SOUTH AFRICA’S YOUTH are experiencing an economic disconnect. A generation faced with a world without jobs, a massive debt burden, and an economy that has failed miserably to gear itself up for the third wave technologies that Asia and the West have embraced decades previously.
While you were out striking, marching or simply shopping, the world evolved, from a bipolar economy, dependent upon China and the USA, to a multipolar universe — an economy without a centre. The rise of the Information Economy — based as it is on information freedom, has been coupled with successive innovations. The Third Industrial Revolution has produced a ‘post-scarcity economy’, where having a ‘China on ones Desktop’, a 3D printer capable of printing anything, is considered de rigeur.
Successive waves of innovation have seen — the virtualisation of the economy, the dematerialisation of assets and the Internet’s proverbial death-of-distance. Pop-up factories, makerspaces, friction-free digital copies and the Internet of Things are all buzzwords and terms which the youth are invariably going to meet on their journey. In the future, your neighbour will hand you a copy of an open source motorcycle, just so the two of you can go for drive. When you return, you will recycle the vehicle into any number of other open source devices.
South Africa’s youth can work and play, just about anywhere there is an Internet connection or icafe, but getting connected to the Net is not sufficient to enable jobs and education. There are other necessities, common to first world economies which we lack as a nation, and without them, being merely connected, is simply not good enough. In fact, a job, as an end in itself, may not necessarily be all that desirable, the same way that owning anything in an economy based upon abundance, is not the alpha and omega.
How did we get here? Let’s take another look at our economy and the problem of state expenditure already covered in part 1.
Instead of taking heed of the lessons learnt via the unbundling of state enterprises, during the very first decade of democracy, the ruling party, hamstrung by labour and its SACP partners, took an anti-liberalisation view of government, and its role in the economy. Preserving the ‘dirigiste economy’ at all costs and accumulating wealth for the state, come what may. Could the money gained from taxation and investment by the Public Investment Corporation (PIC) have been better spent on education, health, and social welfare?
The terrible twins of big government and rampant state expenditure (on dubious projects) has all contributed to the nation-wide malaise, a combination of student protest and declining fortunes.
Increasingly the grand state under Jacob Zuma, brokered in response to anti-market opposition groups such as the Economic Freedom Front* has loomed large on the agenda. Big government has in turn placed a massive weight on the public purse. The slow-motion train crash, in which an increasingly belligerent left, places the brakes on growth, calling for an end to Neoliberalism (and even the marketplace), in order to accommodate a National Development Plan (NDP), better suited to a nineteenth-century economy — one based upon resource exploitation — has meant that there are very few options open to the central bank and Minister of Finance.
Like oil-rich nations such as the United Arab Emirates (UAE), South Africa’s mineral wealth was not going to last forever. Strikes in the platinum sector have proven, that even a reduction in output is not enough to push up prices. Instead of squandering the nation’s wealth, it would have been better invested in a sovereign wealth fund. Like Zambia which suddenly woke up to an end in the commodity boom, and without any cash left in the bank — do we really need to diversify into religion, in order to pray for a time machine to take our economy back to the days when there was a boom? Luckily South Africa has a few other options up its sleeve.
- * Let’s call the EFF what they are, a front for their ultra-left ideological partner, North Korean president Kim Jong-un whose policies are remarkably similar to those advocated by Julius Malema.