First published in City Press on March 1, 2015. Some slight edits have been made since.
Last week I witnessed something truly unexpected at the Gauteng state of the province address.
It wasn’t some of the members of the Economic Freedom Fighters (EFF) making fools of themselves with a few volleys of unspirited interruption during the premier’s speech.
It was what Premier David Makhura said.
Hardly 15 minutes into his speech, Makhura broke with orthodoxy and declared that the focus of his speech would be “the economy, the economy, the economy”.
WTF? But we want to hear about e-tolls, many of us thought.
Over the next hour, the premier outlined his economic plans for the Gauteng city region, an idea that will undoubtedly spawn a New York-style conurbation over the next decade. He kicked off with stats highlighting Gauteng’s current economic prowess – a trillion-rand economy, 36% of the country’s GDP, 10% of Africa’s, 60% of South Africa’s exports and 40% of its industrial output.
The plan pragmatically leveraged what was already existing, five corridors around historical economic hubs, while ambitiously reconfiguring the spatial and economic divides of the province.
The economist Ha-Joon Chang explains what happened in his country of birth, South Korea, for it to become an economic powerhouse over 50 years. Following a devastating war with North Korea that killed 4 million people, the average citizen took home just under R1 000 a year. Meanwhile, folks in Ghana, Africa’s shining star, earned double that.
Today, the South Koreans earn nearly 10 times what Ghanaians earn, live 14 years longer and are 70% more likely to be employed. Incidentally, South Africans actually fare worse. Our people live 30 fewer years and are 87% less likely to have a job than South Koreans.
Chang contends South Korea’s rise can be attributed to “a clever and pragmatic mixture of market incentives and state direction”.
There are, he says, things a developing state can and should do to grow its economy:
Developing its own manufacturing industries and protecting them in their infancy;
- Banning the exportation of raw materials, such as our minerals;
- Either banning or taxing to high heaven any products that compete with products local industries make (as the West does with farming);
- Incentivising innovation and being lax about protecting other countries’ intellectual property;
- The development of transport and financial infrastructure; and
- The subsidisation of key industries and the standardisation of products, such that the country can benefit from scale production thereof.
These things are all simple to conceive but difficult for most emerging market nations to achieve.
Firstly, they put you on a collision course with developed nations. Secondly, most governments that take their eyes off social benefits usually find themselves on a collision course with their voters.
In unequal societies such as ours, there is little patience for an outlook that advocates short-term spending sacrifices for long-term investment benefits.
Both of these require massive gumption in leadership, of the sort not often seen in African liberation movements.
And that’s what was so unexpected about Makhura’s speech.
He invoked four of Chang’s solutions. The others he could never implement at a provincial level. One then wonders if he would if he were a national leader.
“He sounds almost like a Republican,” I heard someone whisper as Makhura extended his government’s hand to the private sector for the umpteenth time in the speech. It’s a dirty word that, especially in a liberation movement.
But he was not alone. President Jacob Zuma in his state of the nation address two weeks ago punctuated “small business is big business” with a huge grin.
Even in the concessions made to small business in Finance Minister Nhlanhla Nene’s inaugural budget speech on Wednesday, one gets the sense the powers that be have realised we can’t hire ourselves out of unemployment or nationalise our way to equality. We’ve got to trade ourselves into wealth.
Truth be told, it was refreshing to know we are beginning to believe Africans can indeed be more than workers, hewers of wood and drawers of water.