SA’s “Muddle Through” is Okay

KgEkm8ZDtfYLLanVVhg9pcqmsOdHAewiq5Td3R5pcetYLY5rmjiEmFgku1Jb_le7abpQX8pHVIcf8cy0WHdhKdvIXhP900EO4lyOQu-TyoOZfnOJHeu8AWGx=s0-d-e1-ftA year’s beginning is always a good time for refreshing hope, but realism is key. In looking at how South Africa is doing, it may be hopeful enough to settle on our progressing in a muddle-through sort of way. Indeed, the “muddle through” to a better future, rather than quick leaps of positive change, carries within it more encouragement than we may suppose.

In his new book, “The Long View” (Stonebridge), Nedbank political economist J P Landman suggests that by looking at trends going beyond the drama of daily headlines, South Africans panic about our society’s short-term dramas, failing to see a broader picture in which “an enormous number of important things are coming right”.

This is not a book for the wild-eyed optimist – rather for the sober and thinking observer. Its bottom line, unsurprisingly, comes down to our success depending on how we perform economically, although not only that.

SA is playing catch-up with the disappointment of the decades immediately preceding democratisation. From 1975 to 1993 we became 11% poorer on average per person. We ended that period with the same per capita income levels as we had in 1970. This holding back of progress found expression across the board: the last university we built was in Venda in 1981; railway rolling stock was last bought 30 years back; petrol taxes were diverted from road maintenance to general state revenues in 1988.

Contrast this with the following years of 1994 to 2012 when we became 34% richer on average and with today’s building of two new universities in Kimberley and Nelspruit; a massive national infrastructure investment rollout; Transnet’s train buying spree; and road upgrades countrywide.

Our economic progress since 1994 hasn’t happened evenly across the years, but the direction of play is important. Thus, despite the 1988 global economic crisis and the 2009 recession, our per capita income increased by one third, but how we performed year-on-year backs the observation that high growth means more jobs – even years of minimal economic growth have seen increases in jobs and we have never had “jobless growth”. An economy that in 2008 was 60% bigger than it had been in 1995 had 45% more jobs in it.

Landman’s study works through many other aspects of how we’re doing – from our slowly ageing population (with effects on our propensity to violence and crime) to urbanisation (welcome in pushing us to modernity even when it causes increased temporary unemployment) to inequality (which is less than some bald statistics suggest, and lessening), and to broader issues of what is needed in societies on a positive trajectory of development. We have them all to greater or lesser degrees.

He places a lot of faith in the National Development Plan and hopes that at least some of it will be implemented thoroughly. But he parts company with its vision of an average 5.4% GDP growth a year this next decade, and with the “wishful thinking” of those who demand 6% minimum, arguing that our average of around 3% GDP growth since 1994 is more likely and, frankly, okay.

His trendlines and stats show convincingly that with just another 20 years of 3% muddle-through, SA will be almost unrecognisably better off than it is today.

– Paul Pereira. First published in The Citizen, 8 January 2014.