YACOOB ABBA OMAR: Weaving our way through a ‘stronger together’ concorde

A coalition of businesspeople, trade unionists, public officials and researchers committed to tackling the low-growth trap, high unemployment, extreme poverty, inequality and social unrest?

This possibility is captured in the Weaver World scenario, part of the recently released Indlulamithi 2035 Scenarios. Dubbed the Concorde Compromise, this scenario comes together in 2029 to decisively take SA out of its economic and social quagmire.

This improvement in the political situation is achieved through the actions of a gatvol public and pressure from grassroots movements, resulting in many progressive economic measures being introduced.

The most decisive is the increasing level of investment in water and sanitation infrastructure, support to SA’s intellectual capacity in agricultural research, improving domestic pharmaceutical and medical equipment manufacturing capacity, and allowing municipalities and private companies to generate 200MW per entity and feed it into the national grid.

It sees SA moving decisively towards greater use of renewable sources of energy. Transnet’s freefall is arrested through recapitalising freight routes, while steep drops in crime from 2030 ease the fears that have reduced the number of tourists visiting SA.

In this scenario, tourism and related industries increase their contribution to GDP to 4.5%, adding 1-million direct and even more indirect jobs. The creative sector becomes an important stimulus to economic activity and growth, doubling its contribution to GDP from the 4% of 2020 and adding hundreds of thousands of jobs. A nation inspired by its sportspeople and creative artists realises the motto “stronger together” in work and education.

In effect, by drawing in the managerial acumen and expertise of specialists from the corporate sector, combined with the vision and heft of the state, the Concorde government helps pull SA out of the trap of a low-investment, low-growth economy.

The same sense of historic opportunity infuses “Growth Through Inclusion”, the report developed by the Harvard Growth Lab under the leadership of Venezuelan economist Ricardo Hausmann. The study was commissioned by Business Unity SA and funded by the financial sector.

Spatial exclusion

It identifies the following key factors impeding SA’s growth path:

• Apartheid-era spatial exclusion that, despite the best intentions of the post-1994 government, has been reinforced by the spatial development patterns and housing policies of the past three decades; and
• Collapsing state capacity, which encompasses the critical network industries, the fight against crime, and municipal dysfunctionality.

Almost in the same vein as the Weaver World scenario, it argues against the “political gridlock” that has come to characterise the SA public policy space.

A pivotal point the report makes is that “SA may have lost its historic comparative advantage in low-cost electricity via coal, but it has great potential to develop new green growth drivers that will help to supply global decarbonisation”.

Coming in from a different ideological perspective is Ha Joon Chang of the School of Oriental & African Studies. Addressing the National School of Government last week on “SA at a Crossroads: The Need For A Sustainable Structural Transformation”, he emphasised a more robust — or what he called “full tilt” — implementation of the industrial policies developed by the government. This also requires the promotion of targeted investments in energy and infrastructure.

Much of his presentation focused on the “green windows opportunity”, which he argues is “a good way of rapid catch-up or even ‘leapfrogging’, as the East Asian countries did with electronics”.

This needs the government to align with current best practice and “greater co-operation and co-ordination among several ministries engaged in trade and industrial policies”. He suggested the National Planning Commission (NPC), which I serve on, should be reoriented into an “orchestrating” body, like the French Planning Commission or the Korean Economic Planning Board. Or the NPC could be complemented with a co-ordinating body more specifically charged with interministerial co-ordination.

One retired businessperson, hearing of the 2029 Concorde Compromise in the Weaver World scenario, and impatient at SA’s inability to get onto a higher growth trajectory, asked: “Why must we wait for 2029 for the Concorde government?”

Why indeed?

• Abba Omar is director of operations at the Mapungubwe Institute.