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The Inclusive Society Institute (ISI) hosted a range of civil society organisations at its offices in Cape Town on Friday, 22 July 2022, to further deliberate the passage of legislation aimed at reforming the electoral system in South Africa. Whilst the Constitutional Court ruled that the current electoral system is unconstitutional in that it does not allow for independent candidates to stand for election, and that the legislature needs to remedy the defect, civil society is of the view that the electoral reform needs to go far beyond the mere accommodation of independent candidates. At the meeting a two-step process for electoral reform was advanced. Step one, in preparation for the 2024 general election, would respond to the Constitutional Court judgement as it relates to independent candidates, whilst the second step would aim to bring about broader reform in time for the 2029 general election. The second step would consider issues such as a constituency-based election, since there is a recognition that such a system would require preparatory processes such as, for example, constituency demarcation, which will not be able to be concluded in time for the 2024 election. Civil society remains concerned about a number of constitutional aspects to the current Bill being considered by Parliament’s Portfolio Committee on Home Affairs, which, they insist, needs to be corrected before being enacted. The Inclusive Society Institute will continue to work with civil society and the political fraternity to advance free and fair electoral processes that will promote a greater sense of accountability and representivity. Picture source: https://mg.co.za/opinion/2020-06-14-electoral-reform-allowing-independent-candidates-is-long-overdue/

Report into the Feasibility, Structure, and Functioning of the Proposed National Anti-Corruption Advisory Council: Striving for a Corruption-Free South Africa Copyright © 2022 Inclusive Society Institute PO Box 12609 Mill Street Cape Town 8010 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute. DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members, the Stellenbosch University, or the Stellenbosch University School of Public Leadership. JULY 2022 Contents LIST OF ABBREVIATIONS LIST OF CONTRIBUTORS ABSTRACT ABOUT THE INCLUSIVE SOCIETY INSTITUTE (ISI) ABOUT THE STELLENBOSCH UNIVERSITY AND THE SCHOOL OF PUBLIC LEADERSHIP (SPL) STELLENBOSCH UNIVERSITY (SU) SCHOOL OF PUBLIC LEADERSHIP (SPL) THEME 1: PRELIMINARY LITERATURE REVIEW AND INSIGHTS INTRODUCTION AND CONTEXTUAL OVERVIEW: SETTING THE SCENE CONCEPTUALISING CORRUPTION IN CONTEXT: TYPOLOGIES, FORMS, AND ACTS OF CORRUPTION AFRICAN ANTI-CORRUPTION ADVISORY BODIES: COMPARATIVE PERSPECTIVE RWANDA SEYCHELLES BOTSWANA CONCLUSION THEME 2: RESEARCH METHOD, FINDINGS, AND ANALYSES BRIEF OVERVIEW OF METHODOLOGICAL APPROACH, STRATEGY, AND SAMPLING SUMMARY OF RESEARCH FINDINGS AND ANALYSES CONCLUSION THEME 3: NACAC IN PRACTICE NACAC COMPOSITION AND STAFF SELECTION CRITERIA NACAC’S AUTHORITY, MANDATE, AND RESPONSIBILITIES DESIGN AND FUNCTION OF A COORDINATING BODY RESOURCES AND CAPACITY NEEDS CONCLUSION EXPERTS’ RESPONSES ANALYSIS CONCLUSIONS AND RECOMMENDATIONS CONCLUSION REFERENCE LIST List of Abbreviations ACCERUS - Anti-corruption Centre for Education and Research of Stellenbosch University ACCS - Anti-Corruption Commission of Seychelles ACTT - Anti-Corruption Task Team APRM - African Peer Review Mechanism CECA - Corruption and Economic Crime Act 29, 2018 CPI - Corruption Perceptions Index DCEC - Directorate on Corruption and Economic Crime GSCID - Governance, State Capacity and Institutional Development Cluster IACAB - International Anti-Corruption Advisory Board ICC - Inter-Agency Coordinating Council ISI - Inclusive Society Institute ICTS - International Cooperation, Trade and Security Cluster JCPS - Justice, Crime Prevention and Security Cluster MFMA - Municipal Finance Management Act 56 of 2003 NACF - National Anti-Corruption Forum NACS - National Anti-Corruption Strategy NDPP - National Director of Public Prosecutions NEDLAC - National Economic Development and Labour Council NPA - National Prosecuting Authority NRF - National Research Foundation PDE - Procuring and Disposing Entities PFMA - Public Finance Management Act 1 of 1999 PPE - Personal Protective Equipment SADC - Southern African Development Community SARS - South African Revenue Service SDGs - Sustainable Development Goals SONA - State of the Nation Address SPL - School of Public Leadership SIU - Special Investigating Unit SU - Stellenbosch University UN - United Nations UNCAC - United Nations Convention against Corruption UNDP - United Nations Development Programme List of Contributors The Inclusive Society Institute (ISI) in partnership with the Stellenbosch University School of Public Leadership (SPL) hosted a High-Level Dialogue on the Establishment of a National Anti-Corruption Agency for South Africa, on 19 October 2021. This dialogue aimed to give direction to the research to be undertaken by the ISI and the Stellenbosch University School of Public Leadership. The following experts contributed to the main aim of the dialogue and, in a larger sense, the direction of the feasibility research report: Abstract In his State of the Nation Address on 11 February 2021, the President of the Republic of South Africa announced the establishment of a National Anti-Corruption Advisory Council (NACAC) for South Africa. The establishment of NACAC confirms South Africa’s commitment to the implementation of the United Nations’ Sustainable Development Goals (SDGs), Goal 16, which aims for peace, justice and strong institutions. This report attempts to investigate the feasibility and possible structures of the proposed National Anti-Corruption Advisory Council for South Africa. The first section of the report compares and draws lessons from three African countries internationally recognised to be amongst the least corrupt in the world. It considers the structure and operation of their anti-corruption institutions and includes an assessment of their effectiveness in combating corruption. In the second section, the findings of the qualitative research conducted, which considered South Africa’s unique socio-political context, are presented. Eight expert leaders based in the public sector, business community, and civil society were purposely sampled to participate in open-ended interviews based on key issues related to the structures, processes, realities, and expectations of the proposed new body. Finally, section three presents an informed attempt to chart what NACAC could look like after considering the research findings and best practices from the case studies found on the African continent. It unpacks the practical steps that need to be taken to implement a fully functioning and successful anti-corruption institution that is fit-for-purpose for the South African context. About the Inclusive Society Institute (ISI) The Inclusive Society Institute (ISI) is an autonomous and self-standing institution that functions independently from any other entity. It was founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever-transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. About the Stellenbosch University and the School of Public Leadership (SPL) Stellenbosch University (SU) Stellenbosch University (SU) is home to an academic community of 29 000 students (including 4 000 foreign students from 100 countries) as well as 3 000 permanent staff members (including 1 000 academics) on five campuses. The historical oak-lined university town, which lies amongst the Boland Mountains in the Winelands of the Western Cape, creates a unique campus atmosphere, attracting local and foreign students alike. On the main campus, paved walkways wind between campus buildings – some dating from previous centuries; others just a few years old. Architecture from various eras attests to the sound academic foundation and establishment of an institution of excellence. This, together with the scenic beauty of the area and state-of-the-art, environmentally friendly facilities and technology, as well as visionary thinking about the creation of a sustainable 21st-century institution, makes for the unique character of Stellenbosch University. School of Public Leadership (SPL) The Stellenbosch University, through the School of Public Leadership (SPL), is a leader in learning for sustainable African and global futures. The SPL is unique in the South African context with its combination of Public Governance, Environment and Sustainability as strategic focal points. These three foci also provide the rationale for the three postgraduate programmes in Public Policy and Management, Environmental Management, and Sustainable Development. SPL’s business vision and mission, with “Learning for sustainable African futures” as its slogan, can best be understood and summarised as serving public value in an African context. THEME 1: Preliminary literature review and insights Introduction and Contextual Overview: Setting the Scene In his delivery of the 2021 State of the Nation Address (SONA), President Cyril Ramaphosa identified the government’s focus as concentrating on four pillars decisively dealing with Covid-19, job creation and inclusive financial growth, acceleration of the country’s economic recovery, and the fight against corruption. It became evident in the speech that the fight against corruption is instrumental in achieving the success of the other fundamentals and its realisation at all levels is the key to government’s efforts to revive hope to the people for a better future. His brave acceptance of the fact that the government’s reputation has been dented for years because of widespread corruption at all government and societal levels, led to the announcement of what has been described as a new feasible step forward in the fight against extensive corruption within the public sector ranks. As the Honourable President Mr Cyril Ramaphosa stated: “We will shortly be appointing the members of the National Anti-Corruption Advisory Council, which is a multi-sectoral body that will oversee the initial implementation of the strategy and the establishment of an independent statutory anti-corruption body that reports to Parliament.” The indication and belief that such a fight against corruption could only be successful when the whole of society becomes an integral, collective part of the effort leading to a strengthened rule of law, was at the heart of the President’s speech. It was stated that the processes of increasing accountability amongst senior government leaders would be rubber-stamped immediately through the signing of a performance agreement with all ministers before the end of February, a measure that would reach the country’s public. In the announcement of the new National Anti-Corruption Advisory Council, it was characterised as a multi-sectoral body that will oversee the initial implementation of the strategy and establishment of an independent statutory anti-corruption body that reports to Parliament. This was followed by the promise that well planned and decisive investigative action would be undertaken against corruption in the procurement processes and outcomes of Covid-19-based goods and services. The beginning of such an anti-corruption journey was initiated by the authorisation of the SIU (Special Investigating Unit) to commence with and complete the investigations of all allegations and evidence of unlawful conduct that took place at all levels of Covid-19 supply chain and procurement structures and processes – by all government spheres and state bodies – during the national state of disaster. It was officially stated at the time, during SONA, that the SIU had finalised investigations into 164 contracts with a total value of R3.5-billion (Ramaphosa, 2021). These initiatives were supported by the creation of a fusion centre, where representatives of all key law enforcement agencies gather, debate, and share information and resources. It was shown that the establishment has been successful in the fight against corruption, as it has delivered a large number of court cases and achieved the preservation and recovery of millions of Rands in public funds. Beyond this, South Africa as a signatory to intercontinental treaties and conventions on societal aspirations – such as Goal #16 of the Sustainable Development Goals (SDGs) of the United Nations (UN), and continental conventions such as the African Charter on Values and Principles of Public Service and Administration – is bound to continually improve its anti-corruption efforts to achieve the planning, designing, and implementation of an honest, transparent, and good governance ethos in running its state affairs. Conceptualising Corruption in Context: Typologies, Forms, and Acts of Corruption Though the phenomenon of corruption is as old as human history, it only received attention after a few years into the democratic dispensation – understandably so, as South Africa was managing the bigger political project of democratic transition and the change of power. The Department of Public Service and Administration (DPSA, 2002) was the first government department to initiate an anti-corruption strategy. Within it, a number of corrupt acts were identified as types and manifestations of illegal actions (abuse of power and privileged information/insider trading; bribery, conflict of interest; embezzlement; extortion; favouritism; fraud and nepotism). Since then, numerous efforts have been coordinated to rid the country of corruption. Amongst others, a series of reports from the empirical research conducted by the Public Service Commission (PSC, 2008; 2011a) entitled The Most Common Manifestations of Corruption were published. The findings included: Abuse of government resources Appointment irregularities Criminal conduct Fraud and bribery Identity document fraud Mismanagement of government funds Procurement irregularities Reconstruction and Development Programme (RDP) housing irregularities Gross negligence Misappropriation, theft, and financial mismanagement; and Social grant fraud. The foregoing list is a stark reminder that corruption is multifaceted in nature. It therefore needs to be dissected if it is to be understood to its core. In the process of continuous empirical research on the subject matter for over a decade, the Anti-Corruption Centre for Education and Research at Stellenbosch University (ACCERUS) has developed a wide range of both specific and ‘general/collective’ types of ‘common’ and ‘sophisticated’ corrupt acts as listed below: Asset misappropriation is associated with theft that comprises a variety of actions such as extraction from cash deposits; asset purchases; theft of tangible assets; cash on hand, from cash deposits received; transactions in foreign currencies; unrecorded cash transactions; inventory and other assets (e.g., stocks); use of organisation’s equipment (or staff); asset transfers; inventory schemes and movement of assets for private purposes. Bribery is one of the world’s most common and serious forms of corruption and is pervasive – in both big and small acts – in the public sector. While it is probably most prevalent in the supply chain and procurement process transactions, it is in fact also found in many other areas of corruption in the public sector (MBPC, 2016). It entails an act or attempt, by way of a gift of money or other inducements, to dishonestly persuade someone (or a group of persons) to act in one’s favour. Bureaucratic corruption is an act associated with public servants who operate at various organisational and professional levels and abuse their positions for their own personal benefit (Gans-Morse et al., 2018:173-174), or that of their associates, without overt gifting. Computer/IT fraud/corruption (cyber-crime) is a generic concept used to describe criminal activities carried out by means of computers or the Internet. Creditors’ corruption is consisted of, amongst others, double billing; fraudulent disbursements/payments; overpayments; shell companies; fraudulent credit notes; mispricing; and false refunds (Leuthner, 2016). Debtors’ corruption acts are related to discounts; false invoices; payment diversions; sales schemes; unrecorded or under-recorded sales; invoice kickbacks; refunds and credit notes; a variety of bribes and short deliveries (Gilander & Neselevska, 2017). Economic and financial corruption cover a wide spectrum of offenses, inter alia, financial crimes committed by banks, insurance companies, tax evasion, illicit capital havens, money laundering, as well crimes committed by public officials (such as bribery, embezzlement, traffic of influences, etc.) either to benefit unduly personally, or benefit organisations. Employee-related fraud/corruption is characterised by a wide variety of acts such as irregular loans; fake educational qualifications; payroll/remuneration schemes; irregular bonuses; falsified curriculum vitae; irregular promotions and bonuses; duplicated reimbursements; department credit cards for personal use; falsified wages; nepotism; fictitious expenses; patronage use; fraudulent travel and subsidy claims; backdating salary increases; a variety of misrepresentations of relevant personal information; illegal gratuities and expense reimbursement schemes (Woods & Mantzaris, 2012). Grand corruption occurs at the highest levels of political and administrative leadership and management as well as groups who, in most, if not all cases, use the privileged information at their disposal to take advantage of the laws, rules, and regulations gaps and anti-corruption agencies’ lack of capacity, weaknesses, and structural and functional inadequacies (Bauhr & Charron, 2017:416-417). Management fraud is perpetrated by a wide range of managers who become directly and indirectly involved with most, if not all, acts of corruption mentioned above purely by having both access to information and power to act and influence the course of events to their favour. Such fraud is also synonymous with “fraudulent financial statements” (Mbaku, 2007). Petty corruption is generally associated with corrupt practices by lower- and middle-grade public servants who, in most instances, deal with the public on a daily basis (also described as ‘survival corruption’) (Stahl et al., 2017(a)). Political corruption, inevitably the most debated corruption reality in South Africa, Africa and globally, is associated with politicians’ greed, avarice, irregular and illegal actions at various levels of position and authority, from the president to a municipal councillor. Principal-agent-type corruption is the idea, planning and implementation of actions which provide an opportunity for ‘middlemen’/‘agents’ to facilitate deals/transactions in the public service terrain. The employed agent can either be an internal or external party to the entity but will naturally have the power to sway influence (GAB | the Global Anticorruption Blog, 2015). Procurement fraud is related to a very wide range of manipulated, inter alia, “preferred and ghost service providers” to direct the procurement processes toward a pre-emptive conclusion; many forms of bribery through mediators; violation of “preferential procurement” and falsified “broad-based black economic empowerment” arrangements; fictitious quotes and invoices; ghost suppliers and purchasing schemes (Mantzaris, 2014(a); Mantzaris, 2014(b)). “Quiet” service has been described as a low-level form of corruption under circumstances where public servants fail to deliver the service they are paid to deliver, such as medical doctors’ or nurses’ absenteeism or drugs embezzlement from public hospitals (U4, 2017). Systemic corruption is rooted in inadequacies, weaknesses, and state institutions’ incapacity of organisational systems, structures, and processes. In most instances, it is encouraged by the lack of transparency, integrity, accountability, and acts of impunity as well as authoritarian and/or monopolistic power relations (Laver, 2014). It is synonymous with state capture. African Anti-Corruption Advisory Bodies: Comparative Perspective In an effort to learn from existing bodies of research and work done in the anti-corruption domain, three African countries that are internationally recognised to be amongst the least corrupt in the world and on the African continent, have been purposively selected as case studies from which to compare and draw lessons that could inform the proposed NACAC. These countries are Rwanda, Seychelles, and Botswana. RWANDA The Rwanda Anti-Corruption Advisory Council was established in 2014 and has played an important role in the fight against corruption in the country. The Council comprises the Chief Ombudsman (the Chairperson), Director General of National Intelligence and Security Service, Minister of Local Government and Justice, two Ombudsman Deputies, the Inspector General of Rwanda National Police, Vice President of the Supreme Court, Prosecutor General, State Finance Auditor General, Executive Secretary of Rwanda Public Procurement Authority, representatives of the Civil Society Platform, and the Chief Executive of the Private Sector Federation. The Rwanda Anti-Corruption Advisory Council was initially based on a continuous initiative communication campaign led by senior ministers, the country’s ombudsman, and highly placed officials. The campaign covered the entire country and was reported daily on radio, television, and social media. Furthermore, all the Council members communicated daily with the media, private sector, and civil society, convincing them to become active against corruption and mobilise their communities and constituencies to grow to be an integral part of the effort. The Council operates at National level but is also decentralised at District, Sector, and Cell levels (Government of Rwanda, N.d.). These significant initiatives took place in the country at a time when it was already considered amongst the least corrupt globally. In the 2014 Transparency International Corruption Perceptions Index (CPI), Rwanda was one of Africa’s five least corrupt nations. Consequently, 97.3 per cent of the population expressed confidence in the government’s efforts to fight corruption, according to the 2014 Rwanda Bribery Index, which was conducted by Transparency International Rwanda chapter (Transparency International Rwanda, 2014). In the Transparency International CPI, Rwanda had a score of 54, ranking as the third-least corrupt country in Africa. The country’s prosecutor general at the time revealed that the prosecution office had filed 155 cases of corruption in courts, of the 225 cases reported in the fiscal year 2013-2014. The Transparency International 2020 results showed that the country’s score increased from 53 to 54 percent, which placed it at 49th on the global ranking (from 51st in 2019), retaining the lead in the East-African region as the least corrupt (Transparency International, 2020). The country’s civil society leadership was encouraged to cooperate with the Council in an effort to sensitise the general public towards the consequences of corruption, and research and reports of corruption to the police, National Public Prosecution Authority, and the Office of the Ombudsman. The Council’s key responsibilities at the national level include: research and reports/opinions on strategies against corruption; thorough study and research of all reports that emanate from anti-corruption institutions and recommendations to advance the fight against corruption; maintain continuous channels of information exchange on corruption between institutions; research, assess, and evaluate all reports that emanate from organisations regarding corruption in Rwanda and recommendations that are based on their positions, planning, and implementation of all processes resulting in the approval and publication of an annual report of the achievements in the fight against corruption in Rwanda (Sebudubudu, Khatib & Bozzini, 2017). Members of the National Advisory Council meet on a quarterly basis and report directly to the President of the Republic, and present copies of all meetings, discussions, and decisions to Parliament, the Supreme Court, and the Cabinet. The Council’s Technical Committee comprises technicians from institutions led by members of the Advisory Council at the national level. The Office of the Ombudsman is responsible for the Advisory Council Secretariat at the national level. Thus, in its structure, the Secretary of the National Advisory Council fights corruption and injustice. International comparative research has conclusively revealed that the success of Rwanda’s government against corruption cannot be underestimated and the key reasons for such a reality lies in the government’s anti-corruption initiatives, plans, and action at all levels (Baez-Camargo et al., 2017; Sebudubudu, Khatib & Bozzini, 2017). Baez-Camargo and Tharcisse (2018:26) recently postulated that empirical research and evidence overwhelmingly suggests that petty corruption as a normalised practice has been eliminated in Rwanda. Such observations highlight the fact that Rwanda’s trajectory is being widely and globally recognised. Moreover, the country is on par with a very small number which have achieved a substantial reduction in levels of corruption in the last 30-40 years (Mungiu-Pippidi & Hartmann, 2019). In fact, empirical research has further conclusively shown that in less than 20 years of high levels of corruption, Rwanda has achieved successes and brought the country on par with ‘middle income’ countries. During this 20-year period, the anti-corruption efforts concentrated on the reduction of administrative corruption – the primary terrain of the scourge in a society struggling to overcome a destructive genocide and civil war of major proportions. The success achieved under a seriously coordinated effort has been instrumental in increasing the developmental levels of the economy and the country’s fiscal stability. Such a success against a grave economic and social pandemic does not imply that administrative corruption does not exist at all. However, the relentless advancements at all levels (careful investigations, persistent public servants training, community communication and support structures, committed alliances with civil society, highly skilled anti-corruption methods, and punishment of the guilty) has moved the country’s public sector forward. Rwanda’s law-abiding public sector, which is rooted in solid and diversified legislation, is the reward of a journey along an arduous road. Internationally, it is recognised as a significant developmental achievement which can be utilised as a guide going forward for countries facing substantial struggles in their efforts to defeat corruption. For this aspiration to be realisable for many countries, the fight against corruption can only succeed through honesty, accountability, transparency, education, effectiveness and efficiency, strong public sector authority and competency, and cooperation, synergy and a persuasive understanding between public and private sectors, civil society, and all sectors of the country’s population (World Bank, 2020). SEYCHELLES The Advisory Council of the Anti-Corruption Commission of Seychelles was established in 2016 and comprises four members. Its primary aim is to oversee the Commission’s administrative policy and review provisions of laws contributing to the prevention of corruption. The Council has the authority to investigate, detect, and inhibit corrupt practices and, according to its founding law, it is a neutral, independent, and self-governing entity, which is not subject to the direction or control of any person or authority. The body also makes recommendations to the President for effective implementation of existing and new legislation. The founding four members of the Council were appointed following a thorough and detailed interview process. The new group members of the Council were announced in September 2021 (Sedrick, 2021). The Advisory Council derives its work from its independent ability to investigate, detect, and inhibit corrupt practices. The work encompasses a wide variety of multi-dimensional research initiatives and direct assistance at all levels of operations undertaken by the primary anti-corruption body; the Anti-Corruption Commission of Seychelles (ACCS), which was also established under the Anti-Corruption Act in 2016. In this process, the Council is responsible to provide research, analysis, and recommendations which facilitate the Commission’s functions, processes, and operations in terms of: Filing cases on the basis of enquiry or investigation Conducting investigation of offences Conducting cases Performing functions assigned to the Commission by the existing Acts Holding enquiry into allegations of corruption Reviewing and recognising laws for the prevention of corruption and submitting recommendations to the Commission Raising awareness and promoting the values of honesty and integrity amongst all communities, with a view to prevent corruption Organising seminars, symposiums, and workshops on the subjects falling within the Commission’s functions and duties Identifying causes of corruption in the context of the country’s socio-economic conditions Determining the procedures of enquiry, investigation, and filing of cases Investigating a public officer’s conduct that the Commission has reasonable grounds to believe is connected with corrupt practices Coordinating and cooperating with other institutions authorised to investigate, prosecute, prevent, and combat corrupt practices Guiding implementation of an integrated approach leading to the eradication of corruption Consulting, cooperating, and exchanging information with appropriate bodies internationally that are authorised to conduct inquiries or investigations in relation to corruption Adopting and strengthening mechanisms for educating the public to respect the public good and public interest Developing educational and other programmes in collaboration with the media Promoting an environment for upholding ethics in governance; and Disseminating information and sensitising the public about the negative effects of corruption. Members of the Advisory Council travel regularly to attend international conferences that address anti-corruption state issues, to network, draw insights, and share knowledge. Furthermore, their strategy and tactics, in terms of examination of complaints and evidence in their duties, have been described as slow, complex, and meticulous, leading to an appropriate assessment for submission to the main body. Though it has been mentioned that such a process has been successful, on occasion, external pressures exert a strong influence, resulting in fear of failure. By ensuring appropriate procedures are adhered to despite pressures, at the end of the process the evidence is often much stronger. This goes beyond the national context. Following the correct international protocols has been described as the best guarantor of being on the correct path towards the next stage of an investigation. One of the body’s acknowledged achievements has been the launching and development of a comprehensive educational and awareness campaign to rally society behind the efforts. Such initiatives have a direct multidimensional impact on all sectors of the country, including the youth, civil society, private sector, and the public sector. Utilisation of all media to strengthen public relations in order to educate the public about corruption has been considered successful. One of the leading factors that contributed to this success is the active cooperation, coordination, and synergy of the Advisory Council with all the government departments, entities, independent bodies as well as civil society and the private sector. It is believed that the country’s existing legislation provides sufficient opportunities and access to authority for members of the Council when the need arises, to scrutinise confidential agreements as well as records, books, reports, returns, and other documents that relate to the work of any public or private body (U4, 2020). Seychelles has a score of 66 and is in position 27 on the Transparency International Corruption Perceptions Index 2021 – and is recorded as the number one least corrupt African country. BOTSWANA The Directorate on Corruption and Economic Crime (DCEC), the most important anti-corruption body in Botswana, bears similarities with the future South African National Anti-Corruption Advisory Council, as it also initially begun as an advisory state entity before a fully-fledged body with necessary institutional authority. It was established in 1994 to combat corruption through thoroughly researched investigations, prevention, and education. The entity operates under the President's Office and is not formally independent; though its staff are subject to public service regulations and independent of citizen oversight committees (Isbell, 2017). Its founding was based on a government decision to turn the tide, described as a very decisive moment by observers, following a well-publicised series of high-level corruption events in the country, which had a reputation for solid governance. The events created a public outcry amongst Botswana’s citizenry to the point where it was impossible not to act. The outcries coincided with the outcomes of the 1994 Corruption and Economic Crime Act (CECA), which re-categorised new forms of corruption, and passed most of the anti-corruption responsibility to the new DCEC from the hands of the country’s police force (Isbell, 2017). An analysis of the Directorate’s anti-corruption philosophy has revealed that the unit, since its establishment and inauguration, has morphed into a highly efficient institution with mixed results. The educational programmes have reached the country’s population, including those in the far-flung corners of the rural lands, while its investigative efforts are widely criticised for a number of reasons after high-profile corruption cases were unsuccessfully prosecuted in court – as opposed to the successes involving petty corruption. This is attributed to the fact that prosecution evidence presented was purely based on advice without rigorous legal analysis, and that the entity was, in its ‘first level’ phase, seriously understaffed. The subsequent legislative reforms – transformation of the entity’s role which began in 2010 and beyond – changed the institution’s path to anti-corruption success (Kuris, 2013). At first the key responsibilities of the DCEC were related to the promotion of ethical behaviour in public service organisations based on codes of conduct, maintenance of transparency, rule of law, and good governance at all levels of corruption prevention interventions. They were later expanded to encompass wide-ranging responsibilities, duties, powers, and operational independence. These were concentrated on three key strategies: investigation, prevention, and public education. Its members had the power to search, extradite suspects, seize, and freeze assets, arrest, confiscate travel documents, and recommend prosecutions to the Directorate of Public Prosecutions, which controlled all prosecutions (Nwokorie & Viinamäki, 2017). As time passed, these initiatives proved instrumental and decisive in the fight against corruption because of the close relations of the body with a wide variety of stakeholders won through the activities of the DCEC leadership. This fact of a societal united front proved to be a key element as NGOs, community watchdog bodies, whistle-blowers in both the public and the private sectors, and citizens became allies of the state institution; assisted by a number of specialist anti-corruption units set up in all ministries involved with preliminary investigations of possible offences in their domains (Sebudubudu, 2003:126-127). In the latter years of the 21st century, international organisations considered DCEC to be the best anti-corruption agency in Africa. It was successful in both the prevention, education as well as positive outcome in the alliance with all anti-corruption state institutions to strengthen accountability and transparency in the country. One of the differences between the Botswana anti-corruption public leaders and those in many African countries has been the open and transparent connection and collaboration with intellectual and research-based think tanks such as BIDPA (Botswana Institute for Development Policy Analysis), instrumental in the designing and development of a national anti-corruption policy framework (Kuris, 2013). The planning and implementation of its three-pronged strategy starts with the prevention of corruption, which is preceded by a process of thorough investigation of existing loopholes and their detection; investigation of suspicious transactions and economic crimes at all levels; and finally, the file/s submission to the DPP when sufficient and irrefutable evidence has been collected. Public education is a complementary strategy but is as vital as the others. To achieve these, the DCEC has been well-resourced and works meticulously with all judicial institutions (Jones, 2017:213-214). The organisation’s new staff develops extra skills and expertise through highly recognised training courses, and performance management training through highly qualified "performance improvement coordinators”, including the Basel Institute of Governance. The latter institute developed an internal training framework and new investigative manual, as well as regular classes for all investigators. Its performance indicators included several investigations; launched a number of completed investigations; ratio of number of investigations to numbers of staff; as well as conviction rate and levels of implementation of recommendations derived from preventive work and public opinion surveys (Sebudubudu, 2003:130). Much significance is given to assignment studies that deal with existing systems and procedures and their weaknesses in terms of systems and processes. The DCEC has been instrumental in promoting an anti-corruption culture in all state agencies – due to many of its officers having been seconded to other ministries in their effort to establish “corruption prevention committees” – as well as all oversight bodies operating in the President’s Office, including the Procurement Department and the State Auditor, Customs, Ombudsman, Immigration Department, Police Service, and international organisations such as Interpol (Anti-Corruption Authorities, 2020). Conclusion The above case studies provide an opportunity for comparative analysis and learning. However, South Africa, like any people, is unique in some respects and therefore differences are bound to exist that have a bearing on how anti-corruption in South Africa works, and the realities informing it. As a result, while drawing lessons about best practices from the above is essential, it will be short-sighted not to consider the socio-political context that characterises South Africa. The following research findings and discussion accounts for this complementary element to ensure that the formation and functioning of NACAC is based on a solid structural and operational foundation. That is fit-for-purpose for the South African context. THEME 2: Research method, findings and analyses Brief Overview of Methodological Approach, Strategy, and Sampling A total of ten (10) expert leaders based in the public sector, business community, and civil society were purposely sampled to participate in the qualitative interviews. Two (2) declined the offer due to prior commitments that were unworkable with the interview scheduling irrespective of the researcher’s attempts to reschedule. Therefore, eight (8) leaders responded to the set standard open-ended questions that were based on key issues related to the structures, processes, realities, and expectations of the new body: NACAC. To ensure anonymity, as agreed upon by the researcher and the expert leaders, no names are used to attribute views expressed, to any of the leaders. Instead, numbers (1 to 8) have been assigned to each interview participant as follows: Expert Leader 1: Retired Senior Member of Chapter 9 Institution, Cape Town. Expert Leader 2: Senior Researcher, NGO, Durban. Expert Leader 3: Senior Researcher, NGO, Cape Town. Expert Leader 4: Senior Public Servant, Provincial Government, KwaZulu-Natal. Expert Leader 5: Senior Public Servant, Chapter 9 Institution, Gauteng. Expert Leader 6: Businessperson, KwaZulu-Natal and Gauteng. Expert Leader 7: Senior Academic Researcher, Gauteng. Expert Leader 8: Senior Administrator, Provincial Government, Gauteng. Summary of Research Findings and Analyses A preliminary briefing took place as a means to confirm that the expert leaders are sensitised to the envisioned NACAC and recent developments in the subject matter, in addition to their existing in-depth knowledge. As it would later emerge, while there is consensus on a few issues, equally, questions and opinions are divergent on other issues of interest. For example, while it is debatable that some anti-corruption agencies and bodies are riddled with corrupt elements that undermine the fight against corruption, there is consensus on “Scorpions’ days when corruption was certain to have repercussions.” Four of the leaders (number 2, 4, 5, and 8) highlighted the complete lack of effort to put in place and use scientific integrity pre-screening processes to maximise prospects of ensuring that the top leadership of anti-corruption bodies comprises competent and ethical leaders, especially in the supply-chain and procurement management, investigations and prosecution services, internal audits, and risk management offices. These offices are integral to the integrity of the anti-corruption bodies’ ability to function effectively and efficiently and to build public trust – without which it will be virtually impossible to mobilise stakeholders in anti-corruption efforts. Interestingly, leader 3 suggested that NACAC could face the same fate as the Scorpions, as it may neither enjoy sufficient legal status nor guarantee security of tenure of office. He further opined: “It is consistent with the ANC’s NEC decision in 2020 to establish a single, permanent, and independent agency with the capacity to deal with corruption decisively. When one considers the Glenister litigation cases, it suggests that poor political advice was rendered without significant acknowledgement of the thrust of the findings.” Amongst other factors, incapacity and illegality could see the agency dissipating, unless duly addressed from inception. This means that, for the new body to exist and operate, it is inescapable that a new law will have to be enacted and passed – a process that is unpredictable. He points to the strong belief that, with support from civil society and the business community, the Democratic Alliance is prepared to present a ‘Private Members Bill’ that could compete with the plans, and the growing ‘look to private prosecution’ view expressed by some – including Eskom’s leadership recently – when there are delays and failures in the state’s anti-corruption agencies. Legitimacy, representability, and trust are intricately linked and crucial to the success of NACAC. This is according to expert leader 5, who emphasised that the structure could assume the representative character of NEDLAC (the National Economic Development and Labour Council) to ensure that it mobilises all stakeholders of society against corruption. However, as she cautioned, members of the public need to feel a sense of institutional trust so that they can report, collaborate, and support it. Ideally, she elaborated, the proposed NACAC must have a witness protection programme that falls under the control of retired Constitutional Court judges who are no longer interested in political power. Besides, retired judges, especially of an apex court such as the Constitutional Court, command moral and ethical respect. It would, all matters considered, be likely that they will be trusted by many, if not all, stakeholders. It is common cause that experience triumphs anything, in many fields. This is a reminder by leader 1, who noted the importance of ensuring that the selection of the NACAC body is more informed by meritocracy than anything else. In particular, according to him, “… the selected members [must] have a developed understanding of the subject matter [that] they will be dealing with. Their knowledge and experience, beyond the technical, should include knowledge on internal workings and systems of public sector organisations, and how corruption manifests itself within the sector.” In addition to the technical know-how and sectoral knowledge, there is consensus on a number of considerations that will ensure that NACAC succeeds in its mandate as per the National Anti-Corruption Strategy (NACS) 2020-2030: NACAC is authorised to issue relevant directives and oversee their implementation. Without such a drastic step forward, any hope for NACAC’s success would easily be inhibited by pedantic bureaucratic layers put down by those who do not want to account (leaders 1, 5, 7, and 8). That these instructions are considered mandatory by the entire security cluster (leaders 1, 3, 4, 6, and 7). That all Cabinet Ministers actively support NACAC and its mandate (leaders 1, 2, 4, 6, and 7). That the Accounting Officers and Accounting Authorities (as per PFMA/MFMA) actively support and oversee NACAC directives – and account for the effective implementation and ongoing application (leaders 1, 4, and 7). That NACAC directives are incorporated within the internal control regime of each, and every public sector organisation stipulated – including the PFMA/MFMA – internal audit function, the risk management function, and prescribed procurement practices (leaders 1, 4, 5, and 7). That every public official involved in the running of the entity must undergo serious essential training, covering the nature of public sector corruption and NACAC prescribed anti-corruption practices (leaders 1, 4, and 7). That various members possessing different expertise and industry knowledge will add respective value to the body. This implies, for example, that NACAC senior representatives would need to establish and lead different subcommittees or working groups based on their skill sets and knowledge. It cannot be expected for each member to be conversant in all aspects of corruption. Two of the expert leaders (4 and 6) highlighted the indisputable fact that the forthcoming report emanating from the Zondo Commission of Inquiry into State Capture would open additional avenues of challenges at all levels of the State and, possibly, result in new relations and actions undertaken by anti-corruption agencies. Such new decisions and outcomes were already described as opening novel paths in the relationship between the new body with organisations such as the South African Revenue Service (SARS) and Special Investigating Unit (SIU), as seen by the collaboration between the entities on a number of high-profile cases. Therefore, it is important for NACAC to not be rigidly formed in the beginning but rather to allow the structure to emerge and mature with time in the first two to three years of its operation (added leaders 2 and 5). It was widely acknowledged by some of the leaders (3 and 6) that the challenges associated with NACAC’s planning and operations as described in the NACS will be extremely difficult, due to the vast expansion and complex composition and dimensions of a public sector characterised by structures and functions of separate autonomous institutions across the three spheres. Considering that NACAC has the responsibility to deal with each one of these equally and comprehensively, it is a foregone conclusion that the establishment of a supportive Secretariat is crucial for it to fulfil its mandate (leaders 1, 5, and 8). While the NACAC leadership should be the “brains trust” of the body, members of the Secretariat should be attuned to the subject matter and goals of the NACAC to constructively execute the instructions of the body and manage the daily operations. This would require the Secretariat members to possess a sound understanding of the internal workings and legal frameworks of all state institutions as well as report writing, events and meetings management, and other administrative abilities that would be necessary for the comprehensive and successful operational duties and responsibilities needed. For instance, one expert leader (3) referred to their knowledge of how the interplay between the National Prosecuting Authority and Department of Justice’s leadership limits resources to restrict meaningful prosecution in certain cases. South African government and state machinery is characterised by fragments. Leaders 1, 4, and 6 warned that the configuration of NACAC should not carry the same fragmented character, because there is great potential for conflicting responsibilities and duplication of areas of competencies. This could stifle the effectiveness of the overall anti-corruption intentions of the government at many levels, as observed from some of the challenges encountered by the Anti-Corruption Task Team. This implies that clear formalised areas of responsibility and authority that exist within a single coherent anti-corruption strategy and action plan are crucial to its success. There were reservations regarding the proposed term of office for the interim body, which is two years, by some of the participants. Leaders 1, 5, and 6 were concerned that with a change of leadership soon after its establishment, NACAC could lose momentum and the necessary sense of urgency. Furthermore, as expert leader 7 added, corruption is a multifaceted phenomenon to be unravelled within a short space of time. The intricate details of grand corruption, as revealed, for example, at the Commission of Inquiry into State Capture, and complex vast networks to disentangle take a great deal of time and resources. Resourcing, staffing, and financing of NACAC was also a common theme. Given the shrinking tax base due to unemployment and a stagnant economic growth rate amidst expanding service delivery mandates, leader 7 recommends that, to supplement operational budget, the body could use additional funds from the Criminal Asset Recovery Accounts to ensure that it has enough funds to meet its financial needs, including hiring of competent staff and the ability to retain them, especially in the investigating unit and the Secretariat. Conclusion The above findings bring a few salient factors to light that must be taken into consideration when formalising NACAC. While it is generally accepted that it is impossible to attend to all issues raised by the expert leaders at once, it is worth sieving through them and deciding on the critical ones, those which have the potential to direct the structure, operation, and mandate of the body to ensure that it is fit-for-purpose at inception stage. The following section gives a detailed overview of how the researcher, in consultation with the reference group from the School of Public Leadership and Inclusive Society Institute, understands NACAC as conceived by the NACS document. THEME 3: NACAC in practice This section represents an informed attempt to chart what NACAC could look like after considering the research findings (theme 2) and best practices from the case studies found on the African continent (theme 1). The establishment of the National Anti-Corruption Advisory Council is the beginning of a two-year process, leading to the creation of a permanent entity that will lead the fight against corruption in South Africa. This process concentrates on, particularly, the management of the initial transitional matters of the new permanent organisation that will later emerge. The key mandate of NACAC is strategy implementation of research and conceptual development, culminating in a draft proposal for Cabinet that will ultimately inform the establishment of the overarching body. The foundation upon which the new body is built should be informed by a sound legal basis governing the institution, which should elaborate especially on financial, personnel, procedural, and operational issues related to the agency. Preparation of internal organisational structures and regulations including the internal code of conduct; initiating the process of recruitment of staff; working out internal administrative, operational, and reporting procedures, and establishing manageable work plans and benchmarks to assess progress should form part of the initial stage. NACAC Composition and Staff Selection Criteria During the first transitional period, between 7 and 10 senior representatives from government, the private sector, and civil society appointed by the President will comprise the body, and they will be supported by a full-time dedicated Secretariat. Government Minister/s who have participated in the Clusters of Directors General and Clusters of Ministers established by the Presidency in line with Section 85 of the Constitution of the Republic are considered to be the appropriate government representatives to be prioritised to represent government. This is because they have sufficient experience and knowledge of issues associated with coordination and integration of government priorities and programmes, the study and processing of Cabinet memoranda, draft bills, policies, documents, and strategic decisions for consideration and approval by Cabinet. The incumbents of the Governance, State Capacity, and Institutional Development Cluster (GSCID); Justice, Crime Prevention and Security Cluster (JCPS); or the International Cooperation, Trade and Security Cluster (ICTS) could be candidates to represent the government. The National Anti-Corruption Forum (NACF) – a coalition formed by the government, business, and civil society sectors – could potentially serve as a ready-forum from which to choose non-governmental representatives, as it already serves as a forum to discuss corruption challenges. It could be considered along with NEDLAC. Other civil society and organised interest bodies such as Business Unity South Africa offer third-level options. In terms of civil society organisations, the existence of a wide variety and diversified anti-corruption entities makes the choice challenging on a number of levels, but inevitably a critical, open, and democratically undertaken debate can lead to an appropriate decision. If the government needs to tap into existing structures, the National Development Commission, and National Governing Council on APRM (African Peer Review Mechanism), for example, offers access to a wide range of civil society bodies at an apex level. In terms of the Secretariat, the key elements for selection should prioritise the knowledge and understanding that exists within all relationships NACAC has with other anti-corruption bodies. The Secretariat members employed after a successful transparent and participatory interview will be well educated, skilful, and capable employees executing daily administrative tasks for the organisation. The existence of soft and hard skills is to be supplemented with important professional aspects such as technological knowledge, systems design, and database management, South Africa’s anti-corruption legislation, rules and regulations, and agreements with African and international bodies. The importance of NACAC means that members of the Secretariat should be attuned to the subject matter and goals of the body so as to constructively carry out the instructions of the organisation – especially as it will be the main daily conduit of communications between NACAC and government departments, anti-corruption bodies, public enterprises, etc. This would require that the Secretariat has a good understanding of the internal workings and the legal frameworks of all these organisations – as well as all the report writing, meeting organising, and other administrative abilities that would be necessary to achieve day-to-day operational goals. NACAC’s Authority, Mandate, and Responsibilities NACAC derives its key primary mandate from the fact that it is the entity that oversees the processes, structures, plans, and implementation of the National Anti-Corruption Strategy and all anti-corruption programmes as envisioned by NACS. In this process, NACAC could then become an organisation that periodically reviews the NACS; and could call for public hearings and/or submissions and recommend changes to Parliament if and when deemed necessary. That is, the body will have the power, authority, influence, and responsibility to ensure cooperation, coordination, synergy, monitoring, and evaluation of all anti-corruption projects and programmes in all societal sectors, including compliance with all international and multilateral institutions and conventions. The research, policy formulation, and advisory roles are integral to the existence of the entity. Research activities on anti-corruption led to the creation and development of new knowledge that is instrumental to the processes of analysing and dissecting operational, regulatory, and legislative inadequacies and devising proposals of relevant interventions. Such initiatives and outcomes give rise to the formulation of new initiatives, measures, and policies aimed at preventing corruption. While in the process of researching the necessity and/or suitability of a single anti-corruption agency, the management of stakeholder relations and partnerships – their engagement and development – ultimately generates a deeper understanding of sectoral and industry forum coordination. Within such a functional and structural reality, hosting regular anti-corruption summits amongst representatives of all anti-corruption bodies becomes inevitable, as such undertakings could prompt further development of relevant interfaces or engagement mechanisms. Therefore, one of the key responsibilities of NACAC is the continuous liaison and collaboration with other anti-corruption agencies and bodies, including but not limited to constitutional institutions such as Chapter Nine institutions and the Public Service Commission, law enforcement agencies, the NPA, the SIU, the intelligence services, specialised units in departments, and any coordinating mechanism for reactive and law-enforcement activities (currently the ACTT). Within the same operational terrain, the importance of highlighting failure or any undue, unconstitutional, political, and/or other interference in the operation of these bodies and bringing it to the attention of Parliament, cannot be overstated. In fact, calling attention to deficiencies related to capacitation, impediments, funding, and resources for anti-corruption bodies is a significant functional objective. It is necessary for NACAC to prioritise raising the alarm on any unethical or integrity-deficient conduct of the head or senior management of any anti-corruption body, as an early warning system for attempts at state capture or any action that could result in state capture. Design and function of a coordinating body Anti-corruption agencies in South Africa are poorly coordinated due to overlapping mandates, diversity, and institutional lack of clarity. NACAC can achieve effective inter-agency cooperation as a coordinating body through sufficient capacity, resources, authority, and political will. A number of well-defined measures could create effective cross-agency cooperation, which might lead to proactive information and communication, joint training initiatives, and evaluating and monitoring the planning processes and implementation of anti-corruption efforts by the existing bodies. In many countries, the effective coordination of anti-corruption work is greatly undermined by the failure to consider cooperation issues from the design stage of the anti-corruption institutional arrangements. This results in inadequate or non-existent coordination mechanisms that lack resources, capacity, and political backing. Empirical research has shown that on many occasions coordination of anti-corruption bodies is weak and inconsistent, even non-existent. Although the mandates of such bodies are defined by laws, rules, and regulations, these entities exist more on paper than in practice and therefore lack a pro-active approach, powers, and political leverage to act in a way that enables them to fulfil their mandates efficiently. Political and legal support across the board is a necessity if NACAC is to succeed in effectively implementing inter-agency cooperation (U4, 2005). Immediate and continuous planning, together with operational and political attention, is required from the onset. Coordination issues need to be debated and planned from the design stage of the anti-corruption policy making. In addition, integration in the overall anti-corruption architecture is important. A coordinating body’s success is based on a strong understanding of how and where the various mandates and responsibilities meet and interact. A new anti-corruption architecture enables the reallocation of responsibilities and roles whereby institutional hierarchies, mandates are clarified, and competencies are readjusted. This means that respective institutions are given clear lines of responsibility, as clear rules of engagement guide the collaboration and interaction of the existing bodies (Meagher, 2005). Coordination can be the solution to the primary concern in the anti-corruption fight in South Africa, as research has shown inadequate networking between different entities with different tasks. At present, South Africa has fourteen anti-corruption bodies struggling to do their work. The poor state of the economy, in part due to the continuing impact of COVID-19, and the reality of a continuous fiscal austerity calls for a prudent approach to the reform of the country’s regulatory landscape. Any reforms should be considered and decided upon based on maximum value on expenditure. A suitable point of departure could be the adoption of a well-coordinated and networked approach that brings together the heads of all the existing entities. These include the Chapter Nine institutions mandated with anti-corruption work, including the Public Service Commission, all the law enforcement agencies in all their various forms and guises, and the intelligence sector. Cross-cutting reforms – especially those associated with corruption and the anti-corruption fight – depend on valuable information and communication-sharing between the public and the implementing agencies in addition to access and dissemination of supporting anti-corruption documents and policies. The developments in information technology have opened increasing opportunities in this field and are instrumental in providing innovative tools to promote information and data-sharing across agencies. The design and implementation of a systematic and proactive strategy of information-sharing amongst all agencies will be crucial to help build and sustain trusting relationships which will ultimately bring about longer-term cooperation. This means that NACAC is designed to take the lead in crucial information exchange as a strategy to gain the confidence of all other agencies (De Sousa, 2010). Resources and Capacity Needs The existing official National Anti-Corruption Strategy 2020-2030 states that, in terms of budget and resourcing, and given the fact that the NACAC will exist for a maximum of two years, this structure can explore the use of funds from the Criminal Asset Recovery Accounts. This is a separate account within the National Revenue Fund (NRF) into which property and monies are deposited after a judicial confiscation, forfeiture, or order – a process rooted in the Prevention of Organised Crime Act, 1998 (Act No. 121 of 1998). The hypothesis behind asset forfeiture legislation is that, by forfeiting or confiscating the proceeds or profits of crime, the incentive for committing specific crimes is reduced, while the state uses the proceeds to strengthen its anti-corruption efforts. It is important that a legal opinion should be sought as to the authority of the National Treasury to redirect the distribution of these funds. It is a natural cause that, if found to be legally permissible, funding of NACAC (and its Secretariat) could produce a considerable politico-societal return by way of reduced corruption – reduced loss of public funds in public sector institutions – which in turn further justifies its funding and increases the pool of resources government needs to deliver services. Beyond resources, institutional capacities needed include: A Research and Policy Unit that is responsible for researching anti-corruption initiatives. Its key responsibility is to facilitate and conduct research and analytical studies on issues pertaining to the development of anti-corruption initiatives locally, regionally, and internationally. While researchers employed in the unit can be directly involved in staff training throughout the anti-corruption institutional terrain, contacts, meetings, and digital conferences can connect the staff with colleagues and academic researchers on the African continent to exchange ideas, research, and insights. Potential staff members of such a unit should be university graduates with at least a master’s degree in the social, law or economic sciences, preferably with knowledge and/or exposure to anti-corruption realities. The unit might be strengthened by the success of the innovative model currently being developed by the University of Pretoria together with the Presidency, which aspires to create a highly networked governance method that will link up existing researchers in a very lean organisational sense. Such thinking could influence the future development of the notion of applying higher levels of coordination and focus to the fight against corruption. Important to note is that the unit does not make recommendations. It presents its final reports to its leadership, its sister organisations, and finally to the anti-corruption bodies and the National Parliament. A Project Management Office that will operationalise the existing policies, strategies, and procedures together with the existing multilateral initiatives on governance and anti-corruption; identify the dynamics and realities for risk analysis and institutional assessments; governance and anti-corruption project design measures; supervision monitoring and evaluation, and similar operational matters. An Education Office that will operate at two levels: the institutional and the public. The institutional level will focus on training all members of NACAC as well as those in all anti-corruption agencies. This will involve an ‘induction training programme’ providing basic training to new employees, all of whom spend the first few months of their service in the Research and Policy Unit in order to improve their knowledge on corruption and anti-corruption realities, investigations, successes, processes, structures, and challenges, before being considered for the final posting. The new recruits’ training could last at least a year, while the trainees work and learn at the Research and Policy Unit. During the process the courses include corruption prevention, communication skills, rules of evidence, law, computer forensics, financial investigation skills, and cognitive interview techniques, amongst others. Throughout the period of employment, the training continues at higher levels. The public pillar is for awareness campaigns and educational programmes in order to mobilise society in the fight against corruption. A Whistle-blower Protection Unit that is responsible for considering the circumstances under which suspicions of wrongdoing can be reported inside and outside the organisation; has the knowledge and means to provide legal and physical protection to the whistle-blowers; ensures that the existing reporting channels, such as information hotlines, also exist for individuals working in the private sector, who are involved in the provision of local and regional public services; encourages positive attitudes towards whistle-blowing amongst citizens by promoting whistle-blowing policies and publicising post-reporting follow-ups, to ensure that individuals considering reporting suspected cases of wrongdoing have access to advice that is confidential and free of charge; forms part of external bodies such as NGOs and national associations; and introduces periodic assessments of the effectiveness of rules and regulations on the protection of whistle-blowers. The treatment of whistle-blowers in South Africa has led to proposals for a reform of the Protected Disclosure Act (PDA) after representative organisations of those who speak up voiced their frustrations. According to the organisations, the PDA does not protect whistle-blowers since whistle-blowing still leads to job losses. The value of whistle-blowing for the public good has increased worldwide over the last 40 years. In many countries, both state and federal statutes have been put in place to protect whistle-blowers from employers and institutions. This is a direct result of the fear public employees face when exposing corruption. New strict laws, rules, and regulations have been introduced worldwide to protect whistle-blowers, and so doing help the fight against corruption by encouraging more people to expose misconduct or illegal and dishonest activity (Lee & Kleiner, 2011:342). A recommended amendment to the PDA is to afford the complete protection of all government employees and especially the whistle-blowers. The amendment should prohibit the government from taking any personnel action against an employee after they have disclosed information that they believe exposes gross mismanagement, corruption, waste of funds, or the abuse of authority. Conclusion To gain protection from the amendment, a public employee needs to show that a protected disclosure was made, the nature of which the accused official was aware of, and that a connection exists between the retaliation from the official and the actions of the employee which induced the retaliation (US Department of Labour, N.d.). Click here to continue to Part 2 of this report

Click here to go back to Part 1 of this report Expert’s responses analysis There were mostly similar as well as a number of diversified opinions in the responses to questions structured in order to receive, assess, and absorb expert opinions of interviewees belonging to all three categories of the first leadership group of the new body in its ‘first stage’ of two years. The questions dealt with key issues of structures, processes, realities, and expectations associated with the body. There were mostly agreements in respect of key issues but also queries and additions based primarily on the deep knowledge of the interviewees as well as their viewpoints and beliefs guided by it. In the preliminary introduction of the topic and the explanation of the structure of the open-ended questions to be answered the researcher had the opportunity to ask the prospective interviewees’ opinions on the conditions and realities of the anti-corruption agencies and the existing law enforcements in the country at present. The general response was rooted on the belief that such agencies and anti-corruption bodies were an integral part of a corruption-ridden public system, a small part of which still ‘remember with nostalgia the Scorpions,’ possibly the only such system in the world that has faced the reality that every single Commissioner of police has been removed from his/her position facing charges for corruption. Such an undisputed fact points to the vital significance of senior appointments of well trained, highly educated, and ethical leadership. Four of the interviewees (No 2, 4, 5 and 8) pinpointed to what they described as ‘complete lack of efforts to corrupt prevention’ in terms of what was described lack of clear cut scientific examination of anti-corruption personnel integrity tests through instruments such as lie-detectors and newly established testing tools, especially in key corruption-ridden or corruption- creating public sector functions such as supply chain management and procurement, risk management and internal audits amongst others. Interestingly, similar positions have been expressed by a highly experienced and knowledgeable former head of the NPA (National Prosecuting Authority) who has publicly mentioned that ‘the focus in the country’s law enforcement entities had been on violent crimes and sexual offences’ due to the public outrage. ’Such a position, it was stated, points to the significance of the support of an anti-corruption agency that only focuses on anti-corruption, not rape or murder. The proposed anti-corruption agency on his part should have the “vital power” to allow answers to self-incriminating questions “like the Scorpions.” Such important positions on the part of the retired anti-corruption leader were demystified as follows: “If there is no cost to them changing their version when evidence comes up, it drags on and on. The Investigating Directorate does this, but its 30 or 40 people will not make a difference. Self-incriminating questions cannot be used against the confessor in his own trial but can be used against others.” He also favoured a “proper whistle-blower mechanism” that fell under the control of retired Constitutional Court judges, as he believed that such a step would make whistle-blowers feel safe (Hofmeyr, 2021). The gist of responses to the questions set appears below: Question 1: The National Anti-Corruption Strategy has indicated that the number of persons in NACAC should be senior representatives from government, civil society and business, consisting of between seven (7) and ten (10) members. Do you consider the composition of the body appropriate and according to NACAC’s principles, duties and responsibilities? If NOT please state your reasons. There was one interviewee who was from the beginning against the very existence of the proposed new body (Interviewee No 3). The interviewee begun the describing the National Anti-Corruption Strategy 2020-2030 as a ‘detailed document rooted on good sense’ and an agreement with the ANC’s NEC urgent resolution in 2020 that ‘instructed’ the Cabinet to establish a single, permanent, and independent agency with the capacity to deal with corruption decisively. This ‘instruction’ was ‘echoed’ in the President’s announcement on February the 21st of the National Anti-Corruption Advisory Council. The interviewee’s belief that ‘the President has been ‘poorly advised’ by politicians who have no understanding or knowledge of the crucial significance in law of the thrust of the findings in the Glenister litigation case (Glenister 2 and 3) that are binding. It was stated that the findings of the case that was centred on the inadequacy of the Hawks were based on the fact that a statutory body as described in the Presidential State of the Nation Address cannot enjoy the legally required security of tenure of office. This means that the body is illegal and will face the fate of the Scorpions, an organisation that disbanded after the ex-President Jacob Zuma replaced then President Thabo Mbeki. The interviewee’s position was clearly based on the belief that the new body described by the President in SONA will be immediately very vulnerable and will face the same ending as the Scorpions. This is, because it is not legally a Chapter 9 institution, an entity that is structurally and operationally independent, one that cannot be legally terminated by a simple majority. On the other hand, it was believed that a ‘real new Chapter 9 institution’ that has the mandate to investigate, prosecutor and answer to Parliament is needed. There was a strong belief that the new independent anti-corruption body described the President was ‘unconstitutional’ and such a position was in fact a negation of the ANC’s National Executive Committee’s resolution in August 2020 as it was mostly in accordance with the Glenister 2 and 3 binding findings. It was felt that the fact that the advisory body’s initial composition has not been announced by the President yet points to the reality of deep misunderstanding of the complexities of laws, corruption realities, as well as the Zondo Commission outcomes. Following SONA there was the expectation that the appointment of the members of the new body would be the first priority. The delay of such an appointment was described by the interviewee as a lack of planning and implementation of key decisions announced publicly which aim at ‘filling the gaps in the fight against corruption’ in South Africa. Such gaps can be only filled by a lawful anti-corruption advisory body that will enable a new successful path for the government. This could only be a body rooted on the clear findings of the Glenister 2 and 3 cases. The introduction of such a body would be the beginning of a road leading the country far away from corruption and ‘state capture’ through carefully executed efficient steps against the corrupt elements throughout the public service and beyond. There was a strong belief that the Democratic Alliance, through an alliance with non- governmental organisations was prepared to present private members’ bills supporting a new anti-corruption investigative body, while non-governmental organisations had already prepared in legally based plans for a ‘one-stop shop’ Chapter Nine organisation that when established would be able and capable to investigate and prosecute all forms of serious corruption at all societal levels. Finally, it was stated that for the new body to exist and operate ‘a new law needs to be passed’’. This meant that given the ‘procrastination of the President’ to establish the new body a court case was prepared to have such a ‘plan’ nullified (Interviewee 3). There was a general acceptance on the number of members elected by the President as the first leading group of the body (between seven and ten) and despite the almost general acceptance of the suggested sectoral representation there was a somewhat diversified opinion. Interviewee No 5 believed that a ‘community member’ should be included in the group and such a position was justified by the example of NEDLAC (the National Economic Development and Labour Council), where there is a community and a worker/labour union contingent. While the equal representation of the groups was generally agreed upon by the interviewees there was a belief that the diversification of the groups, especially those from the ranks of labour and civil society was important (Interviewees No 2, 4, 5 and 6, 7, and 8). A critical issue raised by Interviewee No 1 initially and agreed upon by the majority of the rest was that the most essential element instrumental in the success of the body is that the chosen members have a developed understanding of the subject matter they will be dealing with. It was felt that knowledge that includes the internal workings and systems of public sector organisation, how corruption manifests itself within such organisations, as well as what is to be learnt from the international literature on corruption in the public sectors and the established best practices towards combating is essential. It was strongly felt that without such understanding and experience the NACAC would be ineffective - as previous anti-corruption initiatives have shown conclusively. A number of interviewees indicated that given the existing realities evident within the political and organisational structures of the ruling party, the President’s selection of the body’s members from government should be based on clear criteria of credibility, honesty, existing historical background and serious knowledge of the realities, laws, rules, and regulations regarding corruption (Interviewees No 1,2, 4, 6 ,7). An interviewee emphasised the importance of the proposed number of the initial leadership core, especially in terms of the importance of labour representation. It was felt that more people in the leadership of NACAC ‘would spoil the broth as the saying goes’ (Interviewee No 8). Question 2: It is stated in the Anti-Corruption Strategy Document that ‘This body will be responsible for the managing of the initial transitional matters of strategy implementation, including research, conceptual development and drafting of a proposal to Cabinet for the establishment of the overarching body’. Is it viable that all these matters of strategy implementation can be undertaken by the NACAC senior representatives? If not, what do you feel are the alternatives and the reasons for your response? Given the knowledge of all interviewees, especially in relation to the SOUTH AFRICAN ANTI-CORRUPTION STRATEGY 2020-2030, it was not a surprise that the possibility that an appropriately staffed NACAC would be able to manage the necessary and successful implementation of the responsibilities stated in the Anti-Corruption Strategy Document was very viable at all levels. Despite the general acceptance that the proposed planned and implemented new body could be capable in managing the necessary and successful implementation of the responsibilities as outlined in the Anti-Corruption Strategy Document it was strongly felt that there were a number of ‘particularly important’ prerequisites for such a success to become a reality: The NACAC is given the necessary authority to issue relevant directives and oversee their implementation. Without such a step forward any hope for success is lost (Interviewees No 1, 5, and 7, 8). That these instructions are regarded as mandatory (Interviewees No 1, 3, 4, 6 and 7). That all Cabinet Ministers actively support the NACAC and its mandate (Interviewees No 1, 2, 4, 6 and 7). That the Accounting Officers and Accounting Authorities (as per PFMA/MFMA) actively support and oversee NACAC directives – and must account for their effective implementation and ongoing application (Interviewees No 1, 4 and 7). That the NACAC directives are incorporated within the internal control regime of each and every public sector organisation – including the PFMA/MFMA stipulated internal audit function, the risk management function and the laid down procurement practices (Interviewees No 1, 4, 5, and 7). That every public official involved in the requirement as the above necessities outlined above must undergo serious essential education covering the nature of public sector corruption and the NACAC prescribed anti-corruption practices (Interviewees No 1, 4, and 7). That the various members could introduce various strengths to the table and would not all, for example, have to be researchers although research is an inevitable element of the body. This means that NACAC senior representatives could need to have subcommittees for some of the work as not all elements or decisions are research orientated and might be strong on a particular strategy element but not all of it. It was felt that there could not be expectations for each member to be conversant in all aspects of the corruption realities, meaning that such undertakings would be outsourced to specialised, ad hoc committees (Interviewee No 8). A number of such statements were seen as important in the context of future challenges facing the key operations of the new body and its members as two interviewees (No 4 and 6) pinpointed the undoubted fact that the forthcoming report emanating from the Zondo Commission of Inquiry into State Capture would open new avenues of challenges at all levels leading to new relations and actions undertaken by anti-corruption agencies. Such new decisions and outcomes were also described as opening new paths in the relations between the new body with organisations such as the South African Revenue Services (SARS) and the Special Investigation Unit (SIU) that have been decisive in their road to new, forward-looking, and positive directions (Interviewees No 2, 5 and 8). There could be the possibilities of difficulties in future relations leading to the necessity of fresh paths of collaboration between the new body’s leadership with group/s of politicians as well the leaderships of central, provincial and district municipal leaderships associated with corruption still under investigation as well as state-owned companies such as the Airports Company South Africa, Transnet, Denel, and ESCOM. These realities demand unity of purpose, common understanding of existing realities and openness as vital ingredients of success (Interviewees No 3 and 6). Question 3: It is stated that ‘The NACAC must be supported by a full-time dedicated secretariat to facilitate any practical arrangements, to consolidate and record its work and reports, and to ensure that it can deliver on its mandate’. How important is the composition of such a body and what skills, knowledge, and experience and sector background (public or private) the potential secretariat members should possess. Provide reasons. It was widely acknowledged by the interviewees that the challenges associated with NACAC’s planning and operations as described in the Anti-Corruption Strategy document will be extremely difficult because of the vast expansion and complex composition and dimensions of a public sector that is characterised by the existence, structures and functions of separate institutions and entities. Bearing in mind the reality that NACAC has the responsibility to deal with each one of them equally and comprehensively, it is inevitable that the establishment of a supportive secretariat is crucial to the fulfilment of its mandate (Interviewees No 1, 5, and 8). While the NACAC leadership should be the “brains trust” of the body, members of the secretariat should be attuned to the subject matter and goals of the NACAC to constructively carry out the instructions of the body – especially as it will be the main daily conduit of communications between the NACAC, anti-corruption bodies, Government Departments, Public Enterprises etc. This would require the secretariat members to possess a good understanding of the internal workings and the legal frameworks of all these organisations – as well as all the report writing, meeting organising and other administrative abilities that would be necessary for the comprehensive and successful operational duties and responsibilities. While it has been widely accepted that strong organisational skills and meticulous treatment of existing technical and other existing challenges and problems within the entity, it was felt that that research capacity and skills experience would be beneficial at this this level especially when dealing with confidential information (Interviewees No 2,4,6 and 7). These realities mean that from the beginning the NACAC leadership should recruit highly qualified staff, with skills that are the foundation of future success. It needs to be noted that the commitment to effectiveness of the leadership functions in the process of fighting corruption should be integrated into the duties and responsibilities of the secretariat that could be diversified in terms of operations as follows: The key duties and responsibilities of a secretariat involve a good number of individuals executing daily administrative tasks for an organization, mainly but not exclusively the handling human resources and personnel issues; the organisational finances; practical arrangements for the meetings; planning, implementing, and maintaining a forward plan of agenda items and liaising with the Chair to prepare agendas, and preparing, checking, and issuing accurate minutes. Such a group of professionals needs to be practitioners with a wide variety of qualities associated with the individual’s positions, duties and responsibilities. The combination of hard and soft skills in terms of qualities include deep knowledge of the incumbents’ duties, responsibilities as well as the subject/s associated with the operational roles, such as high technological skills, and deep understanding of the issues related to the communication channels of all anti-corruption agencies, authorities, and state institutions at all levels (Interviewees No 1, 3, 6 and 8). It was felt that the members of the Secretariat could become important in the effort to upgrade existing realities both within government departments and entities as well as upgrading the knowledge of anti-corruption agencies staff in issues as important as an advanced understanding of the Treasury rules and regulations in regard of public procurement, through a careful dissection of first operational stages of the processes involved in supply chain management. Such a process could be based on setting standards and regulations in regard to the procurement and disposal activities of Procuring and Disposing Entities (PDEs) such as Government ministries, District Municipalities, Local Municipalities, and all other public bodies engaged in the procurement and disposal activities. Such processes and mechanisms comprise of compliance inspections of PDEs in terms of establishing whether the legally based structures of all relevant contract and procurement committees and their composition are functional, and that the disposal units are in place and functional and according to the rules, laws and regulations. Such a process compliance inspection could lead to the identification of structural and/or functional weaknesses, challenges and problems that could ultimately lead to further investigation. Such initiatives will make a real positive difference in performance at many organizational levels (Interviewee No 5). In order to dissect the real significance of the secretariat’s understanding of the realities and dynamics facing anti-corruption agencies, an interviewee set up the example of the relationships of ministers associated with such institutions. This was done through the utilisation of the position and attitudes of the Department of Justice leadership, the National Director of Public Prosecutions (NDPP) and the financial independence of the NPA. It was stated that existing relations between these state institutions in regard to NPA’s financial position are in need to be solved, as the existing situation does not allow the entity to pursue meaningful prosecutions. This means that the secretariat employees need to understand the administrative and financial condition of anti-corruption agencies as well all state institutions in general in order to be able to fulfil their duties and responsibilities. It was felt strongly that as the communication with all anti-corruption bodies is considered of paramount importance, both the leadership and the secretariat should plan, design, and implement strategies and tactics as the first key priority (Interviewee No 3). Question 4: It is stated that in terms of accountability and reporting that is recommended NACAC should report to the President and its reports tabled in Parliament. According to your own understanding, experience and knowledge does such a reality mean that possible debates and majority decisions can become instrumental in changing or/and modifying existing decisions of NACAC? Can you provide the reasons and your own ideas on such a possibility? The difficulty of this question that can be justified as legally and politically challenging attracted only two responses from the interviewees. The fact that both interviewees who tackled the issue have experiences both in government institutions, academia and research at a number of levels, indicate both the significance and dilemmas associated with the challenges associated with such decisions. The first position based on the interviewee’s experience both within government institutions, legislative roles, academic research and teaching and political oversight is rooted on the belief that it would be important for NACAC to be given scope within its prescribed mandate to make changes to its decisions should this be seen as necessary to further improve the effectiveness of its anti-corruption efforts. It was felt strongly that such changes should always be made within existing administrative laws and not in conflict with executive directives. It was felt strongly that it would be advisable that the stance of the Cabinet, Parliament, the Accounting Officers, the Accountant General and the Auditor General should be invited and taken into account prior to any significant changes being proposed. Depending on the legal mandate of the NACAC and the degree of independence it is given, it could be subjected to Executive and Parliamentary prescribed changes. However, it was strongly felt that such impositions are not likely (Interviewee No 1). On the other hand, Interviewee No 8 felt that given the importance of NACAC as evident in both the Presidential announcement as well as the content of the Anti-Corruption Strategy 2020-2030, it was felt that new and innovative rules and/or regulations should be structured from the relevant bodies so that the possibility of confusion, misunderstandings that could lead to political and/or legalistic dilemmas could be avoided. The interviewee felt that the final decision would depend on the level of the debates and their constructive nature. Decisions, it was said, should be commonly agreed upon rooted on the common belief that the best interests of the country are of paramount importance (Interviewee No 8). Question 5: It is stated that ‘a transitional interactive strategic relationship will have to be maintained with the Anti-Corruption Task Team (ACTT) and all law enforcement agencies. Similarly, the work of the NACACS steering committee and NACS reference group should be incorporated into the interim advisory body’. Which section of the Advisory Council do you feel will maintain such relationships, the 7 to 10 of senior representatives from government, civil society and business or by the full-time dedicated secretariat to facilitate any practical arrangements, to consolidate and record its work and reports, and to ensure that it can deliver on its mandate. Provide the reasons for your answer. The responses can be characterised as similar in most cases, but with a small number of diversions that need to be explored for comments. The general agreement was related to the common belief that any relationship of NAPAC with anti-corruption bodies and other state institutions should be well defined. It is believed that in such relationships the significance of the ‘detailed realities’ is of paramount importance, a fact that will lead to the avoidance of repetitions of past experiences. There was an agreement amongst most interviewees that it was the responsibility of the 7 to 10-member Advisory Council body to communicate with other bodies its policy and action, which will also be presented to the President and Parliament. The member of the Secretariat facilitates such communications at the administrative level. There were also a small number of different positions on the issue. It was mentioned, however, that experiences of conflicting responsibilities and authorities between various bodies have been instrumental in undermining the effectiveness of the overall anti-corruption intentions of the Government at many levels. This means that the best way forward depends clearly on formalised areas of responsibility and authority which all work within a single coherent anti-corruption/strategy and action plan. It was felt that such a need does not exist at present (Interviewees No 1, 4, and 6). The role of the Secretariat and its knowledgeable staff was said to be a key in creating an environment leading to success. Hence the body needs to be enabled to play a key role in providing the functions and processes of an ‘educational enforcement mechanism’ that could prove instrumental in the fight against corruption in terms of dissecting procurement audits within both government entities as well as the anti-corruption agencies. This is because audit reports throughout the years have been very important sources in analysing the functionalities and dysfunctionalities of procurement and risk management structures and functions as well the relationships between politicians, administrators, and business operators. This means that in the final analysis the comprehensive examination of specified disposal or procurement cases that have given wide negative publicity to the people, a fact leading to public controversy, lack of trust, suspicion of corruption or malpractice leads to well planned, investigation of the relevant anti-corruption agencies. Such an understanding and analysis within this context leads to a belief that at a time when suspicion of a corrupt act in public supply chain and procurement areas are reported to the appropriate anti-corruption authorities, the rule of law demands criminal investigation and prosecution with integrity. In such cases the investigative powers leading to prosecution are in need of capability and excellence on the part of the state employees responsible to deal with such issues and challenges (Interviewee No 5). Such a position by the one interviewee was supported by a business person whose opinion was based on the fact that the realities of corruption and anti-corruption have not slowed down, especially during the period of the Covid-19 pandemic and the continuous Personal Protective Equipment (PPE) corruption had devastating effects on the lives of millions of the poorest of the poor throughout South Africans. This reality was perpetrated for months despite the fact that the Special Investigating Unit was seriously activated, and a large number of such cases were investigated, and culprits were discovered and punished. Such anti-corruption initiatives were also active through the Fusion Centre (Interviewee No 6). On the other hand, there was a belief that the ACT has not proven much success in matters relating to their core activities, while the same applies to the division and duplication among the law enforcement agencies. This was said, to leads to the conclusion that in the end, there is the need for a process leading to substantial transformation within the parameters of the Criminal Justice Cluster. Once such an effort succeeds there is an open opportunity for all stakeholders and role players to begin a constructive and useful debate in respect of all important matters in the fight against corruption at all levels. In the end, it was believed, the responsibility lies with the leadership of the NACAC Advisory Council while the Secretariat will mostly provide professional and support services. The NACS Reference group at least represents all sectors involved in the fight against corruption (Interviewee No 7). Interviewee No 8 believed that the Secretariat in collaboration and direct communication with the main body would provide the ‘guidance of how issues would be resolved after following the administrative processes’ that include direct communications with all government clusters, the DPSA and the National Treasury. The final decision, it was believed, rested with the President and the Department of Justice. Question 6: It is proposed in the National Strategy document that their term of office should be two years’ maximum or until the overarching body is established and operational. Do you feel that the term is well thought given the existing circumstances? Please justify the answer. There were two basic positions regarding this question with 3 interviewees stating that given the existing circumstances it was extremely difficult for them to comment on the issue. Three interviewees (No 1, No 5 and No 6) believed that those two years should be an adequate period for the overarching body to establish the necessary functionality and to go through the learning curve in order for it to establish an adequate modus operandi for the permanent body (i.e., phase 2). For the interim body to extend beyond two years would lead to the loss of necessary urgency and impetus of the NACAC initiative. Two interviewees, however, who based their opinion on what they called ‘a clear understanding of the Anti-Corruption Strategy 2020-2030’ (Interviewees No 2 and No 4), believed that the realities facing South Africa, Africa and the world during the Covid 19 pandemic have led to devastating human, social and health challenges. Such realities, it was believed, have led them to the conclusion that the present and future decisive battles against corruption can only be led and guided by groups of political leaders, politicians, administrators and future leaders and employees of NACAC who themselves are honest, committed, transparent, independent-minded, well - educated and trained specialists in a number of scientific disciplines associated with corruption in all its sides and angles. Their belief was even if the leadership and the Secretariat of the new body were widely accepted because of their own credentials, history and background, the dynamics, realities, challenges, complications, and existing circumstances are so diverse and multi- dimensional that this period is not enough for the completion of the target. It was felt that the term is most likely too short given the fact of all the existence of the technicalities involved and especially the realities of the existing bureaucratic system in which this body will function. It can also be seen with Councillors in local government-they barely have their internal aspects sorted, started with work (especially when taking over from another political party) and then their time has expired (Interviewee No 7). Interviewee No 8 believed that the success or failure of such a plan could depend on the reality of setting up the appropriate aims and objectives as well a ‘business plan’ consisting of the realities of the mandate, the roles, structures and membership of the body, the existing and future resources, the priorities, the performance measures and annual targets,the functionalities of the systems, audit realities, risk assessment and mitigation, policy and priorities agendas. Question 7: It is stated that in terms of budget and resourcing and given the fact that the NACAC will exist for a maximum of two years, this structure can explore the use of funds from the Criminal Asset Recovery Accounts. Do you think that such a possibility exists? Provide the reasons for your answer. A proposed alternative is welcome. It was stated that this proposed source of funding for the NACAC is certainly worth exploring.It was felt that a legal opinion should be sought as to the authority of National Treasury to redirect the distribution of these funds.Failing this, it should be possible to convince the Minister of Finance that funding of the NACAC (and its Secretariat) should produce a considerable return by way of reduced corruption i.e., reduced loss of public funds in Public Sector institutions – which in turn justifies its funding (Interviewee No 1). It was felt that such a decision that could lead to a reality in the end of the process will literally depend on all of the costs that the Council will incur.While the allocation of a budget during the period of the operations could be considered a ‘done deal’, additional funds could come from the Criminal Asset Recovery Accounts. However, it was believed, one should keep in mind what the Criminal Asset Recovery Accounts are actually supposed to do with for example the recovered funds. If the Advisory Council should find their own financial means it will not work (Interviewee 7). Question 8: What do you consider the best ways and channels used by the various anti-corruption agencies to coordinate and interact? This was basically a ‘general question’ set with the hope that the knowledge of the interviewees even from a variety of different angles would or could provide new knowledge or original ideas and alternatives suited to the new entity. The majority of interviewees (Interviewees No 1, 2, 4, 5,6 and 8) mentioned that this was a ‘very difficult question’ for a number of reasons, the most important been the multiplicity of anti-corruption laws, rules, regulations and anti-corruption bodies as well as what was described as the difficulty of South African people, including members of Parliament and senior public servants at all government levels to really know and understand of specific duties and responsibilities of each of these bodies. The name of the Scorpions that do not really exist anymore cropped up a number of times as an almost ‘generic’ belief emerged that ‘perhaps a new body can be the only carefully selected conclusion.’ The new body NACAC was mentioned by four of the respondents as a possibility, although it was stated that knowing the problems and challenges facing the political realities associated with such decisions, a final answer was difficult (No 4, 5,6 and 7). Interestingly a similar position to a point, albeit with an addition, was provided by one of the most distinguished international corruption and anti-corruption researcher Professor Drago Kos, who is the Chairperson of the OECD Working Group on Bribery in International Business Transactions, as well as the co-chair of Mena – the OECD Business Integrity Network, and a member of International Anti-Corruption Advisory Board (IACAB), among others. He questioned whether South Africa has an anti-corruption fatigue because of the fact that the country has 14 anti-corruption agencies. He pointed out that although political will and the right personnel are key to success, any new proposed entity would also need clearly defined powers and resources. Because of these realities, it was stated, ‘South Africa does not need an agency number 15’ (Kos 2021). An almost similar position was proposed by Interviewee No. 7 as follows: “I have always thought that, considering the least corrupt countries in the world, that the South African system has too many pieces of legislation and various bodies. My first suggestion would be to streamline these and then, basically on a similar basis to the intergovernmental relations framework, coordinate, and work together. It would be best to have ONE central reporting point (where there would not be any undue influence) and where information can be compared, verified, and acted on.” One interviewee with attention to detail indicated that a ‘new, fairly radical approach’ might be needed based on the successes of both international, but also African governments. His point was based on all countries’ choice, including South Africa, what is more important in the fight against corruption, punishment or prevention? He provided the examples of South Africa and Botswana. The point was that the South African people and government have been facing the fight against corruption been only successful when the corrupt are arrested and punished in accordance with the corrupt acts, while the prevention initiatives were considered weak or non- existent. The examples of the Hawks, the National Prosecutor and the SIU were mentioned, and the question arose how their successes, their functions and the reasons of successes or failures were communicated to the people who could learn. The conclusion emanating from such realities pointed to the possibility or probability of a new trend that has been now considered as ‘the foundation’ of anti-corruption success, diagnosis, thorough investigation, widespread education, effectiveness. New operational dynamics planned, structured and implemented through a deep study of the best practices across the world (Interviewee No 8). Conclusions and recommendations The key question marks in the minds of anti-corruption leaders, activists, researchers, throughout the public and the private sectors, civil society and the country’s people at large has been revolving since the evening of the 21st of February 2021 around the proposed development of a new anti-corruption entity, the National Anti-Corruption Advisory Council. This is due to the fact that South Africa has 14 fully operational anti-corruption agencies and bodies it was inevitable that serious research was needed in order to assess whether the existing realities were in need of a ‘a gap analysis’ able to assess the necessity of an additional entity /entity, its nature, structures, functions and future responsibilities, planning and implementation imperatives and above it its benefit. This meant that the benefits and/or challenges of a new agency and its leading/guiding/ organising /supervising role, in short its ‘operational mode’ should be clearly identified and detailed as most cases at such new entities tend to be multi-layered and complex. Key questions are developing while the processes, realities, future structures, leaderships, relationships, co-operations, planning for efficiency and effectiveness and possible challenges and problems are unfolding. Debates and decisions have continued or will continue on the issue even during a period when even the real need for such an initiative is urgent, mainly because of the fact that there is a multiplicity of anti-corruption bodies and a widely acknowledged solid anti-corruption legislation, rules, and regulations. Those who have questioned and debated the need of a new institution have used legalistic, legal, financial, functional/structural, personal/professional knowledge and experience and comparisons associated with the effectiveness, successes, or failures of the country’s existing anti-corruption institutions. Such debates can only be based on comparisons, empirical evidence, analysis and dissection of existing realities, relationships, planning, leadership, functions, structures, success, and failures as well as their foundations. It is such a thoughtful analysis that can lead the government and society at large to trust or not such entities and identify the existing gaps that can move the anti-corruption struggles to the future. The research upon which the present document is based utilised primary and secondary sources in South Africa and internationally and included the analysis of the fundamental structures and functions of three successful anti-corruption bodies in African states that incorporate education at all societal levels as integral components of societies based on ethics. The key findings pinpointed the fact that the two basic foundations of a successful anti-corruption agency or council, are strong political will and well trained, highly educated and ethical personnel. It was agreed that there could be no successful fight against corruption without the strong support of society, communities and the government and all its institutions. This means that the combination of a political will and the appropriate and careful selection of new people in the proposed agency who undergo regular integrity testing and lifestyle audits can lead to success. Within this context a careful analysis of the structures, functions, processes, relationships, mechanisms, leadership, political will, independence, priorities, challenges, and problems at all operational and institutional levels can be described as an important lesson for the future. The ethical culture through education to public service personnel at all levels as well as wider society is included in this effort. Such a team with the characteristics as described above, comprising of a variety of committed members can be instrumental in creating the foundations of a common group understanding, cohesion, commitment and dedication based on ethics that can play an important role not only exposing, but also through planning, designing, preparing, and opening the appropriate path forward. Such a path is the way forward in the process of defeating the culture, planning and actions related to corruption in the public and private sectors and society at large. This is a process leading to the destruction of grand and petty corruption, tackled by a team that can become the key ingredient leading to the transformation, reformation, and re-shaping of an already advanced and multiple administration of justice against corruption, a multi-faced crime against South Africa and its people. Corruption is not only a national threat, but also the root of a daily refutation of the country’s Constitutional aspirations and the vision of the National Development Plan. We need to have a second legal opinion included to either validate this or venture an alternative position. Should there be an alternative position, then we make the point thatthe issue be workshopped by the legal fraternity before finalising legislation because it needs to stay out of the courts. A highly interesting position regarding the functions of the new council in terms of the ‘non-trial resolutions’ (NTRs) has appeared recently, a reality that has been described by international research of anti-corruption as a ‘possibility of been critical to the country’s proposed anti-corruption council’, despite the indisputable fact that there would be resistance, mainly because of the harsh reality that South Africa has been stripped of an estimated trillion rand as a result of graft. Within this context an expert researcher on the issue Dr Abiola Makinwa, MICA, a Principal Lecturer in Commercial Law/Anti-Corruption Law, and Policy at the Law Department in The Hague University of Applied Sciences, has indicated that ‘traditional criminal prosecutions are time-consuming and susceptible to lack of political will and the influence of elites. The sentence was completed with the belief that ‘even when in a traditional court prosecution is successful, it may fail to take the money out of the crime, so the poverty trap continues.’ Inevitably such statements could sound and/or considered as both ‘generic’ and ‘ideological’ in nature but they are founded on scientific analysis and dissection of a multiplicity of legal and court reports internationally and in Africa. It has been shown empirically that throughout the world in the case of global powerful companies, out-of-court settlements would often take place. As official reports have shown leniency has been granted ‘upon the extent to which the company self-reports on acts of corruption and foreign bribery that an anti-corruption agency would not have discovered on its own. It was thought that as ‘non-trial resolutions’ could be thought to be and escribed as the ‘new kids on the block’, and were being used successfully globally, an analysis of their processes could be useful for the new entity to study (Makinwa, A., 2021a; Makinwa, A., 2021b). The success of NACAC can only become a reality under seriously and meticulously planned and implemented strategic, tactical and action steps that enable the creation of transparency and accountability. These attitudes and behaviour can guarantee the prevention of corruption risks in the public and the private sectors beginning with the careful and well-researched improvements in public finance, including serious attendance to supply chain and procurement realities at all government levels, political and private sector corruption, attention to corruption risks in all parastatals, as well as the police, intelligence, defences, and the health sectors. One of the key steps leading to the success of NACAC is the creation and actions of an Inter-Agency Coordinating Council (IACC) organising the inter-agency sharing of strategic intelligence with the active participation of the police and national intelligence, and all anti-corruption agencies themselves. The effective cross-agency cooperation should be based on sufficient authority and resources, capacity and political backing to perform its mandates. (Koranteng, 2020). Two Progress Reports per financial year will be instrumental in streamlining the monitoring process with the main aim to assess the appropriate planning, designing and implementation process of all 14 anti-corruption entities and the priority areas identified in the National Anti-Corruption Strategy 2020-2030 the existing Action Plans. Such a report will be the basis of identifying the achieved outcomes, the existing and future as well as existing challenges and gaps (Quah, 2015). The relationship between the Monitoring Tool and the Progress Report will include the following realities: The Monitoring Tool identifies the targets, activities, the responsible agency, specific timeframes, partner/s and budget. It should be filled twice a year by the responsible agencies, including the non-governmental organisations who could be participants. The ratings take two stages of assessments of the activities undertaken: The planning, development and implementation of the Monitoring and Evaluation Framework is the foundation upon which NACAC will be enabled will to integrate effectiveness in the overall management framework, a positive way forward to success. In the process of seeking continuous success in the fight against corruption, NACAC’s leadership and Secretariat should see as one of the key priorities from the beginning the creation, development, and continuation of a set of objectives, well-thought, comprehensive and reliable indicators enabling the assessment and measurement levels as the most important guide to the fulfilment pf the entity’s aims and objectives. Given the existing Pan-African guidelines, laws, rules, regulations, and memoranda of anti-corruption agreements the participation of all organisations and entities the direct and continuous communication with key anti-corruption agencies and organisations is compulsory including the African Development Bank, the African Union Advisory Board on Corruption, the anti-corruption bodies of Sub-Saharan and Southern African countries and the United Nations Development Programme (UNDP). Common meetings, debates, exchange of ideas, conferences, and regular communication are or could be serious contributors in the development of effectiveness indicator/s. The key institution in such processes is the African Development Bank whose leadership is considered vital in the development and continuation of an African common effectiveness agenda (OECD 2017; NCPA 2019). NACAC in collaboration with all key anti-corruption agencies are the foundations of the developmental path leading to strategies and tactics opening the paths of improved collaboration and coordination among all law enforcement agencies at country level and at regional level through multilateral cooperation. Such initiatives can be achieved through the introduction of regular meetings and follow-ups that are instrumental in ensuring one of the most important tools in understanding the dynamics of corruption and its types through the sharing of experiences and best practices against them. Contact with regional organisations and networks including civil society entities lead to expanded and useful relations and exchanges of research, ideas, realities, and knowledge and are instrumental in enriching new planning developments and ways forward to increasing innovation and effectiveness at all levels (World Economic Forum 2018; UNODC 2019). In fact, one of the interviewees who considered himself very lucky to be a participant in regional conference and an integral part of the processes leading to formal resolutions after crucial debates, indicated that as NACAC will be an integral part of the African Union Summit, the SADC (Southern African Development Community) Summit and the Conference of States Parties to the United Nations Convention against Corruption (UNCAC), the possibilities for success and effectiveness multiply. The creation of a new establishment like NACAC will inevitably create the hopes and aspirations for a new entity enabled to achieve results where others have failed and to meet all expectations raised by the country’s senior political and administrative leadership. It is within this context that it is the sheer responsibility of the leadership and Secretariat of the agency not only to achieve the effectiveness expected through its functions, but also the processes of evaluation that is the assessment of the processes and outcomes at all levels of institutional operations. The outcomes of such an exercise are rooted on the comprehensive pre-execution method of the measurements of achievements leading to excellence against goals, aims, objectives, milestones, and objectives. The processes leading to unsuccessful outcomes to be thoroughly researched in the effort to analyse and dissect the reasons which determine the causes and effects of the failure of operations, as well the policy implementation and tactics in terms of effective outcomes. Thus, eradicating corruption remains a very difficult and complicated challenge despite all sophisticated means provided by the state finance but can nevertheless be brought under control (Barrett, et.al 2020:75-76; Camperle, 2018:158-159). The existing realities associated with countries throughout the world that are not as corrupt as the vast majority such as Singapore, New Zealand, Sweden, or Finland that are on the top of the widely acknowledged Transparency International Corruption Perceptions Index (CPI), a reality pointing to the truth that despite the success against corruption at least a minimal percentage of it will exist always. To be ‘thoroughly effective’ in the fight against corruption is always considered a very important achievement because everything in life relies on existing comparisons. This is due to the fact that the lack of objectivity in comparisons has its own boundaries when it comes to functional, organisational, and institutional effectiveness in the fight against corruption (Schütte, 2017). This means that it is relatively easy to compare countries in relation to their own economic and financial development, because such analyses and dissection are directly related with issues that can be scientifically calculated such as a country’s Gross National Product, growth rate realities or per capita income. ‘Successes within the parameters and the purpose of this study related directly and indirectly with NAPAC can be considered as ‘synonymous with effectiveness,’ a reality of the present and the future destined to be a new struggle for those involved (Kuris, 2015:127). Conclusion However, it needs to be said that while effectiveness indicators are synonymous with realities and parameters that pinpoint success or/and the extent to which the expected outcomes or pre-determined goals have been reached, such success is difficult if not impossible to achieve without strong and uncompromising political will steeped in honest and ethical leadership and the well-selected, honest, ethical, and trained personnel at all operational levels. Reference List A Anti-Corruption Authorities. 2020. About the DCEC: History and Mandate. The Directorate on Corruption and Economic Crime, Botswana. [Online] Available at: https://www.acauthorities.org/country/bw [Accessed March 15, 2021]. B Baez-Camargo, C. & Tharcisse, G. 2018. Informal Governance and Corruption – Transcending the Principal Agent and Collective Action Paradigms in Rwanda, Rwanda Country Report. Basel, Switzerland: Basel Institute on Governance. 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[Online] Available at: www.psc.gov.za/documents/2011/PSC%20Report%212,www.psc.gov.za/documents/2011/PSC%20Report-%20 [Accessed November 7, 2021]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

On 19 July the Inclusive Society Institute through its international rapporteur, Dr Klaus Kotzé, met with Ms Britta Utz of the Friedrich Ebert Stiftung (FES) at their headquarters in Berlin, Germany. During a fruitful conversation, the two representatives exchanged insights and discussed the ongoing activities of their respective organisations. They agreed to maintain their existing partnership and build upon their previous exchanges. They reaffirmed their support to domestic and international democracy and to assist each other in the important task of building multilateralism shaped by solidarity and increased partnership. In concluding their discussion, the ISI invited the FES to partake in its end-of-year conference which will be based on the topic of building resilient democracy in South Africa and around the world.

On 15 July 2022 the Inclusive Society Institute’s (ISI) Daryl Swanepoel, CEO and Klaus Kotzé met with the Cultural Religious and Linguistic Rights Commission’s (CRL) represented by Prof Mosoma (Chairperson), Dr Sylvia Pheto (Deputy Chairperson), Mr Brian Makeketa (Senior Manager: Research & Policy development) and Mr Mpiyakhe Mkholo (Senior Manager: Communications). The CRL is a Chapter 9 organisation, receiving its mandate from the Constitution. It is therefore a significant and influential body that plays a key role in pursuing democratic development and Constitutional consolidation. The occasion of the meeting stemmed from a discussion between Mr. Swanepoel and Professor Mosoma to deepen the conversation between the two organisations, with a view to pursue areas for cooperation. During the meeting, the ISI and CRL shared its insights and ideas, giving ideational shape to an upcoming conference later in the year on democracy, social cohesion and public leadership. The CRL will be invited to participate. It was necessary to take stock of democracy, to ask whether democracy is working and what it would mean for democracy to work, both in South Africa and abroad. In this context, the question of democratic identity plays a central role. What does our South African vision of unity in diversity really mean and how do we achieve this? To this the role of strong, democratic leadership is key. While in the past democratic leaders were the giants of the political world, now there appears to be a leadership deficit. What does democratic leadership mean in the 21st century? Tying these ideas together is the recognition that democratic fragility is an international phenomenon. Many developed democracies are also experiencing their own crises. For this reason, multilateralism will function as the conference’s fourth component. A variety of international partner organisations will be invited to participate in the conference. Professor Mosoma led the CRL’s contribution as pertaining to the conference brief. The professor pointed out that the concept of democracy has become decontextualised, both internationally and in South Africa. It is important to ask how it functions in the community where it is introduced. Whether the people buy into the concept. Many of the reasons why democracy is waning is due to the lack of democratic dividend – the people do not experience the delivery of the democratic promise. They do not experience, nor do they express their democratic power. They therefore do not take responsibility as citizens in the developmental state. Furthermore, he asked, how can people speak of unity in diversity when crime and gated communities represent the expressions of their desperation and fear? We need to find a common understanding of what unity in diversity really means. This conference must be bold, must ask difficult questions and must come up with tangible results. To give expression of how to do things differently. To articulate the characteristics of good leadership, to pull everyone together at this time, which like 1994, represents a crossroad for which a new road map is needed. In closing the representatives agreed that the conference cannot only be a talk shop. It must be bold, critical and strategic.

The CEO of the Inclusive Society Institute, Mr Daryl Swanepoel, hosted Irish Ambassador to South Africa, HE Fionnuala Gilsenan, on 7 July 2022 at the Institute’s offices in Cape Town. The purpose of the meeting was to reach out to each other for purposes of finding common areas of interest to engage on, and to establish connectivity between the Institute and likeminded organisations in Ireland. The engagement was broad ranging in its content, with specific emphasis on work being done by the Institute on Electoral Reform, Coalition Building, Social Cohesion and the strengthening of Democracy.

The CEO of the Inclusive Society Institute, Daryl Swanepoel, attended the 246th Independence Day celebrations hosted by the Consul General of the United States of America in Cape Town, Todd Haskell, on 6 July 2022. It provided an opportunity for the Institute to solidify its relationship with the Consulate, friends, corporates and other organisations. The Institute is mandated to promote international collaboration between the progressive forces of South Africa and around the globe. It is currently reaching out to likeminded organisations in the United States. In his speech at the event, Consul General Haskell, reminded the gathering that, whilst nations can get absorbed in their own challenges, many of the challenges on not unique, but shared challenges which need to be overcome through international solidarity and cooperation. Quoting from a speech by JF Kennedy at the University of Cape Town on 6 June 1966, he said: “I come here this evening because of my deep interest and affection for a land settled by the Dutch in the mid-seventeenth century, then taken over by the British, and at last independent; a land in which the native inhabitants were at first subdued, but relations with whom remain a problem to this day; a land which defined itself on a hostile frontier; a land which has tamed rich natural resources through the energetic application of modern technology; a land which was once the importer of slaves, and now must struggle to wipe out the last traces of that former bondage. I refer, of course, to the United States of America”.

Occasional Paper 6/2022 Copyright © 2022 Inclusive Society Institute 1006 One Thibault 1 Thibault Square Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute. DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JULY 2022 by Prof Evangelos Mantzaris Hon Sociology, Public Administration & Economic Science, Ph.D Sociology Opening remarks Part of this article has been based on an empirical report on South Africa’s National Anti-Corruption Advisory Council (NACAC), as identified in South Africa’s National Anti-Corruption Strategy 2020-2030, first announced in President Ramaphosa’s 2021 State of the Nation Address. This article was sponsored and subsidised by the Inclusive Society Institute (ISI), an institution that functions autonomously and independently from any other entity. The question of trust The lack of political trust in South Africa is founded principally, if not exclusively, on political acts such as corruption, lack of ethics, state capture and perpetual legal violations. These everyday realities threaten the very legitimacy of the system, leading to mistrust and non-compliance with the law by citizens. Whereas political trust is founded on good governance based on the existence of accountability mechanisms and ethical codes in all spheres of life. Citizens expect good and ethical governance at all levels of society, meaning that politicians and public administrators are obligated and expected to adhere to the principles of accountability, transparency and integrity, which are the cornerstones of anti-corruption measures such as detection, prevention and deterrence. Policies and their honest and transparent implementation are the foundation of accountable, people-based service delivery. Political trust is not won by verbose party manifestos, distribution of food parcels or pre-election promises, but by politicians’ and administrators’ actions. Once citizens realise that manifestos, policies and promises are forgotten, mistrust becomes a tangible reality and takes on a wide variety of forms – founded on a vast array of individual and community thoughts, perceptions, relationships and actions – leading to political and social outcomes that illustrate a mixture of power relations and contradictions. Trust is both a collective and an individual reality that is inevitably transformed into feelings, relationships, plans and activities – the latter two of which are, in society, determined by the government’s answers to citizens’ questions. Recently, government’s plans and activities have been negatively associated with a plethora of dirty dealings, including two of its Cabinet Ministers spending R3.5 million in hotel accommodation, and the Covid-19 supply chain and procurement-based multibillion-rand theft. The impact of such actions on the relationship between the government and its citizens hugely undermines the honesty, accountability and legitimacy upon which administrative mechanisms operate within a democracy that is healthy and corruption-free. Every time a new policy is announced, political trust is brought into question. All levels and positions in the state apparatus come under scrutiny: from the president to the provincial premier, municipal mayor, judiciary, political parties, ‘corrupt mediators’, even the politicians’ families. In fact, the whole system comes under the spotlight. In most cases, personal distrust overlaps with governmental distrust, because policy, planning and implementation is in most instances personified by a specific individual. Familiar faces in political and senior administration dominate all social media, while middle managers in the small municipalities living it up and driving the Maseratis escape detection until exposed by whistle-blowers. Political leaders are the faces of the regimes and systems they represent. Citizens’ trust in state institutions and their rulings, or opposition parties, is a serious barometer of a healthy democracy. This trust epitomises the very essence of democratic legitimacy that is both internalised and externalised by peoples’ zest for wholehearted willingness to participate and act in the building of a democratic State that rewards honesty and punishes corruption. The South African case The latest widely acknowledged and respected opinion poll by Afrobarometer has shown that trust in the country’s Parliament has declined to 27 per cent and in the president to 38 per cent. And for the first time during the existence of the opinion poll initiative trust in the courts of law has dropped to 43 per cent. Furthermore, the level of trust in the African National Congress has fallen to 27 per cent and is especially low among more educated and younger South Africans, while the opposition parties’ tally is at a lower 24 per cent. The Public Protector received a 42 per cent vote of trust, while only 36 per cent trusted the Electoral Commission of South Africa, with trust levels particularly low among younger respondents. The Department of Health recorded the highest level of trust in comparison to other state institutions (56 per cent). Challenges and opportunities to enhance social mobilisation to combat corruption The path to social accountability is paved through the generation and articulation of citizens’ voices, to elicit enforcement of sanctions when public service provision fails, and to promote answerability of public authorities. Therefore, effective social accountability is made up of three building blocks: voices, enforcement and answers. The fundamental initiatives consist of: The achievement of citizens’ participation in the fight against corruption and paving the way to social accountability initiatives can only be achieved through citizens’ active involvement and coordination that leads to collective action capabilities. The existing local context realities are the foundation of the successful planning, designing and implementing of social accountability initiatives to counter corruption in the delivery of public services. Deep study and understanding of citizens’ expectations and attitudes is at the root of preparing the strategic State path in the process of tailoring capacity building activities that empower citizens to counter corruption. Continuous engagement of all trusted and widely respected stakeholders and actors in their communities, enabling them to share and articulate the communities’ voices. This makes social accountability initiatives more effective. Creation and development of participatory budgeting, leading directly to the planning, formulation, decision-making and monitoring of budget execution, especially at local government level. The challenges and opportunities: Concrete answers for the way forward The focus begins and ends with empirical evidence and is based on known final results. These results point to a fundamental absence of an anti-corruption coordinating body based on concrete and well accepted and known international examples. Historically speaking, it will be nationally and internationally understood that the Zondo Commission has shown with concrete evidence many corrupt individuals in the public sector. And yet, after fair court decisions only ten of these individuals have been jailed. How then, can citizens be expected to trust their government? The answer can be found in the historical success of anti-corruption coordinating bodies in Africa instrumental in enhancing social mobilisation to combat corruption. In Rwanda, the Anti-Corruption Advisory Council is headed by the country’s Chief Ombudsman and includes nine members from the key state departments, civil society organisations and private sector. A coordinating Secretariat is responsible for a daily campaign covering the whole country and reports the corruption and anti-corruption failures and successes daily on radio, television and social media. Furthermore, all the Council members communicate daily with the media, private sector and civil society, convincing them to become actively involved against corruption and mobilise their communities and constituencies to become an integral part of the effort. The Council operates at national level but is also decentralised at district, sector and cell levels. The country’s civil society leadership has been encouraged to cooperate with the Council to sensitise the public to the consequences of corruption, research and reports of corruption to the police, National Public Prosecution Authority, and the Office of the Ombudsman. The Council’s key responsibilities are to research and report/opine on strategies against corruption; thoroughly study and research all reports that emanate from anti-corruption institutions and recommendations to advance the fight against corruption; maintain continuous channels of information exchange on corruption between institutions; research, assess and evaluate all reports that emanate from organisations regarding corruption in Rwanda and recommendations that are based on their positions; planning and implementation of all processes resulting in the approval and publication of an annual report of the achievements in the fight against corruption in Rwanda. The success towards building the foundations that will lead to social mobilisation and, ultimately, social accountability can be easily compromised by specific historical, political or cultural experiences, which can influence the communities’ behaviour and attitudes towards the government at all levels. As international and South African literature has shown, there are key common issues, such as lack of citizens’ knowledge of their rights and corruption realities as well as types and particularities of corruption. These realities could be tackled through several initiatives that are achievable at all government levels, but initially beginning in the local government terrain: Awareness and promotion of the values of honesty and integrity among all communities, with a view to prevent corruption. Organisation of classes and community-based special meetings, beginning with district and local municipalities, on all subjects dealing with corrupt acts, their types, and the role of communities in their defeat. At municipal levels, the community leaders as well as the ward committees can and should play a key role in mobilisation. Identification of the causes of corruption in the context of the area’s socio-economic conditions. Investigation of a public officer’s conduct that the community or its members have reasonable grounds to believe relates to corrupt practices. Coordination and cooperation with all known state institutions and anti-corruption entities and organisations authorised to investigate, prosecute, prevent and combat corrupt practices. Consultation, cooperation and information exchange/s with the appropriate bodies locally, provincially and/or nationally authorised to conduct inquiries or investigations in relation to corruption. Adaptation and strengthening of mechanisms for educating the public to respect the public good and public interest. Development of educational and other programmes in collaboration with civil society organisations and disseminating information and sensitising the public to the negative effects of corruption. The creation of an anti-corruption coordinating body run at its initial phase by a highly trained, knowledgeable and skilled Secretariat will have several key responsibilities, including: Research and reports/opinions on strategies against corruption. Thorough study and research of all reports emanating from anti-corruption institutions and recommendations to advance the fight against corruption. Maintenance of continuous channels of information exchange on corruption among all anti-corruption institutions. Research, assessment and evaluation of all reports that emanate from organisations regarding corruption and recommendations that are based on their positions; planning and implementation of all anti-corruption processes. Collective effort on the part of all government, civil society and communities throughout the country to become aware of and active about reports and existing government strategies and plans against corruption; Secretariat-planned reports and initiatives emanating from anti-corruption institutions and entities in the effort to advance the fight against corruption; continuous exchange of all channels of information on corruption between all anti-corruption institutions and communities and all varieties of media; all reports and results of anti-corruption cases undertaken by anti-corruption agencies and institutions; monthly anti-corruption reports distributed to all national, provincial and local state departments and institutions, including the cases and successes in the corruption and anti-corruption efforts. All these initiatives, plans, designs, and their implementation will take place under the auspices of the Project Management Office. The entity’s main objective is to operationalise the existing policies, strategies and procedures together with the existing multilateral initiatives on governance and anti-corruption; identify the dynamics and realities for risk analysis and institutional assessments; governance and anti-corruption project design measures and supervision monitoring, and evaluation and similar operational matters. The following little-known case points to the need for the next unit, the Whistle-Blower Protection Unit: Grishen Bujram (43) was an underground MK fighter and a UDF activist in the 1980s. Later, as a whistle-blowing ANC councillor in the Endumeni Local Municipality in KwaZulu-Natal, Bujram was gunned down in Sibongile Township near Dundee on 15 June 2007. He had reported the unlawful sale of 17 RDP houses by then-ANC Mayor Thandeka Nukani – who had also acquired one for herself – to the police, the council, and all ANC structures. The two men implicated in the murder used the mayor’s car during the crime. Both were convicted and jailed, one for life and the other for 20 years. The mayor was also charged and appeared in court, but the charges were eventually withdrawn due to insufficient evidence. Whistle-blower protection is crucial for the success of anti-corruption detection and enforcement and should be a key aspect of any whistle-blowing system. Indeed, it will be one of the most important duties and responsibilities of the Secretariat. This is due to the nature of the corrupt individuals involved: those parties who stand to reap substantial benefits through their corrupt activities also stand to be arrested and seriously punished if they get caught out. Politicians and administrators who risk reporting these corrupt activities therefore put themselves and their families, co-workers and managers in potentially serious danger. The Whistle-Blower Protection Unit is responsible for considering the circumstances under which suspicions of wrongdoing can be reported inside and outside the organisation; has the knowledge and means to provide legal and physical protection to whistle-blowers; ensures that existing reporting channels, such as information hotlines, also exist for individuals working in the private sector; encourages positive attitudes towards whistle-blowing among citizens by promoting whistle-blowing policies and publicising post-reporting follow-up; ensures that individuals considering reporting suspected cases of wrongdoing have access to advice that is confidential and free of charge; forms part of external bodies such as NGOs and national associations; and introduces periodic assessments of the effectiveness of rules and regulations on the protection of whistle-blowers. whistle-blowers have unique knowledge, access and expertise … allows them to detect corruption or other matters of concern that might otherwise remain hidden It needs to be understood that as insiders, whistle-blowers have unique knowledge, access and expertise with regards their organisations and, therefore, also with regards the functions and dysfunctions of their institutional realities. This information allows them to detect corruption or other matters of concern that might otherwise remain hidden. However, this knowledge often places them in a difficult position, owing to loyalty to colleagues and supervisors, contractual confidentiality obligations, and the risk of retaliation. This scenario pinpoints the challenges associated with the distinction between the three different types of reporting: anonymous, where a report or information is received, but no one knows the source; open, where individuals openly report or disclose information, or state that they do not require their identity to be kept secret; and confidential, where the identity of the informant is known to the recipient, but will not be disclosed without the individual's consent, unless required by law. The staff of the entity should be enabled to negotiate with and guide everyone connected to such circumstances as well as the ant-corruption units of the specific institutions. While legislation exists that provides protection from occupational detriment for employees who disclose information of unlawful or corrupt conduct by their employers or fellow employees, more needs to be done. There are a number of initiatives that could be introduced – such as proper training, which will have a positive effect on the workplace structure, or the introduction of much stronger policies with severe consequences for the corrupt. The Research and Policy Unit is responsible for researching anti-corruption initiatives. Its key function is to facilitate and conduct research and analytical studies on issues pertaining to the development of anti-corruption initiatives locally, regionally and internationally. Researchers employed in the unit can also be directly involved in staff training throughout the anti-corruption institutional terrain; contacts, meetings and digital conferences can connect staff with colleagues and academic researchers on the African continent for exchange of ideas, research and insights. Potential staff members of such a unit should be university graduates with at least a master’s degree in the social, law or economic sciences, preferably with knowledge of and/or exposure to the anti-corruption genre. The Education Office operates at two levels: the institutional and the public. The institutional focuses on training all members of NACAC as well as those in all other anti-corruption agencies. The foundation is an ‘induction training programme’ providing basic training to new employees, all of whom spend the first few months of their service in the Research and Policy Unit to improve their knowledge on corruption and anti-corruption scenarios, investigations, successes, processes, structures and challenges, before being considered for their final posting. The new recruits’ training could last at least a year, while the trainees work and learn at the Research and Policy Unit. During the process the courses will include corruption prevention, communication skills, rules of evidence, law, computer forensics, financial investigation skills, and cognitive interview techniques, among others. Throughout the period of employment, the training continues at higher levels. On the other hand, is the public pillar, which will be reserved for awareness campaigns and educational programmes to mobilise society in the fight against corruption. Conclusion From 1994 until 2022, the South African government has enacted and implemented a vast number of laws, official rules and regulations, and introduced a populous and widely diversified group of organisations, institutions and entities to fight corruption, including Chapter 9 entities. All the existing laws, rules and regulations have been rigorously amended, so they are extremely detailed and thorough, and the anti-corruption agencies, organisations and entities have had successes and failures. But while the National Development Plan has accepted that all this effort has, for the most part, not worked, it has done so without providing reasons for the failure. The South African transition and the theory and practice of the National Democratic Revolution are still in process for many – if we believe the theorists still praying for the success of the French students’ powerful slogan from May 1968: ‘Be realistic, strive for the impossible’. This transition has been given a variety of names, including the ‘deferred revolution’, ‘first transition’, ‘second transition’, ‘second phase of the transition’. The prophets of the African revolutions, from Thomas Sankara to Oliver Tambo and from Patrice Lumumba to Samara Michel, are gone. The Africanisation of university curricula following the much debated but still misunderstood ‘Fees Must Fall’, is still in the long unveiling process. The late Claude Ake’s 1978 prophetic book, Revolutionary pressures in Africa, comes to two key conclusions. First, the revolution will be televised – as has been seen in Polokwane, Mangaung and the Expo Centre. And second, the National Democratic Revolution against corruption, greed and avarice cannot take place in stages – this is the key message of the National Anti-Corruption Strategy 2020-2030. It can only succeed if it is a continuous and un-interrupted process, coordinated efficiently, professionally and honestly. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

The CEO of the Inclusive Society Institute, Mr Daryl Swanepoel, on Monday 27 June 2022, met with Todd Haskell, the Consul General of the United States of America in Cape Town. The Inclusive Society Institute is reaching out to the international community in order to promote collaboration on policy development and campaigns aimed at addressing the pressing global issues of the day. This includes, amongst others, climate change, the strengthening of democracy and human rights, migration, inequality and the building of cohesive societies. Consul General Haskell and Mr Swanepoel spoke at length on actions needed to rebuild the South African economy and the strengthening of the democratic culture. They also explored ways of deepening the political and civil society dialogue between the United States and South Africa (and Africa), particularly as it relates to ensuring a globally inclusive and balanced dialogue between Africa, and the developing and developed worlds. The Inclusive Society Institute will be reaching out to likeminded political movements, think-tanks and civil society organisations in the United States, with the objective to secure broader dialogue on matters effecting the two countries and multilateralism.

The Inclusive Society Institute met with the Minister of Home Affairs, the Hon. Aaron Motsoaledi MP, on Thursday, 23 June 2022, to present the Institute’s proposals with regard to a new electoral model for South Africa. The Institute was represented by its CEO, Daryl Swanepoel, Professor David Masoma, a member of the Institute’s Advisory Council and members of the expert panel assembled by the Institute to design the proposed model, Mr Roelf Meyer (Convenor) and Professor William Gumede. Whilst the objective of the Institute’s work was to respond to the Constitutional Court’s declaring of the current electoral act as unconstitutional, in that it does not allow for independent candidates to stand for election to the national and provincial legislatures, the panel was of the view that broader electoral reform was needed. Government agreed this was necessary, but has, given the tight timeframe for holding the next election (2024), only introduced draft legislation that responds to the Constitutional Courts ruling. The meeting considered ways to effect broader reform, whilst cognisant of the practicalities of preparing timeously for the election. They considered the possibility of a two-prong approach, that is, to now introduced minimalistic changes to give effect to the Constitutional Court judgment in time for the 2024 election, and then directly thereafter commence a broader consultative process for introducing the broader reforms in time for the 2029 election.

The Inclusive Society Institute and a delegation of foreign direct investors met with the Minister of Home Affairs, Hon. Aaron Motsoaledi MP, on Thursday, 23 June 2022. The objective of the engagement was to share concerns and identify areas of improving the immigration laws to build an investment friendly environment. Amongst the issues raised were: Problems created for business continuity when business owners who have taken out South African citizenship have to renounce such citizenship when they returned to their birth countries. For example, when they decide to retire and family members, who need to take over, do not have permanent residence; Covid induced complications, for example, inter-company transfers resulting in technical expertise needing to return to home countries without replacements being sent; and Covid restrictions that made it impossible for some permanent residents to comply with the requirement for them to spend at least six-months in South Africa, which has resulted in a number of such permanent residencies to be cancelled. The meeting was held in a constructive spirit and since government was committed to providing an investment friendly visa regime, they would consider case-for-case and broader proposals that would improve the visa regime.

The Inclusive Society Institute in collaboration with the Tourism Business Council of South Africa convened a tourism sectoral dialogue on Tuesday, 21 June 2022. The dialogue forms part of the Institute’s research into the development of a blueprint for the rejuvenation of the South African economy. The dialogue was attended by a wide range of organisations representing various divisions of tourism in the country, including, inter alia, the hospitality the industry, the airline industry, travel agents, destination marketing agencies and the hotels, resort and game lodge establishments. Issues raised included amongst others: Need to minimise policy diversion at the political level The need for policy certainty Whilst planning was adequate, implementation of policy programmes was lacking Lack of sufficient communication and guidance from government, for example, crime and safety warnings, and health pandemics Technology not being sufficiently leveraged Slow certification in the aviation industry Monopolistic tendencies More needs to be done to improve the country’s brand reputation Improving the visa regime The sector was of the view that they themselves could improve with regard to innovation, the introduction of new initiatives and improved performance. Given more agreement than disagreement between the private and public sectors they were also of the view that the industry would be better served by focussing on areas in which there was agreement as opposed to being distracted by the areas of disagreement.

Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. All records and findings included in this report, originated from a dialogue on the Meaning of Social Democracy in the Modern World, which took place on 23 November 2021. Author: Dr Klaus Kotzé Editor: Daryl Swanepoel Content Executive Summary Setting the scene Key takeaways from the dialogue National strategic vision Fiscal conditions Appropriate institutions Opening remarks by the Inclusive Society Institute Daryl Swanepoel, CEO, Inclusive Society Institute Remarks by panellists Lord Peter Hain, former UK Labour Cabinet Minister and anti-apartheid activist Dr David Masondo MP, South African Deputy Minister of Finance and Principal of the Oliver Tambo School of Leadership, Shouth Africa Dr Michael Dauderstädt, former Head of the International Policy Analysis Unit, Friedrich Ebert Stiftung Prof Chris Mullard, former Professor of Education and Ethic Studies at the University of Amsterdam and Visiting Professor at the University of London and at the Royal Agricultural University. Co-founder of Focus Consultancy, UK Mr Franz Knieps, member of the Board of the BKK Dachverband, Germany Mr Johan Hassel, International Secretary of the Swedish Social Democratic Party Dr Martyn Davies, Managing Director of Emerging Markets in Africa, Dean of the Deloitte Leadership Academy and Chief Economist at Deloitte Hon Maria do Rosario MP, Workers Party, Chamber of Deputies, Brazil Mr Mariano Schuster, Editor, Nueva Sociedad, Argentina Executive Summary Setting the scene The Inclusive Society Institute (the Institute) recognises that progressive policies are required to advance the nations of the world, and in particular those of the developing world, towards greater equity and development. The Institute furthermore recognises that before any policy can have its desired effect, suitable conditions must be in place. Without the appropriate preconditions, even the best policy can only have a limited impact. On the 22nd of March 2022, the Institute held the second in its series of dialogues on social democracy. While the first dialogue discussed the meaning of social democracy in the modern world, the second investigated which preconditions are required for a society to advance towards a welfare state. The aim of this dialogue was not only to contribute to the global discussion, but, more specifically, to provide guidance in the South African context. The dialogue offered the panellists from seven countries the opportunity to showcase and expand on the development of the welfare state in their respective countries. The speakers representing both developing and developed countries at various stages of welfare implementation, were brought together to provide a broad understanding and, therefore, illustrate the modes and complexities involved in administering such a system. Regardless of the form that it takes, a welfare state entails an extensive programme of action, requiring coordinated effort and vast amounts of money. It is therefore imperative that critical debates showcase the requirements as well as the possible effects which could ensue from implementing welfare measures. By drawing from various experiences and insights, the Institute hopes to demonstrate possible routes and scenarios that could inspire and direct South African policymakers in their thinking on social welfare. A welfare state cannot be wished into place; it needs to be built based on calculated decisions and on strategic and sustainable pathways. It is the Institute’s aim to learn from and work with others on an ongoing basis in order to assist policymakers in their critical decision-making process. The participants in the discussion were: Lord Peter Hain, former UK Labour Cabinet Minister and anti-apartheid activist Ms Maria do Rosário, MP Workers’ Party, Chamber of Deputies, Brazil Dr David Masondo MP, South African Deputy Minister of Finance and Principal of the Oliver Tambo School of Leadership, South Africa Dr Michael Dauderstädt, former Head of the International Policy Analysis Unit, Friedrich Ebert Stiftung Prof Chris Mullard, former Professor of Education and Ethnic Studies at the University of Amsterdam and Visiting Professor at the University of London and at the Royal Agricultural University. Co-founder of Focus Consultancy, UK Mr Franz Knieps, member of the Board of the BKK Dachverband, Germany Mr Mariana Schuster, Editor, Nueva Sociedad, Argentina Dr Martin Davies, Managing Director of Emerging Markets in Africa, Dean of the Deloitte Leadership Academy and Chief Economist at Deloitte Mr Johan Hassel, International Secretary of the Swedish Social Democratic Party Mr Daryl Swanepoel, CEO of the Inclusive Society Institute The moderator of the discussion was Mr Roelf Meyer, former Minister of Constitutional Development and currently, Director of the In Transformation Initiative. Key takeaways from the dialogue The unfolding dialogue revealed the scope of measures that should be kept in mind when establishing social welfare measures. The different voices from different countries provided a hugely beneficial perspective on the range of requirements and limitations facing the South African welfare state. A key lesson that emerged from the dialogue was that the implementation of a welfare state must foremostly be based upon a strategic balance between what is socially desirable and what is administratively and fiscally possible. All actions must first critically consider this strategic balance. Broadly speaking, the implementation of a welfare state requires: 1) a national strategic vision, 2) fiscal conditions, and 3) appropriate institutions. National strategic vision Every nation requires a strategic vision that clarifies its identity and its goals. Such a vision, according to panellist Professor Chris Mullard, is based on the principles rooted in each state. It is imperative that the peoples and the government of each state have a clear understanding regarding what the principles are that bind it and drive it forward. Without a strategic vision, societies crumble. A firm argument for South Africa’s endurance since apartheid – contrary to its perverse inequality – is that post-apartheid South Africa has maintained a vision of transforming into a just and equal state. The principles articulated by the Constitution have bound both citizenry and government to a common set of democratic values. A strategic vision must be pursued and accordingly adapted throughout changing national conditions. Social and economic justice are prerequisites that must drive policy formulation and implementation. It must guide national debates on fundamental issues such as the protracted land issue. Citizens have an active role to play in establishing and advancing the transformative state. As the path changes, the vision borne from principles must continue to pave the way. According to Professor Mullard, though South Africa initially set an example in the articulation and pursuit of a strategic vision, it has, together with the rest of the world, lost its ability to draw up a strategic vision based on its own principles and values. Instead of focusing on the implicit and collective values that paved the way for democratisation, South Africa has instead adopted Western values. While a nation’s vision must be based on its principles, it must strategically be balanced in order to respond to the situation on the ground. The vision and its implementation must align with the needs and lived reality of the citizenry. This means that one group should not benefit at the expense of another. While the conditions of the poor must be central, the richer population cannot feel that they are not receiving commensurate benefits for their higher input costs. Accordingly, people who work for longer periods should be afforded better pensions. The experience of Social Democrats in European states is that social welfare requires a constant adjustment to ensure that both rich and poor draw benefit. Furthermore, the strategic vision for social welfare is a timeous process that requires constant adjustment. For transformation to be durable and thorough, social welfare must be set up in a sustainable way, where the wellbeing of citizens remains central. National leadership is critical in the formulation and implementation of a strategic vision. It is the role of leadership to create the environment for trust to be built between different role players, particularly between the state and private enterprise. Cooperation allows for both private and public sectors to flourish. Countries such as Germany and Sweden showcase the advantages of cooperation. Though South Africa does not have the financial power of these states, it must build the belief, based on trust, that through cooperation benefit will be mutual. Fiscal conditions The second impression drawn from the dialogue is that fiscal conditions determine the extent and structure of social welfare. A strategic balance must be drawn between maximally supporting people, while always doing so within fiscal constraints. In his contribution, Deputy Minister David Masondo emphasised that while government is providing enormous support to the needy, it cannot do so beyond its fiscal means. Government has significant debt obligations. To provide more support than it can fiscally afford will not be strategic and will simply incur larger debts and, therefore, social pressures down the line. A growing economy is required to expand the social welfare system. Economic growth will, amongst other things, ensure that more tax can be collected from a larger tax base. Currently, too few people are relied upon to pay income tax. An increase to welfare measures will demand even more from a group of taxpayers that already carry a large tax burden, often without seeing commensurate benefits. When the economy grows, the balance between what is just and what is prudent becomes an easier decision to make. According to panellist Martyn Davies of Deloitte, the answer to this equation is to create jobs. Davies stressed that South Africa’s biggest problem – and the basis for its inequality – is structural unemployment. Structural reform is required to improve fiscal conditions, which will, in turn, open up more space for programmes such as social welfare. The items addressed under structural reform include properly functioning services, a drive towards re-industrialisation, a move away from commodity reliance, and policy certainty. Appropriate institutions Policy certainty is the domain of government. While Deputy Minister Masondo committed government to structural reforms and sectoral master plans, he, amongst other panellists, stressed the role of institutions in setting up and administering social welfare. A successful welfare state requires appropriate and properly functioning institutions. This is central to the building and maintenance of a capable state. This was the message shared by various speakers. Legislation must provide for the establishment of appropriate and capacitated institutions to distribute and redistribute public goods. When institutions – particularly financial institutions – are not regulated, they pose a direct risk to social conditions. Former anti-apartheid activist Lord Peter Hain suggested that institutions should be established to help people support themselves. One such example mentioned is a national investment bank that helps finance investment and infrastructure. This will be particularly attractive to investors such as pension funds and insurance companies. Institutions that are seen to empower people will re-establish trust in the social contract. Appropriate institutions with a people-centred mandate will assist people to empower themselves. German panellist Franz Knieps pointed to a key lesson from Germany’s long history with social welfare. In Germany there is legislation that empowers workers to have direct and proportional representation in the functioning of industries and sectors they work in. People are both empowered and required to take up active self-administration – contributing to the everyday management and organisation of the sectors they are involved in. Ensuring that people are central to the environment in which they live and work, will build trust and responsibility. It will ensure that institutions and industries are people-centred and do not only seek profit. When social welfare is part of the institutional make-up, it will reduce the reliance on government handouts and will assist citizens to empower themselves. Opening remarks by the Inclusive Society Institute “It is therefore important to consider which socio-economic and socio-political conditions are needed to underpin the funding and sustainability of the welfare state” Daryl Swanepoel, CEO of the Inclusive Society Institute The first dialogue on social democracy stressed that no system is cast in stone. Though there are underlying values that remain – such as freedom, equality and solidarity – what does change over time is how values are interpreted and how best they should be pursued. There can be different answers to these questions, depending on context and grouping. At the previous event, panellists agreed that extensive discussion is required on social democracy and its implementation. Following the event, in its subsequent report, the Institute identified five themes around which a series of workshops will be developed to delve deep into the issues that were identified. This series of workshops will commence shortly. The issues that were identified are as follows: social democracy requires a strategic definition; social democracy is about people; it requires an internationalist approach; it must advance a credible alternative to neo-liberalism; and, lastly, it requires the development of a persuasive narrative. This second dialogue looks at the conditions required for a country to install and advance a welfare state. The objective of this discussion is to afford the panellists the opportunity to share the experience of their countries’ pathways towards the implementation of welfare programmes. To get an understanding of the participant countries’ economic, employment and fiscal structures. For example, how the introduction of welfare programmes benefits the vulnerable in society. Welfare measures may be quite feasible in countries where unemployment is low and there are large numbers of taxpayers paying high taxation rates. In South Africa, where unemployment stands at 46% and the upper margin of personal tax is already at 45%, only around 1.58 million people out of a population of nearly 60 million pay income tax. Just under 25% of those who pay income tax, pay 80% of all the income tax that is collected. It is therefore important to consider which socio-economic and socio-political conditions are needed to underpin the funding and sustainability of the welfare state. This is an important discussion within the South African context, where public policymakers have recently introduced a suite of legislation that supports the advancement of the country towards a welfare state. This includes legislative proposals aimed at introducing a national health insurance, a basic income grant and a national social security fund. These measures come on top of already approved and implemented social interventions, such as free housing, free schooling and tertiary education for the poor, free water and electricity for the poor, and school feeding schemes and child and other welfare grants. What is of concern to many in the policy development fraternity is the long-term sustainability of those interventions. This question remains largely unanswered. This discussion aims to shape and direct policy in this regard. The Institute wishes to reiterate the importance of these dialogues. Globally, Social Democrats need to formulate their message in a way that establishes clear blue water between themselves and those to the right. More than ever, the world cries out for social justice and greater equality. The Russia/Ukraine conflict proves that an internationalist approach is crucial. It is now needed more than ever. This approach must be based on a value system that places the development of the economy and the wellbeing of citizens at the centre. It is only if the economy is successful and growing, that governments are able to fund the programmes which are needed to truly deliver a just and equitable society. How to balance these two, is what this discussion is about today. Remarks by panellists “Unless social democracy provides an alternative to systemic neo-liberal failure, we will not recover the ground, either in Britain, in South Africa, or across the world” Lord Peter Hain, former UK Labour Cabinet Minister and anti-apartheid activist Putting aside the real danger of Vladimir Putin’s barbarous war in Ukraine spreading to the rest of Europe and beyond. Putting aside the immense problems of living with Covid-19 and recovering from lockdowns. Putting aside the seismic threat of climate change, the principle sustainable way to create a decent welfare state, is by building a strong economy. Generating faster, greener growth. And learning from Scandinavian countries in particular, who’ve been more successful in achieving these objectives than almost any other country. That, in turn, means abandoning the disastrous grip of neo-liberalism, since its advent around President Reagan and Prime Minister Thatcher in 1980. Its apocalypse should have been the 2007/2008 global banking crisis, which claimed, from allowing recklessly irresponsible bank lending, to become a law unto itself. Untroubled by a flawed system of financial regulation, most governments across the world permitted market forces to lead financial institutions like lemmings, right over the edge. Today, the casino side of banking still poses a deadly threat to economic stability – with bankers facing the same temptation to take needless reckless risks in the belief that the taxpayer will step in to save them when things go wrong again. Free market systems are inherently unstable and financial markets are prone to periodic failure. The banks may soon become too big to save. Former IMF Chief Economist Simon Johnson has summed up the situation, saying that “we’re nearing the end of our fiscal and monetary ability to bail out the system. We’re steadily becoming vulnerable to disaster on an epic scale”. Social Democrats should be insisting upon stricter rules for all financial institutions, including the shadow banking sector of private equity outfits and hedge funds. Public interest must be paramount. Although neo-liberalism ought to be lying in pieces, fit only for the rubbish bin of history, it has nevertheless continued unabated. The Global Financial Crisis, which threatened to plunge the world economy into a second Great Depression, ought never to have happened, according to the efficient market hypothesis. Sudden shocks on the scale of the 2008 banking crisis, ought not to occur. And if they do, the system is supposed to correct itself quickly, with no need for significant state intervention. But the scale of the state rescue of the financial system is enormous. In the UK alone, 133 billion pounds sterling was measured out in cash outlays. The potential cost – including government guarantees of over one trillion pounds – surely shattered any myth that the financial system has self-stabilising properties. Social Democrats must regain their economic self-assurance. They must start by recognising the success of Keynesian economics, post-World War II. The period 1945 to 1980 saw relatively high average growth – higher than the period under neo-liberalism, at least in the West. Spending was cut by £220 billion, in today’s figures. Eighty-two percent of these cuts were to public spending. Tax cuts continue to be promised by the neo-liberal UK Chancellor. Instead, he should be adopting a big fiscal stimulus, to reverse the current slowdown and get the economy growing. Despite IMF research showing that, “instead of delivering growth, some neo-liberal policies have increased inequality, in turn, jeopardising durable expansion. There remains a constant cover for neo-liberal austerity across the world”. Looking further ahead, longer life expectancy and increasing demand for what the American management writer Peter Drucker termed knowledge workers, means an expanding role for the welfare state. In education, pensions, and health services – especially elderly care. Neo-liberal attempts to shrink the role of the state are taking society in entirely the wrong direction. Social Democrats must stop acquiescing in such mistaken strategies. They must renew the case of a balance between private market enterprise, private enterprise, and market economy and public provision. Jacob Hacker and Paul Pearson in their 2016 study of the part played by government in helping societies flourish, said, “the mixed economy remains a spectacular achievement. By combining the power of markets with a strong dose of public authority, we achieved unprecedented prosperity”. Everyone outside the financial system now realises that the light touch regulation of the banks was a big blunder. Insiders, like former Governor of the Bank of England, Lord King and ex IMF boss, Christine Lagarde, warn that another financial crisis cannot be ruled out. Breaking up the big banks to separate retail banking from investment banking, with taxpayers guaranteeing only the socially essential parts – like payment systems and customers deposits – and not the risky casino side, is essential to prevent another financial collapse. And growing inequality must be reversed by social democratic policies. If this is not done, countries like South Africa will experience increased social unrest. Research in 2015 showed that there had been no rise in the real wages of working and lower middle-class Americans since the late 1970s. Indeed, the level was lower than in the late 1960s and early 1970s. No wonder then, that in 2016, Donald Trump’s ugly populism found a ready response, also amongst key former Democrat-voting white working-class Americans. As middle and lower America lost out, inequality widened hugely. Certain public services were cut, and social and political unrest increased. Adair Turner, former Chair of Britain’s Financial Services Authority, confirms that much financial activity is socially useless. In his 2015 book, Between Debt and the Devil, he argues that the vast majority of bank lending in advanced economies does not support new business investments. Instead, funds increased consumption, or the purchase of already existing assets, in particular real estate, and the urban land on which it sits. Achieving faster growth in the medium- and longer-term means adopting an active industrial strategy. In her book, The Entrepreneurial State, Mariana Mazzucato has cited dozens of examples from America, South Korea and Taiwan, where the state has been the source of innovation, prompting technological advance in areas like aviation, the internet, biotechnology and green technology. A National Investment Bank could also help to finance investment in infrastructure, including accelerating investment in housing and in low-carbon innovation, by attracting funding from pension funds and insurance companies – because the latter need to acquire long-term assets to match their long-term liabilities. An initiative like this would fit with what radical thinkers like Noah Smith call New Industrialism, an approach to economic policy that respects the power of the private sector but isn’t afraid of an activist government. Unless social democracy provides an alternative to systemic neo-liberal failure, we will not recover the ground, either in Britain, in South Africa, or across the world. Remember that after World War II, UK national debt as a share of GDP was more than double what it is now. Yet, Britain, following the war, created a welfare state and achieved higher economic growth and prosperity to fund it than has been possible since. The choice for South Africa and elsewhere is not between a high performing economy and high public spending, but rather, both can be unlocked through a balanced, activist approach. “The role of the welfare state is to ensure that people don’t have to depend on the market for their survival” Dr David Masondo MP, South African Deputy Minister of Finance and Principal of the Oliver Tambo School of Leadership, South Africa The role of the welfare state is to ensure that people don’t have to depend on the market to survive. While they do need to participate in the market, their incomes should not determine whether they can participate. The question as to how South Africa has built a welfare state is an important one, ranging from the old-age pension to the disability grant and childcare support grant. Our unemployment rate, as Daryl mentioned, is close to 40%, which is around 11 million people. Since the arrival of Covid-19, government has been granting the poorest in South Africa US$23 per month as a way of providing them with some income, to allow them to participate in the market. In total, almost 28 million people in South Africa receive direct transfers from government. That is almost half of the population. And that excludes those who receive free education, housing, and other free items that are awarded in terms of means testing. Within this context, only seven million people in South Africa pay personal income tax. In terms of US dollars, that’s 400 billion – almost the same size as Denmark’s economy of US$356 billion, with a small population of almost six million. In South Africa, it is not that there is no will to spend, to increase the public expenditure, but rather, that there are very real fiscal constraints. South Africa has a public debt of R4 trillion – that is a lot of money that is owed to lenders. On the tax side, the economy has not been growing since the global economic crisis. For this year, 2022, it is projected that the economy is going to grow by 2.1% against the National Development Plan target of 5%. South Africa’s revenue is clearly limited and constrained. Addressing the problem raised by Peter Hain, it is not that South Africa has not been spending. In fact, the expenditure has been growing, but unfortunately, it has been growing targeting unproductive expenditure: bailing out state-owned entities. Since 2019 we have spent almost R293 billion on these entities, which is almost US$19 billion. And that has had an impact on other expenditure items in government. We are working very hard to reorganise our state-owned entities, to make sure that they don’t continue to be a fiscal burden on our finances. We agree that it’s important to grow the economy. One of the constraints for the growth of our economy, since the global economic crisis, has been on the supply side – the supply of electricity, energy, telecommunication, water and skills. In order to address these constraints, the government has embarked on a programme called Operation Vulindlela, which is aimed at providing reliable electricity, water and telecommunications. There are people who criticise government, saying that it is not focussing on the demand side of the economy. But this is not correct. One only needs to look at the huge amount of money that is paid to provide for the poor. Besides, one cannot realise demand, if one doesn’t deal with the supply side of the economic constraints. There could be demand globally, for many goods and services, yet these items need to be transported to global markets. Demand has recently improved thanks to the commodity boom. This, however, has been cyclical growth that cannot be depended upon. And it’s for this reason that it is important to have structural change, towards sustainable growth. Government is embarking on industrial policies towards reversing the de-industrialisation that has occurred since 1994. There are different master plans that have been put in place, to boost manufacturing capacity. These plans also take into account the climate, the environment, and re-industrialisation through the green economy. “The central challenge the welfare state faces is the inequality in the country” Dr Michael Dauderstädt, former Head of the International Policy Analysis Unit, Friedrich Ebert Stiftung South Africa should consider the experiences of other countries, such as Germany, in its discussions on a social welfare state. The history, institutional structure and financing of the German welfare state offers interesting lessons for South Africa. Created in the 19th century, under the Chancellor von Bismarck, the German welfare state is one of the oldest such structures in the world. It provides insurance for old age, sickness and accidents at work, and is financed through contributions from workers and employers. This structure has remained the same throughout the years, being a wage-based insurance-type welfare state at its core. But lately, major reforms have been brought about, including care insurance, reflecting an increasing number of old people needing care. The German welfare state has a progressive tax system, which means that people with higher earnings pay more. Germany has also more or less abolished the wealth tax it had until the 90s, where poor people do not pay any income tax at all. The whole system is now basically orientated towards protection of status, rather than redistribution from the rich to the poor. This means that if you are earning well during your working life, you will get a higher pension. Similarly, if you become unemployed, you will receive benefits at the level you were employed. Overall, the German welfare state has worked relatively well, reducing the inequality between the market distributions of income. The inequality of disposable income is much lower in Germany, than the market income inequality. The German system, therefore, provides a type of insurance against poverty and old age. There is de facto a minimum income for poor people. If someone is unemployed for a very long period, they receive – what the Americans call in the narrow sense – a welfare benefit. It’s the same if a person receives a pension which is too low, they will receive an additional topping up to have a minimum level of income. The German state, as a whole, spends about €1 500 billion, which is about 50% of German GDP. This goes towards all the different services, including education, health and social protection. Viewed over the long term, since German unification in 1991, it becomes clear that in absolute terms there has been a continuous increase. From this funding, the lion’s share goes to old age, family and disability. Unemployment is a relatively small share, due to German unemployment, fortunately, being relatively low over the last decade or so. As mentioned, the welfare state is financed by taxes and contributions from workers and employers. Almost 35% of the fund comes from gross wages. The Social Insurance Fund only takes a percentage of wages up to a certain income threshold, which is about €5 000-€6 000 per month. Mothers, for instance, get an additional pension for each child. There are also some other special features which are not reflected in the contributions, and therefore the state contributes tax money to the pension system. The central challenge the welfare state in South Africa faces is the inequality in the country, which in Germany is comparatively very low. But still, it’s substantial, and increased in the late 1990s and early 2000s. Although it has been relatively stable of late, Germany still has a significant number of poor people, with a poverty rate of between 15-20%. As a result of the Covid-19 pandemic, there has been an increase in unemployment and poverty. Germany is a society which is aging fast. While life expectancy is increasing, birth rates are more or less declining, or at least staying at a low level. In earlier times, 100 contributors to the social insurance system had to take care of about 50 pensioners. This will increase to 66 in the next ten years or so. And about 30 years ago, there were only 10 pensioners to be supported by 100 contributors. This is a major problem. So too, is the burden that migration and refugees are placing on the welfare system. “When looking at its vision, South Africa sets an example … The realisation of its vision, together with the realisation of the constitution itself are not static entities. They change and must be modernised” Prof Chris Mullard, former Professor of Education and Ethnic Studies at the University of Amsterdam and Visiting Professor at the University of London and at the Royal Agricultural University. Co-founder of Focus Consultancy, UK This contribution will take a critical look at which socio-economic and socio-political conditions are needed in a country to underpin the funding and sustainability of a welfare state. To these ends, there are four prerequisites that need to be addressed urgently if transformative change is to occur. First is the reassertion of an organic home-grown conceptualisation of a national vision. The world as a whole, not just South Africa and Africa, has lost its ability to conceptualise and pursue a vision. Second is the economic and material realisation of this vision. Third is the creation of a transformative and entrepreneurial state. And lastly, is the reinvigoration of collectively legitimated and community anchored leadership. When looking at its vision, South Africa sets an example. Its articulation of the rainbow nation was bound by a set of constitutional and democratic values. This realisation of its vision, together with the realisation of the Constitution itself are not static entities, rather, they change and must be modernised. Many politicians are saying much the same thing; therefore, these are not simply theoretical points. As societies change, constitutions and laws too must change, and must be articulated and reinforced in legislation. Judges must act on important matters, such as the question regarding land. Herein, all citizens play an equal part in the making of a society – a notion of collective action and responsibility that is the vision of President Ramaphosa. Vision, as can be seen here, is not a static set of principles or static set of values, but rather, an ongoing building set of ideas that are organically rooted. The second aspect is the economic and material challenge regarding inequality. Policy cannot simply be talk, it must be accompanied by actions that are orientated towards real change. The comment by Deputy Minister Masondo on the need to create a manufacturing base is an important one, as South Africa and other African societies have been losing theirs. Here, both neo-colonialism and the flight of capital have played a central role. These and other related issues need to be addressed in a more systematic way. For example, it is important to look at how wealth is being distributed within a society, to look at the bureaucracies that are stifling growth. It is important to assess the institutional representation that citizens really occupy and influence. What does true representation mean? It means the remodelling of the state to reflect citizens’ boundaries. Not the boundaries of the middle class or of the elite – black or white – but the values of the citizens, ordinary citizens. And their demands for employment, housing, education, opportunities, infrastructural improvements, and so on. Societies have shifted away from the values of citizens, the values of the communities, the values that informed the change to democratisation. In their place, Western values have been adopted. This is clear from the behaviour of leaders and administrators. Furthermore, the rights of citizens must be central in the transformative state: it is the citizen that counts, not the elite. It’s not just about parliament and the judiciary and so on, the state must be central to citizens’ lived reality. And not just at the national level, but also at the provincial, metropolitan and community levels. It calls for a reinvigoration, if you like, and a kind of dictatorship of the community. The collective awareness and the acceptance of vision and objectives is absolutely necessary, and in fact, community and social action is derived from this collective awareness. This is not a debate that must be held in Cape Town, or Westminster or Stockholm, for that matter, it must occur organically within the community. This remodelling would ultimately allow for collective government. Leadership, as the last point, is a precondition for change. Wartime cooperation is needed, as the world is now in a struggle for social freedom. Objective-driven leadership is needed for an economically inclusive society, which is currently lacking in the world. Leadership must be decisive, time-bound and monitored. And if necessary, punitive, even retributive on current and past corruption, on tax evasion, avoidance and non-compliance, and so forth. All these things must be part of that package called modern and entrepreneurial state leadership. Some might call this a form of benevolent dictatorship, but I would prefer to term it a collectively driven transformative leadership. For this leadership to flourish, it is necessary to come together and reengage with the very values, beliefs and ideas that created the original democracy here in South Africa. These four aspects are imperatives. Unless these are grasped as the real fundamentals, the state will remain unable to grow, leading to a situation where its people and communities are unable to grow. Where there is, in fact, only progressive freedom, which is not freedom at all, but a control of the people. People must be allowed to prosper in the interest of communities. “A welfare state, as can be seen from Germany’s long experience, needs time to organise” Mr Franz Knieps, member of the Board of the BKK Dachverband, Germany A successful welfare state requires appropriate and well-functioning institutions to deliver on constructive change. Such a system is not put together overnight, as can be seen from Germany’s long experience, it needs time to organise. The nucleus of such a system is social solidarity, which for Germany first started with the miners in the 12th century. The mining fund is now more than 750 years old; its long history holding many lessons on how to propel and adapt social security. Employers and administrators must work strategically. One needs both sides to form the Bismarck-type social insurance system. Bismarck did not simply want to improve social security, instead, he tried to defeat the unions and Social Democrats. Yet, in fact, his legislation was the most important contribution to involve workers. Their representation in legislation and administration was critical – not at the top level in parliament, but at the second level, in a system of self-administration. In recent years, social security has been a precondition for change. Not only for changing the consciousness of people, but also for changing working conditions and other things, towards growth. Without a system of social solidarity, there would not be the acceptance and willingness from the population. Of late, there has been a rapid change in the ideology regarding the system of social security. Up until the early years in our century, costs for social security were seen in a negative light. But now there’s a fundamental change, as costs are handled in the light of investment in health, comfortable aging, and so on. In Germany, the welfare state is fixed, but there are still debates about how it should be organised to ensure financial stability and sustainability. These debates are good; they guide the administration and institutions dealing with insurances and welfare to ensure that the best and most balanced scenario prevails. The most important questions revolve around how tax money is allocated to the pension funds and to the health insurance and long-term care insurance funds. The second big topic relates to how the state integrates care, especially long-term and chronic care. Germany is the world champion of acute care, but it’s a developing country when it comes to chronic care for the elderly and for people with disabilities. The new government is committed to modernising the structures in primary care centres, reducing the number of small hospitals and fostering digital transformation. In Germany, highly paid professionals have their own social security and pension systems, with many privileges. While Germany is a rich country, it still has inequalities and barriers to access. The government is always working to reduce these privileges, thereby ensuring greater equality. It may be a wealthy country that is able to afford an extensive welfare programme, however, it is Germany’s history and critical, discursive practice around social welfare that allows it to strategically address inequalities on an ongoing basis. “Social Democrats believe in the state. When people don’t trust the state, they don’t pay taxes and parallel societies develop. This leads to people turning to alternatives such as far right and populist movements” Mr Johan Hassel, International Secretary of the Swedish Social Democratic Party Three tasks need to be advanced in order to develop an inclusive and socially democratic welfare society: poverty must be eradicated, human capital must be developed, and appropriate institutions must be put in place to distribute and redistribute public goods. At the core of the first task – the effort to curb poverty – is the question of employment. In Sweden, the goal of full employment has been the guideline of the Social Democratic Party since the 1950s. Through the emphasis on improving the lives of all, Sweden has been able to fundamentally increase its wealth over the last century. Today, there are new social risks, new structures in the economy. The first job of the welfare state is to establish the contract between the state and its citizens. Secondly, there should be equity in financial terms. Everybody should get a fair chance of a pension, which is exactly what states with social welfare systems such as Germany and Sweden have done, bringing about systems that are both inclusive and universal. Those who have worked for a longer time, should have a larger pension. This gives recognition to the elders in society. The third institution is housing. In many countries, as it is in Sweden, this is a question for the market economy. For Social Democrats, housing is a fundamental social right, especially for those in the lower class. In Sweden, housing is again one of the most dominant political issues. It is driving segregation, and it is driving the split in society, between different people. Indeed, the inequality seen in housing is one of the main reasons for the split in Western societies today. Social Democrats have neglected this issue and have neglected the role of communities. Housing is essential for keeping the society together and for eliminating poverty. The fourth is the cost of living, and finally, there is healthcare. Good healthcare should be made available for everybody. These are the five main areas which are crucial for a state to erase poverty and to build trust between citizens and the state. These issues have been neglected and are now some of the main reasons for the drive towards the right in Europe and the United States. The second task in developing an inclusive and socially democratic welfare society is to increase human capital. Education at all levels, but especially pre-education, for example kindergartens, is essential. Societies must invest in early childhood education, something that has been neglected in Sweden since the society turned towards privatisation. Vocational and appropriate adult training is also very important, as when the economy and industry changes, people must constantly upgrade their skills. Currently, the transformation of energy and industry is driving the need for digital skills. To ensure these skills, investment in human capital is central. The state must play a proactive role in investing in the economy of tomorrow in order to erase poverty – the state must invest in human skills. Furthermore, the state must be as fair on taxes as it must be hard on corruption. If corruption maintains a foothold in society, in institutions, then people will not trust the state and it will pose an existential threat to the ideas of social democracy and solidarity. The reality of tax havens and tax fraud has led to significant distrust in societies, to the shrinking of the tax basis. If this can be reversed, then all states, in principle, will have the resources needed to set their societies on a better course. However, none of this can happen without collaboration between states and societies. Social Democrats believe in the state. When people don’t trust the state, they don’t pay taxes and parallel societies develop, which leads to people turning to alternatives such as far right and populist movements. “When one wants to address inequality in society, one has to tackle unemployment. This is the primary cause of inequality” Dr Martin Davies, Managing Director of Emerging Markets in Africa, Dean of the Deloitte Leadership Academy and Chief Economist at Deloitte Before any discussion can take place on the nature or extent of a social welfare state in South Africa, it must be asked: what are the central provisions needed for such a system? Here the answer is clear, South Africa first needs to create the fiscal space. South Africa urgently needs structural changes, with inequality being the burning issue of the time. The World Bank has recently allocated South Africa the highest Gini coefficient in the world. This level of inequality is politically, economically, socially, and morally unacceptable. It is truly a burning issue in South Africa. With structural dependence on the export of commodities, one often sees that inequality is baked in. Herein there is no trickle-down effect, instead, the rents from the trickle down are extracted or captured by political leaders. This is a standard model, unless you are Norwegian, or perhaps Canadian. Since 1994, the de-industrialisation of the economy has seen haemorrhaging of jobs. Perhaps the only successful proactive industrial strategy we’ve had in this country is in the automotive industry. There may have been some green shoots in other sectors, such as the textile garment sector, in the last year or two, but that is as a result of a unique set of circumstances coming together. Supply chain disruptions and Chinese inflation in labour costs has perhaps been more supportive of the domestic industrial agenda around textile garments, than proactive policies of government. Manufacturing is so important to cancel out inequality. Manufacturing creates certain incomes, unlike typical agricultural jobs where income is not as predictable. It creates a so-called structural employment. Also, manufacturing embeds knowledge and diffuses knowledge into the economy and creates skills, residual skills. And there’s no sector like manufacturing that also encourages and spurs the growth of the services sector, which arises on the back of manufacturing. To be where South Africa is, on the downward slope of deindustrialisation, is a very precarious position to be in. In the era of digital, or the so-called Fourth Industrial Revolution, capital is not interested in labour-intensive models, particularly in economies where one has restrictive labour legislation. And that’s the challenge that South Africa faces. Many speakers have touched on the inability of the state to provide public goods and services to a wider population. This failure is a major contributor to inequality. Indeed, the failure to provide basic goods and services is a major contributor to inequality in any society. An interesting exercise undertaken by FirstRand, and reported in its Annual Report, asked what the major contributor is to South Africa’s unacceptable Gini coefficient. According to the report, the answer is structural unemployment. FirstRand did an intriguing assessment: it looked at the Gini coefficient of the staff of FirstRand Group. In 2014, FirstRand had the same Gini coefficient as the United States. They also assessed a listed mining company in South Africa. Again, contrary to news reports, in terms of income disparities between high earners and relatively lesser earners, the mining company had a score equivalent to that of New Zealand. From this, it is clear that the inequality in South Africa is due to structural unemployment and not pay differentials between senior management and so-called blue-collar workers. This is not a politically popular statement to make, but it’s an economic fact. When one wants to address inequality in society, one has to tackle unemployment, the primary cause of inequality. By creating permanent jobs, a society moves from structural unemployment to giving people the opportunity to create well paid jobs and add value to their lives. How this is done is the ultimate question that South Africa faces. First, there is a need to shift to an economy that looks more towards manufacturing and services. The competition is becoming far greater. However, because of the invasion of Ukraine and the Covid-19 pandemic, there is an ongoing move towards the fragmentation of the global supply chain. In terms of the invasion of Ukraine, there has been an increase in the balkanisation of the global economy. This may create renewed opportunity for peripheral economies, such as South Africa’s, to be more involved in local value chain development and manufacturing. Furthermore, it is clear that competition drives efficiency and results in gains in productivity in the economy. This is as true for companies as it is for countries. Competition drives efficiency, and therefore should not be hindered in any way. Big, enabling capital should not be limited from investing in big, enabling economic infrastructure. In South Africa, there is an inability to remove red tape and bureaucracy. This is a big disruption to the rise of small business and the opportunities for aspiring entrepreneurs. It disrupts the creation of a workforce with the skills that the economy needs. Lastly, there is the matter of policy certainty. South Africa will not be able to attract capital if it does not have policy certainty. Recently there has been good rapport built between business and government; the conversations have been world class. But the same is needed in terms of policy certainty from the political power establishment, regardless of what side of parliament they sit on. Capital needs clarity. In conclusion, to solve societal problems, the GDP must rise. Inclusive growth ultimately comes from high GDP growth over a generation or two. In 2008, South Africa was growing at 5.5%. This occurred with the fiscally conservative policy of GEAR, which has received a lot of political criticism over the years. Had South Africa maintained this growth rate, this conversation would have been a very different one. If only government could have retained the correct policies, and above all, practical and good implementation of those policies. There’s no reason why South Africa cannot get back to a 5%-plus growth in the current global economy. “The task of opposing fiscal neo-liberalism and advancing democracy is the task of everyone the world over” Maria do Rosário, MP Workers Party, Chamber of Deputies, Brazil Under President Bolsonaro, Brazilian democracy has undergone a tumultuous and destructive few years. The social democratic policies that former presidents Dilma Rousseff and Lula da Silva implemented have systematically been eroded. Instead of their pro-poor agenda, Bolsonaro has undone social interventionist policies. He has allowed the rich to attain a disproportionate amount of the nation’s wealth. His policies have furthermore wreaked havoc on the environment, the Amazon particularly, and have neglected public infrastructure, rebuffing social investment commitments. With former President Lula da Silva eligible for election this year, there is hope that social democratic policies will return. Lula is polling strongly and has massive support from those who know his leadership, as well those who see Bolsonaro as being centrally responsible for the recent decay. There is now a good chance that the democratic gains that have been lost under Bolsonaro can be regained. These gains have essentially to do with the people-centred policies of social democracy. Under Lula, social rights and support was bolstered and many people – especially the indigenous and lower classes – were allowed to improve their living standards. While Lula is the champion of the people, it is more about these gains of democracy that need to be championed. Brazilian people and those around the world must rally behind movements that are people centred, while anybody who actively works against the will and prosperity of the people must be confronted in the name of democracy. Everyone the world over must advocate for democracy and unity. This must take place in a substantive manner, relating to a broad range of issues. This is essential for the world to experience true democracy. This, the task of opposing fiscal neo-liberalism and advancing democracy, is the task of everyone everywhere on Earth. Thus far, there are some victories. Chile and Argentina are two examples where the tide has turned towards social democracy. Brazil must now do the same. Brazil will have a general election in October, which will have a real effect on the global movement towards social democracy. These last few years in Brazil have been an awakening for the Labour Party. Now it is again gaining traction, with democracy being built in a much stronger fashion. In 2016, Brazil underwent a rupture when President Bolsonaro was elected. The crumbling of institutions has been ongoing and Brazilian democracy has been negatively affected. With the effects of Covid-19 and with record unemployment, Brazil is in an untenable situation. Healthcare for all people has declined, and yet the government has executed policies to reduce the resources for health, social welfare and employment, which has directly affected the indigenous and poor people of Brazil the most. These developments are the responsibility of the right-wing government in power – a government whose policies undermine social cohesion. Brazil is a country undergoing a dictatorship, even if this is not known by the population. Crimes are not taken to court, military control has again grown out of control, and human rights are neglected. What is happening in Brazil is very dangerous. Power is radicalised, and there is an ongoing destruction of the public sector. Brazilians should be very concerned about the independence of the election process. Today, former President Lula is on track to regain power and turn the tide back to social democracy. A new Lula government will create a very strong front of support for democracy in Brazil – a front that will advance democratic debate through ideas and concepts. Under Bolsonaro, democracy has been affected in a very negative way. Today, Brazilians feel that the interests of the people in power are different from those in society, which has a direct impact on the rights of the people, especially indigenous people. The Brazilian democratic front will advance fundamental human rights in the manner that President Lula and Dilma did when they were in power. “Social democracy is a political movement that originally was a protest movement against capitalism” Mr Mariana Schuster, Editor, Nueva Sociedad, Argentina This contribution will address some issues with and the differences between welfare and social democracy. Social democracy is a political movement and popular culture that was originally a protest movement against capitalism. It advocated for socialism and has transformed to become a very powerful movement towards reforms within capitalism. This is best seen in the development of Europe, but in South America it has also been successful, albeit in ways that differ from Europe. Social democracy left the transformation of socialism centred on reforms within. This transformation, according to the classic literature, led to the development of the welfare state. This system is different from the Bismarck Model. Even if the concept or understanding of social democracy was not evident at the formation of the welfare state, its meaning was baked in. However, social democracy and the welfare state are not the same. In Europe, at least in Western Europe, the welfare states were the product of a social political action, whereas outside Western Europe, one finds something completely different. In Latin America, social democracy as a force was developed in Chile, Uruguay and Argentina at the beginning of the 20th Century. The welfare state became stabilised during the 1940s and 1950s. In Argentina, under Juan Domingo Perón, social democracy was a force towards providing security to workers. This movement was not about socialism, but about social democracy as a populist force. Across South America, classic welfare states did not arise as a social democratic force until the 1980s, and welfare was advanced through the labour parties as the forces of the left nationalism, of revolutionary nationalism. Over the last 30 years, South America has seen the development of the left wing, similar to what Europe is working on today. In South America, what can be considered as welfare politics has been pushed by Social Democrats; the continent has its own social democratic forces that have been working in different ways to those of their European partners. In South America the welfare state is still being built up. Until now, the Social Democrats have been trying to destroy the structures of the right, but they have not had the outright success that their European compatriots have had over the last 50-60 years. The challenge of the developing world is not only to install and constantly improve upon policies, but also upon deep transformation of the state, which allows for changes that are more durable and sustainable. While there are many lessons to be learnt from European countries, there are also many classic examples of other countries, especially in the Americas, that offer clear and experienced templates to follow for those in the developing world. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

27 May, 2022: A large cohort of civil society organisations held a roundtable discussion to deliberate and decide on a collective approach to the Electoral Amendment Bill currently before Parliament. This gathering took place just two weeks ahead of the 11 June 2022 deadline set by the Constitutional Court for Parliament to change the country’s electoral laws to be in line with the Constitution. Following the New Nation Movement judgment of June 2020, Parliament was ordered to change our unconstitutional electoral laws to allow for South Africans – who are not members of any political party – to run for public office and serve their country. OSA, OUTA, CASAC, Democracy Works, the Independent Candidate Association, the Inclusive Society Institute, the FW De Klerk Foundation, Africa School of Governance, Raising Righteous Rulers, Citizens Parliament, the Helen Suzman Foundation, Devoted Citizen and My Vote Counts agreed on several matters. Firstly, that Parliament has not met its obligations as set out by the Constitutional Court. All parties agree that the proposed Bill in its current form is unconstitutional as it stands. They agreed that a full overhaul of the electoral system with a constituency-based system at its core is what Parliament is required to undertake and not the light touch approach to amending the Electoral Act that it has adopted. There was also unanimous agreement that the next elections in 2024 must be conducted under a new electoral system – there can be no delay, postponement or an election conducted under unconstitutional legislation. In this regard, concern was expressed by all the organisations about the lack of meaningful public participation that Parliament created in its hurried process to produce the Bill. Some organisations are exploring their legal options regarding the processing of the current Bill. The parties agreed on a set of negotiables and a set of non-negotiables. These are: Non-negotiables Constituency based system within an overall proportional system (Regions can be redefined easily without new demarcation process, or use existing municipal districts) There should be a mechanism to enable independent candidates to participate in the compensatory votes – i.e., all 400 seats in the National Assembly Vacancy of seats must be resolved Barriers to entry need to be fair, reasonable, and equitable (particularly the financial requirements) Votes threshold for constituency and PR seats must be reasonable and equitable (irrespective of the split of constituency vs PR seats) Negotiables How seats are to be divided nationally and regionally in National Assembly Single ballot vs Two ballots Open vs Closed party list system Fundamentally, the civil society organisations are concerned with ensuring a constitutionally compliant electoral process that upholds the sanctity of the ballot box and honours the dignity, worth and equality of each individual voter. To this end they agreed to work collectively in looking to galvanise all South Africans towards electoral change that will leave a legacy for generations to come.

The CEO of the Inclusive Society Institute (ISI) has returned from an outreach visit to the United Kingdom where he met with likeminded organisations with a view to solicit cooperation and collaboration. During the visit and with a view to further developing the ISI’s liberation archival portal, he met with, amongst others, Action Southern Africa (formerly the Anti-Apartheid Movement) and the Weston Library at Oxford University. He also met with the School for Oriental and African Studies (SOAS), London University, in search of research and dialogue collaboration, as well as with, for purposes of furthering the ISI’s efforts to promote international cooperation between likeminded social democratic parties and organisations, representatives of the Labour Party, including the Rt Hon Emily Thornberry MP, Shadow Attorney General and Joe Correy-Roake, Senior International and Devolved Nations’ Policy Advisor. He also met with the Westminster Foundation for Democarcy. During the visit the CEO also paid a visit to the Black Cultural Archives, and attended the opening of the new Africa Centre, as well as the Evensong Celebrating the life and work of Archbishop Desmond Tutu, which was held at Westminster Abbey. The ISI and Liliesleaf Trust UK also concluded their discussions with regard to the entering into of a Memorandum of Agreement between themselves with regard to joint work related to the Centre for Memory and Learning, which project aims to draw lessons on promoting inclusive societies from the South African liberation struggle.

Occasional Paper 5/2022 Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute. DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. JUNE 2022 by Dr Klaus Kotzé BA Social Dynamics, BSocSci Honours Political Communication, Master in Global Studies, PhD Rhetoric Studies Introduction This paper discusses the meaning and significance of social cohesion in South African democracy. Social cohesion, vis-à-vis the social division or exclusion that formed the basis of historical South Africa, is foundational to South Africa’s constitutional project. It presents a national standard; a useful lens through which to analyse national progress and the achievement of the national ends. With South Africa’s persistence as being one of the world’s most unequal countries[1], social cohesion as a concept can become trite. Instead, it deserves candid examination. This paper will briefly probe and explain how social cohesion forms part of the constitutional project, before looking at factors that are impeding it. This work then draws on existing investigations undertaken by the Inclusive Society Institute (the Institute)[2], with the purpose of assessing and advancing social justice and cohesion. Instead of discarding it as a quasi-conceptual or unproductive term, it is the belief of the Institute, that social cohesion holds an important place in national transformation. A critical approach is required to ensure that it evolves as a term of transformative consequence. Social cohesion: Setting the scene Conceptual social cohesion differs from place to place. Whereas other countries see social cohesion reactively as an adaptation to increasing multi-culturalism, in South Africa the concept occupies a strategic quality. Here, it should not be assessed simply as a response to fears of xenophobia or social dominance. Instead, the advance of social cohesion and nation-building lie at the heart of the post-apartheid South African project. It has deeply contextual significance. It is shaped by history. Whereas distinction and discrimination were the modalities of governance under colonialism and apartheid, the transformation towards a cohesive and just society has been the overarching national strategy since the accord between political opponents gave rise to the democratic and constitutional order. Driving unity in diversity, advancing a single, legitimate national society from where before there was a divided, illegitimate pseudo nation, is the central strategic function in South Africa. The drive towards social cohesion, therefore, forms the basis for overcoming a past where people were divided, excluded primarily on their race, but also on their religion, gender and other social features. Social cohesion is a term with both descriptive and prescriptive meaning. It is understood as “the ongoing process of developing a community of shared values, shared challenges and equal opportunity … based on a sense of hope, trust, and reciprocity”[3]. A socially cohesive society is one where there is an absence of conflict based on race, gender, ethnicity and other social markers. It is one where there is no great discrepancy based on wealth or access to education, health and other services. Instead, there are social bonds that create the experience of a shared reality. A society where people “feel a sense of belonging, that they perceive the whole society as greater than the parts, and when differences develop, they can be dealt with peacefully”[4]. The emphasis on “shared” suggests that such a society must take a singular form; either becoming united or advancing an existing social unison. Social cohesion is therefore a prescriptive term that achieves its end by promoting values and policies that reduce difference. According to the OECD, a cohesive society is one that advances the well-being of everyone in society, “fights (all forms) of exclusion and marginalisation, creates a sense of belonging, promotes trust, and offers its people the opportunity of upward mobility”[5]. From the previous research conducted by the Institute, we see that there are several determinants that drive or obstruct social cohesion. These determinants include racial diversity, economic inequality and historical events[6]. In all of the above, there are clear divisions whereby trust, identity and social cohesion are determined. The group subjugated to the conditions or policies listed above, are either locked out or experience long-term negative impacts. This results in a rejection of the existing social values and institutions. They experience social conditions as benefiting others, not them. Or they simply reject social cohesion as assisting in the pursuit of their needs. This rejection can take the form of protests among populist formulations. We return to this later. The South African story Historically, South Africa’s social organisation is marked by division. Before social cohesion could be pursued, the socio-political structure had to be fundamentally changed. Installing non-racial democracy in 1994 conjured the proverbial rainbow nation. The concept of the rainbow nation has recently received considerable rebuke. Its use, as an appeal, is however misplaced. The rainbow nation, or the rainbow people of God, as introduced by Desmond Tutu, did not suggest socio-economic equality between different groups, therefore that transformation had been achieved. Instead, by installing a social arrangement where for the first time all people were politically and legally equal, it allowed for the potential to transform. Social cohesion was central to enabling transformation. The ending of apartheid did not summarily achieve social cohesion. Instead, equal rights, for the first time, created a shared reality whereby everybody would not only be enfranchised, but also tasked with the role of continuously overcoming the various divisions of the past. The Constitution, as the foundational text of the emergent South Africa, serves as the guide, as well as the infrastructure, towards the transformed society. It does so through its programme of aspirational norms and principles. In its preamble and with its first words, ‘We, the people of South Africa,’ the Constitution both presents the foundational argument towards building something new and surmounts the divided past by establishing a singular ‘We’ that comprises all peoples. The past as well as the future not only belongs to but is also established by all people in their collective ways. The Constitution provides a normative as well as structural guide for this social development. It is the bedrock for transformation. A technology of and towards social cohesion. The Constitution deftly delegitimises any path for social discord based on racial or other divisions. By rejecting the means and ways that measure and partition according to difference, something new is built. The Constitution calls on all South Africans to “heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights”[7]. In addition to establishing unison between all people, the phrases of the preamble also instruct all of those who comprise the ‘We’, to “recognise the injustices of our past … believe that South Africa belongs to all who live in it, united in our diversity”[8]. Social cohesion – and by extension, social justice – is set up to be achieved through an active rejection of the former national strategy. According to Former Chief Justice Pius Langa, the Constitution presents “a space between an unstable past and an uncertain future”[9]. It is thus a technology that connects and coheres a society which before was forced apart. This technology is referred to in the Interim Constitution of 1993 as a bridge: “This Constitution provides a historic bridge between the past of a deeply divided society characterised by strife, conflict, untold suffering and injustice, and a future founded on the recognition of human rights, democracy and peaceful coexistence and development opportunities for all South Africans”[10]. The Constitution plays an important role in formalising much of the myth upon which South Africa is founded – including the myth that South Africa is somehow special, a democratic miracle, where the indignity of apartheid was replaced by a rainbow nation. The bridge functions as a system of meaning making. It does not coldly separate from the past, thereby denying or forgetting, but instead, it maintains the past as reference, connecting it with the future. In doing so, it establishes a singular normative pathway that binds everyone in society. All people must cross the same bridge, must take ownership of and pride in the national symbols, the national myths and the national heroes. Enacting the vision of a singular nation, and thereby arriving in a shared future. Social cohesion as the method to transcend divisions has a deeply political grounding in South Africa. It is useful to note that the apartheid government tried for some time to maintain power under the promise of reform. It sought, through various political manoeuvres, to legitimate its maintenance of power in a new, reformed political reality. Its plan required “a (conservative) black middle class that could be co-opted into ‘managing’ urban black townships within the envisaged consociational model”[11]. This co-option of a credible, yet pliant black leadership, as embodied in the titular representation of coloureds and Indians in the Tricameral Parliament, alongside black leaders in homelands, was a tactic that recognised the power and importance of cohesion or acceptance between different social groupings. A tactic to maintain legitimacy. “While government motioned to legitimate representation, achieving a new political normalcy was prevented by its own mechanisms, which denied authoritative black input and therefore real negotiation”[12]. The governing party failed to persuade that it could reform into one, a system it essentially held apart. Its approach of division fundamentally rebuffed real social cohesion, thereby leading to its fundamental delegitimation. It was only when the National Party’s strategy fundamentally changed, when instead it sought to advance the effective participation of all in a singular political regime, that the political settlement became conceivable. At the time of the political negotiations, the political basis was racial division. The significant pressure from both white conservative and radical black groupings sought to maintain this order. Neither of these groupings advanced a shared national project. It was, therefore, on the grounds of accepting a shared future, in a single country (as motioned in the future Constitution), that the opposing political forces of the erstwhile government and the liberation movement led by the African National Congress coalesced and agreed on a political settlement. The pursuit of a single, coherent nation became the measure on which South African political legitimacy would be based. Under the brokered political settlement, the party controlling the political arena would be the vanguard not only of a specific group, but of all people. Central to sustained legitimacy would be their commitment to social cohesion. This pursuit embodies government’s fulfilment of the social contract. Under the Constitution, the government is tasked with formulating and implementing policies that transform South Africa towards marked equality. At the turn to democracy, social cohesion lay at the heart of political decision-making – appeasing different social groups and bringing all into the Constitutional ‘We,’ so as to maintain order and political legitimacy. The Truth and Reconciliation Commission (TRC) presented the foremost programme of transitioning from the past. Through legislation, confessing perpetrators of the apartheid regime were afforded clemency and crossed the proverbial bridge. The TRC, together with various government programmes, such as the National Development Plan 2030 (NDP) and the Social Cohesion Framework, all rely on citizens to enact the transformed nation. The approach of government is clear: it proposes the plans, it details what social cohesion and nation-building means[13], while the act of cohering resides with the populace. The rhetoric around the social compact, the citizenry’s activation of social cohesion, has returned to the spotlight under the Ramaphosa administration. The current South African president is perhaps the loudest proponent of a renewed and emboldened social compact[14]. Encouraging public participation in enacting the constitutional vision is central to his strategy, which he has said is the same strategy as President Mandela. Under Mandela, as is the case under Ramaphosa, the governing party “frames the measurement of social cohesion as the demonstration or enactment of a unitary South African identity, the persistent move to instantiate the centrality of liberation heroes and the liberation movement through place renaming, for example, appears rational and even necessary”[15]. The command of this strategic narrative has narrowed to be one overly associated with ANC as political party and its leaders. Instead of having direct bearings on the lives of people, social cohesion has arguably become a rehashed buzzword. According to Abrahams, the academic and commentator Raymond Suttner has suggested that the “social cohesion framework can be seen as an extension of the completed yet rehearsed narrative of liberation. Seen in this way, Suttner suggests that social cohesion continues the historic mission of the liberation movement in South Africa, causing the political party – the ANC – to become the vanguard of ‘nation’”[16]. The control or dominance of the South African project as exhibited by the governing party’s ideology propounds that the citizenry adopts the same liberationist position that it does. The ANC so construed dominates the national vision, it “does not envisage much space for independent identities”[17]. There are many contradictions in the ANC today. The tension between dominating the national vision and seeking citizen command is one such contradiction. The pursuit of the Ramaphosa administration, to attain endorsement from the country’s people, suggests that the tensions in the ANC and the weaknesses of the state are too great. While the Ramaphosa administration seeks broad contribution to building the state, another part of the ANC pursues total control in line with the party’s belief that it is the vanguard of the (ongoing) liberation. This approach, while purporting to champion the constitutional prerogative of social cohesion, does so in a manner which measures transformational progress according to strictly ideological terms. This pursuit of representation according to quantity and not quality, often appeases ideology while not having a direct bearing on national transformation in terms of social justice. According to Abrahams, concepts such as nation-building have been more about the pageantry of governmental power than the empowerment of people. Instead of a truly transformative social agenda, South African social cohesion has been rather superficial. “Social cohesion as a concept needs to be redeemed from the tropes of nation-building; the wider value of the concept is at stake, as is the actual practice of a truly socially cohesive country by all members of society, all political parties and all ideologues”[18]. The NDP clearly states that “social cohesion needs to anchor the strategy. If South Africa registers progress in deracialising ownership and control of the economy without reducing poverty and inequality, transformation will be superficial. Similarly, if poverty and inequality are reduced without demonstrably changed ownership patterns, the country’s progress will be turbulent and tenuous”[19]. Accordingly, social cohesion is equivocal to the realisation of socio-economic transformation. “Unless there is real material transformation in the lives of those who have been apartheid’s victims,” warned Desmond Tutu, “we might just as well kiss reconciliation goodbye. It just won’t happen without some reparation”[20]. Rejections of social cohesion From what has been discussed here, there is clearly a tension between the power, ideological and tactical purposes of social cohesion in South Africa. Furthermore, the concept, and the aspiration towards it, has been damaged by what is seen as the pageantry of nation-building and its failure to correspond to material concerns. People do not actively cohere with others when others benefit without them or benefit at their expense. In South Africa, the rejection of social cohesion as foremost strategy has taken several pathways. One such pathway is broadly considered as xenophobic nationalism. This has various components; its rejection of social cohesion has historical, political and economic foundations. The following description is brief and by no means comprehensive. In South Africa, xenophobic nationalism sees locals taking their socio-economic grievances out on migrants from other African countries. Africans who reside in or operate businesses in proximity to South Africans have been targeted. Whereas black South Africans traditionally have a deep history of solidarity with and appreciation for the role that Africa played in South Africa’s liberation, it is this group that has become most vocal and violent towards migrants. There have been various waves of xenophobic attacks, with the most lethal taking place in 2008 when 62 people lost their lives[21]. These xenophobic attacks have been suggested to be caused by people taking violent action to protect their interests. Suggested reasons why African migrants are the victims include their cultural difference to the in-group where they live. They are seen as taking lower paid jobs and are accused of criminal activities, including the drug trade. But the central reason for xenophobic nationalism is poverty[22]. The people undertaking xenophobic attacks are seen as turning to these actions out of desperation. Instead of seeing the desperation of their victims, they blame them of illicit undertakings or for simply being in South Africa illegally[23]. Their antagonism to coherence is based on their own poverty; their dissatisfaction of their socio-economic reality is passed down the line and onto another victim. The recent rise of the Operation Dudula movement and the anti-constitutionalist Radical Economic Transformation (RET) segment aligned to the governing party are illustrations of an evolving socio-political situation in South Africa. Operation Dudula is a South African nationalist movement that undertakes protest and active citizenry measures against illegal foreign nationals and their perceived illicit behaviour. The movement has been accused of vigilantism, whereas they say that they are taking action where government has failed. Their rise stems from unaddressed frustration and worsening conditions. The movement introduces a new dynamic to modern South Africa, one where fringe groups do not wait for the political establishment to lead but does so themselves. Theirs is not first an unwillingness to adopt social cohesion, but a re-articulation of its meaning. Not a denial of the social contract but giving up on the previous order, so as to establish something new. As there are various factors playing into this re-articulation of the social contract, it is still too early to see what kind of role it will have on the broader political establishment. In a related but different development, there has been an increasing movement from within the political establishment, and particularly the ANC, to reject the political settlement of the early 1990s in favour of radical economic transformation. The strategy of this grouping is to realign the governing party to more aggressive redistribution and away from norms and values that underpin cohesion. The radical revolutionary approach sees the constitutional order more as an obstacle than a conduit towards equality. According to some reports, this grouping has turned away from its earlier strategy of blaming white people[24] for the poverty and inequality in South Africa. With slogans such as “put South Africa first” channelling Trumpist ethno-nationalism, there has been a shift towards attributing responsibility for the nation’s ills to African migrants. The overarching motive here is not only to find a scapegoat, but to denounce social cohesion as the foundation to the national project. It seeks to dislocate equality and a rights-based order, subjugating social ends to the deeply material ends of the National Democratic Revolution (NDR) grand strategy. The NDR seeks to bring about a national democratic society characterised by: “the resolution of antagonistic contradictions between the oppressed majority and their oppressors; as well as the resolution of the national grievance arising from the colonial relations”[25]. The advance of these economic resolutions does not require social cohesion, nor do these resolutions have to abide by legal or normative prescriptions. The populist claim of these revolutionaries, of which former President Jacob Zuma and his coterie are central, suggests that the “constitutional order is ineffective in achieving the revolutionary ends of the liberation movement … To Zuma, the constitutional state was always a means towards the ends of the revolution. Unconstrained political power, where the ends justify the means, is therefore the superior and legitimate approach”[26]. Those advancing this view have increasingly sought to equate the democratic state to the unjust, illegitimate apartheid state – seeking to break down its foundational legitimacy and subvert order to disorder. The looting and destruction that took place a few days after Zuma’s incarceration, in July 2021, exemplifies the subversion of the constitutional order to the materialist ends of the NDR. The populism manifested here was calculated. Looters did not have to be Zuma acolytes to act as foot soldiers of this strategy. Looters became agents of sedition, subverting the ends of the state to that of the revolution. “Amid the destructive plunder, where lives were lost and infrastructure and property were decimated, thousands of poor people returned home with items they would otherwise not ordinarily have had access to. It was under these conditions, the juncture between order and disorder, that thousands of South Africans gained materially and saw the ends of the political power of radical economic transformation”[27]. Measuring social cohesion in South Africa: Some findings The grievances detailed above are substantial. While these grievances take different forms and perform different motives, the mission of social cohesion remains central to the national strategic interest. To get a more detailed and more nuanced understanding of the broad nature and impact of social cohesion in South Africa, it is important to undertake analyses among diverse groups. Since social cohesion is an active exercise involving the building of shared values or shared enterprise, one can get a better idea by measuring these relationships between peoples. The following section draws from the ongoing research undertaken by the Institute. First, social cohesion is here understood as “the notion that relationships among members and groups in society are sufficiently good and that all feel a sense of belonging, that they perceive the whole society as greater than the parts, and when differences develop, they can be dealt with peacefully”[28]. The Institute has identified certain dimensions and factors that are central to its research on the field. The key dimensions regarding social cohesion, as first defined by Langer et al.[29] in their Social Cohesion Index, include inequality, trust and identity. Inequality refers to the extent of perceived inequalities within and across groups, which can manifest itself in various forms, such as economic, social, political, or cultural disparities. Social cohesion is threatened when there are high levels of inequalities within a society because it erodes the relationships within that society, which, in turn, may cause conflict. One often-used reference to inequality is the Gini coefficient, which measures national inequality. According to the World Bank, South Africa ranks as the most unequal country in the world. Trust is the ‘glue’ that holds societies together. When trust is missing between members of society, it weakens the ability of individuals and groups to cooperate peacefully and to collaborate in order to achieve inclusive economic growth. Mistrust towards state institutions may, for example, fuel violent protests, and similarly, mistrust between individuals and/or groups may cause aggressive behaviour towards each other. South Africans have relatively low trust in the state. Identity relates to whether people have a stronger adherence to their national identity vis-à-vis their group or ethnic identity. This is particularly applicable in multi-ethnic communities, more so in countries with a colonial history, such as South Africa. Its fractured history has made the forging of a united, common identity a difficult task. Some of the Institute’s findings on social cohesion in South Africa include[30]: South Africans remain committed to social cohesion as encapsulated in the national motto, ‘Unity in Diversity’. But nearly half of the South African population doubts whether the different groups in South Africa would be able to form a single nation. Instead, they believe that they can unite, live and work together, as fellow South Africans. 47,96 percent (nearly half) of South Africans either agreed or strongly agreed with the notion that it is not possible to form one nation out of all the different groups in the country. This finding held true across all race groups, with whites being slightly more inclined to believe it possible, and coloured people being the most doubtful. 42,7 percent of white South Africans thought is not possible to form one nation, whilst 47,45 percent of black South Africans, 54,55 percent of Indians and 55,77 percent of coloured South Africans also thought so. There was little differentiation between age and gender groupings. It is encouraging that most South Africans agree that there is reason and need to unite as a nation. Most were of the opinion that it was important for all South Africans to unite. 70,53 percent of South Africans either agreed or strongly agreed with this notion, whilst only 13,15 percent either disagreed or strongly disagreed. 2,75 percent did not know. More people agree than disagree that reconciliation is moving in the right direction. 44,97 percent of South Africans agree or strongly agree that it is moving in the right direction, as opposed to 27,54 percent who disagree or strongly disagree. 21,27 percent neither agreed nor disagreed, and 6,22 percent did not know how they felt about it. A significant degree of racial integration exists in everyday life. The survey suggests that there is a relatively high level of integration between the various race groups in the country when it comes to everyday life activities. Moreover, the integration appears to not be forced integration, but rather of a voluntary nature, where there was a high level of enjoyment flowing from such integration and friendships being formed. The statistics indicate that the black community is slightly lagging in terms of integration. This should be understood within the socio-economic context of South Africa, where the majority of the poor and jobless are black and, thus, not within the workplace or able to participate in extra-mural social activities to the same extent as the employed and socially mobile. What the statistics do tell us, is that the majority of South Africans have commenced the journey towards reconciliation, nation-building and social cohesion. Though it may be declining, racial bias is still prevalent in society. Nearly a third (33,44%) of adult South Africans still do not like associating themselves with people from other population groups. This would suggest that the country has still some way to go before it can consider itself to be fully reconciled. Racial political narrative differs from reality. There is a disconnect between the general negative political racial narrative which drives division, and the realities of everyday South Africans going about their daily business. While many in the political establishment seem to be fuelling division, citizens, in turn, are finding each other at the human level. The trust needed to underpin social cohesion is largely absent in South Africa. While they have high levels of trust in their families and neighbouring communities, South Africans do not sufficiently trust their compatriots from outside their lived environment. The lack of trust runs across most dimensions, be it race, gender, age, education, or income. South Africans do not trust at first sight. Across the board, there exists distrust between races. Instead, trust only develops after relationships are built. The more people integrate, the more trust will develop. In general, South Africans do not trust people from Africa or other overseas countries. This is particularly important in relation to xenophobia in the country. The lack of trust runs across most dimensions, be it race, gender, age, education, income, or political party. Overall, only 31,23 percent of South Africans said they completely trusted or somewhat trusted immigrants from African countries, with only a slight differentiation between men and women. 62,62 percent of male and 62,63 percent of female South Africans either did not trust immigrants very much or at all. Trust between South Africans is at a low level. This is the case with all demographic groups, be it race, gender, age, education, income, political party, or province, and immigrants. This does not bode well for social cohesion and presents a socio-political risk within an environment which is prone to xenophobic confrontation. South Africans deeply distrust fellow compatriots who do not belong to the same political party as their own. This undermines social cohesion, and points to a high level of political naïveté, in that in a mature democracy people should be able to associate freely at the personal, workplace and societal levels without overt hostility towards those who differ politically. This is particularly unsettling given the country’s past racial divisions, and party support that remains largely divided along racial lines. All of the political parties enjoy significant trust from their own supporters. There is a strong sense of community within groups. Social cohesion requires a high sense of community. It is when a community is socially invested in each other that they will come to the defence of its people, its institutions and infrastructure in times of need, threat or tragedy. Furthermore, economists find a positive relationship between social cohesion and economic growth, on the basis that social cohesion improves formal and/or social institutions, which causally drives economic growth. Conclusion: The centre holds, but for how long? The various challenges that have been shown to undermine social cohesion suggest that programmes that do not have a direct bearing on material concerns, such as nation-building, will increasingly be used to undermine the advance of social cohesion. Whereas social cohesion and nation-building receive increasing criticism as soft issues, this perception is made without sufficient historical-political regard. It is not seen for the strategic foundation it lays; the transformation put forward in the Constitution. There is, however, sufficient reason to criticise what has become the customary approach to social cohesion – the cursory, yet dominant, approach adopted by the governing alliance. The gaps in the returns on investment are clear; socio-economic inequality persists. The rich and historically privileged have maintained that privilege, whereas the poor, while being asked to uphold their side of the social contract, have not seen appropriate returns. Though there remains the wish for equity and cohesion among the different groups, the trust required is diminished. All groups feel that they deserve more, they share the mistrust – that government cannot strategically improve the lives of all. Whereas the rich can install security or leave for perceived greener pastures, some among the poor have turned to mobilising around populist and xenophobic programmes. Persistent poverty and inequality demand interventions that ensure greater material benefit. Though movements such as Operation Dudula and RET advance different objectives, their appeal to the man on the street is the same: the status quo does not serve them, it must be disrupted. Furthermore, while it is concerning to see vigilantism and sedition, there is broad proof that the majority of South Africans respect the constitutional norms and values. Though the riots last July were disastrous, they did not spread throughout the country. And when they calmed down, there was an enormous response from South Africans across racial and other divides to condemn these actions and to stand in solidarity with the victims. Further proof can be drawn from the recent municipal elections and especially from the national elections in 2019. The election results show that, unlike some nations around the world, particularly those in Europe, the extreme parties failed to draw significant support. Despite the enormous challenges faced, South African politics appear to mature towards the middle. The threat of splintering towards radical fringe parties has not materialised. As indicated above, social cohesion remains the foundation to a united and prosperous nation. Most South Africans believe this to be true. Though there is significant mistrust among people and in the government, the people in South Africa agree that the country should cohere. It is, however, clear that social cohesion without social justice can only be temporary. While social cohesion might have been foundational to the formation of democratic South Africa, social justice will be foundational to its continued existence. References [1] Inclusive Society Institute. 2022. ‘Measuring Social Cohesion in South Africa: Results from the Inclusive Society Institute’s 2021 GovDem survey’, Forthcoming [2] Ibid [3] Human Sciences Research Council. 1998. ‘Social Cohesion and Social Justice in South Africa’ [4] Langer, A. et al. 2017. ‘Social Cohesion Index’ [5] SFRI, n.d. ‘What is Social Cohesion?’ [6] Ibid, 1 [7] South African Constitution [8] Ibid [9] Langa, P. 2006, ‘Transformative constitutionalism’, Stellenbosch Law Review 351 at 354 [10] Interim Constitution (n 10) [11] Louw, E. 2004. ‘The Rise, Fall, and Legacy of Apartheid’, London: Praeger, p94 [12] Kotzé, K. 2018. ‘Strategies of White Resilience: From Apartheid to installing democracy,’ African Yearbook of Rhetoric, 8, p55 [13] Chapter 15 of the NDP is titled ‘Nation Building and Social Cohesion’ [14] Kotzé, K. 2019. ‘Cyril Ramaphosa’s strategic presidency,’ Defence Strategic Communications, 7 [15] Abrahams, C. 2021. ‘Social Cohesion as Imposition of National Identity’, Lesedi, 24, p25 [16] Abrahams, C. 2016. ‘Twenty Years of Social Cohesion and Nation-Building in South Africa,’ Journal of Southern African Studies, 42(1): 95 – 107 [17] Suttner, R. 2011. ‘Revisiting the National Democratic Revolution (NDR): The national question’ [18] Abrahams, Twenty years of Social Cohesion, 107 [19] National Development Plan, p17 [20] Tutu, D. 2000. ‘No Future Without Forgiveness’, p182 [21] Matunhu, J. 2011. ‘Revisiting the May 2008 xenophobic attacks in South Africa’, African Journal of Criminology and Justice Studies, 5(2) [22] Ibid [23] Ibid [24] The term ‘White Monopoly Capital’ has infamously been adopted to pin responsibility for the nation’s ills on white people [25] African National Congress. ‘Umrabulo’, National Policy Conference, July 1997 [26] Kotzé, K. 2021. ‘Jacob Zuma’s treasonous strategy,’ Daily Maverick, 12 July [27] Ibid [28] Langer et al. [29] Ibid [30] Inclusive Society Institute. ‘Measuring Social Cohesion in South Africa’ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. All records and findings included in this report, originate from a panel discussion on developing a new economic blueprint for South Africa, which took place in March 2022 Author: Mariaan Webb Editor: Daryl Swanepoel Contents Abbreviations & acronyms Introduction Main themes Policy, regulation and legislation Government action Collaboration between government and private sector Seizing opportunities Energy crisis Other considerations Comparative research Historical analysis Counterfactual scenario Interventions for economic modelling Efficient bureaucracy Energy crisis Government coordination crisis Transport and logistics Private-sector deregulation Confirmation of property ownership through secure title Private-sector collaboration Downside risks Macroeconomic considerations Conclusion References Annexure A: Economic growth constraints per sector Annexure B: Interventions for fostering economic growth per sector Abbreviations & acronyms GDP gross domestic product GFC global financial crisis ISI Inclusive Society Institute PPP public–private partnership REIPPPP Renewable Energy Independent Power Producer Procurement Programme SMME small and medium-sized and micro enterprise SoE State-owned enterprise Introduction In recent years South Africa has performed poorly on several important economic measures, including unemployment and inequality. With the world’s highest unemployment rate and most unequal society, the country is in dire need of accelerated and more inclusive growth. After consistent economic growth in the decade leading up to 2007, South Africa’s progress slowed dramatically after the global financial crisis (GFC) of 2008/9. In the years immediately following the GFC, the gross domestic product (GDP) growth rate has hovered between 2% and 3% and, from 2014 onwards, stagnated at about 1% before reaching an historic 6.4% contraction in the pandemic-hit year of 2020 (World Bank, 2022). The sustained period of low economic growth is reflected in rising unemployment and poverty. The most recent data indicates that unemployment rose to a record of 35.30% in the fourth quarter of 2021. Using the expanded definition, unemployment is at 46.20% (Stats SA, 2022). Unless South Africa achieves faster and more inclusive economic growth, the country’s goals of eliminating poverty and reducing inequality and unemployment, will remain unachieved. The Inclusive Society Institute (ISI) has embarked on a comprehensive economic research project that will culminate in a blueprint for rebooting South Africa’s economy. The first phase of the three-phase study delved into international experiences of economies that were in dire straits but managed to turn themselves around. The second phase included a series of dialogues with various sectoral stakeholders and policymakers to gain a sectoral understanding of the policies that must be corrected and to find new initiatives to shift the economy onto a higher growth trajectory. The sectors covered include agriculture, construction, energy, mining, financial, foreign investment, hospitality, information communication and technology, manufacturing, and retail. The ISI’s research entered a consolidation phase in March 2022, bringing together several industry experts to identify the themes that require public policy interventions, as well as the priority structural reforms that should be introduced to revive the South African economy. This document is the outcome of the first consolidation exercise and identifies the main themes, interventions and policy changes that should be considered as well as the key interventions that should be included in a formal economic modelling exercise. The final report will highlight key findings of the economic modelling exercise with the aim of projecting the potential impact of policy adjustments and structural reforms over the short, medium and long term. The blueprint will be shared with government departments, including the National Treasury, and will be presented to political parties, public policy institutions and public bodies, such as Parliament and Parliamentary Committees. Main themes This section identifies the main themes that must form part of the final blueprint. These themes were identified in the research thus far, including the sectoral discussions and during the consolidation exercise. Policy, regulation and legislation Government can resolve several constraints to economic growth by assessing the true economic impact of many of its policies, regulations and legislation. Simplifying policies and reducing layers of regulatory red tape will go a long way in promoting sectoral growth. Removing administrative barriers will free up funds and human capital that could be applied elsewhere to drive growth. Further, government should measure the outcomes of certain pieces of legislation and transformation policies against their intended goals and, where necessary, use the results to amend or abolish regulations that are not achieving their aims. In some instances measures to compensate for market failures will be required. These policies and regulations should, however, be crafted with great caution. A review of the economic impact of policies, regulations and legislation will assist in resolving: policy uncertainty outdated policies prohibitive transformation policies excessive regulations the high cost of doing business onerous labour laws insufficient competition tenders and procurement issues environment unsustainability The reduction of red tape should be prioritised in: transport subsidies independent electricity investments by firms reducing the cost of doing business labour market reforms re-evaluating transformation policies creating a responsible investment environment reviewing the tender process creating policies that bolster competition incentivising localisation Government action To stimulate economic growth, it is imperative for government to improve its capacity and effectiveness if it is to honour its role in the social compact. Crucial to this is appointing skilled staff to the relevant positions in all spheres of government as the State seeks to regain its strength. These appointments must result in a marked improvement in service delivery, most notably water supply and logistical infrastructure. Overhauling the education system should be a matter of urgency. South Africa cannot create enduring economic growth using outdated skills and knowledge. Strengthening law enforcement is another crucial step. Corruption and crime reduce investor confidence and drain the fiscus and must, therefore, be dealt with decisively. Ineffectual State-owned entities (SoEs) are also a drain on finances. Those that cannot be saved and not required for national strategic interest, must be severed. This will free up money to spend elsewhere in support of proven growth strategies. Improved government capacity will assist in resolving: the failure to implement policies and/or strategies inadequate infrastructure failing service delivery poor global benchmarking weak government institutions slow vaccination roll-out the skills deficit Improved State capacity should be prioritised in: strengthening leadership curbing crime and corruption strengthening local government establishing an e-government administration developing smaller, more-focused, projects cleaning up SoEs securing electricity supply improved project management and infrastructure investment developing necessary skills Collaboration between government and private sector The state of South Africa’s public finances requires government to mobilise extensive private participation if it hopes to pull the economy from the doldrums. At the same time, business requires government’s support if it is to capitalise on new generation technologies and opportunities. Steps must be taken by government and the private sector to repair the trust deficit following a fraught number of years, owing to, among other things, corruption and State capture. Mutually beneficial arrangements and public–private partnerships (PPPs) can be devised to resolve pressing economic issues. Furthermore, it will bode well for the private sector to have amicable relations with the public and surrounding communities, as this will contribute to better buy-in from communities and boost the success rate of large-scale projects. Collaboration between government and the private sector must be improved to: access funds more easily rebuild the trust deficit between the public and the private sector address exchange rate volatility increase digital technology access reject environmentally unsustainable projects tackle poverty and unemployment address the skills deficit Improved government and private-sector relations should be prioritised in: access to finance skills transfer and development reducing unemployment creating PPPs rebuilding trust between government and the private sector driving new technology investment and productivity Seizing opportunities The South African economy risks falling behind many of its peers. Government and business must better take advantage of new opportunities that arise. The global economy is searching for partners that can keep up with the fast pace of technological, environmental, political and social changes happening worldwide. The upside of globalisation means South Africa can capitalise on these opportunities while using them to uplift local communities. By intertwining expertise and strategies, the private sector together with the State can be a driving force in positioning the country as a strong African economy, a gateway to Africa, a geopolitical force not to be overlooked by investors. Improving the seizure of opportunities will assist in: expediting technology commercialisation overcoming the lag in innovation The seizing of opportunities should be prioritised in: pursuing green initiatives developing a green hydrogen economy and green hydrogen exports enhancing competitive strengths creating a geopolitical alternative strengthening intercontinental trade promoting new mining activities rebuilding mining exploration, especially for energy metals transforming special economic zones revitalising rural economies and strengthening rural security and infrastructure further boostinig agricultural technology and agricultural exports Energy crisis The crisis in the electricity sector is considered to be at the heart of South Africa’s economic malaise and unless resolved with urgency, it is unlikely that economic interventions will succeed. The country must organise itself better to take advantage of low-carbon investment opportunities and collectively rally behind the adoption of renewable energy, which is a modular solution that can be implemented more rapidly and more cheaply than alternatives. There is pent up demand for investment in renewable energy, but regulatory barriers must be removed. While there is a shift to solar and wind electricity generation, State-owned power utility Eskom will continue to supply a large part of the country’s electricity. Eskom’s unsustainable debt needs to be resolved so that it can raise financing for investment in transmission and distribution infrastructure. At the same time, government must clearly signal the building of a new energy system that is reliable, greener and advances the country to its carbon neutrality goals. Resolving the energy crisis will assist in addressing: the high cost of doing business inadequate infrastructure failing service delivery environmental unsustainability weak government institutions excessive regulations Interventions to resolve the energy crisis should be prioritised in: dealing with Eskom’s debt problems ensuring a predictable price path removing regulatory barriers to private energy investment enhancing private-sector involvement sharpening the focus on sustainable developments developing more technical skills and capabilities Other considerations This section summarises some of the points that were made by industry experts during the consolidation exercise. Comparative research A question was raised about the findings from the ISI-led research, compared with similar research undertaken by government and other research institutions regarding the structural reforms that are required. The point was made that the National Treasury modelled the economic impact of structural reforms and that it is included in the Budget documents. However, it was pointed out that at the time when the Treasury modelled the impact of reforms on the network industries on growth, its focus was only on improving Eskom’s energy availability factor. It is felt that this model is outdated, as much of the electricity infrastructure development is happening outside Eskom. Historical analysis A suggestion was made that the blueprint should include an historical analysis of the periods of strong growth and employment creation that South Africa enjoyed since 1994. The factors behind the growth success must be considered, including the policies that were pursued, the strength of the network infrastructure, and the periods of booming commodities markets. South Africa recorded its fastest growth rates since the 1960s from 2004 to 2007, with real GDP growth averaging 5.20% a year (Industrial Development Corporation, 2013). Counterfactual scenario It was suggested that the report provide for a counterfactual scenario, which sketches the South Africa that could possibly be. For instance, to show where South Africa could have been today, had it taken a different path ten years ago. This could prime policymakers to be more open to suggestions that are put forward. An alternative to a counterfactual scenario could be to reflect and build on what is working. Some examples include the shift in the energy space towards new technology and an energy transition, or the policy shifts around freight logistics group Transnet and private-sector participation in rail and terminal operators. Rather than dwelling on the problem statement too much, the report could lift out “pockets of success” and consider whether they could be built upon to have a greater impact. Interventions for economic modelling This section focuses on suggested interventions and policy changes that should be considered for economic modelling. Modelling will quantify the impact of the suggested interventions on the economy. Efficient bureaucracy Efficient bureaucracy should be modelled. For instance, what the implications would be if South Africa cut red tape and adhered to regulatory approval timelines that are of an acceptable international standard. Energy crisis The roadmap must deal with the energy crisis in a focused manner. Specific energy-related actions with specific outcomes must be identified and modelled, such as the impact of the 100 MW reform that will boost private investment in electricity generation; the impact of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) bid windows (as well the negative impact of delays on the REIPPPP), the impact of resolving Eskom’s unsustainable debt and allowing for it to return to capital markets to fund its investments. Government coordination crisis In addition to the electricity supply crisis, there is a crisis of government coordination, or lack thereof. Although difficult to model, because it touches across so many aspects, it is one of the key reasons behind the lack of implementation in the public sector. Transport and logistics A model for transport and logistics must be pursued, considering the debilitating impact that failures in this regard are having on the economy. For instance, economic modelling could determine the value in terms of GDP growth and trade benefits. Private-sector deregulation The implications of deregulating the private sector, and specifically small, medium-sized and micro enterprises (SMMEs), must be modelled, with the examples of South Korea and New Zealand to be drawn on. The deregulation of SMMEs should not have a major cost implication for government, but could get the economy moving while other issues of electricity and infrastructure are being addressed. Confirmation of property ownership through secure title Security of title deeds for those occupying properties could be pursued. A model has already been developed that shows that giving people ownership of the properties that they occupy has a positive impact on their finances, on investment and on economic development. Private-sector collaboration Although difficult to model, the report should consider the implications of a positive mode of collaboration between government and the private sector. Downside risks The ‘downside risk’ posed by the disintegrating social fabric, lawlessness and the dysfunctional and ineffective criminal justice system must be considered and modelled. Macroeconomic considerations To achieve the objectives of the final blueprint, fiscal concerns must be balanced with inclusive growth. Balancing fiscal concerns with inclusive growth Source: Minsat, 2020 The National Treasury presented two debt scenarios in the June 2020 Supplementary Budget. In the passive scenario, which is not deemed a viable option for South Africa and was presented for illustrative purposes only, debt will spiral upwards, exceeding 100% of GDP from 2022. The possibility that government will not be able to repay its debt leads to higher debt-servicing costs. This redirects money that could be spent on health, education, and other policy priorities to local and overseas bondholders (National Treasury, 2020). In the active scenario, government stabilises debt through a combination of reforms and measures to boost economic growth, increase revenue collection and lower expenditure. The deficit would be reduced significantly starting in 2021 and the debt level would start decreasing from a peak of 87% of GDP in 2023 (National Treasury, 2020). The Organisation for Economic Cooperation and Development has proposed a progressive consolidation scenario where government does not pursue highly constrictive fiscal policy and the reduction of the deficit happens over a longer period. In this scenario, the debt level will stabilise by 2028. This progressive consolidation scenario is based on a deficit reduction of 1% a year of GDP and 2% GDP growth from 2025 (Minsat, 2021). Although there are differing views about the approach to debt reduction, taking a longer-term approach to fiscal consolidation could free up capital for investment in economic infrastructure that would be beneficial to economic growth. Pension funds must also be encouraged to invest in infrastructure, following amendments to Regulation 28 of the Pension Fund Act. However, this will require confidence in the ability of the State to be able to prioritise and prepare proper economic plans around bankable infrastructure projects. Conclusion The consensus from the panel participating in the ISI’s consolidation exercise is that the sectoral deliberations have arrived at good insights, but that the research must be further refined to make it more precise and specific in identifying key interventions to lift the pace of inclusive growth. The ISI’s final report must not dwell on the problem statement too much and should instead focus on ‘what’ needs to be done and ‘how’. It must avoid being ‘another list of good intentions’. The blueprint must offer an economically coherent approach – based on clear cause and effect, and on an appreciation of the positive impact on growth of improved efficiencies and capabilities of the State, capital, labour and new technologies. Rather than being purely theoretical, the blueprint must provide practical and immediate action steps for implementation. It is understood that not every issue can be tackled at once, thus, the blueprint should prioritise interventions, not only in terms of capacity, but also in terms of financial ability, taking into account the fiscal constraints facing South Africa. References Eskom. 2022. Weekly system status: Week 10, March 13, 2022. [Online]. Available at: https://www.eskom.co.za/eskom-divisions/tx/system-adequacyreports/[accessed March 31, 2022]. Industrial Development Corporation. 2013. The South African economy: An overview of key trends since 1994, December 2013. [Online]. Available at: https://www.idc.co.za/wp-content/uploads/2018/11/IDC-RI-publication-Overview-of-key-trends-in-SA-economy-since-1994.pdf [accessed March 31, 2022]. Minsat, A, 2021. Reinvigorating South Africa’s Economy: Key Considerations, Inclusive Society Institute panel discussion. April 14, 2021. Organisation for Economic Cooperation and Development. National Treasury. 2021. Budget Review 2021, February 24, 2021. [Online]. Available at http://www.treasury.gov.za/documents/National%20Budget/2021/review/FullBR.pdf [accessed May 10, 2021]. Statistics South Africa. 2022. Quarterly Labour Force Survey – Q4: 2021, March 29, 2022. [Online]. Available at: http://www.statssa.gov.za/publications/P0211/Media%20release%20QLFS%20Q4%202021.pdf [accessed March 31, 2022]. World Bank. 2022. GDP growth (annual percentage) – South Africa, 2022. [Online]. Available at: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2020&locations=ZA&start=2003 [accessed March 31, 2022]. Annexure A: Economic growth constraints per sector Annexure B: Interventions for fostering economic growth per sector - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

11-12 May 2022, Cape Town, South Africa On 11 and 12 May, the Institute participated in the workshop on ‘Populism(s) and social cohesion in Southern Africa: a regional challenge, a global challenge?’ The workshop was hosted by the Institute for Justice and Reconciliation, in partnership with the Research Institute Social Cohesion, based at the University of Leipzig, Germany. Participants from across Southern Africa were invited to share their insights and inputs regarding the broad challenges associated with populism and the changing meaning of social cohesion. Participants represented a wide array of organizations, think tanks, labour unions and the academy. The two-day event allowed for a meaningful discussion on the current debates in South Africa, Namibia and Zimbabwe. This multilateral approach allowed participants to engage their neighbours while relating regional tendencies with their German co-hosts. Whilst case studies on populism(s) and socio-cultural dynamics have developed over the last years, the Southern African region has lagged in regard to producing comparative projects. This workshop offered a valuable opportunity to build regional partnerships and exchanges. The Institute was represented by Dr Klaus Kotzé who delivered an Occasional Paper titled Social Cohesion: Taking stock of South Africa’s socio-political strategy. The paper which was launched at the workshop discusses the meaning and significance of social cohesion in South Africa. It probes how social cohesion forms part of the Constitutional project, whilst suggesting that for social cohesion to be meaningful (and sustainable) it needs to evolve to become a term of transformative consequence

Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. All records and findings included in this report, originate from a panel discussion on developing a new economic blueprint for South Africa, which took place in February 2022 Author: Olivia Main Editor: Daryl Swanepoel Contents Introduction Key growth constraints Neoliberal macroeconomics Lack of localisation Corrupt politicians roam free Too many policies Not enough urgency Foreign nationals and casualisation Towards a new growth path Conclusion References Cover page image: www.mg.co.za Introduction On 2 March 2022, Employment and Labour Minister, Thulas Nxesi, officially tabled the National Labour Migration Policy (NLMP) for public comment and engagement. Touting the policy as the first time in the history of South Africa that government has formulated a comprehensive NLMP, the Minister said that “government have researched extensively and benchmarked internationally in search of policy based on best practice”. Together with the tabled NLMP, amendments to the Employment Services Act (of 2014) were proposed to limit the extent to which employers can employ foreign nationals (BizNews, 2022). And this is all good news. It points to the government’s willingness to look at labour laws that are not working and change them. But it is not enough. South Africa’s reputation – in fact its very standing – as the industrialised leader of the African continent is diminishing. On Statista.com, South Africa is listed as the third-largest economy in Africa in 2021 with a GDP of US$329.53-billion, trailing behind Egypt (GDP US$394.28-billion) and Nigeria (GDP US$514.05-billion). Our strength on the world stage has never been weaker (Statista, 2022). The situation does not look any better back home. According to the Quarterly Labour Force Survey (QLFS) carried out by Stats SA, the number of employed persons declined by 660 000 to 14,3 million for the 3rd quarter of 2021 compared to the 2nd quarter of the same year. South Africa’s unemployment rate in Q3:2021 increased by 0,5 of a percentage point to 34,9%. This is the highest official unemployment rate recorded since the start of the QLFS in 2008 (Stats SA, 2021). It seems there is room for improvement in just about every sphere of the economy. The Inclusive Society Institute has committed to an intensive three-phase research project, culminating in a blueprint for rejuvenating and reigniting South Africa’s flailing economy. This map will, ultimately, be shared with government representatives in the presidency and other important policy institutions and public bodies, such as Parliament, in 2022. A dialogue, hosted by the institute, brought together trade unionists from across a number of unions – as part of the second phase, to interrogate what in terms of the generally accepted economic architecture of the world South Africa is doing wrong. And to explore fresh out-of-the-box ideas that could grow the economy beyond the expected 2-3% to the 4-5% trajectory that is needed to really start chipping away at unemployment and backlogs (National Treasury, 2021). Key growth constraints Neoliberal macroeconomics The panel largely agreed that the South African government’s seemingly unapologetic neoliberal approach to running the economy is problematic. It was felt that the government relies too heavily on the private sector to cure social ills such as unemployment, while not doing any of the heavy lifting itself. In addition, the austerity measures that result from this neoliberalism is not speaking to the lived realities of South Africans. With no state-led development – and the private sector seemingly on an investment strike – money is not ending up in the pockets of the people. The trickle-down effect that the country has been waiting to witness for years has not come, which means the people are excluded from taking part in the economy and, so doing, contribute to growth (Mail and Guardian, 2021). As things stand, South Africa finds itself in the so-called middle-income trap with a middle-income economy, failing to transition to a high-income economy due to rising costs and declining competitiveness (Daily Maverick, 2019). The country’s macroeconomic policies are not assisting its social and industrial policies. Expenditure on industrial incentives is lacking, which does little to grow manufacturing. As a result, South Africa’s social cohesion is being tested as economic strife is compounded by the high levels of inequality still seen in the spheres of healthcare and education, among many others. Lack of localisation Far too little of the South African rand is circulating in the country. Whether it is officials receiving kickbacks from imports or consumers not buying local products, discussants felt that South Africa is losing out due to a lack of localisation. Although good work has been done to get big clothing retailers like Foschini, Woolworths and Markham’s to buy local, a lot more is needed. And not only from industry. As one discussant put it, ordinary consumers must also contribute, saying that “we should all make a little bit of effort to check the label on the trousers we choose to wear”. Additionally, too much revenue is lost to manufacturing done overseas. South Africa is a large producer of raw materials. The fact that those materials are shipped elsewhere and turned into consumable goods amounts to big losses when it comes to taxation, job creation and keeping money circulating within our borders. In a sign of the country’s lagging manufacturing capability, Trade, Industry and Competition Minister Ebrahim Patel recently requested the social partners at the National Economic Development and Labour Council (NEDLAC) to consider an import-substitution target of 20% for non-petroleum imports, which he argued could drive progressive localisation worth up to R200-billion over the coming five years. According to the minister, South Africa’s “propensity to import is out of line with peer countries and developed economies and more can sensibly and sustainably be produced locally” (Engineering News, 2021). Corrupt politicians roam free The panel was unanimous in their assessment that the South African prison system has too few corrupt politicians in its jails. The individuals who have stolen from South Africa for what seems like an eternity must be punished – and punished publicly and with consequences. Simply put, the crooks must go to jail. South Africa lost R1.5-trillion through corruption in the years between 2014 and 2019 (News24, 2021). And it is not only the government’s coffers that are being cleaned out. All over the country, copper cables are disappearing from railways faster than they can be replaced. Transnet and PRASA have seen the systematic destruction of their infrastructure by criminal syndicates over the past two years. Without money, the economy cannot grow. Without cables the trains cannot run. Commuters cannot get to work. Goods cannot get to ports. The panel felt that if the police and the National Prosecuting Authority (NPA) do not act, SOEs like PRASA will soon be gone. In addition, the public will not have confidence in the integrity of the leaders of society. Leaders such as Siyabonga Gama and Anoj Singh, former executives of state-owned infrastructure firm Transnet, as well as Brian Molefe, former CEO of public utility firm Eskom, who the Zondo Commission recommended be investigated for corruption and racketeering amounting to millions of dollars. The latest part of the report also implicates senior political leaders of the ruling African National Congress itself (Al Jazeera, 2022). Too many policies South Africa’s long history of policy changes reads as follows: In 1994, the Reconstruction and Development Programme (RDP) was chosen as the primary socio-economic programme. Two years later, government introduced the Growth, Employment and Redistribution (GEAR) programme to stimulate faster economic growth than RDP had managed. GEAR was replaced in 2005 by the even faster Accelerated and Shared Growth Initiative for South Africa (ASGISA) as a further development on the first two developmental strategies. Shortly after ASGISA came the New Growth Path (NGP), which was followed, in early 2013, by the National Development Plan (NDP) 2030 (South African History Online, 2014). In 2019 the Department of Trade, Industry and Competition (DTIC) put forward proposals for Master Plans for all 15 priority industries in the country in order to “target specific action points relating to the respective industries” (IOL, 2021). In total, therefore, a staggering 20 policies have made it onto the desks of government officials so far (SA History, 2014). The panel felt that such a large number of policies and the shifting ideologies between them is not the best way to take the country forward. The Master Plans have been in the making for three years and some are still not even concluded, while those policies that are currently in place are not being delivered on. Also problematic, is a dual system of social policies whereby one set of policies applies to the poor and another for the rich. A discussant also highlighted that to establish economic policies that are progressive, the youth and gender development must be considered. Not enough urgency South Africa’s economy is growing at a snail’s pace. Although growth was projected to rebound to 5.2% in 2021 (but that is still not enough to recover to pre-Covid 19 levels), the forecast is for the economy to slow to 1.9% in 2022 and 1.6% in 2023 (OECD, 2021). For a country brimming with natural resources, the growth rate is well below what can be achieved. In fact, it seems the only sphere showing real growth in the country is that of unemployment. The recent unemployment statistics released by Statistics South Africa show the rate of growth now sits at 34.9%, while under the expanded definition of unemployment, it rose from 44.2% to 46.6% (Daily Maverick, 2022). Yes, the recent social upheavals in the form of the looting in July 2021 are major setbacks that point to the fragile nature of the country’s social cohesion. But solutions to these problems have been tabled and are waiting to be actioned. Across the board, however, these well-thought-out policies and ideas are not being implemented. Promises are not kept as people in key positions seem to lack the energy, the will, or the know-how to act. A pertinent example is the National Anti-Corruption Strategy 2020-2030 (NACS). The first step in implementing the strategy is to establish an interim National Anti-Corruption Advisory Council, which has yet to happen, despite President Ramaphosa’s promise that it would be established by mid-2021 (Corruption Watch, 2022). Furthermore, from the names of those responsible for sabotaging Eskom, to the persons who stole directly from the State, the information about who did what has been made public. The natural – some might say inevitable – next phase to root out the problem would be to swiftly go into action and apprehend the criminals. But that is not happening. The panel felt that the slow speed of progress and political criminals still at large is, in large part, the result of a lack of political will. The ANC as the governing party has been indecisive and has thus far failed to restore the organisation to its former glory. It still has the overwhelming confidence of the majority of people in the country, but it is not able to lead a society as it has in the past. Foreign nationals and casualisation The twin issues of immigrant workers flocking to South Africa to gain employment and the country’s shift towards casualisation has profound implications both in terms of employment and social cohesion. At present, about three million of South Africa’s 60 million residents are migrants (Stats SA, 2022). Never, since the xenophobic attacks of 2008, has anti-immigrant sentiment been this high. In Gauteng recently, the Alexandra Dudula Movement and Operation Dudula have emerged with the joint purpose of ridding their townships of foreigners. Dudula loosely means to "push back" or "drive back" in isiZulu and gives an indication of the growing discontent among South African communities who feel marginalised. The campaigns of the two groups include a call for all undocumented African migrants to stop trading in Alexandra – a call they made clear by closing down all the stalls owned by foreign nationals who could not show the correct papers for running the business or a valid passport (BBC, 2022). The panel described foreign nationals working on a casual basis in South Africa as having a detrimental effect on the money earned and spent inside the country’s borders, together with taking employment opportunities away from hard-working citizens. As mentioned in the introduction to this report, a law is being finalised by government which will cap the number of foreigners that businesses owned by locals can hire. It remains to be seen whether the legislation will have a noticeable effect on the dire unemployment rate. Towards a new growth path Conclusion South Africa is a country with tremendous potential. As a discussant rightly pointed out, we are not dependent upon a single cash crop or commodity, like most African countries. We have a very diversified agricultural sector. We have all the infrastructure in the world, and we have a significant education system. Unfortunately, we are bearing witness to large parts of that potential coming to nothing through the actions – and inaction – of those we elected to represent us in what we hoped – and still do – is a democratic society. South Africa’s unemployment figures are dismal. The labour force is becoming less skilled. We are losing jobs to outsourcing and desperately poor people attracted to a country which until very recently still had the fastest-growing economy on the African continent. The outlook is poor, but the resolve of the people is not. Despite all the challenges and truly tragic events that have had this country in utter turmoil, South Africans are still pulling together and making things work. The SOEs are in dire straits, but they still exist. We have come through Covid-19 just as the rest of the world has, and let it be said that we still have a Rugby World Cup trophy – and the positivity that came from winning it – safe and secure in the country. However, people can only take so much, and the social cohesion of the country is not guaranteed. Real change is needed to bring about real hope. The labour sector invites all governing bodies to facilitate tangible changes to South Africans’ lived realities through constructive dialogue and innovative ideas – and action. The spirited discussions and the distilled solutions that come from these think tanks will then be in the public domain. More importantly, they will be within arm’s length of those with the power – and passion – to make a difference. References Al Jazeera. 2022. More S African corruption exposed in ‘state capture’ report, March 8, 2022. [Online]. Available at: https://www.aljazeera.com/features/2022/3/8/analysis-south-africas-state-capture-report-questions-anc-leg [accessed March 2, 2022]. BBC. 2021. Dudula: How South African anger has focused on foreigners, March 13, 2022. [Online]. Available at: https://www.bbc.com/news/world-africa-60698374 [accessed March 7, 2022]. BizNews. 2022. National Labour Migration Policy released for public comment, March 2, 2022. [Online]. Available at: https://www.bizcommunity.com/Article/196/717/225576.html [accessed March 3, 2022]. Corruption Watch. 2022. Solutions abound to SA’s graft problem – political will, not so much, February 14, 2022. [Online]. Available at: https://www.corruptionwatch.org.za/solutions-abound-to-sas-graft-problem-political-will-not-so-much/ [accessed March 7, 2022]. Daily Maverick. 2019. China, South Africa and the middle-income trap, April 23, 2019. [Online]. Available at: https://www.dailymaverick.co.za/article/2019-04-23-china-south-africa-and-the-middle-income-trap/ [accessed March 2, 2022]. Daily Maverick. 2022. South Africa needs renewed citizen activism and political imagination to stop the democratic degradation, January 4, 2022. [Online]. Available at: https://www.dailymaverick.co.za/opinionista/2022-01-04-south-africa-needs-renewed-citizen-activism-and-political-imagination-to-stop-the-democratic-degradation/ [accessed March 10, 2022]. Engineering News. 2021. Report warns that industrialisation-through-localisation could stunt South Africa’s development, November 16, 2021. [Online]. Available at: https://www.engineeringnews.co.za/article/report-warns-that-industrialisation-through-localisation-could-stunt-south-africas-development-2021-11-16 [accessed March 2, 2022]. IOL. 2021. Sectoral Master Plans playing a vital role in reviving SA manufacturing, June 30, 2021. [Online]. Available at: https://www.iol.co.za/business-report/opinion/sectoral-master-plans-playing-a-vital-role-in-reviving-sa-manufacturing-6873b700-9d37-47f2-836d-89f68aa589ef [accessed March 7, 2022]. Mail and Guardian. 2021. Intensifying economic insecurity may threaten South Africa’s social cohesion, February 16, 2021. [Online]. Available at: https://mg.co.za/opinion/2021-02-16-intensifying-economic-insecurity-may-threaten-south-africas-social-cohesion/ [accessed March 10, 2022]. National Treasury. 2021. Budget Review 2021. [Online]. Available at: http://www.treasury.gov.za/documents/national%20budget/2021/review/Chapter%202.pdf [accessed March 2, 2022]. News24. 2021. SA lost R1.5 trillion to corruption in five years and continues to bleed – report, June 23, 2021. [Online]. Available at: https://www.news24.com/fin24/economy/south-africa/sa-lost-r15-trillion-to-corruption-in-five-years-and-continues-to-bleed-report-20210623 [accessed March 7, 2022]. OECD. 2021. South Africa Economic Snapshot. [Online]. Available at: https://www.oecd.org/economy/south-africa-economic-snapshot/ [accessed March 2, 2022]. SA History. 2013. South Africa’s Key economic policies changes (1994 - 2013). [Online]. Available at: https://www.sahistory.org.za/article/south-africas-key-economic-policies-changes-1994 2013 [accessed March 7, 2022]. Statista. 2022. African countries with the highest Gross Domestic Product (GDP) in 2021, February 1, 2022. [Online]. Available at: https://www.statista.com/statistics/1120999/gdp-of-african-countries-by-country/ [accessed March 2, 2022]. Statistics South Africa. 2021. The South African economy sheds more than half a million jobs in the 3rd quarter of 2021, November 30, 2021. [Online]. Available at: http://www.statssa.gov.za/?p=14922 [accessed March 7, 2022]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za

Copyright © 2022 Inclusive Society Institute 50 Long Street Cape Town, 8000 South Africa 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the permission in writing from the Inclusive Society Institute DISCLAIMER Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or those of their respective Board or Council members. All records and findings included in this report, originate from a panel discussion on developing a new economic blueprint for South Africa, which took place in March 2022 Author: Mariaan Webb Editor: Daryl Swanepoel Contents Abbreviations & acronyms Introduction Identifying weaknesses Ailing infrastructure Brain drain Environmental concerns Labour cost and relations Limited producer support Livestock theft Policy uncertainty Research and training capacity Trust deficit and lack of social cohesion Veterinary support Suggestions for fostering growth Conclusion References Abbreviations & acronyms AAMP Agriculture and Agroprocessing Master Plan BFS Blended Finance Scheme GDP gross domestic product ISI Inclusive Society Institute NDP National Development Plan Introduction South Africa has a well-developed agricultural sector, which is a key driver of economic growth. Good rains during the summer and winter seasons helped boost agricultural activity in 2021. Together with a rise in animal products, increased wheat production boosted the industry by 12.20% in the fourth quarter of 2021, contributing to 1.20% gross domestic product (GDP) growth in the final three months of the year. Economic growth of 4.90% was recorded for the full year, after contracting by 6.40% in 2020 (Stats SA, 2022). The agriculture industry provided employment to 829 000 people in the third quarter of 2021 (Stats SA 2021). The agriculture sector ensures that South Africans not only have enough food, but it also has a vital role to play in foreign earnings and exports. In 2020, South Africa became the world’s second-biggest exporter of citrus after Spain. While the industry delivered a stellar performance in 2021, industry association AgriSA has warned that there are many challenges that could derail its continued success, chief among them the country’s crumbling infrastructure. The impact of deteriorating economic infrastructure was a key point of discussion during the Inclusive Society Institute’s (ISI’s) recent interaction with the agriculture sector as part of an economic research project. The industry’s concern about the state of the country’s roads, railways and port infrastructure echoes that of the mining industry, which is also heavily reliant on State-owned infrastructure for bulk exports. This report is a summary of the themes that emerged from the engagement that the ISI held with the agriculture industry. The first part deals with the industry’s views on the factors hampering economic growth and development and the second part seeks to provide some answers about interventions that could place South Africa on a higher economic growth trajectory. The ISI’s research project will culminate in a new economic blueprint for South Africa. Identifying weaknesses Ailing infrastructure The agriculture sector’s growth and its contribution to the South African economy, although positive, continues to be hindered by crumbling infrastructure, particularly economic infrastructure such as roads, ports, railways, telecommunication networks and electricity generation. The agriculture sector is increasingly shifting from rail to road transport to move goods between provinces and to ports for export. The modal shift is driven by the steady decline in the efficiency of the State-owned rail industry, partly owing to theft and vandalism of critical infrastructure. The ‘Ctrack Freight Transport Index’ illustrates the change in fortunes between rail and road, particularly since the Covid-19 lockdown. Ctrack’s road freight index reached a level of 129.90 points in January 2022, compared with rail freight’s index level of 81.70 in the same month (Ctrack, 2022). In the 2021 financial year, agricultural products accounted for only 0.60% of Transnet revenue from commodities transported (Transnet, 2022). There is concern that an increase in the number of heavy trucks on the roads results in more safety incidents, damages the road infrastructure and results in more congestion. For example, to load a vessel with a 55 000 t carrying capacity, requires 1 617 trucks loaded with 34 t each, the equivalent of a line of trucks 37 km long. Poor road infrastructure, particularly in rural areas where farmers rely on gravel roads, further increases production costs to the industry. Port infrastructure is also not adequately equipped to deal with demands from the agriculture sector. Port inefficiencies can cost producers of yellow maize up to R200/t, while rail line inefficiencies can add another R150/t. The industry argues that it is imperative that South Africa improves its rail and port infrastructure to ensure the country’s global competitiveness. Transnet is considering various initiatives to improve inland and port logistics, including increased private-sector participation. Telecommunications is another area where the farming community lacks infrastructure. Land-line infrastructure has been stolen in rural areas and has been overtaken by a shift to cellular technology. However, as farmers are dispersed and often in very rural areas, the industry is not a priority for profit-driven cellular companies. A lack of connectivity is a major productivity constraint and a security concern. Brain drain South Africans with experience in farming are in high demand in other parts of the world, particularly in the US. In 2019, about 275 000 workers entered the US on the H-2A programme that allows for US farmers to hire migrant labour to assist with planting, cultivating and harvesting. While more than 90% of these labourers arrive from Mexico, South Africans accounted for the second-most in demand workers. About 7 000 South Africans successfully obtained H-2A visas in 2019 (Business Insider, 2022). As these are seasonal employees, these South Africans often ‘learn, earn and return’. However, as the number of South African citizens emigrating abroad continues to rise, farmers are among those selling up and leaving the country, with Canada and Australia popular destinations. Environmental concerns There is threat to agricultural soils from mining and fracking. The Centre for Environmental Rights published a report in 2016 that showed how some of South Africa’s best agricultural soil has been decimated because of coal mining in Mpumalanga. Labour cost and relations Although farmers, like other economic stakeholders including government, want a decent wage for their workers, given the set of inflated costs the sector is forced to contend with, the cost of labour remains a concern for the industry. In 2021, farm workers’ wages were equalised with the minimum wage, resulting in a double-digit increase. It is argued if wages are too high, farmworkers will be priced out of the market and farmers may turn to mechanisation to remain competitive. The industry’s relationship with labour also has an impact on policy developments, and certain demands could derail progress. Further, labour legislation should not be made more complex, making permitting success, for instance, dependent on labour outcomes. Limited producer support Compared with many international competitors, South Africa’s agriculture sector does not receive direct support from government. Citing an internal study by AgriSA, a participant in the ISI roundtable discussion noted that of relevance to the country, is that four of South Africa’s emerging market counterparts, which had significant budget allocations to agriculture, experienced average yearly GDP growth of 3.40% over a ten-year period. Livestock theft Livestock theft is a major concern for the industry. According to the National Stock Theft Prevention Forum, livestock theft is costing the economy about R1.40-billion a year (Independent Online, 2021). Although stock theft is not new, what has changed is that the crime is now perpetrated by organised syndicates, rather than ordinary thieves. Whereas those stealing for survival will take only a few animals, criminal syndicates operate on a larger scale. Such syndicates often also target railway lines or power infrastructure. Policy uncertainty Policy uncertainty is among the chief structural constraints holding back economic growth and development in South Africa (IMF, 2022). Uncertainty about land reform, particularly the issue of expropriation without compensation, and property rights in general, continue to rattle the agricultural industry, threatening much-needed investment in the sector. A study commissioned by AgriSA and conducted by economist Dr Roelof Botha has quantified the economic output and job losses that the country would face should it pursue expropriation without compensation. Botha’s study involved a future perspective on the likely macroeconomic impact of the policy. The study forecasts a cumulative loss of economic output over nine quarters amounting to R735-billion in one scenario and R1.15-trillion in a second scenario. The policy will lead to substantial job losses (Botha, R, 2021). The National Assembly in December 2021 failed to pass the amendment to Section 25 of the Constitution to allow for expropriation without compensation. AgriSA has said Section 25 does not pose an obstacle to land reform, concurring with findings by a high-level panel led by former President Kgalema Motlanthe, and that it is rather factors such as inadequate budgets, poor implementation, corruption and a lack of political will that hold back land reform (AgriSA, 2021). The organisation has warned that an attempt to expropriate productive land without compensation will not only undermine growth of the sector, but will damage South Africa’s economy and the country’s standing internationally. Another major contributor to policy insecurity is that plans change too often, owing to the fiveyearly electoral cycle. The agriculture sector believes that South Africa is not “policy poor” and that it should rather focus on implementing plans, such as the National Development Plan (NDP). There is cautious optimism about the Agriculture and Agroprocessing Master Plan (AAMP) and the Blended Finance Scheme (BFS). The AAMP aims to accelerate land reform by implementing a comprehensive land agrarian strategy and finalising restitution claims, as well as mitigating and preventing the outbreak of diseases among livestock and products in the agricultural value chain. The BFS, relaunched in 2021, will leverage private funding to support investments to enhance agricultural production by black farmers through deliberate, targeted and well-defined financial and nonfinancial interventions (DALRRD, 2021). These plans are specific, the goals and objectives are clear, and they are measurable with timelines linked to each. A final point on policy uncertainty centres on black economic empowerment. Although the reasons behind the policy are understood, the challenge rests with how it is being implemented. Research and training capacity Agricultural colleges, of which there are 11 in South Africa, play a vital role in producing future farmers and scientists. The research and training at some of the agricultural colleges is not deemed suitable, with the focus tilting towards subsistence farming and food security, instead of state-of-the-art research that will keep South Africa on the cutting edge of agricultural development. Practical experience among graduates from colleges and universities is also lacking. Trust deficit and lack of social cohesion A trust deficit exists between the agriculture sector and government. Farmers are less willing to participate in land reform or other government-led initiatives, such as Statistics South Africa enquiries, when they feel that the country’s progress is threatened by corruption. Farmers feel despondent when provincial and local governments misuse the money allocated for operational expenses. There is also a perception that government spends too much of its wage bill on high-paying jobs, and too little on administrators who ensure the optimal functioning of the State. The distribution of public-service personnel across various income levels has shifted dramatically in the past decade-and-a-half, according to a 2020 study by Intellidex. Using inflation-adjusted income bands, the Intellidex analysis indicates a declining share of personnel earning less than an inflation-adjusted R20 000 a month – from 85% of staff in 2006/7 to 48% in 2018/19 – and a rising share of those earning above that figure (Intellidex, 2020). Further, South Africa’s success in achieving its developmental State goal has been questioned, with participants arguing that more active citizenry is needed, and that higher levels of social unity and cohesion are required among different racial and cultural groups. The NDP envisions building South Africa into a developmental State, which relies on the capabilities of people to improve their own lives, while the State intervenes to correct historical inequalities (NDP, 2012). Veterinary support South Africa has a severe shortage of veterinarians. According to Professor Vinny Naidoo, Dean of the Faculty of Veterinary Sciences at the University of Pretoria, South Africa needs at least 100 veterinarians per million people. Currently, about half of this number are registered in the country (Farmers Weekly, 2022). Rural areas are the worst affected by the shortage. It is estimated that there is one veterinarian for every 800 small-scale livestock farmers. A shortage of veterinary support has big implications for productivity. In a globalised, trade-oriented world, veterinarians working in food production are crucial for the management of international trade in animal and animal products, disease diagnostics and surveillance. The Food and Agriculture Organisation of the United Nations recommends a ratio of one veterinarian per 100 000 livestock units. Using this norm would result in the State requiring 253 State veterinarians to carry out disease control, laboratory diagnostics and veterinary public health (Department of Agriculture, Forestry and Fisheries, 2015). A veterinary strategy has been drafted to address the issue. The strategy was published in 2015, but its implementation has not gained traction, making it difficult to effectively curb diseases. Besides a veterinary shortage, problems with veterinary medicine regulation have also been raised. It reportedly takes between three and five years to have a vaccine registered. The South African Health Products Regulatory Authority has committed to clear its veterinary backlog and to reduce registration timeframes for new registrations to 12 months and major Type II variations to between three and six months, however, these timeframes are not being met yet (Health for Animals, 2021). Poor implementation of animal biosecurity systems and the enforcement of disease control regulations limit the ability of rural farmers to participate in major contracts. Fast-food chain McDonalds, for instance, uses A-grade meat from South Africa, Namibia and Botswana for its local operations, but has said that it could use C-grade meat if it had enough supply (Sunday Times, 2014). Rural farmers in Africa are major producers of C-grade grass-fed beef, but because they lack traceability systems, they cannot supply large food chains. The commercial ostrich production industry, which in 2011 experienced an outbreak of highly pathogenic avian influenza, had to implement livestock traceability systems to continue to be able to sell into export markets. To implement a livestock traceability system required the buy-in from an entire industry, from farmers, to abattoirs and processing plants. The ostrich industry also established a private laboratory to do rapid testing to European standards, instead of relying on the State to provide testing. The commercial ostrich production industry, which is reliant on exports, advocates adopting a do-it-yourself attitude if the State does not cooperate. Suggestions for fostering growth Conclusion The agriculture sector represents a high-potential sector of the South African economy – as driver of economic growth, export earnings and employment. Supportive government policy has an important role to play in enhancing the growth and development of the agriculture sector and ensuring that it remains globally competitive. Political stability, policy certainty and labour flexibility are focus points that the industry requires to continue with ongoing investment. References AgriSA. 2021. Focus on effective implementation of land reform plans, December 7, 2021. [Online]. 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Available at: https://www.transnet.net/InvestorRelations/Pages/Annual-Results-2021.aspx [accessed March 21, 2022]. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - This report has been published by the Inclusive Society Institute The Inclusive Society Institute (ISI) is an autonomous and independent institution that functions independently from any other entity. It is founded for the purpose of supporting and further deepening multi-party democracy. The ISI’s work is motivated by its desire to achieve non-racialism, non-sexism, social justice and cohesion, economic development and equality in South Africa, through a value system that embodies the social and national democratic principles associated with a developmental state. It recognises that a well-functioning democracy requires well-functioning political formations that are suitably equipped and capacitated. It further acknowledges that South Africa is inextricably linked to the ever transforming and interdependent global world, which necessitates international and multilateral cooperation. As such, the ISI also seeks to achieve its ideals at a global level through cooperation with like-minded parties and organs of civil society who share its basic values. In South Africa, ISI’s ideological positioning is aligned with that of the current ruling party and others in broader society with similar ideals. Email: info@inclusivesociety.org.za Phone: +27 (0) 21 201 1589 Web: www.inclusivesociety.org.za