Development issues in South Africa

This address, delivered in March 1986, reviews and assesses major development problems in South Africa, using the Eastern Cape as a representative regional microcosm. The central premise is that South Africa's development challenges are tied to access to political power, means for basic needs satisfaction and wealth creation, and the necessity of tailoring the economic system and style of development to the country's status as an advanced developing country. The discussion is limited to four key development issues: 1. Political Policy and Development The historical policy of separate development (apartheid) failed to achieve its declared economic objectives, limited the economy's potential, and restricted non-White access to the means for basic needs satisfaction and wealth creation due to limited access to power. Since the late 1970s, a policy of political and economic reform was initiated, including a commitment to a free market system, labour reforms, a new regional development policy (based on one unified economy), emphasis on small business, education, and the creation of institutions like the DBSA and SBDC. The acceptance in principle of "orderly urbanization" and the announced abolition of influx control (effective July 1, 1986) were highlighted. Future political systems must reconcile different interest groups in a multi-racial, legitimate system, which will likely increase spending to address the existing backlog in basic needs, posing the challenge of achieving both basic needs satisfaction and economic growth simultaneously. 2. Structural Problems of the Economy and South Africa’s Development Status South Africa shares typical development problems with other African nations: high population growth, high unemployment, increasing rural poverty, reliance on primary products (especially gold) for exports, a large percentage of unskilled workers, and a skewed income distribution. However, South Africa differs with its richest natural resources, a well-developed commercial agricultural sector, the largest modern economy in Africa, and the most diversified industrial base. The country is characterized as an advanced developing country. The large modern sector creates challenges, such as a preference for large projects and labour-saving technology, which must be overcome by adapting the economic system and development style to this status. 3. The Economic System The debate on an appropriate economic system is dominated by the extremes of free market and Marxist/socialistic perspectives. Relying solely on the market will not solve the basic needs backlog, as the benefits of growth do not automatically "trickle down." The government has a role in creating conditions for private sector development, market interventions, and attending to basic needs satisfaction (especially education and training, which strengthen the productive base). Future governments must be cautious of the detrimental effects of radical redistribution, nationalization, and mismanagement (as seen in many African countries). An appropriate economic system must be tailored to South Africa's specific development goals and needs, learning from the experiences of other advanced developing and African countries. 4. The Style of Development Key suggestions for the style of development include: Participation and self-reliance: Pursuing a participatory development approach that involves grassroots organizations and promotes the enlightened self-reliance of communities to discover and use their own resources and talents. Decentralized decision-making: Encouraging this at the local level and ensuring development efforts involve consultation with the local community before, during, and after planning. Employment creation: Receiving top priority, as the modern sector cannot generate enough jobs. This requires a multi-dimensional, long-term policy to address estimated unemployment levels (conservatively 500,000 to radically 4 million in 1985). A growth rate of 5.5% to 6.0% per annum is estimated as necessary to meet job demand. Informal sector contributions: Lifting restrictions to allow this sector to make a significant contribution to employment and income creation in urban areas, though it is not a complete solution. Regional development/urbanization: Reconciling the regional development policy with an urbanization and urban development policy, pursuing a bottom-up approach, and allotting a more important role to intermediate cities. Industrial development: Becoming more inward-looking to expand the urban market for basic necessities, which holds the greatest potential for income and job creation in the coming period of rapid urbanization. Sustainable projects and programmes: Prioritizing these with a long-term perspective, ensuring development benefits the poor and unemployed, and is not viewed with political suspicion. The address concludes by suggesting the formation of a Development Society branch in the Eastern Cape to further non-formal debate and promote justice and well-being.