A Jag in the garage while the lawn needs cutting
Education central to modern societies
Neva Makgetla, Business Day, Johannesburg, 3 February 2010
ECONOMISTS overuse the family as a metaphor for the economy, but sometimes the parallels are irresistible. As in: What would you think if your neighbours bought a Jaguar, attached a fully fitted gym and spa to their roof and set up a helicopter pad, complete with helicopter, in the garden — and then couldn’t afford their rates and school fees, or to keep the lawn trimmed?
A similar philosophy seems to be driving South African government officials when they develop economic strategies. All too often we seem to define “development” as creating conditions for the rich and powerful to pretend they live in Europe, through megabucks projects such as the Gautrain, the pebble bed nuclear reactor, the Fifa World Cup and the arms deal, among others. In short, flashy regularly wins out over the hard slow work of systemic improvement.
These four projects alone cost the country in the order of R100b n, with at best a dubious impact on sustained and more inclusive economic growth. Their cost exceeds the annual education budget and is twice the health budget. If the state had spent that much on building up Eskom’s capital over the past few years, we would not be contemplating hugely damaging increases in electricity tariffs.
Rather than chasing huge projects that promise to be a panacea for all economic and social ills, we need to get education and health right; ensure adequate and cost-effective infrastructure; build market and social institutions that support inclusion and cohesion; minimise unnecessary regulatory hassles for individuals and business; and ensure the government responds urgently and appropriately to changing economic conditions. These require long-run but consistent and rigorous change, not big new projects.
Consider the areas of education, infrastructure and the regulatory framework.
Education is central to modern societies as an engine of economic growth, a critical element in functional democracies, and the launch pad for social mobility. It is thus truly shocking that the education system still largely replicates the inequalities entrenched consistently over decades of apartheid rule.
To this day, unless their parents fall into the top 5% or so of income earners, African children can expect a worse education than others. Only about one African child in five passes matric, and only half of all university students are African.
Central to the failure to address the real problems in education is the insulation of the rich — through Model C and private schools and the decision not to publish pass rates by race and region. As a result, the discourse tends to centre on the quality of individual schools, rather than the systemic inequalities established by apartheid.
It doesn’t help that improvements in education require dedicated and consistent effort over decades to bear fruit. That kind of long, slow slog surely doesn’t promise the easy gratification of, say, world-class stadiums for the World Cup.
On infrastructure, SA compares well with most other countries, largely because Asgi- SA initiated a major build programme in the mid-2000s. That said, SA still faces huge challenges.
Historically, the majority of citizens were denied basic household infrastructure as well as the transport and communications systems needed to engage the economy. The imperative of addressing those apartheid backlogs must be balanced against the parallel requirement of maintaining cost-effective infrastructure to sustain the core formal economy. The picture is complicated by the economy’s extraordinarily high emissions intensity, which means fundamental shifts in energy and transport are unavoidable.
An explicit long-term strategy would let SA set priorities, optimise the incremental decisions on the location and nature of infrastructure, and hopefully anticipate risks.
Indeed, virtually every new law on infrastructure requires the government to publish such a strategy. Yet these requirements are mostly left unfulfilled. At best they are met through bureaucratic procedures that do little to ensure planning reflects broader social and economic needs.
SA also faces systemic challenges around the regulatory framework. The democratic state had to introduce myriad new laws and rules to replace apartheid policies. Inevitably, this legislation spawned unanticipated costs and many other unintended consequences .
Given the risks of regulatory change, it would make sense to enhance the fail-safe mechanisms. For years now, the government has contemplated a regulatory impact assessment system to measure proposed laws and regulations against the core priorities of employment, equity and growth. But the system never takes off.
The result is a plethora of new regulations that pursue more or less desirable ends at disproportionate cost. And taken together, the new rules still do not add up to a consistent programme to benefit the majority.
The Planning Commission and the Department for Monitoring and Evaluation in the Presidency are supposed to ensure that the government takes a longer-term perspective and consistently reviews the impact of its decisions. That, in turn, should entrench a more systematic approach to development.
Yet to succeed requires more than technical solutions. It requires that the long-term plans be debated broadly, so that the majority of South Africans can ensure the government responds to their needs. Otherwise it is fatally easy for the rich and powerful to convince the government to chase projects that make them feel world class, while skimping the hard, slow, systemic changes needed for sustained and inclusive growth.
- Makgetla is lead economist for research and information at the Development Bank of Southern Africa
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