Nearly three decades since South Africa’s democratic transition in 1994, the country remains deeply fragmented. Its political transition has not been matched by a similar transition in the creation of an inclusive post-apartheid economy and, as a result, the continued reproduction of racialised wealth distribution patterns renders the country vulnerable in terms of the sustainability of its political system.

In a fourth country study publication, the Inclusive Economies Project traces the causes and effects of the shortcomings in creating a fairer and more equitable society and pays particular attention to the weaknesses in the system of governance to respond with more urgency and efficiency.

Persisting inequity in the distribution of wealth and capital have prevented those historically barred from free economic participation from acquiring wealth, trapping millions at the bottom of a class structure which provides little prospect for upward mobility. Access to the steppingstones of human development, such as education, have also been wrought with inequalities of access and quality. For the marginalised, secure employment is the only means to acquire capital, but even the labour market has been constrained by an inequitable economy that leaves most behind. Presently, unemployment is higher than ever before and threatens to push many in the middle class into poverty. Simultaneously, increasing poverty and inequality continue to put strain on the wellbeing of the population.

Overseeing these worrying developments has been a government that seems to have grown more concerned with its self-preservation than with the greater good of South Africans. This, alongside state capture and widespread looting of public funds and assets, has had a damaging impact on development prospects that has subsequently amassed trust deficits. Nationally representative public opinion data shows that both vertical and horizontal trust have been in freefall for more than a decade. In terms of the former, trust between the state and society has continued to plummet since 2011. Between 2011 and 2012, civil action more than tripled and continued to increase in the years thereafter.  Horizontal trust has also taken a knock, with South Africans citing race, class and politics as the most divisive facets of South African society. This, alongside the deflated economy and high levels of deprivation among South Africans, has created an intensifying competition over scarce resources. Not only does this force people to live in survival mode; it also heightens tensions between people and exposes parts of the population to capture by populist narratives.

Amid an increasingly bleak economic outlook and growing debt servicing costs that crowd out other spending, the state appears incapable of implementing its Recovery Plan. At the same time, South Africans’ patience is running out with a government that is increasingly being forced into austerity. In the medium to long term, this environment, combined with rising interest rates, inflation and unemployment, could provide fertile ground for populist politics and growing instability. All of this has consequences for peaceful transformation and social cohesion.

In the face of these complex and mounting structural constraints, the authors consider what can be done to improve governance outcomes. Two core recommendations circle back to some of the key long-term National Development Plan (NDP) proposals, aimed at promoting continuity and innovation within the state. First, it is essential that the state strengthens its anticipatory capacity. This could take shape within Department of Planning, Monitoring and Evaluation (DPME) as a dedicated strategic foresight unit. Second, innovation borne from adaptive programmes that return agency at the community level can often be more cost efficient and easier to manage and monitor, while also creating space for inventive solutions that are too risky to pilot at a national scale. Together, these can interventions create room for strategic clarity, and innovative flexible responses attuned to the sensitivities at the local level. Without adaptability, structural barriers will continue to impede meaningful progress.

These are relatively low cost interventions that can, during design and implementation, breathe fresh ideas into how key social stakeholders collaborate in the creation of programmes that ultimately reduce human vulnerability and begin restoring trust, cohesion and wellbeing.

Jaynisha Patel, Project Leader: Inclusive Economies