Development Watch

NDP can benefit from ‘grand apartheid’s’ plan

Time to revisit some homeland aims?
Homeland.jpg

Under the pressure of urgency the implementation of South Africa’s National Development Plan (NDP) should draw on the body of work on which the ‘grand apartheid’ ambitions of separate development was built. 

This is the core of a piece produced by economic historian, veteran journalist and successful JSE portfolio manager David Meades, which can be read here.

Over a period of six years between 1948 and 1954 the Commission for the Socio-Economic Development of Bantu-areas in the Union of South Africa, led by Prof. F.R. Tomlinson worked on its report. It became the basis on which a policy of “ethnic socialism” called “separate development” was constructed by the National Party.

Based on its mammoth work of 51 chapters, 3 755 pages, 600 tables and a separate atlas containing 66 large-scale maps, the commission concluded that the country’s population had to choose between either full integration or separate development of the two main race groups.

It had no particular ideological or political slant and significantly concluded that separate development would only be possible with the full-scale development of the “Bantu” (read: poor black) areas.

In what turned out be a huge underestimation, it calculated that unless the potential of the “black secto” was developed in the “homeland” areas, the “white sector” (read: rich, developed and urban) would have had to accommodate some 17 million black people by the turn of the century.

After only the representatives of the “white-sector” in parliament adopted the report in 1954, the ideology of “separate freedoms for separate peoples” and accompanying policy of separate “homelands” developed.

“As history over the next few decades has shown, especially during apartheid’s last decade, this ideology was just not economically viable – never mind acceptance by the population as a whole,” Meades writes.

The economic non-viable “ethnic socialism”, like communism, had to sink due to its socialist basis.

Economic sanctions also placed the country in a vice-grip and when financial sanctions hit during apartheid’s last decade, sidestepping it became nigh impossible.

Transition

And then came the peaceful transition during the late 1980s and early 1990s, which remains a near-miracle.

But as the country enters the third decade of the ‘new’ South Africa the wheels have started to come off.

After the first decade’s ‘honeymoon’ of reconciliation and laying the foundations for the redistribution of wealth, or put in another way, redistribution of poverty, the time of real work started.

The start of this second decade also coincided with a wave of surplus liquidity world-wide and asset-inflation that beset the world like an infectious plaque.

A global correction is only a matter of time. The Third World’s bonus of fleet-footed money from outside will start moving out again and local currencies will come under pressure.

It is likely to also see the international prices of the lifeblood commodities of Third World economies, including Africa, coming down considerably.

There are already signs of developed-world interest rates edging up on the back of increasing economic growth in especially the US. Likewise, excessive increases in commodity prices are exerting pressure on inflation.

Besides the negative effect of inflation in the developed world, there is the inflation of the ‘wealthy’ (the advantage delivered to speculators of increased commodity prices) dramatically forcing down the quality of life for millions in the Third World.

South African reality

South Africa will not escape the effects of what is happening – although (because it is in the fortunate position of a relative low national debt), they will not be so severely destructive. But a weakening rand could fuel inflation and weaken government’s budget capacity to assist the poor.

Another South African advantage is that it is only now starting to use its substantial loan facilities to help balance the budget, leaving some reserve to ease things over.

But there are not many taps left to open. The ‘dowry’ from the previous government has been depleted. The biggest challenge of the next decade will be to, year after year, find more money to cover running expenses, for some time now no longer financed from tax revenue.

The state’s spending on infrastructure has been negligent. There are creative projects in the pipeline that will cost money, substantial money.

The road ahead will become bumpier and redistribution increasingly difficult.

The realities of 21st-century South Africa are kicking in. The euphoria of 15 years of prosperity and peace largely hid structural imbalances, is almost daily becoming more pressing as a form of institutionalised poverty.

South Africa’s first decade as democracy was when wealth were to be redistributed. After that it became redistribution of poverty.

At some stage reality will hit home – South Africa is not a rich country with a few poor spots. It is mainly a poor country, a very poor country, with a few wealthy enclaves.

The reality in 2015 is that its economy cannot nearly accommodate all our own unemployed plus a few million from neighbouring counties. The challenge is becoming bigger.

Failed BEE

History will show that one of the biggest failures of the first decade was that so-called black economic empowerment turned out to be mainly to the benefit of black shareholders in big corporations.

Only a handful of blacks benefitted and empowering business entities (which mostly only indulged in the process because of a proverbial pistol to the head) regarded it as another way of buying time, hoping to make enough money in the meantime.

Those who had the most money before now have even more and the newly empowered also have considerably more. Most of the poor are actually, relatively speaking, poorer than before.

One of the tragedies of the past number of years is that, having picked up so much apartheid baggage, Tomlinson’s idea of the development of “black areas” were discarded.

What South Africa needs for the next decade or two is a ‘new Tomlinson’, appropriately focused on creating new job opportunities.

It now urgently needs a blueprint to uplift its poor areas. But the luxury of having a commission spending many years on developing it does not exist.

But reports from many commissions and studies, containing surveys and data more than adequate to get the ball rolling, are gathering dust on shelves.

Many people involved in compiling those reports over decades are still around and can be pulled in to help.

The Industrial Development Corporation (IDC) still exists. Long before “separate development” it was already the vehicle for tackling big projects whose shorter-term prospects were not attractive enough for the private sector. As its involvement with Transnet, unlike Eskom, in recent time proves, it can still add value.

The homeland development corporations that delivered valuable work, but unfortunately picked up apartheid baggage, disappeared.

But Tomlinson’s basic point of departure is still valid today: the guiding principle should be human wellbeing, with poor areas the main focus.

There was hope that something of a second ‘Tomlinson’ was on the agenda of the previous minister charged with the implementation of the NDP, Trevor Manuel. But he quietly disappeared from the job.

Now the only ‘Mr Fixit’ is Deputy-president Cyril Ramaphosa who has little time to think about the future while he is searching for the wheels that came off along the way.

Maybe someone should find him a copy of the Tomlinson report to read.

(This summary of David Meades’ report was compiled by Piet Coetzer.)



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