South Africa’s vision of a bright future
A strong, growing, developing nation presents an important and attractive opportunity for the UAE and the world
Leading political scientist, Hugh Heclo, famously said governments are not only about power; they also puzzle. As the non-racial, democratic South Africa celebrates its 18th anniversary today, it is showing the maturity of a country which is ending its youthful age and looking forward to the next few decades.
The South Africa Vision 2030 represents the efforts of our youthful nation to start preparing for middle age; for our government to puzzle over the challenges we face and find solutions to them.
The challenges we face are well known. South Africa has had to overcome the legacies of poor infrastructure, a resource-intensive economy, racially-divided cities, unemployment, poor education and a high disease burden, which included an extremely high level of HIV infection.
The past 18 years have also seen some breath-taking advances, not least of which was our peaceful transition which led many to describe it as a miracle. As we prepare for our fifth general elections, this political stability is continuously being appreciated, treasured and reinforced. The extremely enlightened constitution of South Africa which underpins this robust democracy remains the lodestar of the entire nation.
The dividend from this peaceful transition is felt most tangibly in the dramatic growth of the South African economy, making it the 27th largest in the world. For example in the period 2003 to 2008 the country saw economic growth rates averaging 5 per cent per annum. The country suffered a mild recession in 2009 but was back in positive territory in 2010 and has remained firmly moving north ever since.
The World Bank recently reported that real returns on investment in South Africa reached very high figures before the global melt down. From 2005 to 2008 it averaged 22 per cent — the same as China. During the first decade of the 2000s returns in construction was 85 per cent.
This is followed by retail/wholesale trade sectors returns which averaged 60 per cent, while the financial sector rose from 8 per cent in the 1990s to 20 per cent, and manufacturing rose from 17 per cent to 25 per cent.
However all this growth and returns on investment has had limited impact on our levels of unemployment, on the skills base of the country, on the level of innovation and so forth. This has a direct impact on issues such as crime, sexual attacks, and the healing of communities divided and still devastated by the effects of apartheid which lasted far too many decades.
Just as Abu Dhabi’s wise leadership created a strategic framework with clearly identified pillars of society to sustain its development, so too has South Africa announced its own Vision 2030 complete with a National Development Plan.
The vision aims to transform South Africa over the next 18 years into an ideal model of growth and employment, leadership and innovation, sustainability and resources and society and technology.
Paradigm shift
As part of a democratic approach to creating a pathway framework, President Jacob Zuma appointed an advisory commission in May 2010 to draft a vision and plan for the country, which was released for comment at the end of 2011. The commission, chaired by former minister of finance and now Minister in the Presidency, Trevor Manuel, itself consists of heavyweights drawn from business, academia, trade unions and NGOs. At the core of this Vision 2030 is a major paradigm shift characterised by the following:
- An unrelenting focus on employment. This would be part of a virtuous circle leading to growth and poverty reduction, contributing to an improvement in living standards. In this way economic conditions are meant to improve, creating more opportunities for businesses as well as raising the level of the capabilities of the work force.
- Running through this process is the golden thread of social cohesion. With the very high levels of income inequality South Africa has to endure, we will need to ensure that the rainbow nation holds together.
- A final ingredient of this paradigm shift is a capable state/government which works hand in hand with an active citizenry to achieve the Vision 2030. In a nutshell, this plan speaks to a capable nation and state.
At the heart of the strategy is the creation of large-scale, sustainable jobs in key sectors through a collaborative approach. The end goal is to encourage trade, innovation and economic growth of up to 7 per cent per year — ensuring South Africa remains at the forefront of fast-growing emerging economies and an attractive investment destination.
As with every country around the world, the most important agents for change and development are the people. Aligned with the Emiratisation approach of the UAE, South Africa aims at mobilising people with knowledge thereby influencing change, and promoting an entrepreneurial culture. The plan stipulates that by 2030, 80 per cent of children will complete at least 12 years of schooling, the proportion of youth who enter into the university system should increase by 30 per cent (currently its 17 per cent) and into the Further Education and Training (FET) college system by 25 per cent (presently 7 per cent). Combine this with the establishment of a national skills planning system, aiming to expand FET colleges and produce 30,000 artisans a year will significantly bolster national skill set, opportunities and life chances.
In bolstering long-term skilled employment opportunities South Africa’s aim is to create 11 million more jobs by 2030, the stepping stones already in place to make this achievable are: growing the economy, making it more labour absorbing by promoting competitiveness and exports — diversify trade towards emerging economies, grow agricultural output and focusing on agro-processing. This opportunity should be seized by potential UAE investors so that it can contribute towards UAE’s long-term food security.
A final area of strategic synergy between the UAE’s pathway to development and that of South Africa is the transition to low-carbon economies. Powered by the scaling up of R&D for new technologies, South Africa is currently speeding up and expanding renewable energy and waste recycling and ensuring new buildings meet energy saving standards, such as the target set of 5 million solar water heaters by 2030.
As anyone in business can testify, creating a vision with lofty rhetoric and writing a plan with ambitious targets is the easy task. Delivering is the real challenge. But on what grounds does South Africa believe it truly is emerging, how can it expect to achieve such targets and where does the UAE fit in?
We live in a globalised world and economy. South Africa’s ability to emerge and develop as a nation and a people will be determined not just by its internal policies and framework, but by its ability to trade and create political and economic alliances. That is where the UAE fits in as a partner with bilateral trade between the UAE and South Africa currently approximately $2 billion.
Wider still with the recent ascension of South Africa to the Brics (Brazil, Russia, India, China & South Africa) group of emerging super powers is evidence of just how far the nation is now aligning with other successfully emerging economies which plan ahead in boosting their economies and creating mutually-beneficial trading and investing relationships. Ascension to Brics confirms Africa as a first-tier, rather than a second-tier emerging market linking the Brics and Middle Eastern economies to more than one billion consumers, with South Africa alone expected to be home to 58.5 million by 2030.
For the UAE and the world at large, a strong, growing, developing South Africa presents an important and attractive opportunity; as the gateway to the continent, the world’s next big economic growth story and as the voice of the African business agenda.
Yacoob Abba Omar is the South African Ambassador to the UAE
