Williams / Raal Rescuing Our Republic

Radical ideas on how to save South Africa from itself
1. Auflage 2023
ISBN: 978-1-7764431-1-6
Verlag: Tracey McDonald Publishers
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 236 Seiten

South Africa stands at the edge of a precipice. Almost thirty years after its first democratic election, poor policy and rampant corruption have left the country standing on the brink of becoming a failed state. In this thought-provoking book, Bronwyn Williams and Ludwig Raal interview a diverse group of public intellectuals, business leaders and political mavericks to discuss tangible ways South Africa can rescue itself from itself. Through a series of illuminating conversations, a group of independent thinkers explore the root causes of South Africa's problems and offer insightful and radical ways to solve them. From addressing land reform and economic development to rooting out corruption and overhauling political institutions, the conversations in this book come together as a roadmap towards a better South Africa that leaves no one behind. While the challenges facing the young democracy are immense, these experts provide hope and inspiration towards productive actions that we can take together to build a brighter future. For anyone interested in understanding the complex issues facing South Africa today and how they can be addressed, Rescuing Our Republic is essential reading. It is a powerful reminder that the fate of a nation is not predetermined; that individuals, citizens and corporations still have powerful agency and that when that agency is directed towards the right ideas and actions, South Africa can still realise its full potential.

Autoren/Hrsg.

Williams, Bronwyn

Raal, Ludwig

Leseproben

WHY NATIONS SUCCEED
This interview with Dr Adrian Saville was inspiring and frustrating in equal measure. We focused our conversation on his seminal work looking at 160 nations over 60 years to investigate the key factors that make economies fare better or worse in comparison to each other. In South Africa’s case, when weighed up against the benchmarks Adrian and his team identified, it becomes clear that what is holding our nation back from its full potential is us. Our failings are far less to do with outside factors over which we do not have control and far more to do with our own selves getting in our own way. In particular, our inward-looking policies and weak institutions seem to be deliberately chosen to hold our economy and society back rather than to support the growth we so desperately need. What becomes clear is that what we need now, more than ever, is certainty. Certainty is the foundation of both investment and saving at the family and firm level – without which money, the lifeblood of any economy, remains locked in potential rather than active form. Interestingly, certainty doesn’t mean certain optimism. People, particularly pragmatic ‘make-a-plan’ South Africans, are surprisingly adept at working around inconvenient, even downright bad, realities. Bad situations, properly understood for what they are, are nothing less than opportunities when viewed from a different perspective, and smart and industrious people are good at capitalising on exactly that understanding. However, when the present reality is built on shifting sands or the vagaries of poorly-directed and changeable policy that has more questions than answers, progress becomes paralysed in the face of uncertainty. We understandably want to understand the odds before we place our bets. What then, can ordinary citizens do to increase certainty in the future? Well, we can improve the odds in our favour by (as we will reiterate several times in this book) investing in the future we want, very literally by investing in the next generation: teaching and nurturing our children. Early childhood development, as Adrian explains, has some of the highest returns on investment at a nuclear and national level. Dr Adrian Saville has been involved in the investment industry since 1994 and has extensive asset management experience across all major asset classes and jurisdictions. He founded Cannon Asset Managers in 1998 as an independent investment house. In addition to his role as Chief Executive of the company, Adrian consults widely both to government and the corporate world, and he has served as a Professor of Economics, Finance and Strategy at the Gordon Institute of Business Science (GIBS) since 2003. As a thought leader, Adrian contributes regularly to business shows on radio (including Classic Business, PowerFM and The Money Show), and television (including CNBC Africa, Business Day Television, eNCA and SABC Business). He is often asked to provide comments to the press and has written articles for various financial publications (these groups include the Financial Mail, FinWeek, Daily Maverick, Personal Finance, Business Day, Business Report, The Citizen and MoneyWeb). Bronwyn Williams: I want to talk to you about how we can get South Africa’s economy back on track. It’s undeniable that our economy is facing significant problems at the moment but many of them could be addressed, if not necessarily cured, by smarter policy choices. You have spoken and written about a ‘six-pack’ for economic growth. Can you expand on that idea? Adrian Saville: That’s a great place to start. Over the past ten years or so, I’ve been involved in a piece of work that studies the performance of 160 countries over 60 years. We have access to a very – very – rich set of data for these 160 countries. We’re talking about more than a thousand different line items of data. Everything from the size of government, the number of doctors per person, and life expectancy, to the number of kilometres of paved road in the country, et cetera. We essentially asked a machine to look at this big data set and tell us if there are any shared markers of countries that transitioned to and then sustained what textbooks would call inclusive growth. With the benefit of hindsight, we would then teach these in classrooms and talk about economic miracles. But the real elegance of this research is that these success stories are, in fact, not miracles at all – much of it is common sense. There are six common factors, what could be called DNA markers. In a similar vein to identifying attributes or behaviours of top athletes or CEOs, we can now discern the key ingredients that define successful countries. They include elevated savings and investment rates, and a demographic structure that ensures a continuous influx of people into the workforce rather than retirement – which means you want a lot of babies to be born. Of course, those babies need access to education and healthcare, which are the third and fourth ingredients. Interestingly, for much of the 12 years that we’ve been presenting this work, healthcare hasn’t been a talking point. Yet, in fact, it carries a higher explanatory weight than education. The fifth ingredient is policy stability and institutional capability, with an emphasis on stability rather than good or bad policy. And then the final ingredient is economic connectedness and/or openness. Those are the six ingredients and if you get a fair dose of them, you may not turn into a miracle or a business school case study, but you will have the necessary ingredients to bake a fantastic social and economic cake. Bronwyn Williams: How important is it that a country focuses on all six of these pillars? If a society is very good at, say, education or fantastic at having a free and open market, will it be able to reap some of those economic rewards? Or is it a case of the whole being greater than the sum of its parts? Adrian Saville: I’ll give you an ‘economics’ answer, so prepare yourself for lots of ifs, buts, and howevers. (Laughs.) Let me begin by noting that all six factors carry different weights and should be prioritised in a particular sequence. Savings and investment, and economic openness carry by far the most weight. So, if you’re going to get two things, get those right. To be clear, investment is not capital market investment; it’s gross domestic fixed investment – it’s building highways, harbours, fibre optic cables, et cetera. And economic openness, in and of itself, isn’t enough. It needs to be functional openness, what we would call a win-win outcome in the language of economics. For example, slavery, which was a human atrocity and social tragedy, was economically open with one community extracting from another. In economic terminology, that would be characterised as openness with horrific outcomes. So, openness alone isn’t good, but rather functional openness where both parties are better off through the relationship. No country has become prosperous with low savings rates and there is no country that has become prosperous by building walls. So, if you get those two right, then you have some leeway regarding the other factors. For example, there are countries that have become prosperous while losing their demographic structure. China is a great case in point in that it has a shrinking workforce, while still growing rapidly. And India, where ease of doing business is still incredibly onerous as a result of the institutional legacy of the Raj dynasty, is still growing by six to seven per cent annually. So, while all ingredients are important, there is forgiveness among the other factors as long as you get two big ones right. Bronwyn Williams: That’s very interesting, particularly your point on the importance of having a functioning open marketplace, which should be very easy to accomplish – just do less. The only challenge holding a country back from that appears to be political will. So, it’s not an external threat, but rather an internal decision a country needs to make on whether it wants to be part of the global economy or not? Adrian Saville: But you need to make sure that you are ready for that openness! There are countries that had the right intentions but got this wrong. For example, Jamaica is a sad case, where in the late 1990s, because of their economic and fiscal circumstances, they were almost obliged to throw their borders open. But industrially and economically they were not ready, and the result was that Jamaica was left worse off by being forced onto the international stage. In a South African context, think back to the 1990s, when we were welcomed back into the global economic community. Our trade barriers lowered, and a number of important South African industries weren’t able to compete on the international stage, resulting in the disappearance of those industries. So, you have to be ready, mindful, and deliberate when opening your borders. Bronwyn Williams: Right. It’s important to understand that we’re dealing with a messy, complicated reality and that we’re not starting with a blank slate. We’re not setting up a new colony on Mars, where we could build everything from the ground up the way we want it. Our starting point is very different. Could you explain what a country needs to have in place before it can have an open economy? How can countries avoid being exploited by bigger, stronger, faster international hands? Adrian...