WHEN you fly into Cape Town from George, the contrasts are stark. After flying over the most beautiful coastlines in the world, you turn inward, over billionaire’s valley and into Cape Town. It was a clear, hot January day, good weather for cricket (especially if you were batting). I could see the splendour of Table Mountain in the distance — the inviting beauty of our Mother City.
But don’t look down. For if you do, you will see the masses upon masses of unpainted corrugated iron roofs, reflecting the hot sun back at you — the glitterati of our endless square kilometres of informal settlements.
Our inequality is in our face.
Last Sunday, I went to Boulders in Simon’s Town for breakfast. Afterwards, I was invited to look at Boulders beach — something to see, I was told, if you’ve never seen it before. I hadn’t, so I went. As you approach the beach you are blocked by a concrete structure and a gate. If you want to get into Boulders beach, you have to pay, I discovered. That was a first for me (to pay to get onto a beach). I thought they were public places. I didn’t pay. I just wanted a look — so we walked up the side until we were high enough to see into that special place in which the penguins can go for free. It is special — the water is an expansive shade of turquoise, the beach is tiny, but pristine. Those who could afford the entrance ticket, those prepared to pay, were having a good time. But many were excluded — it was exclusive.
Paying for differentiated service is nothing new, not a phenomenon peculiar to SA, and I have no problem with it. The issue, in an economic society as unequal as ours (we are the world champions of inequality), is that access is only available to the very, very few. So few, in fact, that it is not sustainable and it can have severe negative social consequences. We all know this. One of the challenges in a polarised society is the inability of such diverse needs to even reach consensus on the path to resolution. A polarised society is incapable of electing a cohesive government. The hierarchy of aspirations cannot find sufficient common cause to agree a policy of solution, let alone to implement one successfully.
Education offers a profound case study in the challenge of inequality. Is a dual system the only answer? Does private schooling have the capacity to cope with the demand and, in any case, is it fair that you need more money to get a better education (it isn’t). There will always be private schools, and again, this is neither unique to SA nor wrong.
The trouble, though, with operating two unequal systems of education in parallel, is that they don’t produce equal outputs, and so the divide widens.
We need to find an economic middle ground in which ability and aptitude can be funded for all.
The next debate is about whether or not to lower standards, to ensure higher pass marks, to get more people through the system? With that comes the risk that we’ll produce more apparently educated people who are, in fact, less educated — the effect on the economy, particularly global competitiveness, will eventually show through, so this can’t be the answer. Likewise for employment — if, instead of increasing productivity, we simply create more jobs or more social grants or more protective wage systems, we will end up with dependants, not prosperity.
So, what do we do?
Higher tax rates on an ever-decreasing tax base? I don’t think so. More social grants? I don’t think so.
Is this problem the sole responsibility of the state? I don’t think so. Is the role of the state important? Yes, it’s critical. But it’s our problem, all of us.
Increased productivity per unit of human economic capital (and potential economic capital) is the only way out. We all need to get to work.
We cannot simply contract our way out, we cannot shrink or cut or tighten or rationalise or retrench our way out. Our population isn’t declining, this isn’t Germany — we have to grow, we have to expand, we have to spend. That involves choices. We have to set benchmark investment returns to qualify for capital allocations, but we have to spend.
The external environment has never looked worse. The headwinds we face are fierce and broad, locally and internationally. At home we are dealing with seasonally high, but generally growing personal indebtedness (a sure-fire symptom of discontent), limited capital resources that government has to allocate to long-term projects, a commodity cycle that still hasn’t turned. The world is near as dammit at real, killing war, and the war of currencies and patriotic policy continues unabated. Gross domestic product growth is likely to be less than 1% this year; we need 5%. As if this isn’t enough, we also have the drought to deal with — potentially devastating.
It is no wonder that our mood, our confidence, has never felt worse.
Get over it. We need to move forward. Stop whingeing, get up, go and do something, something difficult — that’s how you create relative value.
Instead of focusing on the width of the divide, we have to fill it. We have to populate the gap between the rich and the poor with a new middle class.
This will not happen through any system that simply transfers wealth (in whatever form), we have to create new wealth. That new wealth has to find its place in the formal, tax-paying, school and hospital-building, infrastructure-maintaining economy, in SA.
Of course, we need good leadership and new policies. But more than that, we need public will.
We need a national call to action.
We can no longer wait for some solution to be fed to us, some sort of prepackaged nirvana.
We have to take it on personally now — there is no more time for "they".
If you’re employed, start working harder, start increasing your units of economic output per unit of time. Colleagues will notice and join in, I promise you.
Person by productive person, SA’s economic output will increase, and that will increase our attractiveness as an investment destination.
Foreign direct investment will create employment. As we move towards 5%-10% unemployment, we will build a middle class, we will create economic dignity, we will start to feel proud.
If you’re outside a formal employment structure (or in your spare time — make some), deploy your skills or financial capital back into our population. If you can teach, start teaching. If you have capital or know how to access it, then go and help get backing for an entrepreneur or an SMME, even if your contribution is just to write the business plan.
If ever the words of John F Kennedy held true for SA, then they do now: "… ask not what your country can do for you, ask what you can do for your country."
Get up, go do something.