The local government election results confirm the growth in the ANC's support and, as in 2004, reflect that opposition parties are fishing from a shrinking pond. Michael Sachs analyses the results.
Not only did the ANC significantly improve its percentage support in the 2006 local government elections, and increase the number of councils it controls, but it did so in the context of a much higher turnout of voters in absolute numbers than in 2000 local elections.
Nearly 1.3 million more people voted for the ANC in 2006 compared with 2000. In contrast the Democratic Alliance (DA) saw its overall vote drop by 320,000. The Inkatha Freedom Party (IFP), United Democratic Movement (UDM), Pan Africanist Congress (PAC) and former Bantustan parties all saw their number of votes drop significantly.
The ANC controls more councils than it did in 2000. In five provinces the ANC controls all councils outright. The exceptions are Gauteng, where one council (Midvaal) was won by the DA, the Eastern Cape (where two councils are hung) and the Western Cape and KwaZulu Natal.
Of the 303 municipal structures in the country, the ANC has outright control of 228. The IFP controls 4 district councils and 23 local municipalities.
The DA controls 4 local councils. A further 40 structures are 'hung', where no party achieved more than 50% of the vote.
Comparing overall council control with 2000 reveals the extent of the DA's decline and the ANC's gain. Out of the 237 local councils and metros, the DA controlled 12 outright in 2000, including eight in the Western Cape, three in the Northern Cape and one in the Eastern Cape. In 2006 it was reduced to only eight, losing control of all its councils in the Northern Cape and controlling only two councils in the Western Cape outright, with the rest being hung. The IFP also took a significant hit, being reduced from control of 33 councils in KwaZulu Natal in 2000 to only 23 in 2006. The ANC was the beneficiary of all of these shifts, increasing its control of councils from 162 in 2000 to 179 in 2006.
TURNOUT
As a percentage of registered voters, turnout was slightly higher in 2006 than in 2000 - 48.4% compared to 47.6%. But the number of citizens who voted was significantly higher than in 2000. More than 10 million South Africans cast their ballots in 2006, up from 8.8 million in 2000. This amounts to a growth in participation of more than 16%.
The growth in turnout was across all provinces, with Limpopo, North West, KwaZulu Natal and Eastern Cape recording the largest increases. The Eastern Cape had the highest percentage turnout, at 56%, while Gauteng had the lowest participation of registered voters, at 43%.
Aside from the Eastern Cape, the provinces with the largest turnout were those in which there was significant contestation for power among parties: KwaZulu Natal, Western Cape and Northern Cape. This pattern is reflected at the municipal level, where the areas with the highest turnout are largely in these four provinces.
The lowest turnout in the country was in Merafong. Aside from the unique situation there, municipalities with the lowest turnout tended to be the large urban areas including Johannesburg, Tshwane, Ekurhuleni and Ethekwini.
Rustenburg, which had the lowest turnout in 2000, maintains its claim to lowest turnout in the country (excluding Merafong).
OVERALL PERFORMANCE OF PARTIES
In terms of proportional representation (PR) votes, the ANC attracted 1.3 million additional ballots in 2006 compared to 2000. The ANC's overall percentage of the vote was 66% in 2006, with the Eastern Cape, Mpumalanga and Limpopo all giving the ANC in excess of 80% of ballots cast. The ANC is the largest party in every province.
In general the ANC's vote increased in almost all municipalities. Some of the largest increases were in KwaZulu Natal, where the ANC's vote increased significantly in every council. In Ethekwini the ANC's vote increased by 115,000. Large increases in votes for the ANC can also be seen across the Eastern Cape.
However, there were a number of municipalities where the ANC's vote declined. This includes Merafong and Groblersdal, where cross-boundary issues had an effect. The ANC's vote also declined in a number of municipalities in the Western Cape. It is worth noting that in many of these areas the Independent Democrats (ID) or independent civic organisations, especially those organised primarily in the coloured community, captured a significant number of votes. The ANC also saw a significant decline in votes in Nxuba, where the Adelaide Residents Association netted more than a third of the PR vote.
In terms of the percentage vote by province the most stunning advances have been made in the Northern Cape, where the ANC received only 49% of the vote in 1995, but advanced to 64% in 2000 and 70% in 2006. KwaZulu Natal, Free State and Gauteng have also seen a significant increase in ANC support over the last ten years, while the remaining provinces have largely retained their overall support. In the Western Cape, the ANC's support increased by only 0.1% since the last local government election.
In 2006 the ANC received fewer ward votes than PR votes, by an amount of 155,000. This is a small amount, accounting for only 2% of the ANC's vote. Nevertheless, it does indicate that strategic voting may be a factor in certain wards and municipalities. In general, all of the larger parties received more PR votes than ward votes, with the balance going to local groups and independents.
Compared with 2000, the Democratic Alliance got fewer votes in most municipalities and lost 330,000 votes overall. The largest absolute declines in DA support were in the metros, where 171,000 fewer people cast their ballot for the party. The largest decline was in Cape Town, taking the DA from higher than 50% of the vote in 2000, to only 42% in 2006.
Outside the metros, the DA's decline in votes was most apparent in the Western and Northern Cape. It is likely that many of the voters that previously supported the New National Party (NNP) - and thus the DA in 2000 - shifted towards the ID or similar organisations. Nevertheless, the DA remains the largest opposition party in all provinces with the exception of KwaZulu Natal The Independent Democrats emerged as the third largest opposition in both the Northern and Western Cape with 8.4% and 10.5% of the votes cast respectively. In Gauteng the ID scored 1.3% of the vote and everywhere else less than 1%. In the Eastern Cape, the ID managed to secure more than 5% of the vote in Kou-Kamma and Baviaans. It did not achieve this in any municipality outside the Western, Eastern and Northern Cape.
The decline of the Inkatha Freedom Party accelerated with this election. While the party gained additional votes in much of its rural heartland, this was more than offset by huge declines in support in the small towns and urban areas. At the same time the ANC significantly increased its votes across the province, in both rural and urban areas, taking control of a number of councils formerly run by the IFP.
The National Democratic Convention (Nadeco) does not appear to have made much of an impact, despite the decline in the IFP's support. It failed to get 10% of the PR vote in any municipality, and only scored more than 5% in Mtubatuba, Imbabazane, Newcastle and Dannhauser. The party won 24 of the 1,651 seats in KwaZulu Natal and one in Gauteng.
The Vryheidsfront did not stand in most areas in the 2000 election, but gave support to the 'Alliance 2000+'. Compared with the combined performance of the two in 2000, the VF+ made significant gains in 2006. It has emerged as the third largest party in Gauteng and the Free State in terms of seats won, and has a presence in all the other provinces except Northern Cape. The VF+ also achieved more than 10% of the vote in three municipalities in Limpopo (Mookgopong, Modimolle and Thabazimbi).
The African Christian Democratic Party experienced moderate growth in votes cast. However, the party failed to make more than 1% of the vote nationally.
But the party managed to win a number of seats in Western Cape, Gauteng, North West and Limpopo.
The United Democratic Movement lost control of King Sabata Dalindyebo, but still managed to poll 25% of the PR votes in that municipality. Other municipalities where the party got more than 10% of the vote were Mbhashe, Mnquma, Mhlontlo and Engcobo in the Eastern Cape and Richmond in KwaZulu Natal.
Interestingly, the United Independent Front (UIF), which split away from the UDM prior to the election, made an insignificant impact in the Eastern Cape, but won the majority of UDM seats in Limpopo, getting 14 seats in that province against the UDM's eight. This may indicate a further narrowing of the UDM's base towards its ethnic heartland.
Former Bantustan parties, such as the United Christian Democratic Party (UCDP), Dikwankwetla and Ximoko all remain players on the local government scene with pockets of support, but with reduced representation.
Independents did not emerge as a significant force in this election. Only 2.68% of the ward votes cast in 2006 were cast for independent candidates. However, independents organised into political parties did achieve some successes. Notable among these is the Independent Civics Organisation of South Africa (ICOSA), which became a force in the Western Cape outside the metro.
GENDER
The ANC has elected more women councilors than ever before, and more than any other party. Nevertheless, we have failed to meet our target of 50% women public representatives at local level. Only three provinces -Gauteng, North West and Northern Cape - succeeded in meeting the gender parity target. In particular the Western Cape and KwaZulu Natal did poorly in this respect.
There are a number of factors which contributed to the shortfall. Some provinces did not manage to achieve a consistent distribution of women candidates across all municipalities. While the province as a whole may have achieved 50% representation of women among its candidates, this was not the case in all municipalities.
While it is relatively straightforward to achieve the quota in the outcome of a proportional representation vote, this is not the case for the ward vote. Because it is not possible in advance to know which wards are going to be won, there is greater scope for the proportion of women ward candidates elected to be lower than the proportion of women ward candidates standing.
That explains why women constitute 52.4% of ANC councillors elected on the PR ballot, while only 40.5% of ANC ward councillors. This imbalance is compounded by the fact that, as a consequence of the formula used to allocate PR seats to parties, the ANC has more ward seats than PR - 3,035 to 2,683.
In seeking to ensure gender parity in future local government elections, the ANC will need to take proper account of some of these 'technical' factors and develop approaches to address them.
Michael Sachs is the outgoing research coordinator at ANC headquarters.
The ANC's position in the Western Cape continues to improve, while the Democratic Alliance loses ground, mainly to the Independent Democrats, writes James Ngculu.
The 2006 local government elections confirmed once gain the assertion that the ANC continues to grow and is increasingly becoming the dominant force in the Western Cape. The election also proved to be a major breakthrough for the organisation, as the ANC made significant gains across the province and in the city of Cape Town.
The election results confirm that confidence in the ANC is growing. This is particularly significant if one considers the environment in which the elections were contested, characterised by a hostile and negative media; dissident groups, mainly from the ANC, given to political intolerance and threats of violence; and a sustained negative and racist campaign by the Democratic Alliance (DA).
THE ANC STRATEGY
The ANC campaign strategy in the Western Cape was basically in line with the national strategy framework and message. It avoided deviating from the core message of the ANC, and approached the election from a positive perspective.
This meant identifying where ANC voters were and getting them to vote. The core strategy involved mass mobilisation and door-to-door work in African base areas and identifying coloured voters through door-to-door canvassing with a special emphasis on rural coloured wards and those wards in the metro identified as winnable.
The ANC put up candidates in all 105 wards in Cape Town, and engaged vigorously in the poster war with message and candidate posters. The ANC also contested print and electronic media in a hostile media environment.
It also focused on former New National Party (NNP) supporters in coloured areas utilising former NNP leaders. Sectoral work was done especially in the religious community and to some extent in the broader Afrikaans-speaking community.
While the ANC campaign saw a massive and successful mobilisation of the movement's cadres across the province, the list process exposed starkly the weaknesses in our branches. In many areas the only activities our branches are engaged in are list processes and preparations for Branch General Meetings (BGMs) and conferences. Problems found in our structures are not based on any ideological differences but more on competition for positions and in particular those positions that result in some form of remuneration.
Levels of discipline and tolerance in some of our structures have plummeted to low levels. The level of political education and therefore political consciousness must be addressed at all levels of the movement including in the Alliance.
THE DA STRATEGY
The DA saw Cape Town and the Western Cape as areas which could be wrestled from the ANC. They therefore ploughed massive campaign resources into the province. They ran a sustained and widespread poster campaign, flighted thousands of radio ads, and maintained a daily advertising campaign in the press. In the tabloid newspapers, they concentrated their adverts on page three, where these papers publish pictures of semi-naked women. From the perspective of nation building, the DA campaign can be characterised as racist, negative, destructive and counter-productive.
The core focus of the DA was in the white and coloured areas. In Cape Town they focused on the call for the largest turnout in white areas by, among other things, portraying the city management and political leadership as corrupt and incompetent. The DA ignored the African areas, except for some sorties meant to counter the accusation that their campaign was racially exclusive.
Their campaign in these areas was largely limited to postering. Most DA ward candidates in African areas stood in more than one ward, indicating that they had no structures or support in these areas.
The core messages of the DA revolved around the notion of 'Take back your city', which was directed at whipping up emotions among the white community, particularly if taken to its logical and barely-disguised conclusion: '...from these inept Africans'. Still focused on the white community was the poster, 'Bly getrou' (Remain loyal), suggesting that whites should stand together against Africans.
These two slogans - 'Take back your city' and 'Bly getrou' - are reminiscent of the slogans used by the Conservative Party in the 1980s to rally the white 'volk' against the 'verligtes'. The Conservative Party's version of 'Take back your city' was 'Klou aan wat joune is' (Hold on to what is yours).
The other version of their election campaign was particularly targeted at the coloured community, with slogans like 'Stop ANC racism'. DA mayoral candidate Helen Zille was even more crude when she said in the Cape Times of 28 February 2006 that the ANC-led council was "...applying rigid racial quotas for city contracts and employment...".
"It makes no sense, for example, for the ANC to apply national demographics to government appointments and contracts in this region... Individuals have been identified as a group, on the basis of their skin colour, and singled out for privileged access (or exclusion) by government policy."
In the Cape Times of 2 February 2006, she said: "In order to meet employment equity targets that reflect national rather instead of local demographics, municipal employees are pushed out for having the wrong skin colour." She goes on to say: "In housing allocations, the decision to build the N2 Gateway in Langa was an indication to many coloured residents that they were being left behind because of their race."
The theme of the 'incompetence' of Africans was evident in the DA's response to the electricity outages in the Western Cape, where they tacitly blamed 'highly-paid' black managers for the outages the city was facing. A DA councilor, Ian Neilson, was quoted in the Cape Times of 22 February 2006 as saying: "There may be numerous competent people at a mid-management and lower level who knew something was needed, and said so, but the problem is that in most cases, their new managers no longer have the depth of technical understanding of the problems... That is what Cape Town faces now. Three years of ANC government with a year of low-tech senior managers... have led to inadequate performance." A 'new' manager is code for 'African' managers, all of whom, according to Nielson, lack the competence to undertake the running of a city like Cape Town.
The DA used, in particular, the allocation of land at Big Bay and the issue of Jewellery City to claim corruption in the ANC-led metro council. Yet it was the DA that sold the Big Bay land without tender to a specific company below its real value and in disregard of black economic empowerment policy.
The DA used a crude radio advertising and pamphlet campaign to claim that coloureds were not white enough during apartheid and now not black enough in the free and democratic South Africa. They mixed their message with a sustained attack on the Independent Democrats (ID) telling coloured voters in particular that a vote for the ID was a vote for the ANC.
THE ICOSA STRATEGY
The Independent Civic Organisation of South Africa (ICOSA), though registered in the Free State, was mostly active in the Western Cape, focusing on coloured communities in the rural areas. It started growing in Knysna but spread to other areas. It used various methods: in some areas, such as Beaufort West, Knysna, Mossel Bay and Kannaland, it campaigned as ICOSA; while in other areas, such as Oudtshoorn and Laingsburg, became an ally with civic groups.
The organisation ran a racist campaign in these areas based on ethnic mobilisation of coloured people. As part of its campaign, ICOSA volunteers wore t-shirts bearing the slogan, "Still no Freedom" - a clear attempt to portray coloured people as still being in bondage.
One of their candidates, Truman Prince, also used his dismissal as municipal manager of Beaufort West for the benefit of this racist campaign, attributing his dismissal to what he called "Africanists".
In the first local government election in 1995 the ANC in the Western Cape decided to work with a number of civic organisations in Oudtshoorn, Beaufort West, Mossel Bay and Kannaland, which were mainly based in coloured areas.
Some of the individuals involved in these organisations - such as Truman Prince, Jeffrey Donson, Michael Carelse, and Angeline Le Kay - later joined the ANC. However, it would seem that they never imbibed nor assimilated the ANC ethos or policies, especially the principle of non-racialism. These were exactly the same people who, when they were not happy with the outcomes of the list process, decided to stand against the organisation.
ANALYSIS OF THE RESULTS
The ANC made significant gains in the Cape Town metro and in rural towns, while the DA suffered significant losses. In the 2000 local elections, the ANC received 40% of the vote or 444,883 of the total PR votes cast in the province. The ANC controlled four councils -Bitou, Beaufort West, Matzikama and the Central Karoo District.
In the 2006 local election, the ANC increased its share of the vote to 40.13% with actual numbers increasing by 16,298 to 461,181. The ANC is now in control of 19 municipalities, 11 together with the ID, 6 with the DA and 2 outright.
On the other hand the DA experienced a dramatic decline from 51.58% to 40.25% or a decline of 109,328 votes. The DA registered declines in all municipalities, save for Swartland (Malmesbury) where it remained static at 58%. The DA suffered significant losses in 19 municipalities.
The ANC registered significant gains in 12 municipalities even gaining a majority in municipalities where the DA was previously in absolute control.
The ANC suffered significant losses in only three municipalities -Beaufort West (21%), Laingsburg (24%) and Oudtshoorn (11%). These losses should be understood in relation to the emergence of ICOSA.
CAPE TOWN METRO
The Cape Town metro represents the most important area of elections in the Western Cape, where over 70% of voters in the province live.
There were 1,486,781 registered voters in Cape Town compared to 1,269,582 in 2000, of which 737,234 voted compared to 717,365 in 2000, representing a 3% increase. The voter turnout in 2006 was 50% compared to 57% in 2000. The ANC marginally increased its support from 38% in 2000 to 39% in 2006 -an increase in numbers of about 6,531. In 2000 the ANC had 71 seats and the DA 103 seats. In 2006 the ANC increased to 81 seats and the DA dropped to 90 seats. The number of DA votes decreased by 72,837.
The DA didn't just suffer losses at a macro level. Its decline is equally and even more telling at ward level. Out of 105 wards in the metro, the DA dropped in all but 16 wards:
However in the rest of the 89 wards in the metro, the DA suffered significant reverses, with the DA's votes in wards 2, 26, 28, 29, 66, 82 dropping by over 2,000. The DA failed dismally to make any inroads in the African areas.
On the other hand the ANC maintained its strong support in African areas, getting 95.36% of the vote in Phillipi, 95.91% in New Crossroads, 92.72% in KTC, 94.59% in Nyanga, 87% in Langa, 75% in Lwandle, and between 74.5% and 93.15% in areas of Khayelitsha. The ANC polled significantly well in Khayelitsha notwithstanding the most virulent opposition from independent candidates and those within the ANC who supported these independents.
The Independent Democrats (ID) are new to contesting local government elections. The election results suggest the white former NNP supporters recoiled to the DA and their coloured supporters mainly went to the ID, with some split between the ANC and DA.
This analysis is borne out by a comparison of DA and ID votes at a ward level. We have already shown how the DA lost significant numbers of votes in the metro, especially in its base, white and coloured areas.
In ward 7, which covers Northpine and Scottsdene and is mainly coloured, the DA lost around 1,000 votes and the ID gained just over a 1,000. In ward 13, which cover Delft and Lyden and is mainly coloured with Africans in Lyden, the DA lost around 1,200 votes and the ID gained exactly the same number.
The ANC won the ward.
In ward 29, which is a coloured ward in Mamre, the DA lost over 2,000 votes whereas the ID gained around 1,800 votes, though the ANC won the ward. In ward 66 the DA lost over 2,000 votes and the ID gained around the same number and won the ward. In ward 79, in Mitchells Plain, the DA lost around 2,000 votes and the ID gained over 2,000 votes. Exactly the same occurred in ward 82, also in Mitchells Plain.
These wards reflect a pattern across the Cape Town metro, with DA losses in predominantly coloured areas being mirrored very closely in the ID's vote.
ANALYSIS OF NON-METRO RESULTS
As indicated, the ANC now controls more municipalities than it did in 2000.
The ANC won the Bitou and Hessequa councils with an overall majority -Hessequa for the first time.
The ANC is the largest party in the following municipalities:
This is a demonstration of the strides made by the ANC in this election. However, because the ANC does not have an outright majority in most councils, it is bound to negotiate with other parties to form council executives.
As indicated, the Independent Civic Organisation of South Africa (ICOSA) positioned itself as the group to frustrate ANC advances in coloured areas outside the metro. It is possible to assess how it managed to achieve this objective and how the ANC faired in this situation by looking at some of the key councils:
There are five district councils and one metro in the Western Cape. The Boland, Karoo, West Coast and Overberg district councils are controlled by the ANC and other parties. The South Cape district is controlled by the DA.
The local government election results in the Western Cape conforms to the national picture, captured in a statement by the ANC National Executive Committee of 26 March 2006 that "the ANC's overall share of the vote has increased in every province in comparison with the 2000 local government elections. The ANC has more councilors elected in 2006 than in 2000".
James Ngculu is ANC Provincial Chairperson in the Western Cape.
South Africa has the institutional capacity to accelerate growth as envisaged in the Accelerated and Shared Growth Initiative (ASGISA). It is less well placed to share that growth, writes Michael Sachs.
At the ANC's National General Council in June 2005, the commissions on Theory of Development reported that: "The central challenge our movement faces in the Second Decade of Freedom is to defeat poverty and substantially reduce the level of unemployment. This means that the ANC and government must produce a coherent development strategy. Elements of this would involve identifying where we need to move to and what strategic leaps we need to get there."
At the beginning of this year, in his State of the Nation address, President Thabo Mbeki unveiled the Accelerated and Shared Growth Initiative for South Africa (ASGISA). He made it clear that ASGISA was not a 'development strategy'. He explained that "ASGISA is not intended to cover all elements of a comprehensive development plan. Rather it consists of a limited set of interventions that are intended to serve as catalysts to accelerated and shared growth and development".
Further work is clearly needed to develop the type of economic strategy that the National General Council (NGC) proposed. But while not completing the work of the NGC, ASGISA does take us forward in defining the kind of programmes we require to substantially reduce unemployment and poverty. It proposes a framework for economic intervention in pursuit of broadly defined targets such as 6% growth.
Therefore, whether ASGISA is described as a set of programmes, or a policy package, it represents a clear set of choices, which rest on particular assumptions about the character of South Africa's current stage of development, and which will impact on South Africa's development trajectory into the future.
This article aims to raise some of the questions posed by ASGISA about South Africa's broader development path as a contribution towards further debate.
QUANTITY, QUALITY AND INSTITUTIONS
At the centre of the ASGISA programme is infrastructure investment. In essence, this aims to:
We have all become aware of the need for energy investments. The lack of adequate transport infrastructure, for example in Gauteng, is another critical constraint on faster growth.
The ANC's 2006 local government election manifesto envisages R400 billion of infrastructure investment over the next five years. The most immediate contribution towards fighting poverty and unemployment will emerge from the 'multiplier effects' that this vast quantity of state expenditure will generate. The state's direct contribution aims to raise the overall level of domestic investment in a manner that 'crowds-in' private sector investment.
And by stimulating demand throughout the economy, and by directly creating jobs in certain sectors such as construction, ASGISA will have an immediate economy-wide effect on the levels of growth.
However, this expenditure cannot be taken for granted. Roll-overs and under-expenditure on government's capital budgets mean that questions about the 'capacity to spend' (rather than the availability of financial resources) will increasingly come to the fore.
The indirect and longer term impact of the investment programme will depend not so much on the quantity of investment but on its quality. The quality of our investment depends to a large degree on our institutional and micro-economic environment, rather than the broad aggregates of macro policy and budget allocations. It also depends on critical political and social choices that will influence the trajectory of development into the future.
Where institutions are weak, the quality of investments is likely to be sub-optimal. This raises the problem of state capacity in general, and the capacity of local government in particular. Whereas many of the parastatals, national and provincial departments which will drive economic investment have strong capacity, our weakest institutional link is at the local level, where the bulk of social investments aimed at improving the capital stock available to poor and marginalised communities will be executed. ASGISA's investment programme aims to both accelerate growth and ensure it is shared.
But it could be argued that the best quality institutions are those concerned with acceleration, while those tasked with ensuring it is shared are somewhat weaker.
The qualitative investment choices we make will also influence the overall trajectory of development. We have already noted that much of the emphasis of economic investments envisaged by ASGISA to 'reduce the cost of doing business' are targeted towards the costs of exporting primary commodities.
Hopefully, as well as increasing investment and innovation in these industries, the upgrading of rail, port and other infrastructure will benefit other sectors of the economy by improving access to overseas export markets. And it cannot be doubted that building the mineral and energy core of the economy is essential to accelerating growth.
However, we should also not forget the point made by the NGC commissions that:
"South Africa's economy has been historically dependent on the resources sector, particularly mining. The pattern of development that this has generated continues to constrain our economic growth. This results in challenges that affect every aspect of our economic transformation and development strategy.
"Addressing the challenges of poverty and unemployment requires us to lead the economy toward a new pattern of development, involving a diversified industrial base."
The sectoral strategies identified do speak to these priorities, by seeking to build non-core sectors such as the creative industries, tourism and others. But the relationship between South Africa's growth path, and its historic dependency on minerals and energy has certainly not been resolved.
DEVELOPMENTAL CAPACITIES
There is continuing debate about the notion of a developmental state in South Africa. In its contribution, the NGC noted that: "The developmental state must be conceptualised in concrete terms. It is a state with a programme around which it is able to mobilise society at large. It is also a state with the capacity to intervene in order to restructure the economy, including through public investment."
If we are to conceptualise the developmental state in 'concrete terms' it may be more useful to consider developmental capacities of our particular state, rather than try to envisage an entirely new form of state that we would call 'developmental'.
Some states emphasise regulatory capacities, for example competition policy and the regulation of state and private monopolies, environmental and social regulations and institutional arrangements to ensure financial sector stability. In other states, welfare capacities are highly developed:
Part of these capacities include sectoral targeting, or a concern with "which industries ought to exist and what industries are no longer needed" (Johnson). Another capacity associated with developmental states has been an ability to lead indicative planning as a mechanism for mobilising society around a common medium term objective, such as accelerating growth, or restructuring of the economy.
In South Africa, the post-apartheid democratic state has made significant achievements with respect to its regulatory and welfare capacities. Much of the ANC's first term of office was devoted to a root and branch transformation of the regulatory and policy architecture, and creating the regulatory institutions needed to manage this architecture. The last fifteen years have also witnessed a massive expansion of the welfare state, including through direct transfers to the poorest people and active labour market policies.
The ASGISA initiative may not change our government into a remodelled 'developmental state' (and it makes no claim to do so) but it certainly does take us forward in building the kind of developmental capacities that we have neglected. This indeed may be ASGISA's main long-term significance.
Building our developmental capacities means ensuring better coordination of economic policies between departments, spheres of government and parastatal enterprises. It means improved prioritisation of economic programmes based on the identification of key constraints, as well as an ability to mobilise society in general behind an economic programme.
For the first time since democracy we have set a growth target (of 6%).
Many commentators have had much to say about whether this is too ambitious or too humble. Either one may be the case, but more important than the percentage chosen is the use of targeting per se. It is the target which has animated engagement with ASGISA; and it is around this target that consensus can be built, with both labour and capital, about the concrete nature of resources that must be marshalled to realise the target. This has shifted us away from the shopping list approach to economic development that has characterised previous attempts at a social compact.
ASGISA also places sectoral targeting and industrial policy much more firmly on the state's agenda than at any time in the past 12 years. Once again, debates about the sectors chosen or the instruments employed may rage on forever. But by taking a particular view, by selecting particular sectors and by embarking on concrete programmes to realise its view, government has taken an initial small step, which must always be the first act of any long journey.
CAN GROWTH BE ACCELERATED AND SHARED?
Probably the greatest ambiguity within the ASGISA project is the definition of what exactly is meant by 'the second economy'. Given that ASGISA is not an overarching strategy but a set of programmes, it is probably beyond its own scope to define this elusive concept. The absence of a commonly accepted definition of the second economy tends to confuse discussions, both within the Alliance and among the broader policy and academic community.
In many respects, ASGISA's second economy interventions appear as an 'add-on' to the investment and growth programme. Rather than regarding the gross inequalities as the central problem that developmental interventions should solve, the programme appears to emphasise that growth of the 'first economy' will generate the resources that will then trickle down into the 'second economy'. We should recall that, in the words of the NGC, "there can be no Chinese wall between interventions in the first economy and the second economy. Our interventions should aim to restructure the economy as a whole".
ASGISA's 'shared' component is focussed largely on assisting those in the 'second economy' with the capital, human resources and other assets that will enable them to participate effectively in the first economy. To some extent, this approach obscures the structural faults which sustain South Africa's dualistic economic structure and diverts attention from initiatives that aim to 'restructure the economy as a whole'. For instance, ASGISA identifies the highly monopolistic and concentrated character of South Africa's markets, but proposes little in the way of addressing this constraint. We wish to promote small business, which is a very good idea, but neglect to address barriers to entry, which monopolistic agents consciously erect to keep out small business.
Another important structural feature of our economy, on which dualism rests, is the highly unequal distribution of assets among the population. While accelerated land reform is mentioned, there is little focus on this or broader questions related to redistribution of assets.
International evidence suggests that an equitable distribution of land is closely correlated with shared equitable growth (World Bank). Noting this fact, and since we have committed ourselves to redistribute 30% of agricultural land over the next 10 years, one would have thought that, alongside reducing unemployment and poverty, agrarian reform would have been a central component of ASGISA, with the explicit intent of overcoming the two economy divide creating an asset-base for shared growth. This raises the thorny question of the relationship between agrarian reform and industrial development. Arguably, this is the question that has traditionally been at the heart of debates about economic duality, or the two economy divide, in other countries.
Among the developing countries, it was the Bolsheviks who first had to confront the apparent contradiction between agrarian reform and industrial development. Alec Nove, an economic historian of the USSR, writes that:
"This kind of dilemma has been faced in other developing countries. There is a tendency for the same people to demand both land reform and industrialisation. Yet land reform often has the effect, at least in the short term, of reducing the volume of marketable production, and sometimes of total production, because egalitarian land redistribution strengthens the subsistence sector..."
It should be remembered that an increase in subsistence production may very well result in less inequality, greater food security for poor households and reduced poverty. But since Gross Domestic Product (GDP) measures only the value of marketed goods and services, a strengthening of the subsistence agricultural sector would stand against the logic of accelerating growth, at least in the short to medium term.
It is worth noting that all the East Asian developmental states initiated rapid economic growth only after completing significant land reform. Redistribution preceded growth, and none of these East Asian states implemented both at the same time. Nevertheless, having completed significant land redistribution, these states ensured that the growth that subsequently emerged was equitably shared.
Land and agrarian reform are mentioned in ASGISA, but do not constitute one of the main priorities of the programme. Perhaps the reason for this is not lack of interest in agrarian questions, but rather that an implicit trade off is being made in favour of accelerated growth, and against shared growth.
As we develop the overarching developmental framework proposed by the NGC, we should pose the question: are our job creation and poverty reduction targets in contradiction with our land reform objectives? In other words, can growth be simultaneously accelerated and shared?
ANIMAL SPIRITS IN THE AGE OF HOPE
There is another factor, which may require us to trade redistribution for accelerated growth. This relates to the question of perceptions of the future, which John Maynard Keynes identified as central in the determination of the overall rate of investment in any economy:
"It is safe to say that enterprise which depends on hopes stretching into the future benefits the community as a whole. But reasonable calculation is supplemented and supported by animal spirits, so that the thought of ultimate loss which often overtakes pioneers... is put aside as a healthy man puts aside the expectation of death.
"This means... that economic prosperity is excessively dependent on a political and social atmosphere which is congenial to the average business man. If the fear of a Labour Government or a New Deal depresses enterprise, this need not be the result either of reasonable calculation or of a plot with political intent; - it is the mere consequence of upsetting the delicate balance of spontaneous optimism..."
When unveiling ASGISA, President Mbeki made reference to opinion polls which indicate that "our people are firmly convinced that our country has entered its Age of Hope. They are convinced that we have created the conditions to achieve more rapid progress towards the realisation of their dreams. They are certain that we are indeed a winning nation".
He went on to say that government is committed to "play its role to give new content to our Age of Hope. I am honoured to have this opportunity to announce some of the elements of the programme of our government to honour this commitment". This programme is ASGISA.
The 'Age of Hope' is therefore integral to the success of ASGISA. If state-led investment is to 'crowd in' the private sector, an Age of Hope must be inaugurated, in which the pessimism of white business (both local and international) about the future of an African republic is decisively overcome. This entails that measures aimed at redistribution, or radical transformation of social relations, would need to be put on the backburner, since they would certainly generate adverse consequences for the need to create a "political and social atmosphere which is congenial to the average business man".
Furthermore, ensuring that state-led investment 'crowds in' the private sector means that intensified and closer partnerships are required by the state and the owners of private capital.
What does the need to build an Age of Hope and to intensify partnerships between the state and capital mean for the political alliance on which the legitimacy of the state is often assumed to depend? The NGC answered this question as follows: "In many international cases, the developmental state has been characterised by a high degree of integration between business and government. The South African developmental state has different advantages and challenges. While we seek to engage private capital strategically, in South Africa the developmental state needs to be buttressed and guided by a mass-based, democratic liberation movement in a context in which the economy is still dominated by a developed, but largely white, capitalist class." It remains to be seen how the state will respond to these questions, and whether the vision outlined by the NGC commissions is a realistic one.
Michael Sachs is the coordinator of the ANC Economic Transformation Committee. He writes this in his personal capacity.
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