The dynamics of the South African political landscape JP Landman Economic and Political Analyst

Three basics in our political-economy Economic growth higher than population growth absolute pre- condition for development and modernity. Social issues driving our politics: unemployment & inequality. Moderate positions mostly win out – less ideology, more pragmatism.

SA economics SA economy tripped twice since 1994 – in both cases because of global forces (1998 & 2009). Growth restored after 2009 recession: From -1.7% in 2009 to 2.7% in 2010 to 3.4% in ’11? Current consensus: Rising to 4.4% in 2013 ?? Average from 1995 to 2010 (16 yrs): 3.3%. Average 16 years before 1993: 1.55%. ‘Muddle thru’ economy: 3.25%.

The muddle through economy Pushing SA growth down: Global environment. Domestically: political confusion; strikes; inequality. Huge social and human deficits; crime, health, education. Tensions of Transition: mining & agriculture. Pushing SA growth up: Investment: from 4% in 2000 to 6.5% in 2007 to 8.4% in the current cycle to 2013. Building blocks of the 3Ms. (‘Swing to the Left’). Reasonable productivity growth. SA’s increasing relations with BRICs. Strong private sector institutions (compare Russia). Thus 3.25%.

Corruption – Three different measurements Transparan Intl WEF Com Report Heritage Foundation Ranking ‘Problem’ Ave: 40.3 Brazil 80 6.7% 35 Russia 147 19.4% 23 India 85 10.1% China 72 7.4% South Africa 54 6.2% 51

Inequality Gini co-efficient (100 = worst) Brazil 57.0 Russia 39.9 India 36.8 China 46.9 South Africa 57.8

More work, more unemployment People working in SA 15 – 64 age group Unemployment rate Unemployed number 1995 9.5 mil 39% 17.7% 1.9 mil 2008 13.8 mil 45% 21.9% 3.9 mil 2010 13.1 mil 41% 24.0% 4.1 mil

Remedies for unemployment Higher economic growth: Commodity economy. New Growth Path. Promise: 5 mil in 10 yrs. Pre-condition for success. What can happen anyway: 3 million jobs at 3.25%. Only other remedies: wage subsidy (R5 billion) & Jobs Fund (R9 billion). Public Works Programme: 4.5 million ‘job opportunities’ to 2014; 4 months & 6 months. 625 000 in first year. Deregulated labour market (no chance).

Moderation wins out (or some critical u-turns) Green Paper on Land Reform: From ideology to burocracy. NHI proposals: From ideology to greater efficiency. Bill on Protection of Information. 4 Labour Bills on inter alia labour broking. ‘Swing to the left’ post-Polokwane. Reaction against Malema and ANCYL. Why is this? Open society (forces and counter-forces; checks & balances). Open economy. We speak and act our fears, not rational analysis; debate of hatred & resentment.

SA’s road map to modernity Achieve democracy.  Establish sustainable economic growth.  Effect (achieve) social development. 1/2 Unlearn and relearn behaviour and values. 1/2 Build effective institutions. 1/2

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