reliability when drawing out and learning the lessons there is an imperative to recognise the diversity, complexity, and uniqueness of each case.   Some  aspects that need to be considered as contextual sensitivity when comparing political and governance systems are:   The historical background and trajectory of the countries, such as their colonial and post-colonial experiences, their state formation and nation building processes, their regime changes and transitions, their conflicts and wars, and their regional and international relations. The cultural and social characteristics of the countries, such as their: ethnic, linguistic, religious, ideological, and demographic diversity, values and norms, their identities, and cleavages, levels and depth of social cohesion, levels in breadth and width of cross-cutting trust in societal institutions and each other, civil society and social movements, and their media and public opinion. The economic and developmental conditions of the countries, such as their: Income levels, inequality, poverty, and unemployment, growth and stability, their structure and diversification, trade and integration, innovation and competitiveness, and welfare and redistribution. The political and institutional features of the countries, such as their: constitutional and legal framework, electoral and party system, executive and legislative branches, legislative, judicial, executive, and public administration institutions , decentralised and devolution spheres of governance such as federal and local units, and oversight, responsibility, and accountability checks and balances, the incidence of bad governance and leadership, and prevalence, and prevalence and incidence of corruption and maladministration.   These matters matter as they will and should have different impacts on the formation, functioning, and performance of coalitions across nation states, depending on the context of each country.   As in the comparative  example in focus here, mature democracies such as Finland may have more stable and effective coalitions than less mature, or maturing  democracies such as South Africa, because they have more:   consolidated and coherent party systems, consensual and proportional electoral systems, transparent and accountable institutions, and more developed and inclusive societies.   This, however, does not mean that coalitions are always better or worse in one context than in another, as there may be trade-offs, variations, and exceptions in each case.   Therefore, contextual sensitivity requires a careful and nuanced analysis of the similarities and differences, the strengths and weaknesses, and the opportunities and challenges of coalitions across nation states cases.    On lessons to be shared and learnt   A first key insight from the Finnish experience is that coalition governments are both a result of as well as a  precondition for inclusive political systems and inclusive political institutions – which feeds the stability and legitimacy of the democratic system. In order to form a coalition government and especially a majority coalition, a number of parties are required to cooperate.   Secondly, even though it is a case of, the bigger the party, the more ministers and the more say they have in the government programme, it is still a negotiation, a coalition, so nobody gets to have it all. And the discussions taking place within spending limits means parties cannot come with outrageous promises, they have to work within that framework.   Thirdly, from the Finnish example it was also concluded that the Finnish system of coalitions is very much reliant on the “rule-of-law” approach and mechanisms that sustain coalitions and make them viable, aspects that build trust between the political actors and among the civil society. This allows parties that have had very little trust in each other to make the necessary compromises in order to build healthy coalitions and move forward.   Fourthly, Finland also has long-held traditions regarding different types of civil society organisations, other than parties. In Finnish government negotiations, experts from various fields – from civil society to the ministries or administration and NGOs – are brought in to mediate, to help build common ground and level the playing field.   Coalitions are often thought of in terms of enabling a governing majority.   However, coalitions might also be useful in diverse and fragmented societies, such as in South Africa, where it is not necessarily about forming a governing majority, but rather, it might be a way to increase social and political cohesiveness in the country – of course, always guarding against the danger of co-option.    The Context, realities and lessons related to coalition success in Finland    Finland for more than 100 years has had relatively successful coalition governments, as during these 100 years no party has ever been even close to securing a majority of the seats in the Parliament. This stability is in part due to the party system being able to accommodate several different societal conflicts. Radical ideas and those parties or actors willing to destabilise the status quo have been tamed through offering responsibility, and at the same time, willingness to take responsibility has been expected of them. Thus far this has worked quite well.   In Finnish history the Finnish people also had to build a strong state to:   Counter the consistent threat to their national state of the ever-looming expansionist Russian empire and its modern-day successors, and Build and sustain a successful welfare state to nurture the Finnish citizens.   This combination of a serious external force challenge and the need to improve the lives of Finnish citizens increased Finnish cohesion and the Finnish sense of national sovereignty and unity. These combined dynamics also made it necessary to internally form successful coalitions in the face of threats as well as for good governance in the interests of the welfare of the Finnish population and their democratic state and governance system.   The Finnish state was formed after a very divisive civil war, and in order to provide a strong institutional base for future stability and success the Finnish institutions are committed to the institutions of constitutional democracy based on the non- negotiable rule of law in central and local government spheres.   There are also statutory requirements to enhance coalition cooperation in all spheres  of governance such as a majority requirement of 66 % of the vote to pass these budgets. The culture of compliance with the institution of the rule of law and the dynamics of legal requirements for compliance towards consensus combined strengthens incentives for responsible coalition governance by all parties concerned.   In conclusion,  the Finnish pluralist multiparty system as well as political system have a long legacy, with parties and voters committed to preserving the stability and legitimacy of the democratic system. And a lot of this has to do with the fact that the long history of Finnish independence has put substantial emphasis on these inclusive political and economic institutions.    Lessons for South African coalitions in the context of comparability for relevance    A further set of lessons from a comparative context is to consider the contextual sensitivity and comparability for relevance, reliability `and validity in comparison sensibly and sensitively. The African context  is significantly different from the Finnish context. South Africa selected to not accept the consociationalism states of Arend Lijphart in crafting its Constitution to enhance the probability for fragmented societies to reach stable political systems.   This then makes the experience of African states also the South African reality.  In the African context with fragmented societies in terms of ethnic, linguistic, and religious divisions, African experience therefore often is one of one-party states after independence, and also of a dominant one or one strong party legacy, strong presidents and presidential systems. This has made the distinction between the ruling party, or the dominant party, and the state a difficult one.   Within this contextual setting,  power sharing in practice has often turned out to be at best co-option, if not direct repression, of the opposition. Nowadays, it is referred to as dominant party systems because most African states are now somewhat nominally, professing to be implementing multiparty systems.   The factions and their behaviours within most of these dominant parties and state party systems are quite remarkably similar.  This similarity includes patterns of patrimonialism or clientelism which, in one way or another, can also be linked to corruption. Currently, the biggest threat to democracy and democratic competence in Africa, and also elsewhere in the world, is corruption. The lesson is then that coalitions are not useful for the corruption appetites of dominant parties in Africa, as they may put brakes on the corruption possibilities for those parties.   In the Finland case parties are more or less medium-sized, and they are not dominant parties. It is seldom clear before the elections which party will be the biggest one. And although there are party loyalties among the supporters, there are also swing voters, so the parties are actually competing for power  with their policy  programmes rather than identity loyalty political choices. The lesson is that voter behaviour in South Africa, and South Africa not being a mature plural democracy (yet) make South African coalition success based on the competition for ideas less probable than in Finland. Coalitions will more likely be formed based on the necessity to achieve a working majority in Parliament.   Finally, the success of coalitions in Finland is grounded in formal and non-formal practices of coalition governments and multiparty collaboration in Finland, as these two link to each other. Finland relies heavily both on legalist tradition, in other words, laws, and also a trust-based culture of working together between political parties. Examples of the way in which this combination supports successful Finnish coalitions are:   Formally, the Constitution of Finland requires parliamentary stakeholder groups including the political parties to negotiate the government programme and composition before electing the Prime Minister. All parties in the Parliament join the initial talks, but the election winner and biggest party invites some parties to the final talks. The parties also choose their ministers, with more seats for bigger parties.   The government must have the  majority support of Parliament, which is why Finland usually has a majority government. Of equal importance is central government spending limits, which is the ceiling budget expenditure for the four-year election term. Obviously, there is an impulse to create several different policies, but these central government spending limits then tie them to the actual decision-making. What political parties promise has to be linked to the budget.  In all of the above dynamics is the result of  negotiation, and as  it is a coalition, as well as negotiated coalition  compromises result into the reality nobody gets everything.   The more informal dynamics that support coalition success in Finland are:   Many of the politicians start their political and governance careers in local government, where they mutually experience and learn about the value of cooperation and consensus based on an increasing resultant trust relationships even under conditions of contestation. This is valuable learning for future success. When complex and contested legislation is prepared and implemented for success in Parliament parliamentary committees work together over party borders to find sufficient consensus. This creates opportunities to learn from the proves when there are successes, and the third alternative thinking and action creates trust and consensus spilling over into future work for success. During election campaigns there is non-formal collaboration between contesting political parties where national consensus and cohesion in the interest of Finland is necessary. This sets a foundation for consensus in later complex issues where the interests of the Finnish people prevail over narrow self-interest-based party political and personal political interests. Finally, the success of Finnish coalitions is enhanced by continuous deep learning, through in-practice and in-conversation learning experiences, which is also enhanced by continuous research and learning through real world experience as well as research and education for the whole society, including all political and governance stakeholders and the electorate as citizens.    The last and very significant lesson directly above is of great importance to societal, educational institutions including the formal education system, as well as in this context of professional learning institutes such as the Inclusive Society Institute and CiviNovus as two  of many other role-players in this space in South Africa.   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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 © 2024 Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8010 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 2024 Author: Nicola Jo Bruns Bergsteedt Editor: Daryl Swanepoel Content 1. Introduction 2. Motivation and Background to the Trip 3. Introduction and Overview of the Danish Labour Market Model 4. The Flexicurity Concept 4.1 The Dual Pillars of Flexicurity 4.2 Integration and Balance 4.3 Tripartite Cooperation and Social Dialogue 4.4 Global Implications and Challenges 5. Historical Context and Development 6. Key Components of the Model 6.1 Impact on Employment Rates 6.2 Influence on Economic Growth and Stability 6.3 Effects on Social Equality and Worker Well-Being 6.4 Comparison with Other Labour Market Models 6.5 Sustainability and Cost Concerns 6.6 Adapting to Evolving Labour Patterns 6.7 Addressing Inequality and Labour Market Segmentation 6.8 The Critical Role of Unions and Employer Associations 6.9 Summary of Findings 7. Impacts and Challenges 8. The Future of the Danish Labour Market Model 9. Lessons Learned 9.1 Reflections for BUSA 9.1.1 Holistic Sustainability Approach 9.1.2 Innovation and Collaboration in Labour Relations 9.1.3 Exemplary Work-Life Balance Practices 9.1.4 Commitment to Environmental Sustainability 9.1.5 Inclusive and Comprehensive Social Welfare 9.1.6 Overall Reflections 9.2 Reflections for COSATU 9.2.1 Main Takeaways 9.2.2 Learning for South Africa 9.2.3 Improving Labour Relations 9.2.4 Mutual Learning 10. Recommendations and Conclusions 10.1 Recommendations 10.1.1 Establishment of Workplace Forums 10.1.2 Creation of a Labour-Business Compact 10.1.3 Transition Support and Basic Income Research   References       1. Introduction   This report delves into a comparative analysis of the labour and business relationships in South Denmark. The aim is to uncover valuable insights and lessons that South Africa can learn from The Danish labour market model, known for its balance and effectiveness in fostering a collaborative environment between labour and business. South Africa's labour market is heavily influenced by its historical context, particularly the legacy of apartheid. This backdrop has led to a labour framework that is protective of workers' rights but often cited as rigid by the business community. The high unemployment rate and stark income inequality further complicate the labour-business relationship, making it a crucial area for policy focus and reform. Denmark, in contrast, presents a unique and successful labour model known as "flexicurity”. This model is characterised by labour market flexibility, strong social security for workers, and an emphasis on mutual agreement and collaboration between employers, employees, and the government. The Danish model has garnered international acclaim for achieving a balance between employee security and business agility. The purpose of the study trip to Copenhagen, Denmark, was primarily to comprehensively understand the Danish labour-business compact. This venture was important, as it aimed to gather insights and practical knowledge from one of the world's most successful labour models.   The delegation that embarked on this journey comprised a diverse and expert cohort from South Africa, including key representatives from the Inclusive Society Institute, Business Unity South Africa (BUSA), and the Congress of South African Trade Unions (COSATU). This assembly of varied perspectives – encompassing policy analysts, business leaders, and trade union representatives – was intentionally designed to ensure a holistic understanding of the Danish labour market model. The core objective was to extract valuable lessons and strategies that could be adapted and applied to the South African context, with the ultimate goal of fostering a more collaborative, efficient, and equitable labour-business relationship back home. This trip was not just about observation and study; it represented a proactive step towards possible and tangible change and improvement in the South African labour market and business environment.   The primary goal participants hoped to achieve during this research trip was to glean actionable lessons and strategies that could be tailored and implemented within the South African context. The objective was to explore and understand the mechanisms and policies that underpin the Danish model's success, particularly how it balances the interests of labour and business to create a harmonious and productive environment. By doing so, participants sought to identify practices and principles that could be adapted to enhance the labour-business relationship in South Africa, aiming to create a more collaborative, dynamic, and equitable labour market. This study trip was envisaged as a crucial step in driving substantive change and progress in the country’s labour and business practices, moving towards a model that benefits all stakeholders in the South African economy.   The cohort participated in meetings and presentations held at various locations during their visit, which included: Arbejdernes Landsbank, where they attended a presentation by Ms. Sofie Holme Andersen, Chief Economist at Arbejderbevægelsens Erhvervsråd. The topic of the presentation was "South Africa's Potential Inspiration from Denmark's Social Model". A meeting with former Finance Minister, Mogens Lykketoft, to discuss the formation of the Danish labour market model. A visit to the Arbejdermuseet, where they gained insights into the daily lives of Danish working-class families in the historical assembly hall dating back to 1879, located in the heart of Copenhagen. Confederation of Danish Industry (DI) in København, where they attended a presentation by DI's Signe Sørensen about DI's efforts in Social Dialogue. 3F Danish Trade Union, where Jesper Nielsen provided information about 3F, Denmark's largest and most influential trade union and unemployment fund. A presentation by labour market economist, Professor Per Kongshøj Madsen, who discussed various aspects of the Danish labour market under the theme "Upstairs and Downstairs on the Danish Labour Market".   The primary objectives of this report are:   To provide a detailed comparison of the South African and Danish labour/business models. To identify key aspects of the Danish model that contribute to its success. To explore how elements of the Danish approach could be adapted or implemented in the South African context, considering its unique socio-economic challenges.   The analysis aims not just to contrast the two models, but also to offer a pathway for South Africa to enhance its labour relations, improve the business climate, and ultimately foster a more inclusive and dynamic economy. The lessons drawn from the Danish model could be instrumental in guiding South Africa towards a more harmonious and productive labour-business relationship.   2. Motivation and Background to the Trip   In 2022, the Inclusive Society Institute, in collaboration with the Economic Council of the Labour Movement (Denmark) published a paper exploring the potential benefits of applying Denmark's Social Model to South Africa. This paper delves into the intricacies of the Scandinavian social model, particularly focusing on Denmark, and considers how South Africa might draw inspiration from Danish societal organisations.   This research was motivated by President Cyril Ramaphosa's proposal to establish a written social compact in South Africa, aimed at addressing the nation's critical issues, primarily its struggling economy. The paper examines this proposed social compact and its goal to unite diverse stakeholders in tackling major challenges like skyrocketing unemployment, growing wealth inequality, deep-seated poverty, and a faltering economy. The success of this compact depends on mutual cooperation, trust, and respect. However, the existing relationship between Business and Labour in South Africa is often marked by scepticism. Labour groups are prone to strike when their demands, particularly for significant wage increases, are not met, as Mkentane (2022) notes. On the other hand, businesses frequently argue that strict labour laws impede job creation. The tension is evident, especially following a statement from Cosatu, South Africa's largest trade union, advocating for national strike action as a response to perceived class warfare by employers.   The 2022 report looks to the Danish social model for potential solutions, noting how Scandinavian labour markets, including Denmark, have managed to harmonise high prosperity and employment levels with low poverty and equality. This balance is credited to effective collective bargaining, an extensive public welfare system, and a strong social safety net, supported by flexible employment regulations. Although these features have evolved from unique historical circumstances specific to Scandinavia, the Danish model specifically offers valuable lessons in achieving a balance between social welfare and economic growth.   The 2022 paper specifically focuses on the Scandinavian social model, with an emphasis on Denmark, and contemplates how South Africa could adapt aspects of Danish society to address its own economic and social hurdles.   Building on this research, the 2024 initiative includes a visit to Copenhagen to gain first-hand insights from businesses and workers about the Danish Labour Model, further enriching the understanding of its applicability to South African challenges. It is encouraged that this report is read in unison with the 2022 paper.    3. Introduction and Overview of the Danish Labour Market Model   The Danish Labour Market Model, as aptly described by The Confederation of Danish Industry – Denmark's foremost business and employers' association – encapsulates the ethos of 'strong companies in a strong society'. In Denmark, both the business and labour sectors are excelling, owing to this exemplary model. They are not just building robust companies but are also integrating them seamlessly into a resilient societal fabric. This remarkable success is a clear testament to the model's innovative design and the effective processes it has in place.   The origins of the Danish labour market model can be traced back to the early 20th century, but it was in the 1990s that the term "flexicurity" began gaining traction (Wilthagen, 1998). Denmark's approach evolved in response to the challenges posed by globalisation and the shifting paradigms of the post-industrial economy. Unlike the more rigid labour systems in many countries, where stringent regulations often govern hiring and layoffs, the Danish model provides a high degree of latitude to employers. This flexibility is seen as key to fostering a dynamic, adaptable labour market, capable of quickly responding to changing economic conditions.   However, what sets the Danish model apart is not just its flexibility but also the robust social welfare system that underpins it. The safety net in Denmark includes generous unemployment benefits, extensive retraining programmes, and a strong emphasis on active labour market policies. These policies aim to assist the unemployed in returning to work as quickly as possible, through initiatives like job training, education programmes, and work trials. The state plays a proactive role in ensuring that workers are not left stranded by economic shifts but are instead equipped with the skills and opportunities to navigate the changing landscape.   The model also embodies a unique collaboration between the government, employers, and trade unions. This tripartite arrangement fosters an environment of mutual trust and cooperation, ensuring that labour market policies are crafted and implemented in a manner that balances the needs of all stakeholders. Collective bargaining, a cornerstone of the Danish labour market, allows workers and employers to negotiate wages and working conditions, leading to a harmonious and productive work environment.   Internationally, the Danish labour market model has been praised for its ability to maintain low unemployment rates, high job mobility, and a high level of worker satisfaction. Its success lies in its ability to combine flexibility for employers with security and opportunities for employees. This equilibrium not only enhances economic efficiency but also promotes social cohesion and stability, making the Danish workforce one of the most resilient and agile in the world.   Yet, the model is not without its challenges and criticisms. Concerns have been raised about the sustainability of the extensive welfare system, especially in the face of demographic changes and economic pressures. Additionally, there are debates about the model's inclusivity and its ability to address the needs of all segments of the workforce, particularly in light of increasing automation and digitisation.   The Danish labour market model, with its innovative approach to balancing flexibility and security, serves as a fascinating case study in labour economics and social policy. As countries around the world grapple with the challenges of the 21st-century economy, the lessons from Denmark's experience offer valuable insights into the creation of a resilient, dynamic, and inclusive labour market.   Next, we break down flexicurity, one of the key components that make up the Danish Labour Market Model.   4. The Flexicurity Concept   Flexicurity, a blend of "flexibility" and "security", is an innovative labour market policy framework primarily developed in Denmark. It has garnered widespread attention in Europe for its unique approach to modern labour market challenges (Wilthagen, 1998). This concept uniquely combines flexible labour relations with robust social security systems, aiming to balance the needs of employers and employees in a dynamic global economy.   4.1 The Dual Pillars of Flexicurity   Labour Market Flexibility: Central to flexicurity is the advocacy for a labour market adaptable to changes and technological advancements. This includes easier hiring and firing processes, which encourage businesses to quickly adapt, fostering economic dynamism, and promoting job creation.   Job Security and Social Protection: Counterbalancing flexibility, the model emphasises a strong safety net through comprehensive unemployment benefits, high-quality retraining and upskilling programmes, and active labour market policies (OECD, 2022). These policies, including vocational training and career counselling, ensure workers remain employable during industrial and technological shifts.   4.2 Integration and Balance   Flexicurity challenges the traditional view that flexibility and security are mutually exclusive (Madsen, 2023). Instead, it posits that when integrated effectively, these elements can be mutually reinforcing, ensuring economic efficiency alongside social fairness.     4.3 Tripartite Cooperation and Social Dialogue   A key to the success of flexicurity lies in strong cooperation between the government, employers, and workers' representatives. In Denmark, this collaboration has been crucial in shaping policies that benefit all parties, with collective bargaining playing a central role.    4.4 Global Implications and Challenges   Flexicurity's track record, particularly in Denmark, shows its potential to achieve high employment, low unemployment, and equitable income distribution. Its principles are increasingly relevant in the face of automation and the changing nature of work, such as the gig economy.   However, implementing flexicurity is complex and context dependent. It requires significant investment in social welfare and labour market policies, and its success hinges on specific cultural and institutional contexts, posing challenges in diverse global environments (Eurofound, 2013).   Flexicurity represents a sophisticated approach to labour market policy, blending employer flexibility with employee security. As nations navigate the challenges of economic globalisation and technological change, flexicurity offers insights into creating resilient, inclusive, and dynamic labour markets for the future.    5. Historical Context and Development   The evolution of the flexicurity model epitomises a seminal exploration in the realms of labour market innovation and socio-economic adaptation (Madsen, 2007). The development of this model mirrors Denmark's strategic responses to fluctuating economic scenarios and labour market exigencies over time (Bredgaard, Larsen & Madsen, 2005).   Denmark's journey towards flexicurity commenced in the early 20th century with the genesis of its welfare state (Kvist, Pedersen & Köhler, 2008). This period was marked by policy initiatives aimed at broad social protection, laying the foundation for the extensive welfare systems, which later became a cornerstone of the flexicurity concept (Greve, 2011).   The aftermath of World War II saw Denmark, akin to its European counterparts, augmenting its welfare policies (Esping-Andersen, 1990). This expansion paralleled economic growth, but by the 1970s and 1980s, Denmark confronted new challenges such as economic recessions, oil crises, and intensifying global competition (Jørgensen, 2009). These challenges underscored the limitations inherent in a labour market characterised by rigid employment protections, thereby catalysing a paradigm shift towards greater labour market flexibility and security (Torfing, 1999). "Flexicurity" garnered significant traction in the 1990s, in the wake of Denmark's labour market reforms, which were aimed at addressing surging unemployment and adapting to the forces of economic globalisation (Wilthagen & Tros, 2004). These reforms encompassed measures to augment labour market flexibility, such as the relaxation of hiring and firing regulations, while concurrently strengthening the social security system to support the unemployed (Andersen, 2023).   A hallmark of the Danish strategy was the tripartite dialogue between the government, employers, and labour unions (Rasmussen & Høgedahl, 2021). This collaboration was pivotal in devising policies that judiciously balanced economic imperatives with worker protections. The consensus-driven nature of the 1990s reforms was instrumental in securing broad acceptance and efficacious implementation of the flexicurity model.   During this period, Denmark significantly fortified its active labour market policies, central to its flexicurity framework (Andersen & Svarer, 2007). These policies were geared towards enhancing employability, curtailing unemployment spells, and fostering workforce adaptability, with initiatives like comprehensive vocational training and re-skilling programmes tailored to align workforce competencies with market needs (Madsen, 2004).   By the early 2000s, the Danish flexicurity model had garnered international acclaim for its efficacy in sustaining high employment levels and social cohesion (European Commission, 2013. It was lauded for its innovative approach to striking a balance between labour market flexibility and robust social security. Nonetheless, the model faced challenges, necessitating adaptation to phenomena like the global financial crisis and evolving work paradigms, including the gig economy and digitalisation (Ibsen & Thelen, 2017).   The flexicurity model has demonstrated a dynamic evolution, continually adjusting to new economic and social realities (Auer & Cazes, 2003). Its foundational principles have exerted influence on labour market policies in various countries, notably within the European Union (Wilthagen, 2007).   The historical trajectory of the flexicurity model exemplifies Denmark's proactive and adaptive stance in addressing labour market challenges (Madsen, 2007). By harmonising employer flexibility with employee security, the model has continually evolved, maintaining its relevance and prominence in global labour market policy discourse (Bredgaard, Larsen & Madsen, 2005).   6. Key Components of the Model   The model combines labour market flexibility for employers with security for employees, fostering both economic vitality and social protection (Andersen & Svarer, 2007).   At its core, flexicurity centres around labour market flexibility, emphasising eased regulations in hiring and firing to allow businesses to rapidly adapt to economic changes, technological progress, and market variations (Madsen, 2007). This approach lessens the administrative and financial burdens tied to employment changes, enhancing business agility (Wilthagen, 2007).   To balance this flexibility, the model includes a comprehensive social security system, featuring extensive unemployment benefits for significant income replacement over extended periods. These benefits are integral in providing financial stability and enabling a less pressured job search (Wilthagen & Tros, 2004).   Active Labour Market Policies are pivotal and designed to expedite the reintegration of unemployed individuals into the workforce. They encompass initiatives like job training, skill development, and career counselling, aligning with modern labour market requirements (Larsen & Andersen, 2007).   The model also stresses lifelong learning and continuous skill development to maintain workforce adaptability in the face of rapidly evolving work environments. Continuous education and training are essential for keeping pace with new technologies and industry shifts (Eurofound, 2007).   The success of flexicurity is further attributed to robust social dialogue and cooperation among government, employers, and trade unions. This tripartite approach is vital for shaping labour policies that benefit all parties, with collective bargaining playing a key role (Rasmussen et al, 2016).   Emphasising equality and inclusivity, the Danish model ensures that various societal groups, including the young, older workers, and marginalised groups, have equal access to employment and training opportunities (Eurofound, 2012).   A defining feature of flexicurity is its inherent adaptability to economic and social changes, with policies continuously evolving in response to globalisation, technological advancements, and shifts in work patterns (European Commission, 2013).   In summary, the flexicurity model integrates key components like labour market flexibility, comprehensive social security, ALMPs, lifelong learning, social dialogue, inclusivity, and adaptability. This framework supports economic growth and social protection, drawing the interest of policymakers worldwide.   6.1 Impact on Employment Rates   The flexicurity model has a significant impact on employment rates. Studies show that Denmark's application of flexicurity is associated with consistently higher employment and lower unemployment rates compared to many European countries (Heyes, 2011). The model's emphasis on labour market flexibility enables employers to swiftly adapt to economic changes, fostering a dynamic job market and frequent job creation. In tandem, the extensive welfare system and active labour market policies in Denmark ensure that unemployed individuals receive adequate support and training, shortening the duration of unemployment and sustaining high labour market participation (Andersen & Svarer, 2007). 6.2 Influence on Economic Growth and Stability   Flexicurity also plays a crucial role in promoting economic growth and stability. The flexibility component of this model encourages entrepreneurship and innovation, as it allows businesses to quickly respond to market opportunities without the constraints of stringent employment laws. This responsiveness is pivotal in driving economic growth and fostering new industry development. Additionally, the security facet of flexicurity, particularly the robust social safety net, is essential in stabilising the economy during downturns. By guaranteeing financial support during periods of unemployment, the model helps sustain consumer spending, a key element for economic stability.   6.3 Effects on Social Equality and Worker Well-Being   In terms of social equality and worker well-being, the flexicurity model has positive implications. The comprehensive social safety net under this model prevents workers from descending into poverty during unemployment periods. Furthermore, active labour market policies are designed to avert long-term unemployment, which can lead to social exclusion and inequality. The emphasis on lifelong learning and skill development under flexicurity aids workers in adapting to evolving labour market demands, thereby reducing the risk of job obsolescence, and enhancing career prospects.   6.4 Comparison with Other Labour Market Models   When juxtaposed with other labour market models, like those in the United States or Southern Europe, Danish flexicurity presents a unique equilibrium. In the U.S., the labour market is marked by high flexibility but low job security and weaker social safety nets, often leading to greater income inequality and reduced social protection for the unemployed. Conversely, some Southern European countries feature highly protective labour markets with strict employment laws, which can inhibit job creation and lead to high long-term unemployment rates, especially among youth.   The Danish flexicurity model strikes a balance between these extremes, melding the flexibility seen in liberal market economies with the social security characteristic of more protective models. This balance has been effective in maintaining high employment rates, spurring economic growth and stability, enhancing social equality, and ensuring worker well-being (Larsen, 2022). However, it's pertinent to acknowledge that the success of the flexicurity model is also contingent upon Denmark's specific socio-economic context, including its strong welfare state, culture of social dialogue, and relatively small and homogeneous population, factors that may limit the model's direct applicability in other contexts (Wilthagen, 1998).   The Danish flexicurity model, while acclaimed for its balanced approach to labour market management, raises important discussions about its sustainability and cost, its role in addressing inequality and  labour market segmentation, and the critical function of unions and employer associations.   6.5 Sustainability and Cost Concerns   A critical aspect of the Danish flexicurity model is its sustainability, particularly in light of the financial demands of a comprehensive social safety network. The model's viability partially hinges on considerable public investment in welfare and active labour market policies, financed through elevated taxation (Green & Harris, 2021). The model's fiscal sustainability, in the context of economic fluctuations, demographic shifts, and evolving labour dynamics due to globalisation and technological changes, is a point of contention (Jensen, 2022).   6.6 Adapting to Evolving Labour Patterns   The changing nature of work, including the emergence of gig economy and contract-based jobs, challenges traditional social security systems predicated on stable, full-time employment. Modifying the model to ensure extensive coverage in this evolving employment landscape presents significant financial and administrative hurdles.   6.7 Addressing Inequality and Labour Market Segmentation   Despite its inclusive objectives, the flexicurity model grapples with inequality and labour market segmentation. Notably, the disparity in security between permanent and temporary or gig economy workers is pronounced, with the latter often having limited access to social benefits and active labour market policies (Andersen, 2023). Additionally, the model's effectiveness in integrating marginalised groups, such as immigrants and the long-term unemployed, into the labour market is crucial for diminishing social inequality and preventing labour market fragmentation (Heyes, 2011).   6.8 The Critical Role of Unions and Employer Associations   Unions and employer associations are pivotal in the Danish labour market, embodying a collaborative approach to governance. Their substantial involvement in collective bargaining helps balance employer flexibility with worker rights (Ibsen & Mailand, 2011). These organisations' significant roles in policy development and the administration of the welfare state, including unemployment insurance funds, underscore their importance in tailoring programmes to workforce needs, thereby enhancing the initiatives' effectiveness (Jørgensen & Schulze, 2011).    6.9 Summary of Findings   The Danish labour market, characterised by its 'flexicurity' approach, represents a unique and effective combination of employment flexibility and comprehensive social security. This model encompasses several key elements:   Labour Market Flexibility: This involves streamlined processes for hiring and firing, enabling businesses to promptly respond to economic shifts. Comprehensive Social Security: It provides substantial support for the unemployed, including generous unemployment benefits. Active Labour Market Policies (ALMPs): These policies facilitate the swift reintegration of unemployed individuals into the workforce through training and skill development. Lifelong Learning: This component promotes ongoing skill enhancement to align with evolving job market demands. Tripartite Cooperation: Involving government, employers, and unions in policymaking, ensures balanced and practical labour market reforms. Equality and Inclusivity Focus: The model strives to offer equal opportunities across all societal segments, including marginalised groups.    7. Impacts and Challenges   The flexicurity model has yielded positive outcomes, notably high employment rates, economic growth, and enhanced worker well-being. However, it faces challenges, including sustainability concerns due to high costs, addressing inequality and labour market segmentation, and adapting to the evolving nature of work.   8. The Future of the Danish Labour Market Model   The model's future success depends on its adaptability to various emerging trends and challenges:   Economic and Demographic Shifts: Addressing the fiscal sustainability of welfare systems amidst an ageing population and global economic changes is critical. Globalisation and Technological Change: Adapting to an increasingly interconnected and digital global economy requires continuous skill development. Rising Gig Economy: The growing prevalence of freelance and gig work necessitates the adaptation of traditional welfare and social security systems. Environmental Sustainability: The transition to a green economy poses both challenges and opportunities for labour market adaptation. Continued Role of Social Partners: The involvement of unions and employer associations remains crucial in negotiating fair labour practices and balancing employer flexibility with employee security. Inclusivity and Equity: Addressing labour market segmentation and ensuring equal opportunities for all, including immigrants and temporary workers, is vital for maintaining social cohesion. Policy Innovation: Continuous innovative policymaking, responsive to labour market trends and societal needs, is essential. International Collaboration and Learning: Engaging in global dialogue and learning from other countries can enhance and refine the Danish model.   The Danish model of flexicurity, a paradigm of balancing labour market flexibility with social security, has significantly contributed to high employment, economic stability, and social well-being. Its future effectiveness hinges on adaptability to new economic realities, technological advancements, and workforce dynamics. Ongoing collaboration between government, employers, and unions, coupled with innovative policymaking, will be pivotal in sustaining the model's relevance and efficacy amid evolving challenges.    9. Lessons Learned   The study tour to Denmark offered an enriching exploration of the Danish labour market model, providing us with detailed insights and valuable lessons that extend beyond our initial observations. Here's an expanded view of the key takeaways, beyond the model in its impressive state:   9.1 Reflections for BUSA   9.1.1 Holistic Sustainability Approach   The Danish commitment to sustainability encompasses more than environmental concerns, integrating economic and social dimensions. This holistic perspective permeates the Danish business and social landscape, where companies prioritise social welfare and environmental stewardship alongside profitability. The efficiency and authority of the Danish legal system, particularly in swiftly addressing labour disputes, foster a culture of respect and compliance.    9.1.2 Innovation and Collaboration in Labour Relations   Central to the Danish model is the harmonious collaboration between employers, employees, and unions. This collaborative ethos is crucial for fostering an environment conducive to innovation and adaptability. In Denmark, labour relations are primarily governed through collective bargaining, supported by state endorsement of unions, ensuring mutually beneficial agreements based on real-world workplace dynamics. 9.1.3 Exemplary Work-Life Balance Practices   Danish industries set a benchmark for achieving a healthy work-life balance. The deeply ingrained policies of flexible working hours and parental leave significantly contribute to employee satisfaction and productivity, exemplifying corporate well-being initiatives.    9.1.4 Commitment to Environmental Sustainability   Denmark's commitment to environmental sustainability is both visible and impactful. The business integration of renewable energy, efficient waste management, and circular economy practices aligns with global efforts to combat climate change and promotes a culture of environmental responsibility.    9.1.5 Inclusive and Comprehensive Social Welfare   The inclusivity and comprehensiveness of the Danish social welfare system are remarkable. Universal access to healthcare and education not only supports individual well-being but also fosters a more cohesive society. Denmark's strategic approach to job offshoring in industries with decent work deficits balances global trade dynamics with domestic labour market integrity, while the investment in free tertiary education prepares a skilled workforce aligned with national economic and social objectives.    9.1.6 Overall Reflections   The Danish model offers key insights for South African businesses. The transparent and efficient functioning of government and labour institutions, free from corruption, establishes a trust foundation essential for effective social dialogue and collaboration. Embracing sustainable business practices, fostering a culture of collaboration and trust, and prioritising employee well-being are areas where South African businesses could derive significant benefits. The insights gained from this study tour provide a range of strategies and practices that, with appropriate adaptation, could enhance South Africa's labour market and economic landscape.    9.2 Reflections for Cosatu   9.2.1 Main Takeaways   The visit underscored the uniqueness of the Scandinavian model, particularly the Danish approach to labour market policies. Notably, there exists a self-regulated equilibrium between business and labour, with minimal government intervention, leading to a robust economy characterised by low unemployment, employer flexibility, and secure retraining and employment placement for workers.   The union density rate in Denmark, standing at 70%, reflects a strong appreciation for the role of unions by both employers and employees, albeit with concerns about a decline from the previous 80% rate. However, the impact of international migration on the Danish labour market, which seems to have sparked political and social tensions, was not deeply explored.   Emerging trends, such as the rise of e-platform work, present challenges, and the struggle to attract young workers to unions is a shared concern with South African unions.    9.2.2 Learning for South Africa   Initially, replicating the Danish model in South Africa seemed implausible. However, upon reflection, it offers viable ideas for South African labour market enhancement. South African businesses seek flexibility in hiring and firing, which is counterbalanced by labour's concerns over high unemployment and the lack of a comprehensive social security and training network. Building such a network could provide a foundation for future labour market reforms.   The level of trust and collaboration between business and labour in Denmark, independent of government intervention, is a crucial aspect to consider for South Africa's economic growth. Addressing the fragmentation and disconnection in the South African labour landscape, particularly in unionisation and employer associations, is vital.   9.2.3 Improving Labour Relations   To enhance labour relations in South Africa, key aspects to emulate from the Danish model include building trust and increasing unionisation and business association membership. Fostering a strong, trust-based working relationship and gradually developing a social security and training framework akin to Denmark's could be strategic. South Africa already has foundational elements like UIF, SRD Grant, NSFAS, SETAs, and NSF, which, despite challenges, could form the basis of this development.    9.2.4 Mutual Learning   South Africa's approach to legislative minimums and norms, particularly for atypical workers, could offer insights for Denmark. The close collaboration between government, business, and labour in South Africa, evident in responses to broader societal issues like the COVID-19 pandemic, showcases a model that Denmark could find beneficial. Additionally, the role of South African unions in championing broader social issues like National Health Insurance could be relevant to the Danish context, promoting a more active civil society consciousness.   10. Recommendations and Conclusions   In conclusion to the exploration of the Danish Labour Market Model and its applicability to South Africa, it's clear that transformative lessons and strategies can be gleaned to enhance the symbiotic relationship between labour and business within the South African context.   The journey towards a more collaborative, less adversarial labour-business environment requires a multi-faceted approach, incorporating lessons learned, inter alia, from the Danish model, particularly its flexicurity compact.   This concluding chapter proposes three actionable strategies aimed at fostering a cooperative labour-business landscape in South Africa, ultimately contributing to sustainable economic growth and social equity:   Shift from Adversarial to Collaborative Mindsets: The primary lesson from Denmark is the importance of perceiving labour and business not as adversaries but as co-builders of business success. This mindset shift is foundational for any substantive change in labour relations. Importance of Continuous Dialogue and Education: Establishing platforms for continuous dialogue, like workplace forums, where both parties can engage in economic education, change management, and discussions on rights and responsibilities, is crucial for mutual understanding and growth. Balancing Flexibility with Security: Denmark's flexicurity model demonstrates the value of balancing the flexibility in labour markets with security for workers, ensuring transitions between jobs are supportive and conducive to overall economic health.    10.1 Recommendations   10.1.1 Establishment of Workplace Forums   Enterprises should consider the introduction of workplace forums across where management and workers meet regularly to discuss:   The economy in order to instil a better understanding of business operations and economic fundamentals. Change management aimed at collaboratively exploring ways to adapt to and manage changes within the business and industry. Rights and responsibilities in order to equip workers and management with knowledge about their rights and responsibilities, fostering a sense of co-ownership and joint participation in the business's success.    10.1.2 Creation of a Labour-Business Compact   It is recommended that an informal dialogue be set in motion between Business and Labour, thereby opening communication channels between the two sides for purposes of ensuring an ongoing, constructive dialogue between labour and business leaders, which should focus on common goals and problem-solving strategies; to contemplate the role and extent of government involvement in labour relations; how to strengthen autonomy in decision-making to swiftly address and adapt to challenges and opportunities; and envision a shared vision for the economy, including commitments to limit protest actions to reasonable demand to work collectively towards a living wage, moving beyond the minimum wage paradigm.   Once sufficient consensus has been developed, the dialogue could be formalised either as an independent body or as a structure within NEDLAC.    10.1.3 Transition Support and Basic Income Research   Research should be undertaken to explore greater flexibility in the labour market, including how to expand support for those losing jobs, and measures, such as a basic income grant, to make job transitions smoother.   By adopting these strategies, South Africa can lay the groundwork for a labour-business relationship characterised by mutual respect, shared goals, and a robust, flexible economy. 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Flexibility and security in collective bargaining, Economic and Industrial Democracy, 32(2): 161-180   Ibsen, C.L. & Thelen, K. 2017. Diverging solidarity: Labor strategies in the new knowledge economy, World Politics, 69(3): 409-447   Jørgensen, H. 2009. Flexible labour markets, workers' protection and the "security of the wings": a Danish flexicurity solution to the unemployment and social problems in globalized economies. [Online] Available at: https://journals.sagepub.com/doi/10.1177/138826270901100401 [Accessed: 15 November 2023]   Jørgensen, H. & Schulze, M. 2011. Leaving the Nordic path? The changing role of Danish trade unions in the welfare reform process, Social policy & administration, 45(2): 206-219   Kvist, J., Pedersen, L. & Köhler, P.A. 2008. Making all persons work: modern Danish labour market policies, In Bringing the jobless into work? Experiences with activation schemes in Europe and the US, pp. 221-256. Berlin, Heidelberg: Springer Berlin Heidelberg   Larsen, T.P. & Andersen. S.K. 2007. A new mode of European regulation? The implementation of the Autonomous Framework Agreement on Telework in five countries, European Journal of Industrial Relations, 13(2): 181-198   Madsen, K. 2007. Flexicurity: a new perspective on labour markets and welfare states in Europe, Tilburg Law Review, 14(1-2): 57-79   Madsen, P.K. 2004. The Danish model of ‘flexicurity’: experiences and lessons, Transfer: European Review of Labour and Research, 10(2): 187-207   Madsen, P.K. 2023. Flexicurity, Local Government and Active Labour Market Policy in Denmark, In Changing labour markets and the role of subnational governments: The Copenhagen Workshop 2018, pp.121-139   Mkentane, L. 2022. Public service unions reject 3% wage offer setting stage for strike. Business Day. 19 September 2022. [Online] Available at: https://www.businesslive.co.za/bd/national/labour/2022-09-19-public-service-unions-reject-3-wage-offer-setting-stage-for-strike/ [Accessed: 30 November 2023]   OECD (2022). OECD Employment Outlook 2022. [Online] OECD iLibrary. Available at: https://doi.org/10.1787/19991266 [Accessed: 30 November 2023].   Rasmussen, E. & Høgedahl, L. 2021. Collectivism and employment relations in Denmark: underpinning economic and social success, Labour & Industry: a journal of the social and economic relations of work, 31(3): 320-334   Rasmussen, S., Refslund, B., Sørensen, O.H. & Larsen, T. 2016. Reducing precarious work in Europe through social dialogue: the case of Denmark. [Online] Available at: https://vbn.aau.dk/ws/portalfiles/portal/244600846/Denmark_final_report.pdf [Accessed: 30 November 2023] Torfing, J. 1999. Workfare with welfare: recent reforms of the Danish welfare state, Journal of European social policy, 9(1): 5-28   Wilthagen, T. 1998. Flexicurity: A new paradigm for labour market policy reform? Social Science Research Center Berlin Discussion Paper No. FS I, pp.98-202   Wilthagen, T. 2007. Flexicurity pathways, Tilburg Law Review, 14: 80   Wilthagen, T. & Tros, F. 2004. 'The concept of ‘flexicurity’: A new approach to regulating employment and labour markets', Transfer: European Review of Labour and Research, vol. 10, no. 2, pp. 166-186.   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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

This report was prepared by the Inclusive Society Institute on behalf of the Global South Perspectives Network, in collaboration with the other two convening institutions, the Foundation for Global Governance and Sustainability (FOGGS)  and HuminzaCom    Copyright © 2024   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, FOGGS and HumanizaCom.                                                                                                                                     DISCLAIMER   Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute, FOGGS and HumanizaCom.   April 2024   Author: Nicola Jo Bruns Bergsteedt Editor: Daryl Swanepoel 1. Introduction   In the dynamic and ever-evolving arena of global governance, the Summit for the Future, set for 22-23 September 2024 in New York, emerges as a critical juncture in the quest for sustainable development and enhanced multilateral cooperation. With the United Nations (UN) spearheading this initiative, the summit aims to be a watershed moment, promising to recalibrate the global community's approach towards tackling the pressing challenges of our time. In preparation for delving into the intricacies of this pivotal event, this report endeavours to capture the essence of discussions and reflections that emanate from a gathering of esteemed minds under the Global South Perspectives Network on 1 March 2024.   This report is structured to provide a comprehensive overview, beginning with an executive summary that distils the key insights and recommendations shared during the meeting. Following this are detailed accounts of two thought-provoking presentations delivered by Dr Georgios Kostakos, Executive Director of the Foundation for Global Governance and Sustainability (FOGGS), and Mr Zaheer Laher, Chief Director of UN Political, Peace, and Security at the South African Department of International Relations and Cooperation (DIRCO). These presentations offer a nuanced perspective on the challenges and opportunities that lie ahead in our collective pursuit of a more equitable and sustainable future.   Moreover, the report includes four incisive responses from distinguished academics and practitioners who bring a wealth of knowledge and experience to the discourse. Prof Cilene Victor, Dr Adel Abdel-Sadek, and Prof María del Carmen Rico Menge, alongside Ms Buyelwa Sonjica, enrich the discussion with their diverse viewpoints, drawing attention to the multifaceted dimensions of global governance, human rights, and sustainable development. Their contributions underscore the critical role of inclusive dialogue and collaborative action in addressing the systemic issues that underpin the current geopolitical and socio-economic landscape.   The meeting, chaired by Daryl Swanepoel, CEO of the Inclusive Society Institute in South Africa, served as a platform for rigorous debate and collective reflection on the Zero Draft of the Pact for the Future. This document, central to the Summit for the Future's agenda, aims to serve as a blueprint for invigorating the UN's role in global governance. However, as the participants noted, while the draft sets an ambitious framework for action, it falls short in detailing the practical measures required to effect tangible change, particularly in the face of persistent geopolitical tensions and humanitarian crises.   As we navigate the path towards the Summit for the Future, the insights and recommendations articulated in this report aim to contribute to a more inclusive, equitable, and sustainable global order. The voices of the Global South, with their unique perspectives and lived experiences, are invaluable in shaping a future that truly reflects the collective aspirations of our global community.   Link to the webinar recording: https://www.youtube.com/watch?v=S8ZaD7MUfsc&ab_channel=FOGGS    2. Executive Summary   In the grand theatre of global diplomacy, the Summit for the Future, set to take place on 22-23 September 2024, stands as a beacon of hope, a promise of concerted action against the multifaceted crises that plague our world. With the United Nations at its helm, this summit has been portrayed as a pivotal moment to recalibrate, realign, and reinvigorate the global community's commitment to sustainable development and multilateral cooperation. Yet, as representatives from the Global South Perspectives Network convened on 1 March to deliberate on the Zero Draft of the Pact for the Future, their reflections cast a long shadow of doubt over the Summit's capacity to steer us away from impending calamities.   The Summit of the Future presents a unique opportunity to strengthen collaboration on pivotal issues and bridge the gaps in international governance. It's a chance to reaffirm the United Nations Charter as the basis for international cooperation and recommit to key initiatives, including the Sustainable Development Goals (SDGs). Building on the momentum of the SDG Summit in 2023, Member States are poised to explore strategies for laying down a stronger foundation for global cooperation capable of addressing both current and future threats.   The Zero Draft, as envisioned, is meant to serve as a blueprint for consolidating United Nations activities, instilling a greater sense of urgency in addressing global challenges, and introducing novel initiatives, including the governance of cyberspace and outer space. These elements underscore a commitment to reinvigorating the UN's role at the centre of a revitalised and more effective multilateral system, which can make a real difference in people’s lives. Yet, as commendable as these objectives are, they merely skim the surface of the deeper, more systemic issues at play.   The heart of the matter, as articulated by the Global South Perspectives Network, lies not in the ‘what’ but in the ‘how’. The Zero Draft sketches a broad outline of the urgent actions needed but stops short of delving into the institutional and financial aspects of implementation. This omission is particularly glaring against the backdrop of current geopolitical tensions and humanitarian crises, from the nuclear brinkmanship in North Korea and Iran to the enduring conflicts in Ukraine and the Gaza Strip. The question that looms large is: How do we move beyond rhetoric to effect real change in these dire situations?   Patently amiss in the current draft is any proposal to reform the UN Security Council, most probably the most urgent, called for, and anticipated requirement to restore the credibility of the United Nations. It is proffered that future drafts will tackle this. The lack of the ‘how’ in the current draft does little to instil confidence that those proposals will indeed be responsive to the demands of the Global South. Time will tell.   This sentiment was echoed in the words of the Chief Director of the UN Political, Peace, and Security Division, South African Department of International Relations and Cooperation (DIRCO). Mr Zaheer Laher’s reflections on the Zero Draft highlighted both its potential and its limitations. While acknowledging the draft's role in consolidating UN efforts and fostering urgency, Mr Laher lamented its failure to address the practical pathways to resolving the kind of entrenched geopolitical conflicts and disasters that continue to ravage communities and destabilise regions across the globe.   The Global South Perspectives Network’s critique extends beyond the immediate concerns of conflict resolution to encompass the broader challenges of global governance. The steady erosion of trust between nations, exacerbated by growing unilateralism and geopolitical rivalries, poses a significant barrier to international cooperation. The Zero Draft, for all its merits, seems to skirt around these foundational issues, offering up a vision for the future that, while aspirational, appears disconnected from the realities of our fragmented world.   Moreover, the emphasis on new initiatives, such as policing outer space, while innovative and important, seems somewhat removed from the pressing needs of the Global South, whose communities are grappling with existential threats that demand immediate attention – poverty, inequality, climate change, and access to healthcare, to name but a few. The draft's failure to directly address these concerns, to provide a concrete roadmap for overcoming them, highlights a critical gap in its approach to shaping a more equitable and sustainable future.   In calling for an action-orientated and inclusive Pact, the Global South points to the need for a global consensus that transcends mere agreement on principles. What is required is a commitment to actionable strategies that are grounded in the realities of those most affected by global crises. This entails meaningful reform of the international financial and debt architecture, bridging the digital divide, ensuring fair trade, and ramping up financing for climate adaptation and mitigation efforts.   As we navigate the intricate landscape of global diplomacy, the voices from the Global South ring out with a clarity born of necessity and lived experience. Their insights offer not just critique but a roadmap for genuine engagement and collaborative problem-solving. It is through the lens of their collective wisdom that we can begin to unravel the complexities of our shared challenges, ensuring that solutions are not only proposed but enacted with equity and sustainability at their core.   This brings into sharp focus the pivotal role that the Summit of the Future must play – not as a mere convener of nations but as a catalyst for transformative change. The Summit's success hinges on its ability to bridge the chasm between high-level declarations and the tangible needs of people on the ground. It demands a concerted effort to not just envision a better future but to lay the foundational stones that will lead there. In this endeavour, the principles of justice, equity, and inclusivity must be the guiding lights, illuminating the path toward a future where the promise of global cooperation becomes a lived reality for all.   Standing at this crossroads, the Summit of the Future presents an opportunity to redefine the contours of global cooperation. But to seize this opportunity, the limitations of the Zero Draft must be confronted head-on. The eventual Pact for the Future, the Summit of the Future outcome, must forge a path that is not only ambitious in its vision but pragmatic in its execution – a path that truly addresses the how, not just the what, of tackling the formidable challenges the world faces.   In the end, the success of the Summit will be measured not by the loftiness of its declarations but by the tangibility of its outcomes. It is incumbent upon all stakeholders, especially those from the Global South, to ensure that the Pact for the Future does not become a missed opportunity. Instead, it should mark the beginning of a renewed global commitment to action, solidarity, and an actionable shared vision for a more just and sustainable world. Only then can there be hope of steering the Summit from a track to nowhere to a path toward meaningful change.   3. A Global South Perspective on the Summit of the Future and the Zero Draft of the Pact for the Future   Speech by Zaheer Laher, Chief Director: United Nations Political, Peace, and Security, DIRCO   Thank you to the Inclusive Society Institute (ISI) of South Africa and the Foundation for Global Governance and Sustainability (FOGGS) for providing an opportunity to the Department of International Relations and Cooperation to participate in this discussion and address you on the upcoming United Nations Summit of the Future.   This forum provides us with an opportunity to relay the Government of South Africa’s perspectives on the upcoming Summit, including our expectations. And importantly, it allows us an opportunity to engage with civil society.   Before I get to that, I think it would be important for us to reflect on the current global geopolitical environment and the context in which we are engaging in the negotiations process on the Pact that is anticipated to be the outcome of the Summit.   No doubt, the world is more globalised and the impact of a pandemic beginning in one part of the world, or a European border war can have an impact on the furthest corners of the globe.   If we are to address global challenges, we have no choice but to resort to collective action. Even when countries have chosen to ignore the rest of the world, they eventually have had to come back and work with other nations to address the challenges confronting them. No one can live in the so-called ‘splendid isolation’ that some sought in the 19th and early 20th centuries.   It is also clear that impediments to global cooperation are hindering relations between states and making it much more difficult to address our ever-increasing number of challenges, whether it be maintaining international peace and security, ensuring global sustainable development, addressing climate change and environmental challenges, or protecting human rights.   A steady erosion of trust and competition between states, especially between countries in the Global South and the Global North, is weakening the ability of the international community to work together to address shared challenges. The obstacles we are facing include growing unilateralism; geo-political rivalries; inconsistent compliance with – and at times blatant violations of – international law and the application of double standards. There has also been a proliferation of alternate forums and side processes outside of established multilateral processes where decisions are taken amongst the few, thereby disenfranchising the many or to divert attention away from the non-delivery of multilateral commitments.   When the 75th Anniversary of the United Nations was commemorated in September 2020, World Leaders adopted a declaration in which they declared their commitment to multilateralism, with the United Nations at its centre. This declaration contained 12 commitments, which included a request to the UN Secretary-General to prepare recommendations to advance our common agenda and to respond to current and future challenges. In response, in September 2021, the Secretary-General presented Our Common Agenda, a report highlighting challenges as well as opportunities to accelerate the implementation of the Sustainable Development Goals and the commitments made by Member States in the UN75 Declaration. The Our Common Agenda report also calls for global solidarity, a renewal of the multilateral system to accelerate implementation of existing commitments and to address the remaining gaps in global governance.   The report called for a Summit of the Future (SOTF) to forge a new global consensus for the global community to be prepared for future threats and challenges.   This Summit – which will take place during the High-Level Week of the 79th Session of the UN General Assembly in September – has already been preceded by a Ministerial Meeting, which took place on the side-lines of the United Nations General Assembly, High-Level Week, in September 2023. The Ministerial Meeting was an opportunity for Member States to set out their expectations and priorities for the Summit and its expected outcome: the Pact for the Future. The Ministerial Meeting also stressed the importance of having an ambitious, clear, and action-orientated outcome that can be achieved at the Summit of the Future.   As an outcome of the Summit, Member States have committed to adopting a Pact for the Future to cement collective agreements and to demonstrate global solidarity for current and future generations. The practical consultations process is expected to have an outcome in the form of an “action-orientated Pact for the Future” that would be agreed on by Member States through intergovernmental negotiations on various issues.   The Pact for the Future, which is being facilitated by the Permanent Representatives of Namibia and Germany in New York,  would comprise a chapeau and five chapters on:   Sustainable development and financing for development; International peace and security; Science, technology and innovation and digital cooperation; Youth and future generations; and Transforming global governance.   South Africa hopes that the Summit of the Future will be a key opportunity to focus on the implementation of the key multilateral outcomes that we have already adopted, including specifically the outcomes adopted in 2015. These are the 2030 Agenda for Sustainable Development (the SDGs), the Addis Ababa Action Agenda (dealing with financing for development), and the Paris Climate Change outcomes.   We have stressed in engagements at the United Nations, that if we want this process to deliver real results, we have to start by engaging in some honest self-reflection.   We have reached the halfway mark of the target date set for implementing the 2030 Agenda and more people are living in extreme poverty and going hungry than in 2015 when the SDGs were adopted. Why is violent conflict on the rise? How do we speak of reinvigorating multilateralism after decades of Summits and declarations have left us with so many commitments not yet implemented? What do we mean by restoring trust and finding solutions for a better tomorrow if we look away whilst a horrific genocide unfolds before our very eyes?    The undertaking to hold a Summit of the Future should seek to do things differently as we seek decisive actions that make a positive impact in the lives of our people and transform international systems of power, governance, finance, debt, trade, and technology so that they work for all countries, and developing countries are not left out.   For South Africa, and these are issues that developing countries negotiating within the context of the Group of 77 are calling for, we believe that some of the decisive actions that the Summit must focus on are a commitment to meaningful reform of the international financial and debt architecture; measures that go beyond GDP to inform access to development finance; harnessing the benefits of Science, Technology and Innovation for all; bridging the digital divide; achieving a fair pro-development multilateral trading system; and scaling up financing for adaptation, resilience, and loss and damage whilst ensuring that climate financing does not subtract from development financing. These essentially will give meaning to Goal 17, the means of implementation of the SDGs.   The Pact of the Future should focus on securing urgent progress on nuclear disarmament, including through the fulfilment of the unequivocal undertaking by the nuclear-weapon States towards the total elimination of their nuclear arsenals, which is key to upholding the non-proliferation regime and securing the inalienable right to peaceful uses of nuclear energy. It also needs to address the importance of promoting conventional arms control, including curbing illicit trafficking and excessive accumulation of such arms; and avoiding the weaponisation of space, cyberspace, and other emerging domains. It is also vital to prevent excessive military spending, and instead redirect resources to the achievement of more urgent priorities such as the SDGs.   For the SDGs to be fully realised, we need to address persistent challenges to peace and security because development and peace and security are interdependent, however, security measures should not be used as a pre-condition for development. The UN peace and security architecture must be revitalised to be able to effectively tackle threats to international peace and security. Of utmost importance is making meaningful progress in the negotiations for reforming the United Nations Security Council to make it representative and effective.   We also need to consolidate the gains we have derived thus far in developing partnerships through Chapter VIII of the UN Charter.   The Pact of the Future must recognise the lack of progress in achieving gender equality and the empowerment of all women and girls and must seek interventions to greatly enhance actions toward implementing and achieving SDG 5. We seek a future built around human rights as a central pillar and this includes a discussion of two specific areas of human rights that continue to be overlooked and neglected. Specifically, racism and the Right to Development. The Pact of the Future needs to reflect stronger action and commitment on the elimination of racism, racial discrimination, xenophobia, and related intolerance. In this regard, the comprehensive implementation of, and follow-up to, the Durban Declaration and Programme of Action (DDPA) remains a priority for South Africa. International action on this topic has been underwhelming and the international response thus far is tragically insufficient. We must have greater action that builds on and strengthens existing mechanisms to combat this scourge. We also firmly believe that the Pact of the Future without a real commitment and recognition of the Right to Development will not be able to address the needs of the future and those who follow us.   To have a successful Summit we are going to have to find a way to tackle difficult and divisive issues, such as sharing technology, unilateral co-coercive measures, different views on gender, and the recent alarming tendency of walking away from long-standing agreements, such as the principles set in the Rio Declaration of equity and CBDR-RC. South Africa is committed to a successful Summit of the Future that bridges the development divide and provides new solutions to the challenges of tomorrow. We are actively engaging in the negotiations on the Pact, and we are hopeful that despite the geo-political challenges that exist, we can and must strive for an ambitious outcome.    4. Summit of the Future & Pact for the Future   Presentation by Georgios Kostakos, Executive Director, FOGGS                     5. Collective insights on Global Governance   The discussion brings to light several critical points on the challenges and opportunities within global governance and humanitarian efforts. There is a unanimous recognition of the gap between the formulation of global agendas, such as the ‘Agenda for Humanity’ and ‘Agenda 2030’, and their practical implementation. The discourse underscores the necessity of moving beyond noble intentions to actionable strategies, emphasising the importance of the ‘how’ in achieving these global goals.   A pivotal concern highlighted is the engagement of diverse global actors, from governments and civil society to academia, in effecting meaningful change. The need for clear, accessible communication is stressed, pointing out the barriers posed by complex jargon and the predominance of English, which limits wider engagement and understanding. The call for action over intentions resonates throughout, advocating for tangible progress across various spheres, including academia, government, and multilateral organisations.   The discussions also address structural challenges within the United Nations, advocating for reforms that reflect the dynamic socio-economic landscape of the contemporary world. A vision for a reformed UN, with a more inclusive representation of the Global South and a reassessment of outdated international laws, is deemed essential for addressing global challenges effectively. The establishment of dedicated leadership to steer this transformation is suggested to ensure independence, objectivity, and high-level engagement from all global regions.   Focusing on regional perspectives, particularly from the Middle East, the dialogue highlights the inadequacies of current global governance mechanisms and their impacts on regional conflicts and disparities. Including the younger generation in global dialogues is critical, considering their unique perspectives and the direct impact of governance flaws on their future. The necessity of a development-focused approach to address transborder challenges, such as illegal immigration, cyber-attacks, and poverty, is advocated over a security-centric one.   The collective insights call for a holistic approach to solving global and regional issues, urging reforms in global governance to ensure fairness, justice, and sustainability. The significance of regional initiatives and cooperative efforts among countries is acknowledged as vital for establishing effective models and mechanisms to address global inequalities and foster sustainable development. The discussions culminated in a call for worldwide engagement in crafting actionable strategies and reforms, aiming to bridge the gap between ambitious global agendas and their realisation, of a more equitable and sustainable global order.   The insights have been gleaned from the remarks by the panellists:   Ms. Buyelwa Sonjica, former Cabinet Minister, South Africa Prof. Cilene Victor, Professor at Methodist University; Fapcom Communication College; FGV LAW; HumanizaCom Research Group Leader, São Paulo, Brazil Prof. Mohammed Taher Gholi Tabar, University of Religions and Denominations, Qom, Iran Prof. Carmen Rico Menge, former Dean, Faculty of Social Communication and Director of InternationalRelations, Catholic University of Uruguay9   6. Epilogue   We continue the engagement with the SOTF process and beyond to ensure that the Global South perspectives are taken into account when planning the future of global governance: a human-centred, inclusive, sustainable and resilient one.   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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 © 2024   Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8010 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 its Board or Council members.   May 2024   Author: Klaus Kotzé Editor: Daryl Swanepoel   Content 1. Introduction: Bringing African voices together 2. Setting the scene and objectives of the meeting 3. The role of intellectuals in Africa’s development 4. South Africa and Africa’s multilateral engagements 5. African perspectives on the state and development of China-Africa relations 5.1. North African perspective 5.2. West African perspectives 5.3. Central African perspective 5.4. East African perspectives 5.5. Southern African perspective 6. Reviewing the purpose and objectives of the Forum on China-Africa Cooperation (FOCAC) and the role of the China-Africa Think Tanks Forum (CATTF) 7. Current state of security and stability in Africa 8. Introduction to the Global South Perspectives Network and the Global Resilience Council 9. The need for an African Fragility Index 10. Conclusions and recommendations  1. Introduction: Bringing African voices together   On 26 and 27 February 2024, the Inclusive Society Institute hosted the inaugural Africa Consultative Meeting. The meeting brought together the representatives of leading African think tanks, representatives from the China-Africa Think Tanks Forum (CATTF), partners from the Global South Perspectives Network, and invited guests representing the South African government.   In a fast-changing global environment where countries of the global south, and African countries in particular, remain underrepresented, there is an urgent need for these countries to engage and critically contribute to the security and development of the continent. Simply put, African insights are required to ensure that African interests are advanced. The continent cannot wait for or depend on others to develop their interests. At present, Africans are not doing enough to cohere and advance the continent.   Too often, African representatives only meet at fora that are organised outside of the continent. Recognising the lack of cooperation between African thought leaders on substantive political and socio-economic issues affecting the continent, the Inclusive Society Institute (ISI) decided to host the inaugural Africa Consultative Meeting. This and future meetings seek to provide a space for African think tanks to discuss issues and initiate understanding regarding the security and development of the continent.   There is rarely a consolidated continental position when African think tanks represent their different countries at global fora. When there is alignment, it is more the consequence of chance. Recognising this concern, the inaugural Africa Consultative Meeting sought to explore mechanisms to develop a consolidated position that will advance development and peace and security on the African continent. Such a position would then form the basis for African delegates’ representations at global fora.   The inaugural meeting first sought agreement from delegates that this is indeed a concern, and then agreed to rigorously pursue a collective position. One that will advance the interests of all member states, and the continent as a whole.   As a first opportunity to gather a consolidated position, the inaugural meeting requested the representatives of the various African regions to assess their region’s relationship with China. The meeting also invited representatives from China, allowing discussions on the China-Africa relationship, with a particular focus on the work of the China-Africa Think Tanks Forum (CATTF) and the Forum on China-Africa Cooperation (FOCAC). Consensus through discussion will form the bedrock and aspiration of the meeting as it develops into a seminal platform for African thought.   The participants in the meeting included, amongst others: Ms Febe Potgieter-Gqubule, Head of Policy, African National Congress and former Deputy Chief of Staff, African Union Commission Hon Alvin Botes MP, Deputy Minister of International Relations and Cooperation Prof Wei Xu, Deputy Director of the Institute for African Studies, Zhejiang Normal University, China Ms Ariella Liu, Director of the South Africa – China Think Tank, based at Nelson Mandela University Business School Mr Zine Barka, Head of Academic Chair, Arab League Educational, Cultural and Scientific Organization ( ALECSO), Algeria Prof Assi Kimou, Deputy Director of Cellule d’Analyse des Politiques Économiques du CIRES (CAPEC), Côte d'Ivoire Dr Ndiakhat Ngom, General President of the South-South Transatlantic Institute, Senegal Dr Melha Rout Biel, Executive Director of the South  Sudan Center for Strategic and Policy Studies ( CSPS), South Sudan Prof Francis Matambalya, Executive Director of the Nyerere Foundation, Tanzania Prof Omar Mjenga, Centre for International Policy Africa, Tanzania Dr David Monyae, Co-Director of the University of Johannesburg Confucius Institute Mr Priyal Singh, Institute for Security Studies Ms Buyelwa Sonjica, Chairperson of the ISI Advisory Council and former Cabinet Minister Hon Faiez Jacobs, Senior Member of Parliament: African National Congress Ms Jenny Wu, Africa Chinese Women’s Association Dr Georgios Kostakos, Executive Director of the Foundation for Global Governance and Sustainability    2. Setting the scene and objectives of the meeting   Dary Swanepoel, CEO: Inclusive Society Institute    The Inclusive Society Institute hosted the Africa Consultative Meeting with the objective of bringing together think tanks from across Africa to consider, discuss and develop policy proposals that will advance development on the continent. It is the belief of the Institute that African think tank representatives travel all over the world arguing the case for Africa. They meet each other abroad, but do not sufficiently meet on the African continent to engage and synchronise toward a common position prior to international engagements.   The Institute, therefore, decided to put together the Africa Consultative Meeting with the objective to go some way in building a collaborative approach between African think tanks. This meeting saw eight think tanks participating, drawn from north, west, east, central, and southern Africa. It aimed to serve as an embryo for setting up an annual consultative meeting amongst likeminded African think tanks for the purpose of dialoguing substantive political and socio-economic issues confronting the African continent. The idea was to prepare these think tanks for engaging in various international conferences on the basis of a more composed contribution.   This meeting served as an exploratory one. If agreed to and proven successful, the hope was to open it to other think tanks and hold the meeting on an annual basis. The meeting’s deliberations would seek to consolidate a collective African position on major contemporary challenges facing the continent. It would further seek to integrate these positions and the participation of African think tanks into the broader Global South think tank community.   The second objective of the meeting was to discuss Africa’s approach to multilateralism and its relationships with regional formations. In this regard, the meeting saw various presentations offering the perspectives of the different regions in Africa, assessing the state of China-Africa relations, with specific emphasis on African proposals to further strengthen cooperation, and to compile and present a synthesised African position on China-Africa relations to the CATTF.   Thirdly, the meeting introduced the concept of the African Fragility Index and sought cooperation among participants for its development.   Lastly, the think tanks would be introduced to the Global South Perspectives Network, a grouping of academics, policymakers, former senior government and United Nations officials and diplomats. Convened by the Brussels-based, Foundation for Global Governance and Sustainability, the Network will introduce its thinking around the idea of a Global Resilience Council.     3. The role of intellectuals in Africa’s development   Ms Febe Potgieter-Gqubule, Head of Policy, African National Congress and former Deputy Chief of Staff, African Union Commission The establishment of an intra-African think tank forum to consolidate African views at fora such as the China-Africa Think Tanks Forum is an excellent objective for such a meeting. Pan-African intellectuals have played a central role in the history of the continent, paving the way for the anti-slavery and anti-colonial movements. These intellectuals have played an active part in the anti-colonial struggles, with debates discussing the construction of post-independent states, and debates about African federation and Africa’s struggles with structural adjustment.   Intellectuals again played a central role in the early 1990s, with the freeing of Namibia, followed by the freeing of South Africa, and a renewed focus on how to get the continent back on track. They were also pivotal in the discussion about Africa’s renaissance and the formation of the African Union, its ancillary policy frameworks and, eventually, Agenda 2063.   Think tanks are seen as essential in responding to the escalation of African coups, of which there have been thirteen in the last three years. Think tanks must look at these complex issues and then advise African policymakers, leaders, and governments on the best way forward. Similarly, the link between the African Union Agenda 2063 and the sustainable development goals is seen as harbouring some concerns that need to be analysed by intellectuals.   Furthermore, issues of integration on the continent remain important. Focus needs to remain on the complex diversity of African integration, from what is happening in different regional institutions to the movement of people and the African Continental Free Trade Area.   Much progress has been made since the launch of the Forum on China-Africa Cooperation (FOCAC) in 2000. The launch of the African Union, and its transition towards playing an important role in changing the approach to peace and security, has been foundational – so too has the formation of institutions such as the African Peer Review Mechanism.   With all the developments on the continent, think tanks, due to their autonomous structures, continue to be paramount. They must employ their independence to pursue critical ends.   Another significant point regarding think tanks is: they must learn from each other. The meeting therefore offers a wonderful opportunity for think tanks to get to know each other, to discuss central concerns, and to find pathways to work together going forward. It is useful to be joined by Chinese colleagues, in the format of the China-Africa Think Tanks Forum. African think tanks can draw much from the experience of China, particularly looking at how to strengthen planning and capacity.   Drawing from Chinese experience does not put Africa in the camp of China. Instead, and similarly proclaimed by Pan-African Kwame Nkrumah, Africa should not look east or west, it should look forward as the African continent. From this approach African states must build friendships with all friendly states, finding pathways for development.    4. South Africa and Africa’s multilateral engagements   Hon Alvin Botes MP, Deputy Minister of International Relations and Cooperation Foreign policy has traditionally been state centric, and the role of non-state actors has not necessarily been fully appreciated. This meeting, brought together by the Inclusive Society Institute, shows how non-state actors have a pivotal role to play regarding the architecture of ensuring the inclusive prosperity that is envisaged in Agenda 2063. This unity of purpose relates to what the intellectuals think and what is executed upon by the people’s representatives.   From the perspective of the relationship between South Africa and the People’s Republic of China, there are several critical issues about which the intellectual community should have a unity of purpose. Noteworthy is the role that China has played in assisting to build the African continent – a contribution that stems from its pro-poor programme. Although this partnership has been based on the common good, it has also been fraught with complexities because of Africa’s own subjective weaknesses. For example, the failure to find commonality in implementing the Abuja Treaty, which spoke to the unification of the African continent based on economic solidarity. African representatives should develop this thinking and produce meaning not only for its relations with China, but for other major partners and blocs.   FOCAC has played a substantive role in developing the people-to-people relationship. Through FOCAC, the first Agenda 2063 ten-year plan was executed, a very noble intent in relation to the plight of the African people. The South African approach was said not to pursue narrow national interests, as national interests are not reconcilable with the Pan-African outlook. Rather, South Africa sought to ensure that it remains true to the founding values of the organisation of African unity. For this reason, South Africa welcomed the full operationalisation of the African Continental Free Trade Agreement.   For South Africa to be an ambitious African state would be in its national interest. It is in the people’s interest to show what the Chinese have done to eradicate poverty. Targets should be set to eliminate income poverty; however, this can only be done if there is the political commitment to ensure that the trade basket will substantively change. After discussions with the ambassador of China, a commitment has been made to achieve this – a commitment to increase bilateral trade by R100 billion. This is significant, but it will be more valuable if that R100 billion speaks to beneficiation and value addition.   Last year, 2023, was a very positive one for South Africa in terms of cementing its relationships with the African continent. It was also a positive year for the relationship with China. Not only was the strategic dialogue convened, but South Africa was also able to convene the people-to-people dialogue mechanism, and in particular, South Africa received the Chinese president for his fourth state visit.   This Africa Consultative Meeting must produce research outputs that African states can draw from when attending FOCAC and other strategic meetings. It is important to rally together and aggregate a common voice of Africa in relation to these engagements. That is why academia and institutions have a pivotal role to play – ensuring a multiplicity of voices.   The message should be the same in terms of what needs to be done between Africa and China in the FOCAC programme. There is much uncertainty about what non-state actors think should be the G20 priorities for South Africa in 2025. At present the government is besieged with requests for engagement on the intragovernmental level. But there should be some indication, not only from South African research institutions, but from the entire African continent, of what should be the development agenda of the G20 plus the AU in 2025.   FOCAC will remain an exemplary form of South-South cooperation, premised on a win-win approach. It is a very important mechanism to ensure that inclusive prosperity based on socio-economic development is achieved. It is important that this forum, amongst others, should be thoroughly engaged. Despite the fact that the government does not have an internal policy and research repository, it does call on progressive intellectuals to make contributions on foreign policy.   These progressive institutions should be equally critical as to how government executes its foreign policy, and this criticism should be realistic in terms of details. As for the Chinese, they see in Africa a partner to achieve their goal of building a modern socialist country in all respects. They see in Africa a reliable, not only ideological, partner. A development partner. It is in Africa’s interest to be true to the founding values of the African Union, which speaks to the centrality of a Pan-African outlook.    5. African perspectives on the state and development of China-Africa relations   It is recognised that China is an increasingly important partner of the continent. Many African states have recently established or developed their relations with China. While these relations have seen advances, including the increase in the volume of trade, China-Africa relations are not new and have deep historical significance. Both sides supported each other in their shift towards independence in the previous century. This initial support from independence has ensured that various African states have walked an extensive path with their Chinese compatriots, culminating in cooperation and partner contracts, principally through the Forum for China Africa Cooperation (FOCAC), and often under the Belt and Road Initiative, China’s flagship foreign policy programme.   At a recent Africa Consultative Meeting organised by the Inclusive Society Institute, one of the topics that came under scrutiny was Africa’s relationship with China. In an attempt to find a synchronised African position, the participating think-tanks from across Africa came to a number of commonly agreed conclusions.   Africa must learn from China while remaining independent   The partnership between Africa and China offers tremendous opportunity for Africa’s development at a time when its relations with traditional Western partners have come under strain. It is in the interests of African states to be ambitious. It is, therefore, in Africa’s interest to look at what the Chinese have done to pursue development and eradicate poverty. Targets should be set, and programmes drawn up to ensure that goals are met.   While African states should draw from Chinese experience when it comes to industrialisation and development, this does not necessarily mean that African states are in China’s ‘camp’. Nor should they seek to copy the Chinese. Instead, on the similar basis as proclaimed by Pan-African Kwame Nkrumah, Africa should not look east or west, it should look forward as the African continent. From this approach African states must build friendships with all friendly states. They must develop regional and independent pathways that are fit for purpose.   Africans must ensure greater internal security and stability, so to spur further investment. Africans must take ownership of their affairs and not simply blame others. In this vein, China should not be blamed when African states cannot repay their debts.   The Africa-China partnership: Concerns of a Chinese bias   The meeting agreed that African states should not overly rely on any external parties. Relations should be balanced better. Africa must be more of a partner than a philanthropic beneficiary or customer. The relations between Africa and China, still appears to be biased towards China, thus not yet giving full effect to the agreed notion of a mutually beneficial relationship between the two sides. More needs to be done to ensure African development, technology transfer and the buildup of expertise.   Political intelligence and commitment are required to address these biases. It is incumbent upon African leaders to have a thorough understanding of their own local realities, so as to raise the perceived imbalances with their Chinese counterparts. It is encouraging that the Chinese are displaying tangible commitments to address imbalances. One such example, is the case of South Africa, where China has committed to increase bilateral trade by R100 billion. Another is the opening up of the Chinese market to more imports from Africa -  and it is facilitating the competitiveness of African products through zero--rating import tariffs on a growing number of products from the continent.   Yet, it will be more valuable if that R 100 billion speaks to beneficiation and value addition.   The trade balance between China and Africa has long been in China’s favour. African governments need therefore to do more to ensure greater balance. The continent must become more of a partner than a customer. Here African states must stand up to achieve their own industrial autonomy and overall independence.   Africa must uplift itself   To prevent over-reliance on any external party, African states must uplift themselves. While various concerns were heard about skewed relations with others, including China, it can be argued that it is primarily Africans who were letting Africa down.   More needs to be done by Africans to understand their own realities and the needs of the continent. Research and more programmatic studies are needed so to ensure that they know what it stands for and they need to empower themselves to pursue their own future with confidence. Greater knowledge of self will allow the continent to better develop its own strategies, as well as better perceive its worth.   A deeper, longitudinal understanding of partnerships, the structuring of loans and the effect of foreign investment will also allow greater balance in its relationships with external parties. Presently, Africa does not sufficiently know holistically where partners, including China, are investing and what effect it has on the continent. Greater knowledge will allow it to strategically partner with all sides and draw maximum benefit. With a growing population, Africa needs to invest in itself to bolster employment. By pursuing its own industrial autonomy, Africa will diversify and rely less on others.   Setting its own targets and strategies is important for Africa. In recent years, African states have sent strong signals that they need to extend its relationship beyond the West. This is a turning point that deserves reflection. They need to engage widely to ensure that relationships are not skewed at the expense of others given that it is in the continents interest to have productive relationship beyond the East/West divide.   Conclusion   Whilst Africa’s partnership with China is central to its interests, the relationship must shift more rapidly from the current bias in China’s favour, to the mutually-beneficial vision that the two sides share. To ensure mutual benefit, Africans must take ownership and better perceive and strategically pursue their interests. They must engage in global fora from a calculated position that effectively pursues a consolidated continental strategy. 5.1. North African perspective   Mr Zine Barka, Head of Academic Chair, Arab League Educational, Cultural and Scientific Organization ( ALECSO), Algeria   Many African countries have recently established and developed partnerships with China. The policy priorities for North Africa, while similar to other African states, are unique. In some countries China has become the first commercial partner, replacing some traditional partners. In Algeria, for example, where it used to be France, now it is China.   These developments beg certain questions, including: What is the novelty of such a new partnership? How is it different to other commercial relationships? How is it more suited to the African countries? And finally, how can these relations between the continent and China be boosted to make them profitable for both countries and what issues stand in the way and need to be addressed?   Central to these questions is to look at how the partnership between China and Africa brings potential benefits for the economies involved. Another salient point the speaker raised is to ask whether the Chinese African partnership is mutually beneficial.   When Algeria was under occupation by France during the 50s, China supported the Front de Libération Nationale (FLN), the socialist revolutionary party, at an early stage. China was the first non-Arab country to recognise the FLN as the Algerian provisional government in December 1958. Between 1958 and 1962 China assisted the armed wing of the FLN by providing funds, arms, and training for Algerian officers. After Algeria gained independence in 1962, China continued to fill the void left by France after 132 years of occupation. Algeria received aid and material bought from the socialist Eastern Block, the former USSR, Yugoslavia, Cuba, and some other countries such as Egypt and Syria. China provided the US$15 million low interest loan to Algeria.   Right from independence, China has supported Algeria. When the Algerian Civil War loomed in 1992, the established socialist economic path underwent significant changes. The mismanagement in the preceding period led to national assistance by the IMF under significant conditions or structural adjustments and debt rescheduling. In the early 1990s Algeria undertook to define the system management vote, thus concretising the transition to a more liberal economy based on the exchange of goods and services carried out directly by individuals.   With the opening of the economy and lifting the monopoly on trade, Algeria turned to China. Several cooperation and partner contracts were signed between the two countries to strengthen their relations.   In 2014, the Algerian bilateral relationship became a comprehensive strategic partnership that was the first of its kind in the Sino-Arab world. In 2018 Algeria joined the Belt and Road Initiative and then, later, the three-year plan for cooperation in some strategic areas was signed. Finally, in July 2023, the Algerian president made an official visit to Beijing to elevate the new partnership to a global dimension, giving it a bigger role. As a result, the two countries signed 19 cooperation agreements, memorandums, in valued sectors such as rail, transport, technology transfer, agriculture, cooperation, communication and sports.   The partnership agreements to facilitate and strengthen cooperation between China and Algeria have created apprehension for Algeria’s new small local enterprises, who cannot compete with the Chinese products. The key challenge facing North African economies is job creation for the growing population. With a growing population, Algeria needs to invest in itself in order to bolster employment. The speaker stressed that it is important to assess exactly where China is investing and what effect the investment has had.   The trade balance – which has long been in China’s favour – is another important aspect to look at. This is a government concern and needs to be more balanced, as the Algerian state has funded most of the projects undertaken by the Chinese companies. There has also been little transfer of technology or expertise to the Algerian society.   Despite the efforts made by Algeria, the country’s main challenge is still to diversify the economy – to move away from oil and to create more business opportunities. Furthermore, it is also essential to improve the business climate to achieve better economic growth and to reduce food dependence. There is an urgent need to establish data on contracts and trade between the two countries to enable empirical studies to assess the effects of trade on both countries and to suggest alternatives.   In conclusion, the partnership between Algeria and China is a highly valuable one but cannot remain in its current bias towards China.    5.2. West African perspectives   Prof Assi Kimou, Deputy Director of Cellule d’Analyse des Politiques Économiques du CIRES (CAPEC), Côte d'Ivoire   Central in the relationship between China and West Africa is the structuring of loans, foreign direct investment, and private sector investment. These all come with certain challenges. The cooperation between China and Africa and Côte d'Ivoire specifically, requires political will. This political will gained momentum in the early 2000s, with former President Laurent Gbagbo, who sought to diversify the state’s economic partnerships and give Côte d'Ivoire an opportunity to address the infrastructure deficit.   The increase of support from China challenges the traditional support from and business with France, West Africa’s historical partner. The shift towards China represents a turning point for West Africa, with clear changes in states such as Benin, Côte d’Ivoire, and Senegal.   Furthermore, sectors that can address the issues of productivity and competitiveness are supported. In these sectors, West African countries such as Côte d'Ivoire have a new major partner in China.   Foreign Direct Investment (FDI) has significantly increased in the region of West Africa. While FDI from China remains low compared to France, it is increasing, especially from state-owned businesses. FDI has increased by 15.6% between 2012 and 2021, with most companies being based in Abidjan. This is said to be a challenge, though, due to the concentration of capital in only one area. What is encouraging about Chinese operations in Côte d'Ivoire is that 89% of employees are African, however, these processes are focussed on local markets.   The Chinese promote exports to Africa and not African export-led production. The trade imbalance is of serious concern, as products are entering Africa but not the other way around. More must be done to have African goods enter the Chinese market.   While China has supported African countries, their debts are still growing, with African states not growing fast enough to repay these debts. Corruption is another devil that plagues further cooperation. So too is the low level of skills and technology transfers.   A further challenge for China-Africa cooperation is the language barrier. French is deeply rooted and has historical significance, while the citizens of Africa consider English to be the best language to learn for international cooperation. The Chinese language only accounts for 3%, so this remains a barrier. In response, China is supporting academic development on the continent. Yet, while the Chinese are setting up Chinese cultural programmes, there is very little knowledge of Africa or African studies programmes in the Chinese academy. This is something to be addressed.   Dr Ndiakhat Ngom, General President of the South-South Transatlantic Institute, Senegal   Building trust should be at the centre of Africa’s relationship with China. Africa and China have historically had fruitful relations, reflecting a good example of South-South cooperation. It is a relationship that was built on three essential phases.   Firstly, China supported African countries in their struggle for independence and their development programme.   Secondly, Africa played a decisive role in the recognition of China in global governance when its vote in 1971 ensured China’s access to the United Nations. Mao Zedong recognised this debt and expressed his gratitude. The last phase was in 2000, with the formalisation and intensification of relations, in similar fashion to this meeting, within the framework of the China-Africa Think Tanks Forum.   Twenty-four years after its creation, FOCAC has become the reference point for China-Africa. Due to its industrial competitiveness, China sees Africa as a strategic trading partner – with China receiving a steady supply of raw materials, energy, fishing, agroforestry, and mining benefits. In return, African countries benefit from improvements to roads, ports, airports and infrastructure, and diversification of trading. Geopolitically, both parties share the vision of a more just and equitable world, supporting each other at the United Nations in order to influence decision-making. Finally, the enlargement of BRICS to include Egypt and Ethiopia in 2023 is said to represent a significant milestone for South Africa, and Africa.    Despite these obvious successes, there have also been concerns in the relationship. As was the case with the France-Africa relationship in the past, the China-Africa connection not only brings praise but raises suspicions and criticism too. Four sectors stand out in this regard: the skills, economic, environmental, and geopolitical areas.   The first area is skills and technology transfer. China has set out to train 564 directors and teachers at vocational schools in Africa each year. China also plans to invite 20 000 government officials and technical professionals from African countries to seminars and forums. In addition, to support the development of African capacities in science, education and innovation, China will implement a cooperation programme between 100 Chinese and African higher education institutions. It will launch ten pilot projects between China and African partners.   Training and technology transfer are essential to the industrialisation of the emergence of Africa – the African population is young, dynamic, and demanding this training.   Economically, China’s direct investment in Africa is US$3.4 billion in 2022, making China the fourth-largest foreign investor in Africa. This investment brings growth but there are also many interests in labour. There needs to be more equal economic cooperation in which China invests in industry activity that requires technology transfer. Currently, its main sector of activity is construction and energy, an area of high demand for often low-schooled labour.   A better balance is required, where Africa becomes more of a partner than a customer. African states must stand up for achieving their own industrial autonomy, by looking at China’s own trajectory when it developed through its own initiatives. China has surpassed many developed states and has achieved significant feats in design and production of innovative goods and equipment. Likewise, Africa must invest in local schemes to gradually gain its own autonomy.   Setting its own targets and strategies is important for Africa. In recent years African states have sent strong signals that they are unhappy with their relationship with the West. This is said to be a turning point that deserves reflection. Platforms such as FOCAC and CATTF have a role to play in preventing such a skewed relationship with China.   A few recommendations in conclusion: the China-Africa Think Tanks Forum must set goals for its analyses; in West Africa it is imperative to carry out a study to evaluate the relationship between the migration and the fishing crisis; and lastly, a report should be drawn up that assesses the possible impact of FOCAC to help it with decision-making. In short, cultivating wisdom and a capacity for listening and anticipation is the message that Senegal wants to impart upon FOCAC.    5.3. Central African perspective   Dr Melha Rout Biel, Executive Director of the South  Sudan Center for Strategic and Policy Studies ( CSPS), South Sudan   China-Africa relations have grown significantly over the last 40 years. China is now one of Africa’s biggest investors and donors, identifying Africa as a source of its ambitious programme of economic, diplomatic political development. With the help of African resources, China has become the second strongest economic global power. However, despite all of its promise, there is a growing worry about the future cooperation between China and Africa when it comes to loans and debts. In this area, it is imperative for the CATTF to engage African as well as Chinese policymakers, avoiding mistakes and crises in the future. African states must prove what the loans are for, and  they must agree to payment terms.   China has projected itself as a voice for developing countries but faces a lot of criticism, particularly from the West. China is recognised as the largest developing country in the world, while the African continent is recognised as the continent with the most developing states. Both China and Africa are believed to share a post-colonial experience, which is another point of cooperation between them.   The role of think tanks is imperative to ensure a preferable China-Africa relationship. Critical assessments – particularly regarding unpayable debt – are needed as China and Africa grow closer together in many areas.   The problem of unpayable debt is not one that is singular to China. Since 2010 African public debt has been growing extensively. In fact, data from December 2022 indicate that African countries have accumulated billions of dollars in debts. The IMF and the World Bank consider that at least 22 low-income countries in Africa are either in debt distress or are at high risk of debt distress as of November 2022. According to the experts, debt distress means that a country is having problems with solving its debt obligations.   The high-risk debt burden could endanger African economic growth and development. Africa is already facing challenges such as conflict, insecurity, drought, dislocation, unemployment, and insecurity. Were this situation to continue, Africa will not be able to deal with pressing issues such as development, meeting obligations, and achieving the UN sustainable development goals.   For China, Africa is one of the biggest beneficiaries of Chinese bilateral lending. The West accuses Beijing of debt trafficking, but this criticism has been rejected by China. The Western University Group Development Policy Centre shows that the Chinese debt to Africa varies widely across the continent. Further research suggests that Chinese policymakers are taking an increasingly hard line when lending to Africa. According to the speaker, these measures should be applauded.   Africa’s funding problems should not only require foreign support. Africa must invest in itself, in its own developments and support its own businesses. Not enough is being done in this regard. By investing in Africa, the continent will actively fend off escalating inflation.   Africans must also ensure greater internal security and stability, so as to spur further investment. When Africans take ownership of their own affairs, they do not blame others – China in this case – when they cannot repay their own debts. The problem is with those who ask for a loan and then cannot pay it back when they are not abiding by the rules of the procedure. They cannot blame China for that. China is not the problem, Africa is. This is something that think tanks must critically assess and contribute to.    5.4. East African perspectives   Prof Francis Matambalya, Executive Director of the Nyerere Foundation, Tanzania, and Prof Omar Mjenga, Centre for International Policy Africa, Tanzania   Africa’s relationship with China is not a new one. Tanzania and China have developed and defined a friendship over a significant period. The socialist Tanzanian policies, known as Ujamaa, were influenced in association with China.   In Tanzania several tracks of cooperation have been built with Chinese colleagues. The Julius Nyerere Leadership Institute is but one. It was constructed by the Chinese as a present to the parties that spearheaded the liberation of Africa. Based in Kibaha, about 60 kilometres from Dar es Salaam, the Institute is an international organisation owned by six political parties, namely, Chama Cha Mapinduzi (CCM) from Tanzania; FRELIMO from Mozambique; African National Congress (ANC), South Africa; MPLA, Angola; ZANU-PF, Zimbabwe; and SWAPO, Namibia. Together they own the Institute, a very impressive, very modern institution.   The Institute pursues work across various programmes, covering issues including peace, unity, and development. These were issues dear to Julius Nyerere and are central to China. At present the Institute is pursuing independent programmes in five areas. They involve, but are not steered by, Chinese institutions.   Current programmes include a Nyerere Legacy Week, where the legacy of Nyerere is kept alive through workshops, commissioned papers, and talks. Usually, about three-to-five scholars are commissioned to do in-depth research of Nyerere’s ideas, to see how they could be applied in the current context and what could be learned to inspire the youth.   Furthermore, cultural activities are organised to remind everyone where they come from. This year, the funding of this programme came from a Chinese company. The other projects seek to leverage Chinese knowledge and experience to help Africa charter its way forward – for instance, there is a strong focus on industrialisation from the Chinese model. A further programme looks at the hospitality industry, which is an area where there is huge potential for growth.   Altogether, East Africa wants to leverage China’s experience, and promote sustainable industrialisation on the continent. But it also wants African partners to drive its own development. This meeting offers a very serious opportunity to bring think tanks together – for far too long African think tanks have been working in isolation. It is imperative to come up with a forum to take Africa forward.   There are six areas that the Nyerere Foundation believes will take the world forward: peace, defence, security, foreign policy, international relations, and gender, women, and marginalised societies.   Together, think tanks must design ways of cooperation. There are already various foreign-steered fora in Africa; it is time that it designs its own, for its own development. It is the role of think tanks to conduct research and factfinding to advise governments on their decision-making processes. Often, the failures of governments, are the failures of think tanks in that country.  5.5. Southern African perspective   Dr David Monyae, Co-Director, University of Johannesburg Confucius Institute (UJCI) The Africa Consultative Meeting represents a significant milestone. Whereas some delegates met in China previously, it is important that Africans meet each other on the continent and that the different think tanks get to know each other, find agreements and similarities on how to approach their relationship with China, eventually pursuing Agenda 2063.   It is shocking that even though African think tanks get invited by other states, including China, for meetings and briefings, they do not receive the same treatment in their own countries. Think tanks hardly meet each other to discuss issues, which is why this meeting represents a first. A first, held on African soil, to meet and discuss the important issues that affect the various institutes attending the gathering.   The meeting is a reminder of the seminal 1955 Bandung Conference, where Africans and Asians met to discuss shared global grievances such as colonialism, imperialism, development, and the United Nations and its agencies being unbalanced in favour of the developed world. There they discussed technology transfer, the lack of cooperation, cultural matters and more.   Today, a new Cold War has emerged. The more things have changed, the more they appear to have stayed the same. The US has remained the dominant power in the West, the UN remains untransformed as it was then, Africa remains the poorest, while Asia has grown significantly.   Even though states are independent, they are not enjoying their freedoms, due to political and economic restraints. Global issues have a disproportionate effect on Africa, and with the emergence of the Fourth Industrial Revolution, Africa is destined to be left behind even more if it does not improve its skills and knowledge. While Africa is confronted with crises emerging from outside the continent, the bulk of the crises that Africa faces are of its own making. African states need to cooperate with each other to solve these crises, with guidance  from external relationships.   The most thriving of these relationships is Africa’s connection with China. However, there are key issues that need to be addressed. And in order to do this, a reappraisal of FOCAC is needed.   In the 24 years since FOCAC was established, the depth of mutual understanding between Africa and China has flourished. The forum developed into a principled organisational framework and forms the foundation of the relationship, giving it stability and predictability. It is a platform for China and Africa to discuss both high and low political matters, from international affairs, peace and security, and economic cooperation to education, cultural exchange, youth, and women groups. The forum has grown in leaps and bounds both quantitively and qualitatively. At the inaugural gathering in 2000 only 44 African states were represented. In the last meeting, in 2021 in Senegal, a total of 53 African states including the African Union Commission were represented.   Since its first meeting, the length of the action plan has expanded four times over, which signifies a more comprehensive relationship. The forum now has 28 subforums, including the Investing in Africa Forum, China-Africa People’s Forum, and the China-Africa Law Enforcement and Security Forum, amongst others. The subforums are earmarked to focus on specific areas of cooperation between China and Africa.   There are also 21 special purpose instruments such as the China-Africa Joint Business Council, China-Africa Products Exhibition Centre, China-Africa Chamber of Industry and Commerce, China-Africa Youth Festival, and the UNEP China-Africa Environment Centre. These instruments are also meant to streamline and facilitate cooperation in selected areas.   Furthermore, the forum has developed implementation and monitoring mechanisms at three levels. At the apex is the ministerial conference, which meets every three years to deliberate on and adopt declarations and action plans. The senior official meeting consists of senior directors from member country’s ministries that meet twice a year and a few days before the forum takes place.   Through these interactions, it often appears that China knows more about the continent, than the very Africans representing the continent. This is evidenced in that China invites African think tanks for briefings, in Africa and China, but the same is not done from the African side. The level of resources, researchers, and analysts, is also hugely imbalanced in favour of China.   Africa needs to be more serious about its research. It needs more complex studies to understand its relations with its strategic partners, to understand where strategic interests converge. Africa needs to evaluate its partners so that it can form a basis upon which to determine its strategic interests. Presently, it is a free flow, with heads of states going everywhere, without specific purpose – this is not strategic. Africa needs to be more intentional about who it takes seriously. The forums in which states engage should also be structured better, with formal agreements and clearly delineated outcomes.   The Chinese take African concerns seriously. For example, when African leaders complained about the imbalance of trade, President Xi opened up agricultural trade with Africa to correct that. However, the greatest imbalance is that of raw materials leaving Africa. By allowing this, Africa is exporting jobs. Beneficiation is imperative, and China is important in this regard, but Africa needs to demand that others also help with this issue.   Africa must not underestimate the power that it has. Its own development banks should come together and ensure that when Chinese companies are working on the African continent, that they do not go it alone. Africa remains too fragmented, with a lack of unity and understanding. Worse, African states compete with each other, instead of working together. Although internal trade remains at a lowly 15-20%, there are opportunities. The biggest of which is the African Continental Free Trade Agreement, which has the power to bring significant change to the continent.   6. Reviewing the purpose and objectives of the Forum on China-Africa Cooperation (FOCAC) and the role of the China-Africa Think Tanks Forum (CATTF)   Prof Wei Xu, Deputy Director of the Institute for African Studies, Zhejiang Normal University and Ms Ariella Liu, Director of the South Africa – China Think Tank, based at Nelson Mandela University Business School   China and its people wish to engage with Africa. In February, the speakers were joined by students from China on a fieldtrip through South Africa that led to an appreciation of the country’s natural landscapes, wildlife reserves and cultural heritage. The students also took part in the Spring Festival in Johannesburg, which was very well attended, particularly by South Africans, proving that South Africans are also interested in China.   FOCAC was officially launched in Beijing in 2000 and is a product of China-Africa cooperation. However, it was not China but the African countries that first put forward the idea of establishing a China-Africa cooperation mechanism. With South Africa being the most developed African country, a China-Africa cooperation mechanism could not be established before it initiated diplomatic relations with China in 1998.   The core mechanism of FOCAC is a ministerial meeting held every three years, alternating between China and the African countries. China will host the next session of FOCAC in 2024, which will be the second time that Chinese and African leaders will gather after the 2018 FOCAC Beijing Summit.   Each meeting results in a joint declaration and action plan on the basis of full consultation between China and Africa. It shows that from its existence, FOCAC has had different dialogue mechanisms with African countries compared to the former colonial powers, reflecting the originality, equality, and the initiative of African participation. And since its establishment in 2000, FOCAC has demonstrated that it is a platform and a mechanism for China and Africa to engage in collective dialogues, consultations, and equal and pragmatic cooperation.   FOCAC has promoted the leapfrog development of China-Africa cooperation in various fields. With its pioneering spirit of equal consultation, pragmatic cooperation and keeping pace with the times, it has become a prominent brand of China’s multilateralism and has promoted the leapfrog development of China-Africa cooperation in various fields. It has advanced equal consultation, pragmatic cooperation and has become a prominent brand of China’s multilateral diplomacy under the banner of south-south cooperation. It is also a platform for Chinese and African leaders to meet regularly. The action plans for China-Africa cooperation, launched every three years, outlines the blueprint and the implementation parts for China-Africa cooperation in various fields.   At the political level, the FOCAC hosting a ministerial meeting and a summit every three years allows the leaders of China and Africa to exchange ideas with each other. This helps the two sides strengthen mutual political trust and communicate on major international issues.   FOCAC’s economic action plan covers most aspects of trade, investment, contracting of engineering projects and development assistance. It also formulates measures to achieve the development goals in each area.   And since 2008/9, China has been Africa’s largest trading partner. At the people-to-people exchange level, it was said that there are more and more Chinese people investing in and visiting Africa and more and more Africans going to China to study and do business. China-Africa people-to-people exchange has expanded to fields of ideas and joint research. China has offered about 120 000 government scholarships to African students, co-funded 61 Confucius institutes and 44 Confucius classrooms in 46 African countries.   It has dispatched 1.11 million medical team members to 48 African countries. And has treated about 220 million African patients and established 150 pairs of friendship cities between the two sides. The public opinion, based off China-Africa friendship, is becoming more and more consolidated.   Since its establishment, FOCAC has adhered to the spirit of being driven by African needs, doing practical work for African people, reducing poverty and promoting development.   FOCAC has closely integrated with the Belt and Road Initiative (BRI). So far, 52 African countries under the African Union Commission have signed the cooperation documents on the BRI with China, making Africa one of the most important continents participating in the BRI.   With regards to the China-Africa Think Thanks Forum (CATTF), the forum has developed since the 2010 speech delivered by Chinese President Xi Jinping in South Africa. The CATTF was launched the following year in Hangzhou. It has been highly important for China-Africa academic cooperation.   Since inception, the CATTF has had 12 sessions organised alternately in China and Africa. The topics, concepts and focus points are determined through consultation, with the core issues being those that concern both sides. The China-Africa Think Tanks Forum has become a widely influential academic forum in China and on the African continent, and even in Western countries.   The CATTF platform allows Chinese and African scholars the opportunity to enhance their international influence, by creating a new model of academic participation and performance. It is not only an annual event for Chinese and African thinkers and academics to engage, but also a forum for Chinese and African politicians to interpret the policies and express their views freely. After more than ten years, the forum has become an institutionalised platform for dialogue and exchange between the diplomatic, academic, think tank, business and media communities in China and Africa.   Furthermore, the CATTF has brought together current African scholars, think tank experts, government officials and so on. Here, they have enhanced their communication and cooperation. It has created a favourable platform for the academics and politicians and for the scholars and officials to rely on each other and support each other, thus forming an aggregation effect.   All previous CATTF meetings have attracted intensive coverage by national and international media outlets, which has quickly and widely disseminated the current Chinese policy towards Africa and the strategic ideas and the significance of China-Africa cooperation.    7. Current state of security and stability in Africa   Mr Priyal Singh, Institute for Security Studies   This presentation focusses on the overarching contours and broad trends of the current international peace and security landscape, and the African peace and security landscape, in particular. In summary, globally things are not looking too good at the moment. The inevitable end results of longstanding governance deficits and weak public institutions is stunted economic growth and development, ongoing growth and operation of violent extremist radical groups and radical non-state actors, as well as widening inequality across the international system coupled with the volatility and fragility of the international trade and financial system.   Many of these longstanding, pervasive and deeply rooted challenges have been exacerbated by emergent conflict stressors including the Covid-19 pandemic, increasing concerns over cybersecurity and the spread of disinformation online, as well as the overarching existential threats we all face posed by the climate crisis.   Many of these issues have been left inadequately addressed by international actors, which has led to popular uprisings, armed conflicts, prolonged insurgencies, and terrorist activities. And these threats are felt much more acutely, especially across the African continent, during critical periods surrounding electoral processes or during times of political transition.   The confluence and interplay of these various factors, amongst many others, have informed the trajectory of conflicts across the world’s many conflict belts or zones. But this is only one part of the story. The contemporary African peace and security landscape places much of the blame squarely at the feet of state actors, which remain the single most important and influential actors within the international system.   The experiences of the last few years compel a much more critical view of the role of nation states in initiating and compounding, shaping, and prolonging the conflicts that we all seek to address as the international community.   The research of the Institute for Security Studies has noted how even a simple thing like access to humanitarian aid has become politicised within multilateral bodies. This is due to the myopic, shortsighted interpretations of national interest, which can lead to devastating results over longer term frames of reference for human security. Not just in Africa, but across the world.   This is happening at a time when the world has arguably developed its most sophisticated models and technical approaches to things like UN peacekeeping, AU peace support operations, peacebuilding, post-conflict reconstructions and development. All of this based on a wealth of data, historical lessons learned and official reviews, and the fruits of this are not seen or experienced. These approaches are simply not being employed or deployed effectively due to a lack of political will, compromise, and strategic foresights on the parts of member states.   The international order is said to be at a point where powerful countries are increasingly pursuing narrow geostrategic interests outside of the established global rules-based international system. They are increasingly circumventing the system, pursuing unilateral actions, and promoting what we often refer to in the field of international security as a greater sense of pragmatic adhocism.   There is also massive underinvestment, both in terms of financial and diplomatic resources, in facilitating ongoing conflict resolution efforts on the part of its member states, be it bilaterally or multilaterally. And consequently, the sustainability and the predictability of international responses to conflict have been a massive and persistent concern for far too long.   The greatest challenge confronting Africa, and the international peace and security landscape in general, is the failure of politics amongst state actors. The linkages between conflict stressors and structural drivers and root causes of conflict are evident. The challenge is primarily political in nature. It is imperative for state actors to forge robust and practicable political strategies to facilitate the use of the tools at their disposal. Furthermore, to achieve levels of consensus and compromise, the continued deployment and operation of the various conflict resolution models is necessary.   In order to pursue and develop the political solutions necessary to anchor effective conflict resolution mechanisms, the world must remain cognisant of a somewhat uncomfortable truth that states must become more active in dealing with the issues at hand. This must happen at a time when the multilateral, institutional order has become increasingly opaque. Civil society and the international community must adequately reflect on the implications of these issues from a long-term human security perspective. And from an international rules-based perspective. Only once these issues are resolved can there be a significant reinvigoration or renewal of the various multilateral institutions.    8. Introduction to the Global South Perspectives Network and the Global Resilience Council   Dr Georgios Kostakos, Executive Director of the Foundation for Global Governance and Sustainability (FOGGS)   The Global South Perspectives Network is a collaborative initiative of the Foundation for Global Governance and Sustainability (Brussels), the Humanitarian Journalism and Media Interventions research group (Sao Paulo), and the Inclusive Society Institute (Cape Town). The Network gathers international affairs, sustainability and communications experts from Latin America and the Caribbean, Africa, and the Middle East. The Network recognises that the Global South remains under-represented in the UN. It sees the role of civil society in the UN reform process as imperative and works to promote civil society organisations directly in this process. At present, the participation of non-state actors is dominated by big companies that promote their interests, the underprivileged countries, and the peoples of the South.   While civil society should be represented, measures should be taken to ensure that representation is not skewed towards the North, who have big pockets. Structures to properly represent the citizens of the world are imperative. Yet, there is a perception in developing countries and their civil societies that the UN is a western construct. That, like a guest, they can go to the UN agencies and demand official assistance. These states are members and must co-own and co-shape the next phase of global governance.   This is the goal and orientation of the Global South Perspectives Network: to have a positive impact, to grow and be consolidated in many ways in different countries, to include respected institutes that have influence over public opinion and can influence governments with positive proposals. This must be done so that the UN will be different and really belong to all the people and all the countries of the world.   The idea of the Global Resilience Council is similar to the Security Council but for non-military threats. The establishment of the Council would be to enable the UN to respond to multidimensional crises from the level of self-standing intergovernmental bodies to an inclusive multilateral platform. If set up, the Council would address global non-military threats such as climate, health, and economic crises that find no adequate response at lower levels of governance. It would be created to involve both state and non-state actors, including scientific advisory bodies and the UN system entities.   The current infrastructure is inadequate at addressing unfolding crises such as climate change. The Security Council could not simply securitise climate change; it cannot be solved by a 15-member body that is not representative. From countries and regions to individual people, when trade breaks down, when there is disease and no vaccines, the world needs a consolidated place to go. Resilience is central to all these matters and will become more important as poly-crises develop.   It will be in the interest of developing countries to support such an inclusive idea. It would have no vetoes, no permanent members that can control it in the manner of the Security Council. Also, it will have a more integrated connection to civil society, science, and even companies and other non-state actors in the process of decision-making and in the process of implementation. The idea of the Council has been put before the secretary general’s Common Agenda report, which is providing the framework for the Summit of the Future consultations. The concept is still developing, but there is hope that the think tanks and their governments will support the initiative.   9. The need for an African Fragility Index   Daryl Swanepoel, CEO: Inclusive Society Institute   The Inclusive Society Institute (ISI) decided 18 months ago to develop an African Fragility Index. After developing the first phase of the Index, it was clear that an index that drew mostly from secondary databases would be incomplete and insufficient.   When doing country analyses, there were glaring omissions in the data. Matters of fact were not showing up in the data. And the data was not providing sufficient information on actual affairs, such as the manifold military interventions taking place across Africa. The Institute concluded that it would be preferable to deal with and draw from people who were closer to the areas of concern. People that can assist in putting more relevant primary data into the database.   The African Fragility Index would be a tool to aid policymakers and political decisionmakers in assessing whether peace and security on the African continent is stagnating, progressing, or regressing. The Index would be developed and published annually. Initially, it will only offer a snapshot of the current state of security affairs, but over time it will prove to be a useful tool that assesses trends on the continent. And in time it will show the progression from one year to the next. It will then be possible to draw deeper insights over time. The Institute is looking for an association of members to last for at least five years, which would allow a similar approach to a set of questions over a period of time.   This approach will not only point out the state of affairs in a specific country but also look into specific elements, the variable elements that constitute conflict. According to the measures in place in the Index, conflict is constituted by religious conflict, territorial conflict, civil unrest and civil conflict, political suppression, terrorism, and inequality.   The Index would constitute a country-by-country analysis, which will be done via a desktop study and through gathering empirical data by regional policy experts. The ISI invites the other institutes that gathered for the Africa Consultative Meeting to participate in this programme.   The intention is to capture a feeling on the ground in each of the African countries, drawn together as a summary report, which analyses the presence of conflict for each of the variables identified. A narrative will then emerge that offers a snapshot of the situation on the ground.   From there a panel of three security experts would verify the information and offer a score that would detail the level and degree of, for example, religious conflict. The same will be done for each of the variables. The second step is to have a Likert-type scaling done with five possible scores attached to each.   Lastly, there would be a judgement-orientated evaluation with a mitigation strategy to counteract subjectivity. This would be where the three expert evaluators look at and verify the results through verification methods. The process is then expressed in a multi-variant table containing six columns. This allows for the specific variables to be ranked and a narrative drawn out that will substantiate the scores.   For this project to be successful, for the Index to take off and become a legitimate resource for policymakers, the Inclusive Society Institute would be looking for collaboration from the institutes present. Ideally, a think tank for each of the five regions present would take responsibility to populate the table. They would be ideally suited as they are close to the ground and, therefore, understand what is happening in the region. In each of the areas, they would guide the process and populate the templates. The policy experts will then go through and verify that information and do the necessary analysis.   The various institutes would accordingly co-own the publication and this meeting will become an annual workshop anchored by the African Fragility Index. The different institutes would then be invited annually to attend the workshop in Cape Town, to go through the report and to find consensus before its publication.   The report would form the basis for presentations to fora such as the Istanbul Security Forum, which is a new security forum that has been established to look at peace and security through the lens of the developing world rather than the developed world. The Index could potentially also be used to engage other fora, especially the African Union Peace and Security Council.   All the preparatory work has been done. It would now be about getting credible data. The institutes that gathered for this meeting are invited to join the programme and play a profound role by populating the data of their neighbouring countries.    10.         Conclusions and recommendations   At the conclusion of the meeting, it was resolved that:   The participating African think tanks agree to establish the African Academic Consultative Network (Network) to act as an early warning system on matters confronting the African continent; and to drive its collaborative policy and advocacy work; To this end the Network will meet: (1) quarterly and ad hoc when necessary (digitally) to monitor and advise the work of the Network; and (2) in person annually in Cape Town to consolidate and steer its work; The Network will engage and encourage other credible think tanks within their regions and sphere of influence to join the collaboration established at the inaugural Africa Consultative Meeting; The Network will develop a synthesised report from the deliberations at its Consultative Meeting that discusses its individual positions and on strengthening Africa-China relations, which should advance mutually beneficial development between the two sides in parallel to those with their existing and traditional, and other, cooperation and trading partners; and To this end, they would approach the Institute for African Studies at the Zhejiang Normal University to partner and work with the Network in advancing dialogue and policy development to promote such mutually beneficial development; The convening institutions be mandated to seek additional international fora for consideration by the participating organisations to engage with, to advance the African development within a more just, sustainable, and fairer world; Participants will also seek participation in the Global South Perspectives Network as a means to be involved in the discourse aimed at promoting an inclusive, more effective and fairer multilateral dispensation in which Africa is more equitably and justly represented; Peace and security on the African continent are worryingly volatile, requiring a more focussed, sustained, holistic strategy to reduce the fragility of the continent; and To this end the participating organisations will collaborate in research and advocacy aimed at addressing the peace and security deficit on the continent.   - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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

Occasional Paper 1/2024 Copyright © 2024 Inclusive Society Institute PO Box 12609 Mill Street Cape Town, 8010 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 2024 Dr Roelof Botha Introduction   The document commences with two sections that provide some background to pressing challenges facing the economy, followed by a more comprehensive discussion of a number of positive developments, some of which may realistically be regarded as growth drivers over the medium term. A concise reflection on key aspects of the 2024/25 National Budget is included and, where feasible, data sets and graphs have been updated.    Erosion of public sector competence   The systematic erosion of the state’s capacity at all tiers of government and the public corporations is widely regarded as one of the key obstacles to higher economic growth in South Africa.   A recent report by the Growth Lab at Harvard University has examined in detail the key reasons for the below-par performance of the South African economy. Lead-authored by development economist Ricardo Hausmann, the report, titled Growth through inclusion in South Africa, seeks to explain why South Africa’s economy has consistently failed to grow at the same pace as its peers, with adverse social consequences, especially in the crucial area of unemployment.   The report concurs with the findings of several domestic research institutions since the scourge of state capture came to the fore almost a decade ago and discusses several causes of the collapse of several state institutions. The include:   Ideological gridlock within several government agencies, which has prevented critical decisions on the maintenance and expansion of infrastructure to be made in time. An ideological emphasis on central state planning that has effectively prevented society from contributing to supply societal needs, for example, by limiting power generation by the private sector and municipalities. A dearth of requisite skills and corporate governance standards at local government level, which has rendered many municipalities dysfunctional. A rise in political patronage, cadre deployment and corruption, as vividly proven by the Zondo Commission, which has restricted the productivity enhancement associated with labour specialisation. Inadequate public sector spending on the maintenance of the country’s infrastructure, which has led to serious inefficiencies in the areas of energy, railways, roads and harbours, resulting in supply-chain disruptions, especially permanent electricity rationing, and ultimately lower profits for many companies. This has also impacted negatively on taxation revenue growth.   In December 2023, the Gauteng Division of the High Court in Pretoria handed down a judgment in a case brought by opposition parties in which three judges found that government was responsible for rolling blackouts, and the numerous failures that led to it. It also ruled that government (in the form of Electricity Minister Kgosientsho Ramokgopa) must take steps to stop the interruption of power to public health facilities, police stations and schools by the end of January.   Even though it will probably take several years to end electricity blackouts, the judgement has removed all doubt over the fundamental cause of the electricity crisis. The judges have declared that it was the fault of the government. The judges also explained how the lack of investment, the failure to stop State Capture at Eskom, and all the mistakes since then brought about the energy crisis.   Energy expert Chris Yelland has noted that the country’s energy availability factor (EAF) for Week 7 of 2024, was 52.8%, while the year-to-date EAF remained slightly lower than for the same period last year.   This lack of progress is especially troublesome against the background of the return to service of three 800 MW generator units (Units 1, 2 and 3) at Eskom’s Kusile power station in November 2023, and the synchronisation of Kusile Unit 4 to the grid in December 2023.   Figure 1 captures one of the causes related to the problems of decaying energy and logistics infrastructure in South Africa, namely gross underspending by the public corporations. Unfortunately, substantial and repeated losses by several of these public sector institutions (especially Eskom, Transnet, Petro SA and South African Airways) has severely limited their capacity to deliver services, whilst also threatening fiscal stability (via recurrent bailouts by National Treasury).     Inordinately restrictive monetary policy   Ever since the onset of restrictive monetary policy in South Africa at the end of 2021, the financial resilience of households has been under pressure, with a strong (and predictable) inverse correlation between higher interest rates and the Altron Fintech Household Resilience Index (AFHRI) trend. The gains that were made with the post-Covid recovery have now been wiped out by the highest interest rates in 14 years, with the current real prime overdraft rate (prime minus the consumer price index – CPI) at a level of 6.5%, which is more than double the average rate that existed during the tenure of the previous Governor of the SA Reserve Bank, Gill Marcus.   The decision by the Monetary Policy Committee (MPC) of the Reserve Bank to raise interest rates to higher levels than before Covid continues to be a thorn in the flesh of most households and businesses, as this overly hawkish policy approach is not based on any signs of demand inflation in the economy. Scrutiny of the reasons for the overall downward trend of the AFHRI and the country’s leading composite business cycle indicator, reveals the following:   Restrictive monetary policy by the South African Reserve Bank since the end of 2021 has raised the cost of credit (and of capital) by 68% (measured against the prime overdraft rate). In February 2020 (prior to Covid) the annualised consumer price index (CPI) was 4.7% and the prime rate was 10%. In January 2024, the CPI stood at 5.3%, with clear signs that the lower level of the producer price index (PPI) of only 4% will force it down in coming months, whilst the prime rate stood at 11.75%. This means that South Africa’s real prime lending rate is now 150 basis points higher than four years ago, despite the fact that several key sectors of the economy have not yet fully recovered from the Covid pandemic. Against the background of lower taxation revenues than the budget estimates, consistent increases in welfare grant payments and very high unemployment, it seems quite strange that the MPC has opted for excessively restrictive monetary policy, knowing full well that the short-term interest rate is a blunt instrument that directly affects the cost of credit and of capital. Unnecessarily high interest rates have a profound negative impact on the ability of households to maintain their standard of living and on the ability of businesses to invest in new productive capacity. Authoritative economists have publicly voiced alarm over the inordinate emphasis placed by the MPC on inflation expectations, which are based on surveys with minute sample groups and are not based on any control over the methodology utilised by the survey participants or whether they have sufficient knowledge of/or experience in applied macroeconomics and forecasting. One of the most valid criticisms of the MPCs ignorance of the plight of South African households is the fact that, in real terms, total household credit extension, which is valued at more than R2 trillion, has declined by 3.5% since 2017, which means that there has not been any real growth in this key macroeconomic indicator over almost a decade. History confirms that the South African economy has never been able to grow at meaningful and sustained rates unless household credit extension grows in real terms. Ever since the changes to the composition of the MPC that occurred after the departure of the previous Governor, Gill Marcus, a dramatic shift towards a more restrictive monetary policy approach has been followed. This stands in defiance of the twin mandate of the Reserve Bank, which is not only aimed at curbing inflation, but also at ensuring that economic growth and employment creation are encouraged.   Figure 2 aptly illustrates the dilemma faced by South African households in the wake of the highest interest rates in more than a decade. At the end of the third quarter of 2023, the cost of servicing debt as a ratio of disposable income was higher than before Covid and was rapidly approaching double-digit territory. On the average home loan administered by BetterBond , homeowners are now paying approximately R4,000 per month more.   As a direct result, the average deposit required for a first-time home buyer increased by more than 100% between the fourth quarter of 2021 (when interest rates started to increase) and the fourth quarter of 2023, whilst the number of applications for home loans for all buyers declined by 30% over the past two years.    New record for manufacturing sales   South Africa’s manufacturing sector ended 2023 on a high note, with the 4th quarter recording a sales figure of R876 billion, representing a new quarterly record, both in nominal and real terms, as illustrated by figure 3.   It turned out to be a splendid year for the country’s factories, with each and every month recording a new year-on-year record sales performance and managing to maintain real growth of between 4% and 5%. The total manufacturing sales value for 2023 amounted to R3.3 trillion, 10% higher than the previous year (in nominal terms), and well above the average rate of inflation of 6%.     The continued resilience of the manufacturing sector is especially encouraging against the backdrop of a number of intimidating challenges, including electricity rationing, high interest rates, and capacity utilisation that has not yet fully recovered from the debilitating effects of the Covid pandemic. Although a marginal improvement in the level of capacity utilisation occurred during the 4th quarter of 2023, a lack of sufficient demand remains a deterrent to a further improvement in this key economic indicator.   Fortunately, two of the major manufacturing divisions, namely food & beverages and motor vehicles & parts, did manage to increase their capacity utilisation during 2023. Food and beverage processing represents the largest of the manufacturing divisions, accounting for more than 22% of total manufacturing sales.   It remains a boon to South Africa to enjoy a large measure of food security, with an agriculture sector that is a significant generator of foreign exchange earnings, whilst also playing a key role in the return to price stability after the supply-side shocks of 2020 to 2022.    Fiscal stability retained   The 2024/25 national budget will mainly be remembered for its novel utilisation of a portion of South Africa’s gold and foreign exchange contingency reserve account (GFECRA), commonly known simply as the forex reserves. The fact that South Africa’s forex reserves swelled from less than R100 billion a decade ago to close to R900 billion has proven to be an enormous windfall in the current macroeconomic climate of subdued growth and below-par tax revenue collections. Finance minister Godongwana plans to draw down R150 billion of these reserves over three fiscal years.   Most countries have official foreign exchange reserves (state-owned), held by their central banks, which can be used for purposes of maintaining macro-economic stability. The latter is exactly what has been implemented by National Treasury in the wake of the tax revenue shortfall experienced during the 2023/24 fiscal year. The latter may be attributed to weak prices for several of South Africa’s key commodity exports, sluggish world growth and weak domestic demand as a result of the record high interest rates that have been plaguing consumers and businesses alike.   For anyone that is concerned over this practice, it is interesting to note that the origin of the hefty amount in foreign exchange reserves currently held by the SA Reserve Bank (SARB) was a fiscal transfer to the SARB of (merely) R28 billion made by then finance minister Trevor Manual in 2003, following the decimation of the forex reserves during the emerging market currency crisis of 1998.   Capital market reaction to a country’s budget is widely regarded as the most informative barometer of its soundness in maintaining sufficient fiscal stability. National Treasury would have been most pleased by the decline in the country’s bond yield and the strengthening of the rand/US dollar exchange rate (albeit marginally) immediately after the tabling of the budget in Parliament.     Although South Africa’s bond yield remains higher than most of its key trading partners, the country’s ratio of public debt to GDP of just above 70% compares favourably to other highly diversified economies - both for high-income countries and emerging markets. The country’s ratio of government expenditure to GDP is also not out of kilter with its major trading partners (see figure 4).   Much detail is still required in the area of growth enhancing policies, but it is nevertheless encouraging to note that Mr Godongwana has echoed President Ramaphosa’s stated commitment to much closer cooperation with the private sector in fixing the mess surrounding the country’s infrastructure, especially in energy, roads, harbours and the railways.   Progress with fixing and expanding the logistics network, combined with lower levels of electricity blackouts, an improvement in export commodity prices and lower interest rates (which are imminent), could eventually provide National Treasury with a more pleasant budget task next year.   Foreign direct investment in good nick   Over the 12 months ended September 2023, gross foreign direct investment (FDI) inflows on the South African balance of payments achieved a record high average quarterly level (excluding the Naspers share swap transaction of 2021). Since the decline in FDI inflows associated with the Covid pandemic, an average quarterly inflow of R28.7 billion has been realised – an increase of 140% over the prior seven quarters (see figure 5).   The strong upward trend in gross FDI inflows is especially encouraging against the background of South Africa being placed on the so-called “grey list” by the Financial Action Task Force (FATF), which is the global money laundering and terrorist financing watchdog. The grey listing occurred in February 2023.   Fortunately, a recent report by the FATF has indicated good progress with South Africa’s efforts to be removed from the grey list. According to National Treasury, the FATF has formally re-rated 18 of South Africa’s 20 deficiencies. Of these, 14 recommendations had been fully or largely complied with, and one was rated as not being applicable to South Africa.   Following these re-ratings, South Africa is now deemed to be fully or largely compliant in 35 of the FATF’s 40 recommendations, including five of its six core recommendations. National Treasury has indicated that it hopes to conclude the necessary reforms by 2025, which will remove South Africa from the list.   Once this has been achieved and considering the resilience of the South African financial sector, including compliance with international regulatory standards for banks, further impetus in FDI inflows can realistically be expected. In the interim, the attractiveness of direct investments in the country’s on-going transition to renewable energy in the Southern African region should continue to boost the balance of payments.    Inflation declines further   Following the recent lull in the pace of retreat of the consumer price index (CPI), inflation has now returned to a downward trajectory, both in terms of consumer prices and producer prices. Although the January reading of Statistics SA’s CPI data has seen a slight uptick to 5.3%, consumer inflation is still down from 5.5% in November and 5.9% in October (see figure 6).   The producer price index (PPI), which invariably acts as a leading indicator for consumer prices, has set an even better tone, with the latest reading of 4% suggesting that inflationary trends will continue to moderate into 2024. More importantly, both the CPI and PPI are well within the Reserve Bank’s target range for inflation.   Other good news for indebted consumers, especially property owners, is the welcome decline in South Africa’s long-term bond yield, which could be indicative of an imminent turning point for mortgage bond rates. Since early October last year, the 10-year bond yield has shed more than 100 basis points – an indication that international capital markets are pricing in a lower interest rate scenario for South Africa in 2024.   Recovery of tourism sector   South Africa’s tourism industry is well on its way to a full recovery, with the number of overseas travellers in 2023 breaching the two-million mark – an increase of 42% over the number in 2022, but still below the figure of 2.6 million recorded in 2019 (pre-Covid).   Global tourism has recovered well from the negative impact of Covid lockdowns and South Africa is no exception, with the recovery rate standing at 79% of pre-Covid arrivals from overseas – marginally lower than the global average. Europe continues to dominate the South African tourism industry in terms of overseas arrivals, accounting for 64% of the total. Combined with North America, these two regions were responsible for more than 82% of all tourist arrivals from overseas in 2023.    Figure 7 depicts the overseas tourist arrivals to South Africa in 2023 for the top-ten source countries, confirming the importance of maintaining sound relations with countries that share the same fundamental governance principles related to democracy and free enterprise.   The imminent further recovery of tourism bodes well for the prospects of higher economic growth in 2024, as the sector possesses a pervasive value chain with other economic sectors, most notably accommodation, restaurants, transportation, and retail trade in clothing, ornaments, and artefacts. Tourism contributed almost 4% to South Africa’s GDP in 2019, a solid increase from the ratio of 2.6% in 2017.   The average spending of tourists visiting South Africa via air travel is estimated at around R40,000 per person and the industry was responsible for almost half-a-million jobs in 2021, despite the negative impact of the Covid pandemic. With a bit of luck, this figure will eventually recover to above the level of 777,000 recorded in 2019.    Altron-Fintech Index bottoms out   The latest reading of the Altron-Fintech Household Resilience Index (AFHRI) points to a bottoming out of a downward trend that commenced shortly after the South African Reserve Bank adopted a restrictive monetary policy stance (at the end of 2021). Since then, the prime overdraft lending rate in South Africa has risen to 11.75% - a full 175 basis points higher than the rate that existed before the Covid pandemic.   Fortunately, the results of the AFHRI for the third quarter of last year point to a marginal recovery in the financial disposition of households, with increases of 0.3% (year-on-year) and 0.8% (quarter-on-quarter). This trend is aligned to the recent marginal recovery of South Africa’s leading business cycle indicator, which increased by 0.4% Between the second and third quarters of 2023.   The improvement in the AFHRI has been driven by higher employment levels, higher real salaries in the public sector, with real household disposable income also increasing by 6.7% (quarter-on-quarter). The rise in employment has been especially encouraging, with total employment now higher than before the Covid pandemic, as illustrated by figure 8.     Even though unemployment rose marginally during the fourth quarter of 2023, a total of 800,000 new jobs were created in 2023. Total employment in the economy now stands at 16.7 million, which represents a gain of 300,000 jobs compared to the end of 2019 (pre-Covid). Other good news on labour market trends is the fact that 139,000 jobs were created in the private sector during the fourth quarter, most of which originated within the financial services sectors.   Trade surplus intact   Thanks to November 2023 recording the country’s highest monthly trade surplus of the year, with a hefty increase of more than 9% in exports, South Africa managed to record another trade surplus in 2023 – for the eighth year in succession. Data released by SARS at the end of January confirms a new record for total exports, breaking the R2-trillion mark for the second successive year. The R1-trillion level for exports was achieved in 2015 and, thanks mainly to a 31% increase in export earnings in 2021, a doubling of this level occurred in 2022.   Over the past two years, prices for several of the country’s key export commodities have been volatile and under pressure, resulting in October 2022 recording the first trade deficit in 30 months. Fortunately, total exports have managed to continue an upward trend, confirming the absence of any significant balance of payments instability.     Of late, the chances of maintaining solid export growth in 2024 have improved, with the prices of gold, coal, iron ore and platinum having increased substantially from their pre-Covid levels. Gold, which remains a major export earner for South Africa, has risen to an all-time high of marginally above $2,000 per fine ounce. At the end of February, gold was trading at a level of $200 higher than at the beginning of October last year.   Iron ore, which contributed an average of more than R8 billion per month to the value of mining sector output in 2023, may also be back in demand. Although the price has dropped from its recent highs at the end of last year, it stood at $123 per tonne at the end of February 2024, considerably higher than the most recent low of just below $100 per tonne, recorded in May 2023.   The Chinese government has recently started to implement measures designed to stimulate infrastructure development, including central bank loans to the China Construction Bank and a lowering of the official interest rate, which should encourage activity in the residential building sector during 2024.   Capital formation back on track   Capital formation seems to have decisively turned the corner after the debilitating effects of state capture and the Covid pandemic. Not only does this key demand-side indicator add value to the economy during the implementation stages, but it also facilitates future growth by virtue of expanding the country’s productive capacity in all sectors.   At a level of more than R270 billion during the 3rd quarter, gross fixed capital formation was 6% higher than a year ago (in real terms) and has been boosted by new investment in machinery and equipment. Although South Africa’s ratio of capital formation to GDP declined dramatically during the disastrous state capture era (from 17.6% to only 13.8%), it has since stabilised and is now at above 15% and rising.   Sufficient imports of machinery and equipment (as was experienced last year) are a prerequisite for economic growth, particularly in a developing country.     During 2023, imports of machinery and equipment rose dramatically to a level of R465 billion (see figure 10), representing almost a quarter of total imports, its highest share since 2016. The imports of mineral products (which is mainly represented by oil, diesel and petrol) amounted to 21% of total imports, its second highest level since 2014.   Both of these categories of imports are crucial to the expansion of productive capacity and economic growth, with the stellar performance of machinery & equipment imports also closely associated with higher investment in renewable energy by small and large businesses alike.    Strong growth in construction activity   South Africa’s construction sector seems to have turned the corner and is heading for expansion in 2024. The Afrimat Construction Index (ACI) for the 3rd quarter of 2023 recorded a quarter-on-quarter increase of 9.2% and builds on the positive ACI growth rate of 5.8% recorded in the 2nd quarter of the year (see figure 11).    It is especially encouraging that the important indicator of job creation in construction continued to record a healthy growth rate, with 145,000 new jobs having been created since the beginning of 2023. Equally impressive is the increase of almost 10% in the volume of building materials produced in the 3rd quarter, compared to the previous quarter, with year-on-year growth also having returned to growth.     Despite the slump in the residential housing market, several key drivers of further growth in the construction sector may strengthen or emerge during 2024. They include the following:   Progress with public/private partnerships or outright privatisation in the area of repairing, maintaining and expanding the country’s logistics infrastructure Progress with the inevitable and gradual switch to renewable energy, which is often linked to construction activities New capital formation in the economy, which recorded its 7th successive double-digit growth rate during the 3rd quarter of 2023 (year-on-year) A larger measure of price stability in the economy, which may lead to lower interest rates, hopefully early in 2024.   In addition to the sterling performance of wholesale sales of construction materials, new job creation, and the volume of building materials, other highlights of the latest ACI were the positive real growth in the value of building material sales, retail hardware sales and remuneration of construction workers (quarter-on-quarter).    - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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

Occasional Paper 2/2024 This paper is published jointly by the  Inclusive Society Institute and School of Public Leadership, Stellenbosch University Inclusive Society Institute   PO Box 12609, Mill Street Cape Town, 8010 South Africa   235-515 NPO School of Public Leadership, Stellenbosch University   PO Box 610 Bellville, 7550 South Africa    Copyright © 2024   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 and the School of Public Leadership, Stellenbosch University.    D I S C L A I M E R   Views expressed in this report do not necessarily represent the views of the  Inclusive Society Institute or the School of Public Leadership, Stellenbosch University.   APRIL 2024 by Daryl Swanepoel Research Fellow, School of Public Leadership, Stellenbosch University This is the first in a series of three occasional papers on managing social cohesion in diverse communities. They will explore the mechanisms that Singapore, Finland and the United Arab Emirates have deployed in forging socially cohesive societies within their very different environments. The three papers will ultimately be integrated into a comprehensive synthesised report, with the objective of providing a menu of tools for South African policymakers to contemplate for purposes of strengthening their efforts within the South African context. Singapore Skyline istockphoto.com : Stock photo ID:1165735071 Abstract The Inclusive Society Institute’s GovDem Survey  has revealed that social cohesion in South Africa has not made sufficient progress post-Apartheid. In fact, the level of cohesion has declined of late, reversing the early gains made at the onset of the democratic order initiated in 1994. This is worrying given the need for cohesion to underpin peace and security, and economic growth in a country, both of which are at worryingly low levels in South Africa. This occasional paper has as its objective the development of a menu of policy interventions aimed at advancing social cohesion, that the policymakers in South Africa may wish to ponder. The paper forms part of a broader study that explores the practices in other diverse communities, notably Singapore, the United Arab Emirates and Finland. This particular paper discusses proposals informed by the Singaporean case study. It discusses the findings thereof, and advances recommendations for South African policymakers to consider. 1.   INTRODUCTION   In analysing its extensive 2023 GovDem Survey, the Inclusive Society Institute (ISI), an independent public policy research institute, came to the conclusion that thirty years into the new South African dispensation, social cohesion had not advanced to optimal levels. In fact, tren ds were worrying.   Context In 1994 South Africa transitioned from Apartheid South Africa, in which the minority white community controlled all political power, to a new democratic dispensation in which universal suffrage ensured that all South Africans, regardless of race, shared political power in the country. Hopes were high that a rainbow nation could be forged from the divisions of the past (Austin, 2021). South Africa is celebrating its 30 years of democracy during 2024.   In the poll, less than half (48 percent) of South Africans were of the view that a united nation could be forged out of all the population groups in the country. Thirty-one percent believed it possible. Eighteen percent did not express a view one way or the other. This sentiment held true across all the major race groups in the country. Only 46 percent of whites believed it feasible, 48 percent of blacks believed it so, and for Indians and coloureds it was 44 percent and 50 percent respectively (ISI, 2023). Even more disquieting is the finding that only 39 percent of South Africans were of the opinion that reconciliation in South Africa is moving in the right direction. This held true across all the race groups, where similar trends existed.   In its definition of social cohesion, the Inclusive Society Institute includes dimensions wider than just race. It also considers religious tolerance, and attitudes towards immigrants, amongst other criteria, as contributors towards social cohesion. The Institute’s South African Social Cohesion Index (SASCI), currently in its development phase, is built on three pillars: demographic integration, extent of connectivity to the country, and sense of community (ISI, 2022). These pillars respond to the three dimensions of social cohesion as argued by Langer et al. (2017), namely inequality, trust, and identity.   Figure 1: Social Cohesion Triangle (Langer et al., 2017)   High levels of inequality, Langer et al. argue, threatens social cohesion in society, in that it erodes relationships, which, in turn, could cause conflict. When trust is missing between members of society, the ability for individuals to collaborate in order to build the nation is weakened. And a national identity, in contrast to group or ethnic identity, may cause aggressive behaviour amongst members of society to the detriment of stable co-existence.   In South African society, trust amongst the various groups is worryingly low. For example:   In the same GovDem Survey , only 40 percent of white South Africans completely or somewhat trusted their black compatriots, and similarly only 41 percent of black South Africans completely or somewhat trusted their white compatriots. Only 48 percent of South Africans completely or somewhat trusted people from a different religion to their own. Only 43 percent of South Africans completely or somewhat trusted people from different nationalities. Similar trends existed across all the major race groups. Of particular concern was the finding that 68 percent of South Africans did not trust immigrants from other African countries. So too, some 66 percent did not trust immigrants from overseas. And likewise, similar trends were registered across all the race groups. (ISI, 2023)   These disappointingly low levels of trust suggest that, as a nation, in terms of demographic integration , South Africa has a long way to go in consolidating social cohesion in the country.   That said, the ISI survey finds that South Africans are slowly starting to forge a nation. Already, 46 percent of South Africans – with similar trends across all race groups – are in favour of associating with compatriots across racial lines, as opposed to only 31 percent who do not like associating with people from different population groups. And already, 52 percent of South Africans – with similar trend across all race groups – are socialising (entertaining) with compatriots from across racial lines.   Likewise, some 49 percent of South Africans – with similar trends form across all race groups – do attend the church/shul/mosque/religious services of their fellow South Africans.   And 69 per cent of respondents indicated that they wanted a united South Africa.   In considering the second pillar of the ISI’s SASCI, the extent of connectivity  to the country, the findings of the survey were equally disappointing. Nine percent of the respondents indicated that they were seriously considering emigrating to another country in the next year or so. Of particular concern was the number of high income earners and those with tertiary education. Eleven percent of the high income earners and those with tertiary qualifications were considering emigration. South Africa is experiencing a critical skills shortage across almost all sectors (Business Tech, 2023). For the country to lose more skills and taxpayers would be quite tragic for the country.   The minority communities are the most vulnerable. Fifteen percent and 14 percent of whites and Indians respectively were considering emigration, as opposed to 8 percent of black South Africans.   There were two main reasons driving the sentiment:   A lack of confidence in the ability of the economy to deliver jobs for themselves and their family. Twenty-five percent of respondents cited work opportunities as the reason for them contemplating emigration, and only 23 percent were confident that their children will be able to become part of the South African labour market and that they will find a good job. A sense that South Africa was failing. Twenty-one percent of respondents were of the view that the country was failing. Once again, with the exception of the coloured community, it was the minority communities – particularly the Indian community – that were most vulnerable. Twenty-three percent of whites and 41 percent of Indians cited South Africa’s failure as a state as the reason for them considering emigration.   In considering the third pillar of the ISI’s SASCI, namely a sense of community , a far healthier picture emerged. Seventy-five percent of South Africans agreed or strongly agreed that it was important to get involved in the community in which they lived, 47 percent agreed or strongly agreed that it was important to actively work for the welfare of their community, and 58 percent said that they actively looked for ways in which they could support people that were less fortunate than themselves. Similar trends were registered across all the race groups.   The survey was however silent as to the extent to which the individual race groups’ involvement extended across demographic lines.    About the survey   The aforementioned data is drawn from the Inclusive Society Institute’s GovDem Survey , which forms part of the Ipsos Khayabus Survey , the methodology of which is illustrated in the diagrammes contained in Figure 2 below.    Figure 2: The Ipsos Khayabus (ISI, 2023)   Against this backdrop one has to ask: Is enough being done to promote, nurture and ensure social cohesion in South African society? The country’s National Development Plan (NDP) after all recognises that the strategy set out therein needs to be underpinned by social cohesion (NPC, N.d.).   The NDP argues that “leaders throughout society have to balance the power they hold with responsibility, including … promoting social cohesion”, and that it is necessary to broaden social cohesion and unity while redressing the inequities of the past. “South Africa’s own history and the experiences of other countries”, it says, “show that unity and social cohesion are necessary to meet social and economic objectives”. It also argues that social cohesion in society is necessary to narrow the inequality divide (NPC, N.d.).   The NDP is correct, because in socially cohesive societies, where there is a general absence of underlying social conflict, people work together as one towards the well-being of all in society. It works against exclusion and marginalisation, creates a sense of belonging, promotes trust, and offers its people the opportunity of upward mobility (SFRI, N.d.). It enables people to be engaged in “a common enterprise”, wherein they are able to face shared challenges as members of the same community (Maxwell, in SFRI, N.d.). It allows society as a whole to share equitably in its prosperity, because cohesive societies are politically stable, thereby allowing them to focus on economic growth (Bris, 2014).   It is therefore encouraging that the National Planning Commission recently proposed the establishment of a Social Cohesion and Reconciliation Council , with the objective of “developing and monitoring strategies for the promotion of tolerance and the embracing of  diversity … for the emergence of a shared South African identity and pride” (NPC, 2023).   Some progress has been made in setting up the structures and mechanisms to advance the goal of social cohesion in South Africa.   The Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities (CRL Rights Commission) has been established in terms of Chapter 9 of the South African Constitution. The primary objectives of the CRL Commission is “(a) to promote respect for the rights of cultural, religious and linguistic communities; (b) to promote and develop peace, friendship, humanity, tolerance and national unity among cultural, religious and linguistic communities, on the basis of equality, non-discrimination and free association; and (c) to recommend the establishment or recognition, in accordance with national legislation, of a cultural or other council or councils for a community or communities in South Africa” (RSA, 1996).   Since its establishment the CRL Commission has tackled a number of topics that impede social cohesion. The full list of reports contained on the CRL Commission’s official website include:   The commercialisation of religion and the abuse of people’s belief systems; Challenges that lead to deaths and injuries at initiation schools in South Africa ; The reuse  of graves by local governments: Seeking a solution to the violation of cultural and religious rights of communities  through the reuse of graves by local governments; Ukuthwala ( the  abduction that involves kidnapping a girl or a young woman by a man and his friends or peers in order to compel the girl or young woman's family to endorse marriage negotiations); The use of official languages by organs of state; Violations of religious rights by members/congregants of church missions; and Civil unrest in Phoenix that allegedly resulted in racially motivated deaths. (CRL Commission, N.d.) Scrutinisation of the annual and other reports will suggest that the bulk of the Commission’s work has been limited and reactive in nature. No wonder given that the Commission’s annual budget in the 2021/22 financial year amounted to a mere R46,4 million rand (CRL Commission, N.d.). Given the extent of the work needed to tackle the social cohesion deficit, it is clear that the Commission has not been adequately resourced to properly carry out their work.   So too, the Department of Sport, Arts and Culture (DSAC), is mandated to lead nation-building and social cohesion through social transformation, but the unit tasked to carry out this mandate is inadequately resourced. The DSAC social cohesion programme includes activities such as the celebration of national days, advocacy platforms on social cohesion, and community conversations (DSAC, N.d.). The unit tasked with carrying out the social cohesion mandate comprises four members of staff (Anon., 2023) and the annual budget for 2024/25 amounts to a mere R59,8 million (Treasury, 2024).   On paper it suggests that government is committed to securing social cohesion in South Africa. It forms an integral part of the NDP, a constitutionally committed commission has been established to promote and protect the rights of the country’s diverse communities, and DSAC has established programmes aimed at promoting social cohesion in South Africa. The lived reality tells a different story: activities are few and limited in nature, the programmes are wholly under-resourced and as evidenced in the ISI’s GovDem Survey , the level of social cohesion is disappointingly low.   What to do?   There are many other countries around the world that have/are faced/facing social cohesion challenges. Three come to mind, each with different mechanisms to nurture and promote social cohesion within their societies. These are Finland, the United Arab Emirates, and Singapore, which is the focus of this particular paper. The Singaporean experience may hold lessons for South Africa, the exploration of which is the object of this dissertation.    Research question and methodology   The departure point of this study, based on the empirical evidence contained in the Inclusive Society Institute’s GovDem Survey , as highlighted in the introductory chapter, is that:   Social cohesion, of which, in the South African context, nation-building and reconciliation are crucial elements, is not at an acceptable level. South Africans desire a united nation in which the different communities that compose the nation can work together to build a common future. The South African Constitution places a high premium on a non-discriminatory environment underpinned by social cohesion. All three spheres of government – that is, the executive, legislative and judicial spheres – at its heart, recognise and promote the ideals of the Constitution, which is a united and reconciled South Africa culminating in a socially cohesive society. The current structures, programmes and resources allocated by the authorities have not yet – thirty years since the transition from Apartheid – delivered the desired level of social cohesion in South Africa.   It recognises the importance of social cohesion in any society that wishes for harmony, stability, and prosperity. Thus, more needs to be done to promote such. What that is, is an open question.   This paper examines the Singaporean model for managing diversity and social cohesion. It aims to provide new options for South Africa’s policymakers to contemplate, by identifying a set of practices that do not currently form part of the South African toolset.     2.   THE SINGAPOREAN CASE STUDY   Singapore is a city-state of about 718 square kilometres on the southern tip of the Malay Peninsula, in Southeast Asia. It gained independence on 9 August 1965, and has adopted a parliamentary democracy system (MOFA, N.d.).   It is a “hyper diverse” state, with a racial composite that has remained stable over the last fifty years, notwithstanding significant inter-racial and transnational marriages. A large proportion of the population is comprised of transient labour (RSiS, 2024).   According to the latest census (2020) the Chinese comprised 74,3 percent of the population, the Malays 13,5 percent, Indians, 9 percent, with the rest from a range of other ethnic groups. The relative stability of the ethnic breakdown of Singapore’s population can be seen in Table 1 below.   Table 1: Ethnic composition of Singapore’s population:                          Source: RSiS, 2024    The historical context The British established trading posts in Penang (1786) and Singapore (1819), and captured Malacca from the Dutch (1795). In late 1818 they established a trading station at the southern tip of the Malay Peninsula on the island of Singapore through a formal treaty concluded with Sultan Hussein of Johor and the Temenggong, the de jure and de facto rulers of Singapore. A second treaty was entered into in 1824 where outright ownership of the island was ceded to the British. And in 1867 Singapore became a Crown Colony of the Colonial Office in London (Singapore-Expats, N.d.). Singapore became a significant port of call for ships sailing between Europe and East Asia. And after the 1870’s following the development of rubber planting industry, it also became the main sorting and export centre for the global rubber trade. This led to unprecedented prosperity, which led to Chinese, Malay and Indian immigrants flocking to Singapore. The peace and prosperity ended when the Japanese conquered it during the Second World War (Singapore-Expats, N.d.). The British returned in 1945 and Singapore came under British Military Administration, and in 1946 the Straits Settlements was dissolved, which saw Singapore become a Crown Colony, whereas as Penang and Malacca became part of the Malayan Union, later the Federation of Malaya (Singapore-Expats, N.d.). Postwar Singapore no longer comprised transient immigrants and the people demanded a say in the government. Whilst constitutional powers vested in the Governor, who had an advisory council of officials and nominated non-officials, it evolved into the separate Executive and Legislative arrangements in 1948 with provision for six members to be elected by popular vote to the legislature (Singapore-Expats, N.d.). Self-government was attained in 1959. But it ushered in an uneasy period. The People’s Action Party (PAP) had come into power with the support of the communists, who controlled many mass organisations, especially the workers and students, with the shared objective of fighting British colonialism. The moderates pushed for full independence for Singapore as part of a non-communist Malaya, whereas the communists wanted a communist take-over. The two factions split in 1961, with the Malayans agreeing to Singapore's merger with them as part of a larger federation. This was, however, short-lived as Singapore separated from the rest of Malaysia in 1965 to become a sovereign, democratic and independent nation (Singapore-Expats, N.d.).   Means taken to promote social cohesion   Given the ethnic diversity, Singapore has taken a number of measures to ensure the meaningful political representation of the various groups, and they have instituted a number of constitutional safeguards to ensure social inclusion.   These measures include:   The Presidential Council on Minority Rights (PCMR), which advises on any Bill or subsidiary legislation that contains differentiating measures. And it also reports on matters that affect any racial or religious community that are referred to it by Parliament or the Government. The Presidential Council on Religious Harmony (PCRH), which advises on matters affecting religious harmony. Reserved presidential election to ensure multi-racial representation. Under this measure the election to the office of the president is reserved for a certain community, that is Chinese, Malay or Indian, if no person belonging to that community has held the office of the President for any of the last five terms of office. Group Representative Constituency, which ensures minority representation in parliament. Under this measure the electorate will, in their particular constituency, elect a group of individuals to be their member of parliament, of which at least one of the candidates must be from an ethnic minority (RSiS, 2024).   Furthermore, there is a deep sense of heritage preservation, which emphasises and supports cultural and faith continuity. The Singaporean system accepts that the state and tribal identities are not mutually exclusive, but complementary. The CMIO (Chinese, Malay, Indian, Others) typology is a deeply entrenched frame of reference in policymaking (RSiS, 2024).   Singapore also adheres to bilingual policy. All Singaporeans learn English as their main language, and a mother tongue according to their racial identity, that is Mandarin for Chinese, Bahasa Malay for Malays. And Tamil for Indians (RSiS, 2024).   The state also supports Community Self-Help organisations. It recognises that social safety support along community lines can better address ethnic specific challenges. A number of such community schemes, for example the Chinese Development Assistance Council, the Council for the Development of the Singaporean Malay/Muslim Community – Malay-Mendaki – and the Eurasian Association,  are officially recognised and supported (RSiS, 2024).   It is also recognised that there is an overlap between racial and religious identity. Accordingly, the major faith groups in Singapore take guidance from their respective domestic religious authorities, who interpret religious teachings through a Singapore-centric and progressive lens (RSiS, 2024).   To this end, the Inter-Religious Organisation (IRO), which is comprised of the ten main religious groups, including, amongst others, Islam, Catholicism, Christianity, Buddhism and Hinduism, was established in 1948 (RSiS, 2024).    Coding integration into law   The Singaporean authorities are strong proponents of social integration. This they believe is essential in order to maximise a shared experience and to forge a distinct Singaporean identity. It is, they believe, through social integration that a sense of belonging, pride and patriotism is engendered. To this end, a number of social policies have been coded into law.   With regard to education policy, all Singaporean children are compelled to attend at least ten years of schooling, in which a standardised national curriculum is taught. Schooling is taught in English, but the curriculum includes a mother tongue as a second language. All scholars are taught to embrace national symbols such as the anthem and national pledge, which is recited at the onset of every school day. National service is also compulsory for all Singapore citizens and second generation permanent residents. They are obliged to serve two years conscription in the defence force. The rationale behind the enlistment is grounded on three principles: Firstly, the defence imperative  is to fulfil a national need, not an ideology. Secondly, it is universally applied , with little or no exception. And thirdly, it is done in an equitable manner , in which servicemen/women are deployed according to operational needs and competency. Communal ties and cohesion are fostered through the Ethic Integration Policy. Under this policy, shared spaces and interaction across communities is promoted in order to avoid the formation of racial enclaves. A prime example of such a policy is the Singaporean public housing scheme (HDB flats), which is done against the backdrop of 80 percent of Singaporeans living in public housing. The workings of the scheme is explained hereunder: Every block of flats is allocated a racial quota according to the latest census on the racial identities of households in Singapore. This ensures that there is a racial mix in every block of flats and that the occupancy of the block reflects the national demography of the country. Home sellers are restricted from selling their apartment to buyers from another race in instances where the blocks have reached the maximum quota. For example, a Malay household is not allowed to sell the unit to a Chinese buyer in instances where the block has too many Chinese households, since the sale would further dilute the proportion of Malay residents. Similar quotas are imposed on permanent resident households in order to prevent immigrant enclaves. (RSiS, 2024)   In short, there is a social compact between the individual and the state in Singapore. A balance is struck between heritage, agency, and continuity on the one hand, and a national super-ordinate identity on the other. There is a trade-off between individual autonomy and the national collective interest. And the small nuclear family, economic competition, individual-centric pursuits, and the retreat to communal psychological safety are overtly recognised as some of the key challenges to fostering cohesion.   Figure 3: Singapore’s social compact (RSiS, 2024)     Presidential Council for Minority Rights   The Presidential Council for Minority Rights (PCMR) was established in 1970 but took its current name in 1973. It was established under Part 7 of the Singapore Constitution. It has as its purpose the safeguarding of minority rights and advising the Government and Parliament on these issues (Desker, 2024).   It forms part of a structure in the President’s office comprising the Council of Presidential Advisors, the PCMR, and the Presidential Council for Religious Harmony (PCRH) (Desker, 2024). The objectives of the PCMR are to ensure:   That legislation takes into account the diverse interests of Singaporean society from the perspective of ethnic, linguistic, and religious diversity That the legislative process has considered the diverse elements in Singapore society so that minority groups do not feel that they are oppressed or excluded. (Desker, 2024)   The role of the PCMR:   The primary function is to scrutinise Bills that are before Parliament after the second reading in Parliament and after the first debate on the Bill. That is, before the third reading of the Bill, when it is adopted into law, if it is passed. The intention is that all Bills will be reviewed by the council to ensure that it does not discriminate against any ethnic or religious community. If there are differentiating measures, then the council will report its findings to Parliament and refer the Bill to it for reconsideration or revision. It also examines all subsidiary legislation and statutes. A secondary function is to take up other issues affecting social cohesion that are deemed necessary. The President also has the executive power to appoint the Chairperson of the PCRH. This body was established by the Maintenance of Religious Harmony Act of 2001. This is done on the advice of the PCMR. (Desker, 2024)   The composition of the PCMR:   Up to twenty members can be appointed to the PCMR (Republic of Singapore, 2020). It may be comprised of up to ten permanent members (who may be appointed for life (Republic of Singapore, 2020), who could include the Prime Minister, as well as any previous Prime Ministers. The current council has six permanent members. It includes the current Prime Minister, the Minister for Law, three retired ministers – one of which is ethnic Indian and two that are ethnic Malay. It is currently chaired by the Chief Justice (Desker, 2024). The Chairperson is appointed for a three-year period, but is eligible for re-appointment (Republic of Singapore, 2020). There are also up to ten additional members that are appointed for three-year terms, which terms could be renewed. These ten members come from ethnic minorities, religious groupings, for example, the Muslim Mufti, the Catholic Cardinal, the head of the Buddhist community of Singapore are members of the council. Then there are representatives from the minority communities, for example, the Sikh community, the Eurasian ethnic minority, and the Malay communtiy and an Indian Supreme Court Justice – whose father happened to be a former leader of the opposition (Desker, 2024). The President of Singapore has the executive power to appoint the members of the Council, on the advice of the Prime Minister (Desker, 2024).   Eligibility for appointment to the PCMR:   Members must be Singapore citizens residing in Singapore. They must be at least 35 years of age. There are no restrictions on the appointment of cabinet ministers or political office-bearers or members. (Desker, 2024)   Meetings of the PCMR:   The PCMR generally meets once a month. It could schedule additional meetings if there is a specific reason therefore, for example, as happened after a race riot in Little India. In that instance the PCMR reviewed actions taken by the government. The Prime Minister may authorise ministers and parliamentary secretaries to attend meetings, but that is not generally the case unless it is felt that there is a need to advise the Council. All meetings are held in private. The conclusions are recorded and conveyed to Parliament, but the discussions are not. This is to allow for the exchange of views that can sometimes be of a very sensitive nature in a society that has had race, linguistic and religious riots in the past. (Desker, 2024)   Matters excluded from consideration by the PCMR:   Money Bills Bills on defence and security Bills classified by the President as urgent. In such instances, if the Bill were to be passed into law and the PCMR subsequently discovers some or other differentiating measure, it may discuss the matter and make recommendations as how to remedy the Act. (Desker, 2024)   Resources deployed to support the work of the PCMR:   The budget is limited since it uses the facilities and staff of Parliament. The Clerk of Parliament acts as the Secretary to the Council. Unlike members of Parliament, there is no funding provision for the members of the Council to commission outside expertise to assist with their work, but there are no barriers or prohibitions excluding members from getting voluntary or externally funded support by expert individuals to assist them in their work. Members of the PCMR receive an honorarium, which is limited in nature. On its own it is not sufficient and requires the member to have external employment and/or resources. It is considered a contribution to society. (Desker, 2024)   Working methodology:   More often than not, the findings of the PCMR are in the form of a comment on what issues need to be considered or gaps in the legislation that need to be addressed. The findings could also take the form of drafting actual amendments to the legislation for Parliament to consider. (Desker, 2024)   Example of a finding:   There was a piece of legislation which restricted Indian workers coming into the city centre on their days off – at the weekends. This applied mainly to people from the South Asian sub-continent who came to work on one- or two-year contracts. They were housed outside the city, but tended to concentrate in Little India on the Sunday when they were off (Desker, 2024).   Legislation was introduced after a major riot took place. The council played the role of attempting to ameliorate the impact of the legislation so that it did not completely prohibit the entry of people who came from these communities into Little India, but to rather ensure that it wasn’t done in a manner which would overwhelm Little India. It ensured that some other crowd control means were put in place and that, for example, bars could only sell alcohol after six in the evening. Before that, bars were open during the day and the workers would get inebriated, with consequential unruly behaviour (Desker, 2024).  Presidential Council for Religious Harmony   As already mentioned, the President also has the executive power to appoint the Chairperson of the PCRH. This body was established by the Maintenance of Religious Harmony Act of 2001. The President makes the appointments on the advice of the PCMR. Some would argue that the PCRH is subsidiary to the PCMR, others argue that it functions in parallel to the PCMR (Desker, 2024).   The objectives and role of the PCRH:   The PCRH considers and reports to the Minister on matters that affect the maintenance of religious harmony. They also consider and make recommendations to the President on restraining orders against religious leaders or groups that cause “feelings of enmity, hatred, ill will or hostility between different religious groups”, or that carry out activities to promote a political cause or political party, or encourage disaffection against the President or the Government, under the guise of promoting or practicing any religious belief. (Republic of Singapore, 1990)   Composition of the PCRH:   The PCRH is comprised of a chairperson and at least 6 and not more than 15 other members. At least two-thirds of the PCRH members must be drawn from amongst the representatives of the major religions in Singapore. The others must be individuals that “have distinguished themselves in public service or community relations in Singapore”. As already pointed out, the members of the PCRH, including the Chairperson, are appointed by the President on the advice of the PCMR. They are appointed for a period of three years. (Republic of Singapore, 1990)   Eligibility for appointment to the PCRH:   To qualify for appointment, the individual must be a Singaporean citizen. He/she must be at least 35 years of age. He/she must be a resident of Singapore.   Meetings of the PCRH and working methodology:   The PCRH has the power to appoint a Secretary and any other officers it deems necessary to carry out its work in order to meet its objectives. It regulates its own procedures, provided that a quorum of at least half of its members need to be present at a meeting; and that the Chairperson (or if he is not available another member elected to chair the specific meeting) chairs the meeting. Its discussions are held in secret, with only its findings and recommendations reduced to writing. (Republic of Singapore, 1990)   Impact and need for the measures on social cohesion   In considering whether the measures taken to ensure social cohesion in Singapore are bearing fruit, this report defers to the 2022 report by Mathews, Key and Nah, titled Attitudes, actions, and aspirations: Key findings from the CAN-IPS survey on race relations, 2021 .   In this dissertation, only a snapshot of the survey’s findings is given, so as to provide a sense of the progress made in Singapore in promoting social cohesion. The full report on the survey can be accessed via the link below.   https://lkyspp.nus.edu.sg/docs/default-source/ips/ips-exchange-series-22.pdf    Most respondents believe that meritocracy  in Singapore is not contingent on race, with more than 80 percent believing that everyone can be successful, regardless of race. This is evidenced by the respondents’ beliefs about success and race as set out in Table 2 below. Ninety-seven percent are of the view that this will remain true and improve in the future. However, racial minorities and younger respondents are more likely to believe that majority privilege exists, and they are split on whether racism remains an important problem today – about 56,2 percent (up from 46,3 percent in 2016) feel that discrimination based on race will worsen.   Table 2: Respondents’ beliefs about success and race (figures in brackets are from 2016 wave, where available)             Source: Mathews, Key & Nah, 2022   Although a significant number of respondents (58,6 percent) disagreed with the notion of political leaders speaking openly about race in that it may cause unnecessary tension, most (88,8 percent) felt it important for them to do so.   Most (70,2 per cent) do not believe that the majority race’s culture is privileged, but racial minorities are more likely to feel the converse is true. As for the next five years, most respondents of all races expect intercultural knowledge and willingness to accommodate differences to stay the same or even improve. In terms of the attitudes with regard to national unity, as can be gleaned from the responses in Table 3 below, only a small minority were of the view that the level of national unity would worsen. Table 3: Attitudes with regard to the level of national unity          Source: Mathews, Key & Nah, 2022 With regard to racial prejudices and biases , respondents have become more likely to see themselves, their family, and their close friends as hardly or not at all racist. At 83,6 percent this is up from 73,6 per cent in 2016. But members of the majority race tend to perceive their own race as less racist than how racial minorities view them, whilst the same trend is not observed for Malay’s and Indian’s perceptions of people of their own racial groups. This is illustrated in Table 4 below.   Table 4: Perceived racism of self, by respondents’ race (figures in brackets are from 2016)            Source: Mathews, Key & Nah, 2022   Whilst some policies , such as Racial Harmony Day (8 out of 10 respondents) are well-received, others, such as the Special Assistance Schools (4 out of 10 respondents), are not. Most respondents (63 per cent) feel that the CMIO system (Chinese/Indian/Malay/Others) is effective in preserving racial harmony, whereas a lower proportion (38,6 per cent) feel that it is safeguarding minority rights. The other overarching race classification policy is also broadly viewed positively.   Over three-quarters of respondents are of the view that legislation on race is able to preserve racial harmony. More than 7 in 10 respondents are of the view that the Ethnic Integration Policy (EIP) and ethnic self-help groups help to preserve racial harmony. Six in 10 want to retain these policies as they are. Chinese respondents (81,3 percent) are, however, more likely than minorities (two-thirds) to believe the EIP preserves racial harmony. Nevertheless, an overwhelming majority, whether from the majority Chinese or minorities’ point of view, want the EIP to continue.   The sentiments towards the various ethnic-based policies are set out in Table 5 below.   Table 5: Sentiments towards ethnic-based policies         Source: Mathews, Key & Nah, 2022   In terms of their lived experiences , only a small proportion of respondents experienced racial discrimination at work (less than 9 percent) and in the housing market (less than 3 percent). That said, minorities are more affected by such discrimination than Chinese. See Table 6 hereunder.   Table 6: Experiences of discrimination and unfair treatment           Source: Mathews, Key & Nah, 2022 And much of the population (41 per cent) say they have not been affected by race-related incidents highlighted in the news.   A slight majority of respondents are tired of talking about issues of race and racism, whereas the rest are of the view that more public dialogue on these issues will be helpful.   Regarding aspirations  for the future, whilst many respondents indicated an indifference as to future developments to do with race, a highly welcomed development is greater intercultural understanding. As can be seen in Table 7 below, about 62,9 per cent were of the view that this greater understanding will be good for Singaporean society. With regard to discussions concerning racial issues, mixed sentiments were expressed. About half thought that by speaking up freely about their ethnic identity not being properly respected or about problems with different ethnic cultures, would be good; most of the rest felt it would make no difference.   Table 7: Views on deeper intercultural understanding, by respondents’ race             Source: Mathews, Key & Nah, 2022   Although more than half of all respondents think it would be beneficial for people to identify as Singaporeans as opposed to Singaporean-Chinese, Singaporean-Malay, Singaporean-Indian and so on, they are less supportive of policies that would move in a race-blind direction. This is illustrated in Table 8 below.   Little India, Singapore istockphoto.com: Stock photo ID:1278570046 Table 8: Attitudes to future developments towards a race-blind society             Source: Mathews, Key & Nah, 2022   China Town, Singapore istockphoto.com : Stock photo ID:614980556 3.  DISCUSSION   Both Singapore and South Africa emerged from a colonial past. Singapore from British rule, and South Africa from a white minority oppressive Apartheid regime, which was also preceded by British colonial rule.   So too, both jurisdictions have a multiracial demography, with a majority and a number of minority communities. In Singapore the Chinese community comprises around 74,3 percent of the population, the Malay 13,5 percent, the Indian 9 percent, and others around 3,2 percent (RSiS, 2024). In South Africa, according to the latest census (2022), similar trends emerge, albeit from different ethnic communities. Here, the black population form the majority with around 81,4 percent, followed by the coloured community at 8,2 percent, the white community at 7,3 percent, and the Indian/Asian community at around 2,7 percent (RSA, N.d.).   The difference between the two countries is that the Chinese majority did not have to contend with the Apartheid laws and were therefore not favoured and excluded from the economy to the same extent as blacks were in South Africa. The result is that at independence, in Singapore there was greater equality between the races than was the case in South Africa.   There is also a different philosophy as to the defining of the individual’s identity. In Singapore, group identity (ethnicity) is accepted and coded into law. That is, individuals identify as Singaporean-Chinese, Singaporean-Malay, etcetera. In the ‘new’ South Africa the “question constantly arises about what it means to be a South African … and whether you’re a South African first and then ‘black/white/coloured/Indian’ or vice versa” (Diergaardt, 2018).   Until this question is settled in South Africa, there will be a constant debate as to whether the legislative and social construct should embody and reference race as a composite component of public policy. A national dialogue on what constitutes the South African identity seems overdue in light of the ISI’s GovDem Survey  findings.   The trust deficit between races, religious groups, indeed across all facets of South African society, evidenced in the GovDem Survey , would suggest that pro-active mechanisms need to be put in place to improve the levels of trust in the country. Some would argue that it should start in the political sphere, where minority communities often (rightly or wrongly) feel that their interests are being marginalised by the majority. One example is that a lthough “Afrikaans is still maintaining its status of an official language, its speakers feel that it is being marginalised by the government. One of the reasons given is the enforcement of English in former Afrikaans institutions” (Snail, 2011).   The architects of the new South Africa “chose a functionally single-district proportional representation electoral system and a federal executive structure to distribute power both racially and regionally” in order to maximise inclusiveness at the national and provincial levels of government. The main parties are broadly multiracial, but as elections have progressed, there has been a gradual emergence of racial politics. The ruling African National Congress (ANC) has, for example, escalated its racial appeals in its election rhetoric, and it has to a much larger degree filled its party lists with more black candidates. And it has of late disproportionately targeted the black voters in its campaigns (Macdonald, 2012), leaving many from the minority communities perceiving themselves to be largely excluded from mainstream political decision-making.   Now the electoral system is under review, with an Electoral Review Panel set to be announced in the foreseeable future as provided for in the Electoral Amendment Act 1 of 2023. This panel will be tasked with designing a new electoral model for South Africa (RSA, 2023). It may be wise for the panel to consider some elements of Singapore’s Group Representative constituency system, which guarantees minority representation at the constituency level, with a view to ensuring multiracial representation at the constituency level, as opposed to a single-seat constituency system, which could marginalise opposition parties and those from the minority communities from constituency representation at the expense of social integration and cohesiveness.   The perception of exclusion is being exacerbated through the inclusion of racial coding into South African law. A number of laws and policies have been introduced that have as their objective the remedying of historical injustices. These include, for example, the Employment Equity Act of 1998, the Black Economic Empowerment Act of 2003, and the Black Industrialist programme of the Department of Trade, Industry and Competition, amongst others. The noble and constitutional intentions of these laws are often overlooked when wrongly interpreted and implemented, which in turn builds distrust amongst some from the minority communities, and feeds their perception, rightly or wrongly, of alienation. Hence the high level of intent shown in the GovDem Survey  by those from the minority communities to emigrate.   Coding into law of racial quotas, per se, does not constitute an infringement of minority rights. It is often, as in the South African case, a necessary tool to remedy past injustices. It is when this legislation is introduced within an environment of low trust that perceptions of exclusion take root.   The Singaporean case, where racial quotas are a feature of legislation and policy, proves the point. Singaporeans have embraced the notion to the extent that in the 2022 survey, covered herein, a majority of respondents indicated that they were not supportive of racially-blind policies, nor did they experience the quota system as threatening of their rights.   The introduction of mechanisms in South Africa such as those embodied in the work of Singapore’s PCMR and PCRH may prove a differentiating feature capable of building trust. If a credible body with sufficient powers and regard were to ameliorate legislation that would differentiate on racial and/or religious grounds, it would serve, as the Singaporean case would suggest, to instil faith and build trust amongst minority and religious communities.   However, a cautionary note. Singapore’s PCMR and PCRH are adequately resourced and are composed of individuals with gravitas and who command great respect. Should this route be charted in South Africa, great care will have to be taken in selecting the right calibre of individuals to be appointed to oversee the work, lest trust be further imploded.   The choice must be such that it creates trust in society that their recommendations will be taken seriously by the lawmakers and not just fobbed off. As pointed out by Dr Mathew Mathews (2024) from the Institute of Policy Studies in Singapore in the course of an interview with him, in Singapore, as it relates to the PCMR, “it’s too high a council for anyone to ignore”.   In this regard Singapore’s PCMR and PCRH cannot simply be cloned. South Africa will have to make its own adaptions in two main respects:   Firstly, as it relates to the separation of powers. In Singapore the PCMR is comprised of, amongst others, members of the Executive such as the President, Prime Minister and ministers, and members from the judiciary, such as the Chief Justice. Furthermore, it is housed in the Parliament and makes use of its facilities. The Clerk of Parliament acts as its Secretary. Within the PCMR, these different arms of government work in partnership. The purists would argue that such machination would go against the separation of powers principle that is prescribed in the South African Constitution (RSA, 1996). So, in this regard one may have to consider re-mandating one of the Constitution’s Chapter 9 Institutions, the Commission for the Promotion of Cultural, Religious and Linguistic Communities (CRL Commission) possibly being the choice. This being the case, the eligibility for being appointed as a Commissioner, to provide for the necessary gravitas, respect and skills, and the mandate, to provide for the reviewing of legislation for recommendation to Parliament, will have to be revisited. And the fiscus will have to provide sufficient resources for the Commission to do its work effectively and independently – the current budgetary allocation to the CRL Commission is, when considering the importance of social cohesion for peace and stability and economic growth, quite frankly, a farce.   Secondly, it is doubted that unfettered appointment powers by the President will, within the South African environment, pass constitutional muster. An open and transparent public participation and parliamentary process will have to be followed. More so, against the backdrop of cadre deployment across all spheres of the state, which the State Capture Commission has declared illegal and unconstitutional (Haffejee, 2022), public trust will be undermined should the process not be considered and embraced by the broader society as being credible.     Masjid Sultan Mosque, Kampong Glam district, Singapore istockphoto.com: Stock photo ID:1445118179   4.  CONCLUSIONS AND RECOMMENDATIONS   Social cohesion in a country is by no means a nice-to-have. It is an economic imperative, and a crucial requirement for peace and security. Otherwise stated, a lack of social cohesion will not garner the level of societal and investor trust needed for a growing economy, and it inevitably leads to social insecurity and instability.   Evidence suggests that social cohesion in South Africa is backsliding, with disturbing trends developing. Whilst on paper structures and mechanisms exist to promote social cohesion, the lived reality tells a different story. South Africans are not confident in the country’s ability to come together as a united nation. And trust levels amongst the various race, religious, linguistic, nationalities, are worryingly low.   Public policymakers can no longer sit by idly and allow social cohesion to slip any further. The stakes for the nation are simply too high.   To this end the Inclusive Society Institute has commissioned a study on Managing Social Cohesion in Diverse Communities. The study explores how other nations with diverse populations are dealing with and building social cohesion. It has identified Finland, the United Arab Emirates and Singapore as countries from which South Africa could possibly learn. It provides a menu of options for policymakers to consider. This paper considers the Singaporean practices and tools deployed in this regard.   Scoping of the Singaporean approach, the research suggest, has identified at least five areas from which South Africa can draw lessons, and accordingly, makes the following recommendations :   That the custodianship of South Africa’s social cohesion programme be reallocated from the Department of Sports, Arts and Culture to the Presidency. And that the importance of social cohesion for the nation’s wellbeing be recognised by properly and sufficiently resourcing the programm e. Social cohesion is far more than a cultural imperative. It affects all aspects of societal life. It is necessary for creating business and investment confidence, the prerequisite for economic growth and job creation; and it is necessary to ensure a peaceful and stable environment. It nurtures a sense of belonging, and creates hope for the future for all citizens, who then see a place for themselves in the country. This builds trust and patriotism amongst the various communities of the country, who then work together to build prosperity and a shared future. In the first instance, it requires a multidisciplinary, inter-departmental approach, best coordinated in the centrality of the Presidency. And by locating it in the Presidency it signals the importance and priority that government attaches to ensuring a socially cohesive South Africa. Re-evaluate and expand the mandate of the Commission for the Protection of Cultural, Religious and Linguistic Communities to include the scrutinisation of Bills before Parliament and other secondary legislation for purposes of ensuring that it does not discriminate against any minority or religious community. And that should differentiation measures be necessary, for example, to ensure redress from past discrimination, that it is ameliorated in a manner that does not create social dissonance. To this end the CRL Commi ssion’s budget will have to be materially overhauled, given that the current paltry budget is wholly inadequate to give credence to the Commission’s stated objectives. And the process of appointing commissioners will also need to be revisited. Currently, commissioners are selected by a panel appointed by the Minister (RSA, 2002). To ensure greater public faith and support in the work of the Commission, a more open and transparent parliamentary process – with meaningful public participation – ought to be followed. It is further recommended that the Commission, or at least the legislative review functions of the Commission, be chaired by a retired High or Supreme Court of Appeal judge. I n that electoral reform is currently underway, it is recommended that an electoral system be designed that will adequately accommodate multiparty support at a constituency level. One such mechanism could be a Multi-Member Constituency (MMC) model. Whilst South African policymakers may not be persuaded to code racial quotas into the electoral system as is the case in Singapore, evidence suggests that South African political parties remain racially slanted in their composition. Thus, by guaranteeing multiparty representation at the constituency level, the probability is that the various demographic groups will be better represented in an MMC system compared to a straight-winner-takes-all single-seat constituency model. Furthermore, parties should be encouraged to voluntarily ensure that their MMC candidates adequately reflect the demographics of the particular MMC and the party supporters they serve.   S ocial cohesion programmes and policies should be data-driven, and accordingly, regular extensive surveys related thereto need to be adequate ly resourced.   The Singaporean case study has highlighted the impor tance of securing broad public support for social cohesion engineering, the nature of which can sometimes be very sensitive. To ensure that public policymakers are able to ensure that support, they need to accurately understand the public mood and sentiments, to which end an empirical measurement tool is required.   It is recommended that an extensive independent but publicly funded annual social cohesion survey be undertaken, much along the lines of the Attitudes, Actions and Aspirations: CAN-IPS Survey on Race Relations, which measures these issues within the Singapore context. Independence is necessary to ensure that the issues are reported on in a non-biased manner, and public funding is necessary to ensure that the measurements can be done in a sustainable way.   A national dialogue nee ds to be organised to tackle the question of what constitutes the South African identity.   The ISI’s GovDem Survey underscores the undeniable reality that the lived reality in South Africa is still race-driven. And studies have shown that there isn’t a unified understanding of what constitutes the South African identity. The research cited in this paper suggests that South Africans continue to grapple with the question as to whether they are South Africans that happen to form a particular race group, or whether they are white/black/coloured/Indian South Africans.   The answering of this question will have a profound impact on how policymakers can and should approach the design of public policy. Furthermore, a unified understanding and acceptance of what that identity entails will allow for a greater understanding and broader societal buy-in to what can sometimes be sensitive social-engineering policy manoeuvres.   Social cohesion trends are currently heading in the wrong direction. But it is not all doom and gloom. Whilst it is so that only around a third of South Africans believe a united South Africa is achievable, nearly 70 percent of them want a united nation. What is lacking is the political will, policies, and tools to build the cohesion.   The Singaporean case study encapsulated in this report suggests that by deploying the right  policy instruments and driving those policies with the necessary vigour and priority, a united, and socially cohesive multiracial society is possible.   What South African policymakers now need to do is to refocus their efforts on achieving the Mandela rainbow nation dream, by better equipping themselves with the means to do so. 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Revising aspects of language in South Africa during the Apartheid era, Historia Actual Online , 24:65-91 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This paper is published jointly by the  Inclusiv e Society Institute and School of Public Leadership, Stellenbosch University                      www.inclusivesociety.org.za             www.sun.ac.za/english/faculty/economy/sp