Sa Economic Growth Creates Job Opportunities but Mainly in High-Skills Sector

Article excerpt

BYLINE: Ralph Mathegka

In some circumstances, the relationship between democracy and economic progress is not contentious because the two spheres are regarded as separate. Thus one can determine progress in democratic development separately from that of economic progress.

While this approach may work for post-industrial societies - where the economies are to a greater extent capable of distributing resources to citizens - the reality in South Africa is that the standing of our democratic institutions is under threat. This is because democracy continues to be perceived by the majority as not advancing their material betterment.

And public confidence in the state and its organs has shown a rapid decline as evidenced by the findings of the Institute of Justice and Reconciliation's South African Reconciliation Barometer (SARB) survey, which shows a slump of 20% in confidence in the state by those who took part in it. Democracy in South Africa cannot be assessed separately from economic performance.

Democratic stability and economic performance are believed to reinforce each other. However, the perceived disconnection between political and economic systems in South Africa has become bigger, fed as it is by political tension among the ruling elites. There is a disconnection between political institutions on the one hand, and solutions to the social question on the other, that is the main driver of the present political infighting within the ANC. The need for democratic performance and economic sense to mesh is not a philosophical or ideological construct, but rather is informed by the realpolitik of gross poverty and inequalities. The idea of democracy in such a situation is not therefore employed for its aesthetic value, but as a vehicle through which the material needs of society can be realised. Assessment of transformation in post-apartheid South Africa hinges on how democratic institutions have contributed towards bridging the economic gap in the country.

SARB 2007 shows that confidence in a number of key institutions has waned significantly over the past year. Institutions at national, provincial, and local level have in the past two years seen a major reversal of public approval and, in the past year, each of the three branches of government has declined in public approval. We need to ask whether this increased public cynicism has to do with perceived limitations of democracy as a vehicle to reach the ultimate goal of a better life for all South Africans. If so, then democracy's inability to bring about an equitable economic structure poses a risk to democracy itself. So how do we assess the relationship between democratic institutions and economic performance?

South Africa has experienced a remarkable economic turnaround since 1994, in circumstances not always favourable to recovery. This becomes evident when one takes into account that the process of regaining the country's fiscal stability had to commence from the ravages left by a bankrupt apartheid economy, and was later severely constrained by the Asian and emerging market crises of the late 1990s.

Among the fiscal problems that the newly elected democratic government had to face was that of ensuring that foreign debt did not mount. The priority of the new government was to restore fiscal stability, and end the 1980s' rapid oscillation between recession and low growth. This has been attained, and South Africa has proved before the eyes of international capital that the government is indeed capable of managing the economy.

There have been differences on how to attain economic growth with transformation in South Africa. Some have favoured the Reconstruction and Development Programme (RDP) approach, which prioritised immediate major redistribution as a basis for growth, but risked triggering a debt crisis, a fear which led to the early adoption and sustained implementation of the market-friendly Growth, Employment and Redistribution (Gear) policy. …