Can we even imagine a pro-poor economy? What does it look like?

By Published On: 4th May 2017

An image of hands on the globe. Taken from SME South Africa

“The failure to transform the structure of our economy has given oxygen to elite demagogues who want to seize the commanding heights of the economy for selfish accumulation agendas, in the name of the people, as other avenues for legitimate development and accumulation are blocked. In this context, calls for nationalisation are not necessarily progressive in themselves. International experience shows plenty of examples where it is used to feed an elite predatory agenda”

Neil Coleman, strategies co-ordinator in the COSATU Secretariat, wrote the above in an opinion piece arguing that South African society should not have to make a choice between what he terms “a predatory elite and white monopoly capital.” This speaks to the deep-rooted class- and race-based divisions in South African society, and the subsequent lack of agreement on what to do about it. On the one hand, there is growing sense of injustice at the current distribution of access to resources and opportunities. On the other, the misuse of public office and resources has become entrenched within powerful sections of government and its institutions- the self-same institutions that are supposed to play the leading role in addressing inequality and exclusion. Both issues pose a threat to societal stability and our collective welfare, and both will continue as long as a critical mass of South African society fails to mobilise behind a shared vision of an inclusive society.

According to the 2015 South African Reconciliation Barometer (SARB) data, South Africans are clear on what our greatest divisions are: economic inequality and race[1]. More than two thirds of South Africans (67.3%) indicate that they have little to no trust in other race groups. Our legacy economic inequality and exclusion creates social distances within which distrust and prejudice can fester, distrust that paralyses society in mobilising against collective threats. Sisonke Msimang explores this point poignantly with regards to the current state of affairs, stating that the “Zuma problem is not simply a problem of having an undemocratic and deeply compromised person at the helm. The Zuma problem is not simply a problem of an ANC that is stubbornly stuck in the past and incapable of creating a functional education system and steering a working economy. The Zuma problem is evidenced in our collective responses to him: We are deeply unhappy about the man but we do not yet trust one another enough to unite to demand his resignation.”

The challenge facing South African society goes beyond the need to find a collective voice to stop the institutional decay and demand accountable leadership; we need to find a workable vision towards which can alter the structure our economy and how it distributes resources and opportunities. Even if the current government were functioning 100% efficiently and honestly, an unsustainable proportion of our society would still be unemployed, poor and excluded. In an environment where the benefits of economic growth have historically disproportionately concentrated at the top, high levels of growth could potentially fuel an increase in tensions. We need an approach that prioritises the poor and marginalised, and we need to make it the centrepiece of our economic programme.

Such a vision would also have to deal with an important caveat: that people tend to act in their own self-interest. This is not to imply that acting in your self-interest is necessarily malevolent- it’s generally just the default human condition. What I mean by this is that there is significant gap between a well-off individual agreeing that current levels of exclusion are unsustainable and unjust, and to them being sufficiently motivated by the injustice to consent to an arrangement that seems against their interest, or of which the outcomes seem uncertain at best and potentially disastrous (say the nationalisation of the banks, for example). It is difficult to imagine any upper-middle class or well-of person supporting radical economic measures as they are currently on the table, and especially not under the current environment of discontent and distrust.

As important as finding a collective voice against corruption and cronyism may be, it is not where our society’s long term challenge lies. Somewhere, somehow, we will have to find a broadly accepted and implementable pro-poor vision for our economy- one that prioritises distribution to the bottom, and not the top.

Tiaan Meiring is an intern in the Policy and Research Programme at IJR

[1] In the 2015 SARB, a majority 30.3% of the respondents indicated inequality between rich and poor is as South Africa’s primary source of social division. The second most mentioned division is race, which 23.5% of respondents highlighted as the primary source of social division.

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