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The Inclusive Society Institute launched its Business Circle programme on 11 May 2023 at a business breakfast hosted at the Radisson Blu Hotel in Sandton. Business Circle is the business outreach programme of the Inclusive Society Institute, which has as its objective the inclusion of the business community in the development of socio-economic policy for South Africa. It recognises that the development of socio-economic policy without the inclusion of those directly involved in and impacted thereby is necessary to ensure its credibility and suitability in the real-world economy. Business Circle aims to involve the business community in the Institute’s policy development processes. It will also create a platform for policy dialogue, networking, empowerment, and business trade and promotion. Speakers at the event included the Hon. Faiez Jacobs MP, a senior member of Parliament’s economic cluster, Ms. Jenny Wu, a prominent Johannesburg businesswoman, the Consul General of the People’s Republic of China in Johannesburg, Tang Zhongdong, and the CEO of the Inclusive Society Institute, Mr. Daryl Swanepoel. The keynote presentation was made by well-known economist, Mr. Keith Lockwood, who dissected the South African economy with projections as to what society can expect going forward. [Click here for the presentation of projections for the South African economy]

The National Liberation Heritage Institute of South Africa (Nalhisa) hosted the "Dialogue on bridging the gap, crossing the divide: Steps towards a post-Apartheid heritage", to which a number of speakers, including former President Kgalema Motlanthe, were invited to speak at Freedom Park, Pretoria, on 10 May 2023. The CEO of the Inclusive Society Institute, Mr. Daryl Swanepoel, also spoke. In his speech titled ‘Preserving South Africa’s liberation history is important for nation-building’, Mr. Swanepoel pointed out the importance of keeping the inclusive story of South Africa’s transition to democracy alive, in order to inspire citizens towards an inclusive and socially just, cohesive future. He also bemoaned the diversion away from the Mandela era of reconciliation and called for today’s leaders to re-prioritise reconciliation and nation-building. Click here for the speech of Daryl Swanepoel

The CEO of the Inclusive Society Institute (ISI), Daryl Swanepoel, participated in the Istanbul Security Forum, which was held in Istanbul, Türkiye from 2 to 3 May 2023. About the Forum Facing challenges that disrupt peace and stability in different parts of the world, international actors are prompted to ponder on ways to navigate their future. Since the traditional understanding of the concept of security has been transformed, the need for building resilience against modern challenges targeting security has also arisen. International actors, ranging from states to international organisations, have come to acknowledge that the concept of security has a multi-layered structure that includes phenomena such as climate and environmental problems, natural disasters, epidemics, economic crises, and cyber threats. Natural disasters and epidemics have marked the significance of joint actions and international cooperation in alleviating human suffering. The prolonged conflicts in recent years, including the Syrian Civil War and the War in Ukraine, also demonstrated the disastrous impact of instabilities on civilians. As civilians continue to withstand the worst of conflicts, which have global reverberations for international security and stability, there has been debate over the role of international organisations in addressing said conflicts. In light of the aforementioned issues, the Presidency’s Directorate of Communications of the Republic of Türkiye is hosting the Istanbul Security Forum (ISF), aiming to generate fruitful discussions over the concept of security with an innovative perspective. The Forum, held for the first time, brought together policymakers, academics, experts, journalists, and representatives of international organizations who discussed the regional and global powers’ approaches to security policies. In panels and roundtables, the participants exchange views on ways to ensure security, and on facing challenges that await collective response. Programme Click here to view the programme ISI participation The ISI CEO participated in the panel discussion titled “Türkiye as a Stabilizing Power in an Age of Turmoil”. His remarks at the panel discussion were based on a paper prepared by the ISI titled “Beyond Colonialism: Türkiye's Unique Approach to Africa”. Click here to view the paper Click here to view the speech

The Inclusive Society Institute (ISI) attended a roundtable exploring the best models for co-existent between monarchical rule within a democratic system in Southern Africa, the design of social accords for more sustainable state society relations, and the role of the Southern African Development Community and other actors in supporting and facilitating the transitions to democracy in Eswatini or consolidation of democracy in Lesotho. The roundtable was held in hybrid format with the in-person event taking place at The Capital Menlyn Maine, Pretoria. It was hosted by Gateways for Peace – an EU-South Africa Partnership for Peace & Security. It was held on Tuesday, 18 April 2023. The CEO of the ISI represented the Institute. Two policy briefs served as the basis for the discussion: Navigating the crisis in Eswatini: Options for dialogue and transitional justice Promoting Human Security and Peacebuilding in Lesotho.

Occasional Paper 4/2023 Copyright © 2023 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. APRIL 2023 by Dr Roelof Botha and Daryl Swanepoel Introduction - heightened geopolitical risk Geopolitical risk is characterised by its omnipresence, but there have been few, if any occasions than the events of 2022, when such a variety of overlapping shocks have transpired to create a bewildering sense of near-universal anxiety. No sooner had most countries removed harsh lockdown regulations associated with the Covid pandemic than Russia staged a full-blown military invasion of Ukraine. The invasion started in February 2022 and is the biggest military mobilisation in Europe since World War II. The global repercussions of this war has shifted global concerns away from health issues related to the Covid pandemic and towards intensifying risks in the socio-political, security, environmental and macroeconomic domains. Russia’s subsequent use of energy as a weapon against Western European nations led to food and commodity price shocks that predictably resulted in the worst global price instability in more than four decades (EPRS, 2022). The rapid tightening of monetary policy arguably caused more harm than good, as higher interest rates were never going to be effective to counter one of the other key reasons for the spike in inflation, namely the eight-fold increase between 2019 and 2021 in freight shipping rates (Kaspar, 2022). The latter was caused by the supply-chain disruptions during the Covid-pandemic, especially the random closure of key harbours as part of lockdown regulations. Since 2022, the extraordinary confluence of geopolitical risks has also fuelled a cost-of-living crisis and heightened social unrest in many parts of the world. The World Bank has forecast a global economic slowdown, with median incomes in virtually all emerging markets and developing economies (EMDEs) being eroded by inflation, currency depreciation and under-investment in human capital and private sector expansion (The World Bank, 2023). Since these gloomy predictions were published in January, however, a number of positive trends have started to emerge that suggest an avoidance of undue economic contraction. These include signs that inflation has peaked in most countries and the imminent recovery of the Chinese economy (Romei, 2022). In addition to various risks whose intensity may eventually start to dissipate, the world is also grappling with climate transition that is not nearly as advanced as it needs to be. Until mid-January 2023, several authoritative research agencies, including the World Bank, the Economist Intelligence Unit (EIU), the World Economic Forum (WEF), the Eurasia Group and a variety of academic institutions, had started to highlight and analyse new unfolding global risk scenarios. In the process, a loose consensus has developed pointing to adverse ripple effects of the war in Ukraine, global monetary tightening and an economic slowdown in China, all of which were expected to weigh on the global economy in 2023. Global growth forecasts were revised downwards and the long-awaited final recovery phase from the Covid pandemic seemed to have been effectively halted (Gourinchas, 2022). The latter half of 2022 witnessed the fall-out of these unfortunate circumstances. Carbon emissions started climbing again as production responded to pent-up demand and Russia’s use of food and energy as part of its military strategy was partly responsible for inflation rising to their highest levels in decades. China’s zero-Covid policy prevented a full reopening of global freight shipping routes, the cost of which had sky-rocketed as a result of supply-side constraints and harbour closures. A cost-of-living crisis soon started unfolding, with Europe and under-developed nations having to bear the brunt of escalating food and energy prices. According to the World Bank, small states are especially vulnerable to such shocks because of their reliance on external trade and financing, limited economic diversification, elevated debt, and susceptibility to natural disasters and climate change (The World Bank, 2023). Identifying the largest risks Table 1 lists the ten largest global risks as identified by the latest Global Risks Perception Survey, published by the World Economic Forum. Table 1: Global risks ranked by severity of impact over the short term Fortunately, two of the three key triggers perceived to lead to higher levels of geopolitical and socio-economic instability have become considerably less potent in a short space of time, as portrayed by the latest Global Economic Outlook of the International Monetary Fund (IMF) and indications of an imminent reversal of the rising interest rate cycle in most countries (IMF, 2023). An element of optimism over a dilution of geo-economic risks has also emanated from rising asset prices, especially global equity markets and sovereign bonds of some emerging markets, including South Africa. Risks associated with civil unrest and crime As identified by an overview of recent authoritative economic and political research reports, including by the IMF, the US Federal Reserve and the European Union, it has become clear that governments and businesses all over the world are facing a variety of escalating risks, caused, inter alia, by: The turmoil brought about by the war in Ukraine Sanctions against Russia Supply-chain disruptions Unprecedented increases in shipping freight charges China’s long-standing zero-Covid policy Fiscal constraints from falling tax receipts The rise in support for populist policies in some countries Socio-economic inequality and poverty Higher inflation Higher interest rates In its latest update on the global political risk outlook, Verisk Maplecroft points to risks currently being at the highest global level in the last five years. Unsurprisingly, the research company has concluded that, after two years in which the Covid-19 pandemic served as the primary source of global instability, the conflict in Ukraine was the main driver of risk in 2022 (Middleton, 2023). In December 2020, Verisk Maplecroft warned of a new era of civil unrest, projecting that 75 countries would see an increase in civil unrest risk by August 2022. The reality has been far worse, with more than 100 countries witnessing an increase in risk since then (Soltvedt, 2022). According to Verisk Maplecroft’s latest Civil Unrest Index (CUI), the world is facing an unprecedented rise in civil unrest as governments all over the world grapple with the impact of inflation on the price of staple foods and energy. The data, covering seven years, shows that, during the last quarter of 2022, more countries witnessed an increase in risks from civil unrest than at any time since the Index was released. Out of 198 countries, 101 saw an increase in risk, compared with only 42 where the risk decreased. The impact is evident across the globe, with popular discontent over rising living costs emerging on the streets of developed and emerging markets alike (Soltvedt, 2022). The CUI report rates crime as the biggest security issue facing companies in major cities across the world, putting staff, assets and supply chains at risk. Incidents of conflict and terrorism are primarily cited as threatening global security, but crime and civil unrest are more widely distributed threats. Of these, crime represents a significant cost to business, due to the need to protect staff and assets and maintain supply chain integrity (Soltvedt, 2022). Verisk Maplecroft publishes a risk index for 579 urban centres with a population over 1 million on their exposure to a range of threats. The latest index shows that the most dangerous cities overall are distributed widely, with the top 100 including 33 cities from the Americas, 33 from Africa, 19 from Asia, 14 from Middle East/North Africa (MENA), and one from Europe. Unfortunately for South Africa, three of its own cities feature in the high and extreme risk categories, as depicted by the data in table 2. The data suggests that the severity and frequency of protests and labour activism is set to accelerate further during 2023 (Moshiri, 2022). Table 2: Selection of global cities with the highest risks for crime and civil unrest A concise discussion of the key geopolitical risks that feature in several authoritative research studies and surveys follows (in declining order of their probability to lead to an escalation of socio-economic and political instability). Russia’s invasion of Ukraine It is no surprise that the war in Ukraine features prominently in all of the authoritative studies on current geopolitical tensions, as several other risks in the socio-economic and political domains are intrinsically tied to the conflict in Eastern Europe. Towards the end of February 2023, the United Nations General Assembly voted overwhelmingly in favour of a resolution calling for an end to the war and demanding that Russia leave Ukrainian territory (UN, 2023). A similar resolution was adopted a year ago, shortly after the invasion began. The extent of global opposition to Russia’s invasion of Ukraine is also illustrated by the fact that only one country in the Middle East block of 16 countries voted against the resolution (Syria), whilst only one abstained (Iran). Although Algeria and Tunisia regard themselves as part of the Middle East, they remain geographically part of Africa. The Middle East has a long-standing record of opposition to the US and strong ties to Russia. Unfortunately, Russia’s military invasion of Ukraine has also raised the spectre of nuclear warfare. On 31 January, the United States accused Russia of not complying with its obligations under the New Strategic Arms Reduction Treaty (START), the only remaining treaty limiting the world’s two largest nuclear arsenals. The US State Department said Russia is refusing to facilitate inspections on its territory as required under the treaty. The United States remains committed to restoring compliance with the accord, it said (Hudson & Cho, 2023). The allegations of noncompliance come months after Russian President Vladimir Putin threatened to use nuclear weapons to defend the Ukrainian territory that Russia has illegally annexed. The demise of New START would mark the near-total collapse of the nuclear non-proliferation architecture that the United States and the Soviet Union, and later Russia, built in the 1980s and 1990s (Hudson & Cho, 2023). The Russian Ambassador in Washington, Anatoly Antonov, said in a statement on 1 February that, due to the conflict in Ukraine, it was currently inappropriate to invite the U.S. military to Russia’s strategic facilities. He added that Russia still views the treaty as a useful tool for maintaining stability between the two nuclear powers (Hudson & Cho, 2023). In February, Russian President Vladimir Putin nevertheless signed a bill formally suspending the START treaty. Further escalation of tensions Tensions between the US and Russia over the invasion of Ukraine were heightened again on 24 March when Russian President Vladimir Putin announced that his country would station tactical nuclear arms in Belarus, a move that has predictably evoked fierce criticism from the US and the North Atlantic Treaty Organisation (NATO). Ukraine’s response was to request an emergency meeting of the United Nations Security Council to counter Russia’s “nuclear blackmail”, whilst NATO spokeswoman Oana Lungescu calling the decision dangerous and irresponsible. She also stated that Russia’s reference to NATO’s nuclear sharing is totally misleading, as NATO allies always act with full respect of their international commitments (Gregory, 2023). In addition, the International Criminal Court (ICC) issued a warrant of arrest in March for Russian President Vladimir Putin for alleged war crimes related to the unlawful deportation of children and unlawful transfer of people from Ukraine to Russia (Borger & Sauer, 2023). President Cyril Ramaphosa's spokesperson, Vincent Magwenya, has refused to speculate on South Africa’s likely position when Putin is expected to visit the country later this year for a Brics Summit, saying that no invitations had yet been sent to the leaders of the other four Brics countries. In a media statement, he did, however, acknowledge the South African government’s respect for international statutes (Gerber, 2023). South Africa is a signatory of the Rome Statute and, therefore, has the responsibility to honour an ICC arrest warrant, if the person against whom it is issued sets foot in South Africa. This was not the case in 2015, when the South African government under Mr Jacob Zuma’s orders refused to detain the former president of Sudan, Omar al-Bashir, who attended an African Union summit in South Africa. Al-Bashir was subject to two ICC arrest warrants for several counts of genocide, crimes against humanity and war crimes. The following year, South Africa's Supreme Court of Appeal ruled that the implementation act for the Rome Statute overruled the immunity granted to foreign heads of state, and that Al-Bashir should have been arrested in South Africa (Gerber, 2023). Although concern remains in the United States and Europe over Beijing providing military assistance to the Kremlin, the recent visit to Moscow by Chinese President Xi Jinping served to allay these fears somewhat. During the state visit to Russian President Vladimir Putin, the two leaders pledged friendship and predictably denounced the West. The West has been critical of China, suggesting that it is supporting Russia against Ukraine, but the Chinese leader has said that China had an "impartial position" on the conflict (Reuters, 2023). He also discussed with the Russian President China’s Position on the Political Settlement of the Ukraine Crisis, which plan has been developed by the Chinese authorities as a basis for their mediation to bring a resolve to the Russia-Ukraine conflict (FMPRC, 2023). To some extent, the summit between the Russian and Chinese leaders was upstaged in Kyiv, where Japan's Prime Minister Fumio Kishida made an unannounced visit and met President Volodymyr Zelenskiy. Japan is the world’s 3rd largest economy and is an important Asian ally of the US and Europe. During 2022, geopolitical risk became more pervasive and few countries have been left unscathed by the side-effects of the war in Ukraine, lingering supply-chain constraints due to China’s zero-Covid policies and renewed assertiveness by China towards Taiwan. GDP growth forecasts by the World Bank and the European Union prior to and after the onset of the war in Ukraine confirm a marked slowing down of the post-pandemic economic recovery, especially for EMDEs in the European and Central Asia regions (The World Bank, 2022). Global economic damage The damage wreaked by Russia’s invasion of Ukraine has spread to all parts of the globe, with advanced and emerging economies alike weakened as a result of: Significant disruptions in trade flows and supply chains Commodity price shocks, especially surging energy prices due to lower energy supplies to Europe Sharp increases in food prices, which exacerbated the spike in global inflation caused by record freight shipping charges. It is estimated that Ukraine and Russia provide at least half of the grains for over 26 countries. Declines in consumer and business confidence A prolonged risk-off sentiment amongst global fund managers, which was reinforced by the sharp increase in US interest rates Equity market weakness, which eroded household wealth/disposable income ratios The macroeconomic impact of the war in Ukraine lends credence to the geopolitical risk (GPR) index, developed by Dario Caldara and Matteo Iacoviello and published by the US Federal Reserve. Since the turn of the century, the following events led to spikes in the GPR index: After the 9/11 terror attacks in the US (2001) During the 2003 Iraq invasion During the 2014 Russia-Ukraine crisis After the Paris terrorist attacks in 2015 During the current war in Ukraine (Caldara & Iacoviello, 2021) Although the war in Ukraine only led to the fourth highest monthly reading of the GPR Index since 1985, it has resulted in the third highest ever annual average reading over the past four decades and the highest in almost two decades. On every occasion that a spike was observed in geopolitical risk, it resulted in a decline in real economic activity, equity market weakness and movements in capital flows away from emerging economies and towards advanced economies (Caldara & Iacoviello, 2021). Global economic disruption, however, pales in comparison to the damage suffered by Ukraine. The country’s economy contracted by around 35% in 2022 and 14 million people are estimated to have been displaced. In addition to the tragic loss of life, the cost of recovery and reconstruction of infrastructure and productive capacity could amount to $350 billion, which is more than 1.5 times the size of Ukraine’s pre-war economy in 2021 (The World Bank, 2022). NATO steps up its involvement One of the reasons for Ukraine’s recent plea to members of NATO to supply the country with tanks is that the area in which the war is mostly being fought is flat and open. Russian forces have dug in deep, which rules out infantry-only attacks, but tanks could be decisive during the next phase of the war. The US and Germany have been cautious about escalating the war, which explains their reticence at providing Ukraine with an offensive weapon like a tank (Cohen, 2023). But they do not want a stalemate to emerge along the existing lines of occupation. What they want, it is now clear, is for Ukraine to win. Consequently, an escalation is firmly on the cards. Ukrainian President Volodymyr Zelenskyy has requested 300 tanks, and at the moment, he is likely to get a third of that figure, which does not compare favourably to Russia’s estimated 2 000 battle-ready tanks and several thousand more in storage facilities. Interestingly, US military officials that have been monitoring the war estimate that Russia has already lost more than 1 000 tanks. What Russia clearly lacks, is unquestioned air superiority, and it is sheer madness to drive tanks into a modern battlefield that has no ground cover, without adequate air support (Cohen, 2023). Since the beginning of the year, Ukraine has secured huge pledges of weapons from the West, offering new capabilities - the latest to include rockets from the United States that would nearly double the firing range of Ukrainian forces. Officials in the US have confirmed that a new $2 billion package of military aid will be announced early in February that would for the first time include gliding missiles that can strike targets more than 150 km away - a new weapon designed by Boeing (Stone, 2023). These weapons would put all of the Russian-occupied territory on Ukraine's mainland, as well as parts of the Crimea peninsula seized by Moscow in 2014, within range of Kyiv's forces. In a significant shift, the Pentagon announced at the end of January that it would expedite the delivery of 31 M1 Abrams tanks to Ukraine by around September. Originally, the plan was to send the newer M1A2 Abrams tanks, but this would have taken between one and two years to deliver. Following pressure from Ukraine and other NATO countries, it has now been decided to rather send the older M1A1 version, which can be taken from existing US army stocks, subject to the necessary refurbishing. The new arrangement will provide Germany with political cover for a swift provision of Leopard battle tanks to Ukraine. An advantage of the older M1 Abrams tank is that it will be easier for Ukrainian forces to learn to use and maintain as they try to repel the invading Russian forces (Baldor, 2023). According to Tim Cohen, business editor at Daily Maverick, the crucial aspect about the supply of tanks and other sophisticated weapons to Ukraine is the change of attitude in the West (Cohen, 2023). From now on, NATO is effectively at war with Russia and the world needs to face this fact. In mid-March, Polish President Andzej Duda announced that the country would deliver the first four of a batch of Soviet-made MiG-29 fighter jets before the end of March. Poland has a stronger vested interest in an end to the Ukrainian conflict than most other countries, due to an imminent humanitarian crisis flowing from 10 million refugees that have entered Poland over the past 13 months (Statista, 2023). Poland and Slovakia, which has also committed to sending fighter jets to Ukraine, have already called on other countries to follow their lead. In February, Britain said that it would start to train Ukrainian pilots on fighter jets used by NATO countries. Commentators have suggested that the Polish donation was of more symbolic than battlefield value, with a senior Kyiv official calling it a “psychological tipping point” that could encourage other countries to also provide additional aircraft (Chapman et al, 2023). Any doubt over the pervasive negative economic impact of Russian aggression in Ukraine was dispelled by the 25% decline in the value of the S&P 500 Index between the end of 2021 and September 2022 (Simonetti, 2022). Fortunately, however, global equity markets have recovered well since the third quarter of 2022, mainly due to signs that inflation has peaked in most countries and that hawkish monetary policy by the US Federal Reserve may end during the first half of 2023. Tensions between the West and China The conciliatory tone of an address at Davos by Liu He (a Chinese vice premier) stands in somewhat in contrast to President Xi Jinping’s cautioning to the West merely three months earlier that China is willing to use force to reunify Taiwan. The warning was made during his opening address to the Communist Party’s 2022 National Congress in Beijing, where he was appointed for a third term as Party leader after abolishing a two-term limit on the Chinese presidency in 2018 (Gan & McCarthy, 2022). This move will effectively enable him to remain at the helm for an infinite period. Under Xi Jinping, China has taken a more assertive stance towards Taiwan, reaffirming its view that the island is a breakaway province that will eventually be part of the country. This position has put China at odds with the United States and its Western allies, who maintain an approach of strategic ambiguity. Tensions between the US and China escalated in August 2022 with the visit to Taiwan by House Speaker Nancy Pelosi. China perceived the visit as a challenge to its sovereignty over the nation and retaliated with a show of force by firing ballistic missiles over Taiwan (Lendon, 2022). Xi Jinping is widely considered one of the most powerful Chinese leaders since Chairman Mao, but local dissent has increased due to his firm-hand approach, especially on the lengthy implementation of extremely harsh lockdown regulations. Millions of China’s citizens have suffered under the regular and tough enforcement of tight lockdown regulations. In November 2022, anger eventually turned into widespread protests, triggered by an apartment fire that killed 10 people and comments on social media suggesting that the lockdown had prevented their escape (The Guardian, 2022). Xi Jinping’s rule has been characterised by restrictions which have seen thousands of critics sanctioned. The Chinese leader has also stepped up the regime’s control over the private sector, including a larger degree of surveillance and censorship, whilst his zero-Covid policy has been criticised for damaging the world’s second-largest economy (BBC News, 2022). Tensions between China and the West also flared up earlier in 2022, shortly after Russia began its invasion of Ukraine, with US President Joe Biden warning Chinese leader Xi Jinping that Beijing could regret siding with Russia's invasion of Ukraine, pointing out the number of American and foreign corporations that left Russia as a consequence of its ruthless behaviour (Al Jazeera, 2022). The Biden administration has been pressuring China and other countries to refrain from supporting Russia, including attempts to counter Western sanctions and providing military assistance. Western democracies, spearheaded by the US and the EU, remain concerned about China’s support to Russia following the invasion of Ukraine. The EU has also taken an increasingly confrontational stance towards what they term China’s human rights abuses in Xinjiang where UN reported arbitrary and discriminatory detentions go against international law (UN, 2022), discrimination against EU firms operating in China and the country’s subsidy-led industrial model, which they say flouts the protocols of the World Trade Organisation, which, they say, effectively leads to dumping, a term associated with exporting goods at below cost (WTO, 2023). Middle East tensions remain in place Global geo-political risk also remains omnipresent in the Middle East, with multiple air strikes carried out by the US military in Syria against Iran-aligned groups during March. The retaliatory attacks were carried out at the direction of President Joe Biden, following a drone attack that killed an American contractor and injured five US troops. US officials believe that drone and rocket attacks are being directed by groups affiliated with Iran's Islamic Revolutionary Guards Corps (IRGC). Over the past two years, US troop shave come under attack by these groups 78 times, which has further strained the relations between Washington and Tehran (The Guardian, 2023). Cyber-warfare aimed at damaging infrastructure Russia’s invasion of Ukraine and tensions surrounding Taiwan have increased the likelihood of major cyber-attacks between states. Given the much higher costs of direct military conflict and the difficulty in identifying perpetrators of cyber-attacks, any military escalation between repressive states like Russia and the West is most likely initially to take the form of cyber-warfare. According to research by the Eurasia Group, a real possibility exists that Kremlin-affiliated hackers will ramp up cyber-attacks on Western firms and governments (Eurasia Group, 2023). This could take the form of attempts to disrupt oil pipelines, American and European satellites and infrastructure, including telecommunications and electricity grids, which would severely disrupt business operations. Further efforts to influence and sabotage global elections also pose a risk. Environmental degradation Concerns over global warming and environmental risks do not feature prominently in a number of recent studies on geopolitical risks in 2023 and beyond, including the Economist Intelligence Unit’s Risk Outlook 2023 (EIU, 2023). In contrast, The Global Risks Perceptions Survey 2023 (GRPS), published by the World Economic Forum (WEF) in January, shows that climate and environmental risks are the core focus of risks perceptions over the next decade. In the ranking of global risks by the GRPS over the short term, environmental concerns represent five of the top-ten identified risks. Over the long term (ten years) this share rises to six out of the ten most severe perceived risks (WEF, 2023). According to a report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), biodiversity within and between ecosystems is already declining faster than at any other point during human history (IPBES, 2019). Human interventions have negatively impacted a complex and delicately balanced global natural ecosystem, triggering a chain of negative reactions. Given that over half of the world's economic output is estimated to be moderately to highly dependent on nature, the collapse of ecosystems will have far-reaching economic and societal consequences. According to research contained in the GRPS, these include increased occurrence of diseases, a fall in crop yields and nutritional value, growing water stress exacerbating potentially violent conflict, loss of livelihoods dependent on food systems, and ever more dramatic floods, sea-level rises and erosion from the degradation of natural flood protection systems like water meadows and coastal mangroves (WEF, 2023). A report from United Nations (UN) Climate Change published in October 2022 shows some progress in bending the curve of global greenhouse gas emissions downward but underlines that these efforts remain insufficient to limit the global temperature rising to 1.5 degrees Celsius by the end of the century (UNEP, 2022). The fact that only 24 new or updated climate plans were submitted since the 26th Conference of the Parties (COP) to the UN Convention on Climate Change is disappointing. The UN has repeatedly urged the 193 Parties under the Paris Agreement to align government decisions with actions that reflect the level of urgency, the gravity of the threats the world is facing, and the shortness of the time to avoid the devastating consequences of runaway climate change. According to the UN, the downward trend in emissions expected by 2030 shows that nations have made some progress this year, but the world is still nowhere near the scale and pace of emission reductions required to achieve a 1.5 degrees Celsius world. According to the EIU, climate change models point to an increased frequency of extreme weather events. Although these have been fairly sporadic and in different parts of the world, they could start to occur more frequently and for prolonged periods. Recent droughts and heatwaves in Europe, China, India and the US have contributed to rising prices of food. Crop shortages and rising food prices also raise the risk of food insecurity or even famine. Other risks A combination of slow growth, tightening financial conditions, and heavy indebtedness could weaken investment in new productive capacity and infrastructure and potentially trigger corporate defaults. Fiscal stability is being threatened in less creditworthy emerging markets and developing economies (EMDEs), especially if they are also energy importers. This threat is related to dampened capital market risk appetite, which has led to widespread capital outflows and slowing bond issuance across EMDEs. Socio-economic instability in less developed countries often leads to large-scale involuntary migration, as has been evident in North Africa, the Middle East, Venezuela and Zimbabwe. The rise of social media has provided so-called generation Z with the ability to organise online to affect corporate and public policy, often making life difficult for multinationals and disrupting politics with the click of a button. Members of this generation were born into a world of peak tech­no­log­i­cal inno­va­tion - where infor­ma­tion was imme­di­ate­ly acces­si­ble and social media increas­ing­ly ubiquitous The conflict in Ukraine has brought to the forefront the strategic competition that has been emerging between a Western model and a Chinese-Russia centred zone. The inherent longer-term risk for companies is related to the future manner in which China will engage internationally. References Al Jazeera. 2022. ‘Gigantic mistake’: Biden warned China’s Xi over aiding Russia. 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[Online] Available at: https://www.nbcnews.com/news/world/xi-putin-pledge-new-world-order-chinese-leader-leaves-russia-rcna76048 [accessed: 4 April 2023] Romei, V. 2022. Global inflation likely to have peaked, key data indicators suggest. [Online] Available at: https://www.ft.com/content/85498afc-43d3-4525-bee0-7ea7c6c05b34 [accessed: 4 April 2023] Simonetti, I. 2022. S&P 500 Hits Lowest Level of 2022 as Global Sell-off Continues. [Online] Available at: https://www.nytimes.com/2022/09/25/business/stock-market-today.html [accessed: 4 April 2023] Soltvedt, T. 2022. 101 countries witness rise in civil unrest in last quarter: Worst yet to come as socioeconomic pressure builds. [Online] Available at: https://www.maplecroft.com/insights/analysis/101-countries-witness-rise-in-civil-unrest-in-last-quarter-worst-yet-to-come-as-socioeconomic-pressures-build/ [accessed: 4 April 2023] Statista. 2023. Number of people who crossed the Polish border from the war-stricken Ukraine from February 2022 to April 2023, by date of report. [Online] Available at: https://www.statista.com/statistics/1293564/ukrainian-refugees-in-poland/ [accessed: 4 April 2023] Stone, M. 2023. U.S. readies $2 billion-plus Ukraine aid package with longer-range weapons. [Online] Available at: https://www.reuters.com/world/us-readies-2-bln-plus-ukraine-aid-package-with-longer-range-weapons-sources-2023-01-31/ [accessed: 4 April 2023] The Guardian. 2022. Covid lockdown protests break out in western China after deadly fire. [Online] Available at: https://www.theguardian.com/world/2022/nov/26/covid-lockdown-protests-break-out-in-western-china-after-deadly-fire [accessed: 4 April 2023] The Guardian. 2023. US strikes Iran-backed group in Syria after deadly attack on coalition base. [Online] Available at: https://www.theguardian.com/world/2023/mar/24/us-strikes-iran-backed-group-in-syria-after-attack-on-coalition-base [accessed: 4 April 2023] The World Bank. 2022. Russian Invasion of Ukraine Impedes Post-Pandemic Economic Recovery in Emerging Europe and Central Asia. [Online] Available at: https://www.worldbank.org/en/news/press-release/2022/10/04/russian-invasion-of-ukraine-impedes-post-pandemic-economic-recovery-in-emerging-europe-and-central-asia [accessed: 4 April 2023] The World Bank. 2023. Global Economic Prospects, January 2023. [Online] Available at: https://openknowledge.worldbank.org/server/api/core/bitstreams/254aba87-dfeb-5b5c-b00a-727d04ade275/content [accessed: 4 April 2023] United Nations (UN). 2022. China responsible for ‘serious human rights violations’ in Xinjiang province: UN human rights report. [Online] Available at: https://news.un.org/en/story/2022/08/1125932 [accessed: 4 April 2023] United Nations (UN). 2023. UN General Assembly calls for immediate end to war in Ukraine. [Online] Available at: https://news.un.org/en/story/2023/02/1133847#:~:text=The%20UN%20General%20Assembly%20on,line%20with%20the%20UN%20Charter. [accessed: 4 April 2023] United Nations Environment Programme (UNEP). 2022. Emissions Gap Report 2022. [Online] Available at: https://www.unep.org/resources/emissions-gap-report-2022#:~:text=The%20report%20finds%20that%20only,cent%20for%202%C2%B0C. [accessed: 4 April 2023] World Economic Forum (WEF). 2023. Global Risks Report 2023. [Online] Available at: https://www.weforum.org/reports/global-risks-report-2023/ [accessed: 4 April 2023] World Trade Organization (WTO). 2023. Panels established to review EU complaints regarding Chinese trade measures. [Online] Available at: https://www.wto.org/english/news_e/news23_e/dsb_27jan23_e.htm [accessed: 4 April 2023] - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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 Inclusive Society Institute (ISI) participated in the Kagiso Trust Anti-Corruption High Level Dialogue, which was held at Constitution Hill, Johannesburg. The ISI was represented by Professor Evangelos Mantzaris, who led the Institute’s own research looking into the feasibility and desirability of a National Anti-Corruption Agency for South Africa. Five themes were identified during the dialogue: Taking a stand against corruption The implications of State Capture Understanding the causes of corruption Challenges and opportunities to build social accountability Enhancing coordination for social mobilisation to promote access to justice and combat corruption Professor Mantzaris delivered a presentation on the outcomes of the ISI research into the desirability and feasibility of an Anti-Corruption Agency for South Africa. Much emphasis was placed on the need to rebuild trust between the organs of state and the public, without which, the fight against corruption would come to naught. Recording of event: Part 1 & Part 2:

Occasional Paper 3/2023 Copyright © 2023 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. MARCH 2023 by Robert Mopp and Daryl Swanepoel “Then the flag and the palace where sits the government cease to be the symbols of the nation. The nation deserts these brightly lit, empty shells and takes shelter in the country, where it is given life and dynamic power. The living expression of the nation is the moving consciousness of the whole of the people; it is the coherent, enlightened action of men and women” (Fanon, 1963). Introduction This essay begins with some background on the concept of social cohesion and then defines the constitutive elements of the term. Various approaches, by key theorists, to the concept of social cohesion are then outlined – the terms “social cohesion” and “social capital” will be used interchangeably in this context. Some of the key elements of social cohesion relate to trust, social networks, well-being and happiness. With reference to South Africa, the challenges facing the country and that pose a threat to social cohesion will be highlighted and some of the programmes that are in place to facilitate improvement in these areas will be discussed. In the conclusion, our levels of social cohesion will be assessed. In brief, despite a plethora of initiatives to foster social cohesion and many government initiatives, and some progress made, we still have a long way to go on the social cohesion front and in the creation of a stable, vibrant, harmonious and prosperous society. Social cohesion is deemed to be a critical ingredient for people to co-exist meaningfully and in harmony; it is also important for their social progress, well-being, happiness and overall development. Social cohesion is seen as part of the cure for the manifold challenges that South Africa faces such as high levels of unemployment, poverty, inequality, crime, corruption, gender violence, etc. It is also seen as important in restoring trust between, especially, the prosperous and the poor, who are the majority. The country is not well governed and service delivery is abysmal. Confidence in government, political parties and other institutions is low. At the same time, honest and frank social dialogue is required to deal with lingering legacies and the enduring economic marginalisation of the majority. At a broader societal level, our economic growth levels must be much higher to absorb labour and to make people feel that they have worth and restore flagging dignity. This is in addition to some of the other negative features that plague our country. Norton and de Haan (2013) remind us of the positive attributes of social cohesion in achieving a prosperous and happy populace. They state that “social cohesion can stand for the elements of social progress which include human security and solidarity, and can be both constitutive to development, and instrumental to other elements of development, for example the ability of social groups to sustainably improve living standards, or the ability of representative institutions to facilitate economic reforms” (Norton & de Haan, 2013). This is important for turning the fortunes of South Africa around in the period ahead. The Background of Social Cohesion Social cohesion is a core concept in social science and can be traced back to changes that were regarded as undermining the social fabric. Emile Durkheim is credited with being the first modern sociologist to theorise about the concept, in his De la Division du Travail Social (The Division of Labour in Society). Some of the earliest references to social cohesion can be found in the writings of the Arab polyglot, Ibn Khaldun, regarded as the last great scholar of the Islamic Golden Age and one of the founders of sociology, economics and historiography. Khaldun’s concept of assabiyah (group feeling) is loosely translated as social cohesion; the solidarity of small groups (tribes) that have the power to promote broader social integration, through a number of stages. The process of industrialisation and the development of the market economy (capitalism) and the notion of solidarity between individuals in society found different expressions in various theorists. For Marx it was mainly about class conflict, whereas for Durkheim it was about solidarity (Norton & de Haan, 2013). Pre-modern societies were marked by “mechanical solidarity and a strong collective ethos based on relatively homogeneous patterns of life and work” (Norton & de Haan, 2013). In contrast, advanced capitalist societies, with the now complicated division of labour, were characterised by “organic solidarity based on merit, respect for different roles within the labour force, with a need for moral regulation” (Norton & de Haan, 2013). Ferdinand Tönnies surveyed modernity and individualisation by distinguishing between Gemeinschaft and Gesellschaft. The former is a group of individuals who are socially connected and act for the sake of the community, whereas the latter is a group of individuals who are living together geographically but are socially more isolated (Schiefer & Van der Noll, 2017). Max Weber was concerned about the development of capitalism in modern society, highlighting the role of religious beliefs (the Protestant ethic of hard work). Weber saw rationality as a binding force in modern society, with the bureaucracy the “embodiment of that rationality” (Norton & de Haan, 2013). Jürgen Habermas highlights the importance of “critical rationality” as a binding force in today’s society that illuminates processes of socialisation. The French theorist Pierre Bourdieu (1986) is regarded as the founder of the term “social capital”, which many use interchangeably with “social cohesion”. This term displays the benefits that accrue to individuals for participation in groups and the necessity to invest in these relations. Whilst many theorists view social capital as a rewarding network of social connections, Bourdieu sees it in terms of the cold realities of social inequality; how people are inserted into the hierarchy of society (Gauntlett, 2011). Putnam (1998) is another important theorist on social capital, with his influential study of civic traditions in Italy. The crux of the study was to “determine the conditions for creating strong, responsive, effective representative institutions” (Norton & de Haan, 2013). Bourdieu and Putnam both emphasise the “role of social networks for the functionality and problem-solving capability of societies” within the social capital framework. Social Cohesion as a Concept There is no single, universally accepted definition of social cohesion (OECD, 2012). Indeed, a purview of the literature on the subject matter reveals that the term “social cohesion” holds numerous definitions. The term is differently appropriated and utilised in many countries across the globe, depending on the context, as there are multiple challenges in countries and different responses are developed to deal with the diversity. A number of theorists propose that the definition of the term “social cohesion” should be broad enough for people to embed a wide variety of ideas which reflect their own concerns and beliefs (Ballard, 2019). Delhey et al (2018) define social cohesion as the quality of social cooperation and togetherness of a collective – defined in geopolitical terms – that is expressed in the attitudes and behaviours of its members. The European Committee for Social Cohesion (2004) defines social cohesion as a set of social processes that help instil in individuals the sense of belonging to the same community and the feeling that they are recognised as members of the community. The French General Planning Commission (Commissariat général du Plan) (Eurofound, 2004) defines social cohesion as the capacity of a society to ensure the welfare of all its members, minimising disparities and avoiding polarisation. A cohesive society is a mutually supportive community of free individuals pursuing these common goals by democratic means. The Organisation for Economic Co-operation and Development (OECD) defines a cohesive society as one that “works towards the well-being of all its members”, minimising disparities and avoiding marginalisation, and entails fostering cohesion by building networks of relationships, trust and identity between different groups, fighting discrimination, exclusion and excessive inequalities, and enabling upward social mobility (OECD, 2012). Easterly (2006) sees the lack of social cohesion as based on “the nature and extent of social and economic divisions within society” – divisions such as income, ethnicity, political party, caste, language, etc. – which create societal cleavages. Pierre Bourdieu defines social capital as “the sum of the resources, actual or virtual, that accrue to an individual or a group by virtue of possessing a durable network of more or less institutionalised relationships of mutual acquaintance and recognition” (Gauntlett, 2011). South Africa’s National Planning Commission (NPC) states that social cohesion seeks to address “the divisive effects of racism, class divisions, social fragmentation, language, spatial exclusion, sexism, unemployment, crime and inequality” (NPC, 2012). The National Development Plan 2030 situates social cohesion at the centre of South Africa’s socio-economic transformation agenda to promote ubuntu, trust, tolerance, social interaction, inclusion and solidarity in communities and society at large. The country’s motto speaks of “unity in diversity” and this concept seeks to harness this energy and its character traits to improve relations between people, irrespective of background, status or colour. It is seen as a constructive process of addressing division and exclusion, which continue to replicate and buttress the racial, ethnic, and other identities of South African society (NPC, 2012). Approaches to Social Cohesion Contemporary approaches to social cohesion put more stress on the “operationalisation and usability” of the concept to policymakers (Schiefer & Van der Noll, 2017). The paradigm of the Canadian Policy Research Networks (CPRN) advances five dimensions for social cohesion: Belonging/isolation (i.e., shared values, collective identities in the social entity) Economic inclusion/exclusion (e.g., in the labour market) Participation and involvement of the society’s members in public affairs Recognition versus rejection of diversity and pluralism The degree of legitimacy of societal institutions. Bernard developed the CPRN’s framework further into three specific fields, namely economic, political or socio-cultural, and the type of social involvement (attitudinal or behavioural). This addition makes it six dimensions. Chan, To and Chan (2006), for example, differentiate between subjective (trust, attitudes, identification) and objective (participation rates, crime rates, etc.) divisions, which apply to both horizontal relations (between members of society) and vertical relationships (between individuals and institutions). Chan, To and Chan went further and proposed four main areas of social cohesion, namely, legitimacy versus illegitimacy (i.e., institutional trust), acceptance versus rejection (i.e., solidarity, and concern for the common good), political participation, and socio-cultural participation. A supplementary distillation results in six distinct magnitudes of social cohesion commonly found: social relations, identification, orientation towards the common good, shared values, quality of life, and equality/inequality. According to Moody and White (2003), four out of the six dimensions reside under the ideational and relational divisions of social cohesion. The ideational dimension comprises cognitive and affective facets such as norms, values and identification; the relational dimension encompasses the relationships and ties between individuals (Moody & White, 2003). The remaining two dimensions, quality of life and equality/inequality, can be incorporated under a third area, labelled the distributive dimension, comprising the relatively equal or unequal distribution of physical, economic, social and cultural resources (Moody & White, 2003). The last dimension is pertinent to South Africa, given the unequal nature of South African society. It is prudent to be mindful that there are different approaches to social cohesion, depending on political ideologies or subject focus. Social democracy views equality and solidarity as essential to social cohesion, whereas from a nationalist view, the shared national history and traditional values are important. Liberal views perceive equality in terms of individual opportunities. The World Bank, for example, addresses social cohesion with a focus on economic development and poverty reduction (Moody & White, 2003). Social Cohesion and Trust Trust is an important element for social cohesion in society and amongst people. Trust towards institutions is equally significant. They have to trust each other and the “belief that they share a moral community” (Chan, To & Chan, 2006) that engenders trust. Trust is deemed crucial for social development and is an essential element of social capital since it “enhances economic exchange, improves the efficiency of public institutions” (Uslaner, 2019). Participation or civic engagement is another positive outcome of high levels of trust that conceivably strengthens democratic processes. “Participation in the public life reflects sense of belonging, solidarity and the readiness for mutual cooperation in the pursuit of common goals” (Schiefer & Van der Noll, 2017). It is important for people to feel attached to a social entity (other people, a group or community). A sense of belonging, together with social interactions, trust and willingness to participate and help others (Chan, To & Chan, 2006). It provides security and self-worth, which enhances the willingness for participation and effective social networking in community and societal affairs. In South Africa, this is expressed through the concept of ubuntu (recognising each other’s humanity), which was expressly referred to in the 1993 Constitution, but not the final 1996 Constitution. It is submitted that ubuntu is impliedly included in the 1996 Constitution by its frequent reference to human dignity. Ubuntu refers to behaving well towards others or acting in ways that benefit the community and encourage trust. Yet, research findings by Afrobarometer (2021), etc., show low levels of trust in public institutions and representatives in South Africa, which undermines social cohesion. This latest Afrobarometer opinion poll has shown that trust in the country’s Parliament stands at 27%, while the trust in the president comes in at a lowly 38%. Trust in the courts of law has dropped to 43%. The Public Protector received a 42% vote of trust, while only 36% trusted the Electoral Commission of South Africa, with trust levels particularly low amongst younger respondents. With a 56% approval rating, the Department of Health recorded the highest level of trust in comparison to other state institutions. In fact, trust as a concept is problematic in South Africa. Findings from the extensive GovDem Poll commissioned by the Inclusive Society Institute (ISI) in late 2021 showed that South Africans do not sufficiently trust their fellow compatriots. And that the lack of trust runs across most dimensions, be it race, gender, age, education, or income (ISI, 2022). Except for high levels of trust within families, with 87,42% of South Africans trusting other members of their family, disquieting trends endure across all other dimensions. Whilst people have reasonable trust in their neighbours – 62,27% indicated that they either completely or somewhat trusted their neighbours – and whilst they grow to trust people who they have gotten to know, they highly distrust people they do not know. There are also disturbingly high levels of distrust amongst people from different religions – less than half of South Africans (47,1%) indicated that they completely or somewhat trust people from religious groups other than their own – and races, where only around 50% of those South Africans from the minority communities indicated that they completely or somewhat trusted people from the black community. Then again, alarmingly, only 41% of black South Africans completely or somewhat trusted their white compatriots, which deepened to only 39% for their coloured compatriots and 35% for their fellow Indian South Africans. (ISI, 2022). What also emerged in the ISI’s GovDem Poll as an alarming trend, is the extreme lack of trust that South Africans have in foreigners, be they from Africa or other overseas countries. Overall, only 31,23% of South Africans said they completely trusted or somewhat trusted immigrants from African countries and 32,29% of South Africans said they completely trusted or somewhat trusted immigrants from countries other than those in Africa. This is particularly important to take note of, given the sporadic incidents of xenophobia in the country (ISI, 2022). Within the political sphere, the GovDem Poll revealed that the majority of South Africans deeply distrust fellow compatriots who do not belong to the same party as their own. Results drawn from the three largest political parties show that, across all parties, only 43,26% said that they could completely or somewhat trust people who supported the ANC, whilst this dropped to 33,2% for the DA and 32,39% for the EFF (ISI, 2022). This undermines social cohesion, and points to a high level of political and social 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. This is particularly unsettling given the country’s past racial divisions, and party support that remains largely divided along racial lines. This needs to be overcome in order to achieve social cohesion and to build a united nation. Well-being and Happiness The well-being and happiness of countries are regarded as extremely important aspects, over and above economic progress, output and prosperity (wealth). There is now much more to consider than simply measuring GDP per capita in determining well-being and satisfaction with life. Two key determinants of well-being are equality and education (a positive relationship). South Africa performs poorly on both fronts. The level and quality of education influence contemporary well-being, and education matters greatly to social cohesion. South Africa does badly on this front as our output is inadequate, despite having one of the highest per capita spends on the continent. But countries can catch up, as the examples of many East Asian nations illustrate. The Happiness Index was developed to show how people evaluate their own lives and express the universal desire for happiness, and how people support each other in times of great need, like at the height of the Covid-19 period or when disaster strikes. South Africans, for example, are overwhelmingly kind and display “ubuntu” in their day-to-day interactions. The Happiness Index was first created by the Global Happiness Council, a group of independent academic happiness specialists, with the first World Happiness Report being published in 2012. The definition of the report originates from the Bhutanese Gross National Happiness Index. In 1972, Bhutan started prioritising happiness over other factors such as wealth, comfort and economic growth. The Happiness Index has since been revised, and the report no longer makes reference to the term. The World Happiness Report now determines the happiness ranking of countries in the fashion of a "happiness ladder”, known as the Cantril Ladder, which asks respondents to think of a ladder, with the best possible life for them being a 10 and the worst possible life being a 0. They are then asked to rate their own current lives on that 0 to 10 scale. This methodology is used in a lot of studies as a simple way to ask people to rate their current satisfaction with life, i.e., happiness. The latest country ranking shows life evaluations (answers to the Cantril ladder question) for each country, averaged over 2019-2021. Over the years, Scandinavian countries have been placed consistently at the top of the ranking, and this report says no different. According to the Ranking of Happiness in the World Happiness Report 2022, Finland ranks first, at 7.8, followed by Denmark and Iceland in second and third place. The United States (US) ranks 16th (6.97), and the United Kingdom (UK) sits just below at 17th (6.94). In sharp contrast, South Africa can be found way down the ranks, at position 91 out of 146, with a score of 5.19 – below the global average happiness ranking of 5.59 (WHR, 2022). South Africa’s Societal Challenges Impacting on Social Cohesion South Africa is characterised by unusually deep inequalities in employment, poverty, income, savings, etc. The narrow definition of unemployment was recorded at 33.9 percent in Q3, 2022. Poverty levels are elevated, and South Africa is the most unequal society in the world, according to the World Bank report, Inequality in Southern Africa. Racial and gender inequalities remain stubbornly embedded. Millions of South Africans cannot live without credit and are falling further behind on their debt repayments, resulting in over-indebtedness. In fact, more than half of South Africa’s credit-active consumers are over-indebted, an April 2022 report by the Financial Sector Conduct Authority (FSCA) shows. Between 2015 and 2020 the percentage of credit-active consumers with an impaired record fluctuated between 38-48%, according to the report. A whopping 95% of the surveyed low-income individuals engaged in debt financing to afford basic needs such as food, clothing, transport and bills (FSCA, 2022). Over-indebtedness is coupled with high levels of crime, corruption, and alcohol and drug abuse. Additionally, the majority of the population has been excluded from the body politic and mainstream economy for the longest time, despite policies that have been developed, post-1994, to address this iniquity. This has a negative effect on social cohesion efforts in the country. It is generally recognised that these levels, apart from being unacceptable, are unsustainable and pose an existential threat to the long-term stability and functionality of the country. According to the Institute for Justice and Reconciliation’s (IJR) South African Reconciliation Barometer, the legacies of apartheid continue to have an economic and psychological impact on South Africans. The public discourse has become louder, questioning the outcome of the 1990s negotiated settlement. Many are saying that reconciliation has been emphasised at the expense of justice. The IJR Barometer further says that in the absence of memory, a society is likely to repeat previous catastrophes. In the same vein the Barometer states that “South Africans do not have enough of a shared understanding of their history, and the country is replete with ‘silent non-agreements’ underlying conflicts that are not spoken of, so as not to upset the democratic transition” (IJR, 2021). The post-1994 nation-building project designed to create unity and a common nationhood was also seen as instrumental for redistribution of wealth and other benefits, which historically had been denied to the majority. The levels of mistrust and anger are growing simultaneously, with negative consequences for the social cohesion agenda in South Africa. The 2020 ANC Discussion Paper on Social Cohesion, Gender and Nation-Building states that social cohesion can be a critical element of our attempt at uniting the country, deepening our democracy and making it safer for all who live in it. The underlying causes contributing to the less than satisfactory levels of social cohesion have to be urgently addressed to improve the situation in the country. Poverty and Crime In 1917, George Bernard Shaw, the playwright, argued that “the greatest of all evils and worst of crimes is poverty”. Amartya Sen (2007) notes that poverty is a tragedy. Sen further highlights the “calamity of deprivation and penury” and how “lives are battered, happiness stifled, creativity destroyed, and freedoms eradicated by the misfortunes of poverty”. Sen says that poverty is more than the ‘lowness of income’ (primary poverty), it is about the ‘inability to lead a decent, minimally acceptable life’ (secondary poverty). Sen also examines the connection between poverty and crime, of which South Africa is seen as a prime example given the high levels of both indicators. Many theorists have argued that countering poverty is one of the guaranteed ways to decrease crime, enhance social cohesion and prevent social turmoil. Sen mentions that then (2007) Calcutta had the highest level of poverty in India, but the lowest incidence of murder among all Indian cities. How to account for this anomaly, this seeming paradox? For Sen, it demonstrates that “poverty does not inescapably produce violence”. One of the positives of Calcutta is that it has a “long history of being a thoroughly mixed city, where neighbourhoods have not had the feature of ethnic separation”, like many other cities in India (Sen, 2007). There are also other social and cultural features that impact positively in Calcutta, as opposed to the situation in South Africa – many point to the apartheid legacy of divided neighbourhoods, deprivation, and lack of access to equal opportunities. A number of theorists have asserted that inequality, poverty, injustice, and continued suffering can generate intolerance and provoke anger and fury. For example, the banlieues on the outskirts of Paris, where mostly immigrants reside, have high crime rates and there is intermittent violence linked to neglect, marginalisation, and bad treatment by authorities. For Sen this demonstrates that ‘’we do not know enough about the empirical relations and their fragility and robustness to be confident of what the exact causal connections are” (Sen, 2007). Sen concludes that the “tendency to see a universal and immediate link between poverty and violence is hard to sustain”. Sen says that the “economy of poverty involves much more than just economics” (Sen, 2007). Many theorists feel differently with regard to the South African situation. There is something different in the psyche here that results in the high levels of crime and the violent nature of crime. South Africa’s Risk Profile According to the World Economic Forum's Global Risks Report 2022, the five biggest risks facing South Africa are: Prolonged economic stagnation Employment and livelihood crises State collapse Failure (and destruction) of public infrastructure The proliferation of illicit economic activity. (WEF, 2022) South Africa was also identified as one of 31 countries – including Argentina, France, Germany and Mexico – with high risks around the ‘erosion of social cohesion’. The country where most people say that things are heading in the wrong direction is Colombia (89%), followed by South Africa (85%), Peru (81%), Argentina (80%) and Brazil (79%) (Ipsos, 2021). The Aug-Oct 2021 Afrobarometer survey reflects the following findings: Trust in institutional checks and balances on political power is weak. Trust levels in local councils are very low, at 24%. Only 10% of South Africans indicated that they thought that politicians were trustworthy (Ipsos, 2021). Only about one in three citizens (36%) trust the IEC, with trust levels particularly low among younger respondents. Equally concerning is weak trust in the country’s courts of law (43%). Trust in both the ANC (27%) and opposition parties (24%) continues to decline. Trust in the ANC is especially low among younger and more educated respondents. Two-thirds (67%) of South Africans would be willing to give up elections if a non-elected government could provide security, housing and jobs. Nearly half (46%) say they would be “very willing” to do so, with higher levels of support among younger and more educated respondents. Only 35% think their Local Government is doing well. Most South Africans feel unsafe and only 13% had trust in police (Ipsos, 2021). Almost two-thirds (64%) of South Africans say that corruption increased in the past year, including half (49%) who believe it increased “a lot”. Most South Africans believe that GBV is getting worse (Dec 2021); (73%) of South Africans believe that GBV increased “somewhat” or “a lot” over the past year. Citizens point to alcohol and drug abuse and unemployment as primary contributing factors. (Afrobarometer, 2021) Identity in South Africa This is one of the key aspects of social cohesion that South Africa battles with and that is baffling. The question arises as to how we identify as South Africans and identify the factors that constitute the South African nation beyond birth and citizenship (inclusive of naturalisation). English has become the lingua franca (common language) and other languages, with the possible exclusion of Afrikaans, are on the periphery and have not been developed as mediums of instruction in the post-1994 period. South Africans would struggle to answer the following: What are our common dishes, clothing, major sporting codes, cultural artefacts, music genres, etc.? These are issues that we still grapple with, but don’t seem to have answers for, 28 years after our democratic breakthrough. These questions have no easy answers, but government and political parties, civil society formations, the religious sector, etc., are not doing enough to foster an inclusive, albeit diverse South African identity. There is rhetoric from government departments, but programmes are not rolled out on a large enough scale and consistently; it is done piecemeal and ad hoc. Speeches are given on national days, which are largely ignored. It should be noted that government programmes on their own, are insufficient. Rather, an identity is largely formed through life practices and choices – in other words, people choose to be identified in a certain way and it reflects their life choices. Schools, workplaces, religious institutions, sports association, etc., also contribute to identity. The dark side of our identity is that the social fabric is not robust and relatively minor infractions and incidents cause discomfort or outrage. The recent attempts to address lingering discomforts around prejudice and potential racial views, allied to dealing with our divided past, created a huge furore at Fish Hoek High School, for example, and had to be abandoned. There were also the unfortunate incidents at Stellenbosch University and various other such incidents across the spectrum – including many actors from different backgrounds and one political party that features prominently on a regular basis. Efforts to deal with the underlying unease and unhappiness in various institutions and in society have to continue and multiply if we are to create a positive South African identity. Government Programmes to Foster Social Cohesion Government has a variety of interconnecting interventions to encourage social cohesion and unite the country. Values like ubuntu, solidarity and instilling a culture of participation and equality are important to the vision in the Constitution and to realise our motto of “unity in diversity”. Many efforts are underway to make communities safer, but there remains an overwhelming sense of people feeling unsafe in their homes, public spaces and in communities. Healing the wounds of the past focused on redress and forging a united nation through culture, sport, etc., but with mixed results. Our national symbols have been promoted, including the constitutional values, to assist in forging a common national identity. Yet, how united do we feel as South Africans in 2023, after 28 years of democratic rule? To what degree have attitudes been shifted in a positive direction? Have the values enshrined in the Constitution found increasing expression in behavioural change in society at large? A New Value System A new value system would see social cohesion as more than moral ‘regeneration’, or nostalgia for an idealistic past that never was. It would be inspired by the humane values of a caring society. To achieve this, there should be a thorough understanding of the socio-economic environment that today shapes the South African political and socio-economic landscape, which is infused with the forces of individualism and greed that simultaneously suppress the imperatives for solidarity within the community. In South Africa, we have a mindset of taking shortcuts and the easy way out to reach goals. Too often, incentive systems are vastly inflated and distorted and not commensurate with individual contributions to an effort or to society. Excessive displays of wealth are common and serve as the wrong example for young people. These are, unfortunately, the dominant values that permeate mediums like social media and imagery globally by persuasive and powerful influencers and personalities. These must be countered to coincide with values like fairness, justice, respect for the rights of others, and the importance of solidarity and helping the less fortunate in life. The Covid-19 crisis showed us that this is possible. We need to build upon this, and the acts of kindness and solidarity displayed by most people on a daily basis. South Africa is in need of a national dialogue to determine what we understand as “unity in diversity”. A good starting point is to look to the concepts and ideas of the Constitution, which form the bedrock of South Africa's national culture. The first words of the preamble to the Constitution state, "We, the people of South Africa", words that serve to right the wrongs of a long battle against authoritative and repressive state power during apartheid. This phrase is encapsulated in the national motto – ! ke e: /xarra /Ike (diverse people unite) – a call to South Africans of all races, religions and gender identities to create justice, unity, peace and prosperity together (Kotzé, 2023). Therefore, to create a new value system that steers us towards social cohesion, we must adopt democratic values, social justice and fundamental human rights to transform our society. We need people-centred transformation. “In liberating all South Africans from the over-reach of repressive state power, transformation, is first, the freedom and duty of all to ‘improve the quality of life of all citizens and free the potential of each person’” (Kotzé, 2023). Uniting in this goal and speaking with one voice should be every South African’s holy grail. Nelson Mandela embodied these values and inspired others to also become active citizens who live this transformation through their everyday actions. Indeed, to confront our contemporary crises, “we cannot wait idly for another generation of leadership. Instead, we can all take from the approach of Mandela (and others) and embody the Constitutional values” (Kotzé, 2023). It was only through a robust democratic process, one where different groups pursuing their own ends recognised each other in committed deliberation and negotiation, that the anti-apartheid movement was victorious. People like Desmond Tutu, who advocated for koinonia (a fellowship between different groups), have shown us that it is possible to be a united force without losing our individuality. Now, as the governing party has loses its authority and the ability to maintain order, there is an increasing call for change, for a new way. But unlike before, where the goal was to defeat apartheid and usher in democracy, today the call is for the competent and just execution of the state. It is the time of the united citizenry; we must seize the national moment and put our heads together to find solutions to the crises. Importantly, we must engage in open, inclusive and robust ways. The process must be guided by the principles and values in the Constitution, rather than being dominated by any group or political affiliation (Kotzé, 2023). It is through this type of engagement, deliberation and civil action that leaders who recognise the needs of the people will emerge and a national voice will be born. Conclusion As mentioned, South Africa is assailed by manifold challenges that range from high levels of unemployment, poverty, inequality, crime, corruption, low economic growth, etc. We have emerged from a divisive past that has left the country with many psychological scars, and efforts to promote social cohesion. Education, as one of the key components of ensuring social cohesion, continues to deliver negative outcomes. Our inequality levels engender envy, resentment, anger, and are most likely a factor in our violent crime patterns. All these challenges make it difficult to become more cohesive as a nation. The introduction noted that social cohesion is deemed to be a critical ingredient for people to co-exist meaningfully and in harmony, and is important for their social progress, well-being, happiness, and overall development. Social cohesion is needed as part of the cure for the myriad of challenges that South Africa faces. It is also seen as important in restoring trust between, especially, the prosperous and the poor, who are the majority. During the Covid-19 period, the good character traits that make up the essence of human beings shone through. The best qualities – values like ubuntu, assisting those in need and mutual trust – came to the fore, through big and small acts of goodwill, respect and kindness, which helped people to be more resilient in overcoming the odds. This needs to be harnessed. It shows us how we can assist in breaking down artificial barriers and practices of selfish individualism, especially in the suburbs but also in society at large. These acts must be encouraged to continue and multiply. The strength of any nation is its people and there is a recognition that South Africa’s people and their ongoing goodwill and resilience in the face of much adversity shows promising potential, which must be mobilised and channelled for the collective good of the country, so that, together, we can produce higher levels of sustainable growth. More mixed neighbourhoods closer to city centres and places of work must be created as part of growing a more inclusive nationhood. National unity is necessary for the achievement of equality, justice and development. Ethical leadership at all levels of society and in all organisations, together with improved governance and service delivery, is essential to restore faith in the affairs of the country. Trust levels in leadership and institutions must improve urgently to counter cynicism around the political process and to increase civic interest, participation, and accountability by all for the state of affairs in the country. Social cohesion, as difficult as it is to define, is clearly important to create a prosperous, harmonious society. It is even more critical for us, in South Africa, given our history. Our transition was lauded across the globe, but ironically, now is increasingly being doubted for the supposed benefits it failed to deliver – economic prosperity and increased equality, in the main. In conclusion, Norton & de Haan (2013) say that social cohesion enables peaceful contestation, voice, respect for cultural difference and, broadly speaking, builds the freedoms of both individuals and groups (as advocated by Sen’s capability approach). Social cohesion thus also implies the capacity of societies to manage social change peacefully, inclusively, and with a view to enhancing individual and group freedoms. We still have a long way to traverse in rooting and deepening social cohesion in South Africa, but with the necessary willpower it can be achieved. There is an urgent need to have meaningful dialogue on many difficult issues. We have to deal with entrenched challenges like unemployment, poverty, inequality, crime, corruption, ineffective governance, etc. Trust and confidence levels in institutions have to lift to make social bonds stronger. Efforts must be intensified to finalise the social contract that will enable South Africa to achieve higher levels of inclusive growth and employment, and economic development. 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The Historical Roots of Well-Being and Social Cohesion. [Online] Available at: https://hdr.undp.org/system/files/documents/hdr19bpthehistoricalrootsofwell-beingandsocialcohesionfinalpdf.pdf [accessed: 6 March 2023] World Economic Forum (WEF). 2022. Global Risks Report 2022. [Online] Available at: https://www.weforum.org/reports/global-risks-report-2022/ [accessed: 6 March 2023] World Happiness Report (WHR). 2022. World Happiness Report 2022. [Online] Available at: https://worldhappiness.report/ed/2022/happiness-benevolence-and-trust-during-covid-19-and-beyond/ [accessed: 6 March 2023] - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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

Occasional Paper 2/2023 Copyright © 2023 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. MARCH 2023 by Daryl Swanepoel MPA, BPAHons, ND: C.Admin The current energy crisis raging in South Africa is the number one challenge for the country, negatively affecting all aspects of life. It is having a severe impact on the economy, which the economy can least afford in an environment of low growth and structural high unemployment. It has led to some workers having to work short-time and some firms to close down, resulting in job-losses. Market analysts have flagged the energy crisis as one of the major factors denting South Africa’s economic prospects with the South African Reserve Bank (SARB) calculating that load-shedding slashed 2.3 percentage points off the growth rate in Q3 2022. The National Energy Crisis Committee (NECOM) January 2023 update affirmed the ongoing shortfall in electricity as government’s single most important priority. After years of state capture, corruption and the inefficiency of ANC-appointed people, government is under rising pressure to resolve the power crisis, that is Eskom’s failure to meet the country’s power needs. Various sectors of the economy, including tourism, mining, agriculture and manufacturing, amongst others, have warned that they have already been under severe strain and that the more frequent and lengthy electricity loadshedding is a tipping point which will not only constrain growth, but is likely to see declines in revenue and profits. This should raise a red flag in terms of projected tax revenues for the country, with a concomitant weakening in the state’s ability to deliver services. To this end, President Ramaphosa has been consulting various stakeholders on the crisis and is expected to soon announce measures to counter the calamity. The cancelling of his trip to the World Economic Forum (WEF) in Davos in January to deal with the matter suggests the seriousness of the issue is acknowledged at the highest level of decision-making. This acknowledgement has been reiterated by the ANC’s Secretary General, Fikile Mbalula, who told reporters on the side-lines of the first day of the ANC’s National Executive Committee (NEC) meeting in late January that: “Load-shedding started in 2008, and we [the ANC] have been grappling with it for a long time now. The ANC does take responsibility. We [the ANC] cannot deal with loadshedding by running away and cutting corners as if we are not in power”. What further bedevils the government’s efforts in combatting the energy crisis is the differences between ministers Gordhan and Mantashe. Opposition has emerged within ANC ranks against the 55th Conference resolution to move the oversight of Eskom from the Department of State-Owned Enterprises (SOE) to the Department of Minerals and Energy (DME), aligning antagonists of the move with that of many of the analysts in the media, some civil society entities and opposition parties. The President needs to crack the whip in order to ensure unity within the ANC, yet he has not. Could it be that minister Mantashe has emerged stronger from the December conference and that he is viewed as one of the key allies that ensured the victory for the Ramaphosa aligned slate? Minister Mantashe prevailed as ANC Chairperson in a three-horse race. Load-shedding, which can be traced to as far back as 2008 and coinciding with the Global Financial Crisis (GFC), is likely to impact negatively on ANC performance in the 2024 general election – both internal and external surveys suggest a swing away from the ANC to opposition parties and independent candidates. It is quite conceivable that voter support for the ANC could fall to below 50% for the first time in 2024. This is likely what has spurred the ANC to propose to government that it consider dealing with the crisis through emergency state of disaster regulations. Both in order to get a grip on the problem in order to stabilise electoral support and to respond to a number of civil action actions have been launched against government to deal with the energy crisis. ANC energy summit (ES), 25 January 2023 – University of Johannesburg Speaking at an ANC energy summit (ES) on 25 January 2023, Minister Gwede Mantashe outlined his four-pronged plan to bring an end to SA’s current energy crisis. The four solutions he is proposing are to bring energy from ship-mounted gas-fired power plants online, importing electricity from neighbouring countries, speeding up plans to increase the operational efficiency of Eskom’s fleet of power stations, and addressing the skills shortage at Eskom. He is of the view that these four interventions will take the country out of the energy emergency within a period of six to twelve months. He suggests that government could procure about 1,200MW of power from Turkish company Karpowership under such an emergency solution. The contracts could perhaps be reduced to 10 years - from 20 years - to make it more palatable to those opposing the move. Minister Mantashe was critical of the plan announced by the Eskom board and executives to bring about 6,000MW back online over the next 24 months by improving the energy availability factor (EAF) of the coal-fired fleet. Mpho Makwana, Eskom’s chair, told journalists on 22 January 2023 that they had a generation recovery plan to improve the EAF — a measure of the amount of energy being generated against the total installed generation capacity of Eskom’s entire fleet — from the current 58% to the targeted 70%. Minister Mantashe was unconvinced with the sufficiency of ESKOM’s plan, which proposes to improve the EAF to 60% by the end of March, then to 65% by March 2024 and 70% a year later. Numerous analysts and commentators have urged government to speed up action to deal with the energy crisis, with the requisite urgency, which until now has been lacking. This was echoed at the ANC energy summit. Minister Mantashe reiterated the need for urgency and accelerated action at the summit: “I listened to the board of Eskom saying it will work to improve the EAF to 70% by end-2024. My argument is that this does not reflect [the] urgency [to solve] the crisis”, he said. According to the minister, if Eskom directed sufficient resources and skills towards the service and maintenance of its power stations, it could “accelerate the process of coming out of load-shedding”. Public enterprises minister Pravin Gordhan supported minister Mantashe’s view that Eskom’s recovery plan could (should) be sped up. If all the “supporting mechanisms” that Eskom and the government were putting in place through structures such as the national energy crisis committee “come together in the next five to 10 days”, the two-year recovery plan could be shortened, he said. National Energy Crisis Committee (NECOM) progress report, 21 January 2023 The National Energy Crisis Committee (NECOM) six-month progress update on implementation of the Energy Action Plan (EAP) comes in the wake of load shedding being escalated to stage 6 in the period under review. This was due to a high number of breakdowns across Eskom’s generation fleet. The declining Energy Availability Factor (EAF) of Eskom’s fleet reflects the cumulative impact of historical underinvestment in maintenance and assets, exacerbated by flaws in the design of new power stations (Medupi and Kusile) in the last decade. To respond to the severe impact of load shedding on households, small businesses and the economy as a whole, President Ramaphosa announced a range of measures in July 2022 to improve the performance of existing power stations and to add new generation capacity as quickly as possible. The EAP was developed through extensive consultation and endorsed by energy experts as providing the best and fastest path towards energy security. NECOM was subsequently established to coordinate government’s response and ensure swift implementation of the plan. In mid-January, President Ramaphosa convened NECOM to accelerate government’s efforts to reduce load shedding. The president also engaged with a wide range of stakeholders, including political parties, labour unions, business associations, community groups, interfaith leaders, traditional leaders, premiers and mayors to ensure a collective response to this national challenge. The progress update outlined important steps that have been taken to follow through on the earlier commitments announced by the President. These include: Schedule 2 of the Electricity Regulation Act was been amended to remove the licensing requirement for generation projects, which will significantly accelerate private investment. Since the licensing threshold was first raised to 100 MW, the pipeline of private sector projects has grown to more than 100 projects with over 9000 MW of capacity. The first of these large-scale projects are expected to connect to the grid by the end of this year. NECOM instructed departments to cut red tape and streamline regulatory processes for energy projects, including reducing the timeframe for environmental authorisations to 57 days from the previous more than 100 days; reducing the registration process from four months to three weeks; and ensuring that grid connection approvals are provided within six months. Project agreements for 19 projects from Bid Window 5 and six projects from Bid Window 6 of the renewable energy programme, representing 2800 MW of new capacity. These projects will soon proceed to the construction phase. A new ministerial determination has been published for 14771 MW of new generation capacity from wind, solar and battery storage to accelerate further bid windows. An additional 300 MW has been imported through the Southern African Power Pool, and negotiations are underway to secure a potential 1000 MW from neighbouring countries starting this year. Eskom has developed and launched a programme to purchase power from companies with available generation capacity through a standard offer. The first contracts are expected to be signed in the first quarter of 2023. A team of independent experts has been established to work closely with Eskom to diagnose the problems at poorly performing power stations and take action to improve plant performance. While the power system remains constrained in the short term, these measures will soon reduce the frequency and severity of load shedding as new capacity is brought online. At the release of the 21 January 2023 NECOM progress report, President Ramaphosa said: “South Africans are right to demand immediate action to address the devastating impact of load shedding on our lives and on the economy. The EAP provides a clear way out of this crisis. We do not need any new plans – we are focusing on implementing this plan fully, and effectively, to achieve energy security for all South Africans.” The President has also instructed law enforcement agencies to ramp up efforts to protect electricity infrastructure and to combat the rampant corruption that is sabotaging recovery within the energy generation sector. A special meeting of the National Security Council was to be convened in the last week of January to receive a report on operations underway to disrupt criminal syndicates and address theft and sabotage at several power stations. Risk Factors The pathway our of the energy crisis is confronted with a number of material risks, such as: Vacancies at the very top of Eskom’s organisational structure, including the CEO, COO and a number of other senior managers. These vacancies need to be filled urgently, and with capable individuals with proven skills and management expertise. The restructuring of Eskom must be dealt with decisively, as indecisiveness will pose serious challenges to bringing about an improved business model Disagreement between the two key ministries - SOE and DME - as to the direction to be taken to emerge from the crisis. As Head of State the President needs to step in and resolve this post-haste. Eskom has an unsustainable debt burden exceeding 400 billion rand. Innovative ways needs to be found to lessen Eskom’s debt and to improve the utility’s balance sheet and capacity to raise capital in the markets. This may include the state taking over some of the debt. The inability to finance Eskom’s capital build programme impedes the creation of new generation capacity. Conceptual opposition to private sector supply and/or public private partnerships needs to be addressed, and bureaucratic stumbling blocks removed. Affordability of energy for the majority of households. There is little scope for large tariff increases, lest stability in society is to be put at risk. Social unrest is already starting to pop-up across society. The already high cost of energy is negative impacting households and economic activity. With less disposable income households are struggling to service debt, and are spending less. This poses a serious macro-economic threat. Lack of trust. Government’s tardy track record in dealing with the energy crisis, and its failures, has created widespread doubt that the crisis will be turned around in the stated timeframes. This is having a material impact on the business and investment confidence needed to underpin economic growth. Dissent with regard to moving Eskom from SOE to DME oversight as per the ANC 55th Conference resolution. There has been strong opposition to this, first by players outside of the ANC and the media, and lately within the ranks of the ANC, including backers the president. The internal political squabbling has the potential to slow, even derail, progress. Measures to ameliorate and obviate the energy crisis Eskom has an installed capacity of 46000 MW. However, it has been reported that Eskom can only guarantee between 24000 – 26000 MW Energy Availability Factor (EAF) out of the 46000 MW installed capacity. The country needs between 4000 - 6000 MW of additional EAF to mitigate loadshedding immediately, whilst dealing with medium to long-term engineering solutions to fix plant performance and stabilize the grid. It is estimated that one stage of loadshedding costs the economy about R1 billion a day with many small businesses collapsing. Six power stations have been identified for particular focus over the coming months through a comprehensive Generation Recovery Plan. Cabinet has decided that the immediate focus must be on the following initiatives and actions that will urgently contribute to the reduction and ultimately elimination of loadshedding in the next 6 to 12 or at most 18 months. These initiatives in the include: Improving the EAF through maintenance of existing power stations Procurement of emergency or short-term power Purchase of electricity from neighbouring countries Improving skills capacity at Eskom Conclusion There is general agreement amongst public policymakers that a national state of disaster must be declared and that the president leads a nation-wide, societal and inter-governmental effort to end the loadshedding and stabilise the energy supply. The ANC National Conference, and their Lekgotla, have resolved that, in both the country’s interest and their own survival, a decisive national energy crisis action plan be urgently rolled out. This will be better enabled with the declaration of the national state of disaster. Such will enable better focus and mobilization of all government structures, resources and society. It is expected that, drawing from the Covid-19 experience, the president will constitute a national command structure that will include cabinet ministers, premiers of provinces, mayors, organized labour, business and other critical sectors of society. To date government has not communicated sufficiently or timeously. This lack of communication has created uncertainty in the public mind and has, to the detriment of social and economic stability, heightened the trust deficit between the government and the public. They need to up their game. The president must be the leader and principal communicator of the government action plan to resolve the energy crisis. The public will not be satisfied by anything less. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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

Occasional paper 1/2020 Copyright © 2020 Inclusive Society Institute 50 Long Street Cape Town South Africa 8000 235-515 NPO All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without 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 or Members. by Prof David Luka Mosoma Chairperson of the CRL Rights Commission Abstract Like many other drastic events in our country’s 26-year-old democracy, the COVID-19 lockdown has uncovered the deep social divisions in our society. Different classes, races and cultures are differently affected by the crisis, facing vastly different challenges. Indeed, social cohesion remains one of the most fundamental policy challenges facing South Africa since the dawn of our democracy. This paper contextualises the work of the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities (or “the CRL Rights Commission”) against the backdrop of our nation’s pursuit of social cohesion. It firstly suggests that no effort aimed at creating a truly cohesive society will succeed if it disregards the enormous challenges facing the South African nation. These include gender-based violence, women and children abuse, home lessness, unemployment, and economic exclusion. Moreover, social cohesion initiatives must be responsive to the needs of those on the receiving end of the seemingly endless string of human dignity violations perpetrated of late. Anything less will merely serve to perpetuate a cosmetic social cohesion, which is empty and meaningless to most. Secondly, the contribution advances the notion of ubuntu as a vehicle to achieve a social cohesion paradigm that is meaningful to all. Finally, it calls on all South Africans to reflect on, and start breaking free from, their decades-long social “lockdown” from their compatriots. Over the years, various scholars and policymakers have expressed the view that social cohesion is arguably one of the most fundamental policy challenges facing South Africa since the dawn of democracy. Like other drastic events in the past 26 years, the current battle against COVID-19 has again exposed the deep lines of social division in the country, with different classes, races and cultures being differently affected by the crisis. Ironically, South Africans marked Freedom Day 2020 in lockdown, each confined to their own space, their own thoughts, and their own problems. But apart from the fact that we are normally physically free to move as we wish, haven’t we perhaps been a socially locked-down nation all along, with each class, race and culture keeping to themselves? And, more importantly, is it truly possible for our society to achieve a state of true social cohesion, or are we still trying to define what this means as we struggle through our diverse interpretations of the concept? Among the many authors who have attempted to capture the essence of social cohesion over the years was influential sociologist Emile Durkheim, whose writings have informed the thinking of scholars, development agencies, government institutions, policymakers, and ordinary people. According to Durkheim, social cohesion can be summed up as “as the interdependence between the members of the society, shared loyalties and solidarity. Aspects often mentioned in describing social cohesion are the strength of social relations, shared values and communities of interpretation, feelings of a common identity and a sense of belonging to the same community, trust amongst societal members as well as the extent of inequality and disparities (Berger-Schmidt, 2000:2-3)” This he conceptualised not as a cosmetic idea, but in response to the challenges that society of the late 18th to early 19th century faced. At the time, Durkheim was searching for solutions to the deep divisions and discrimination that had been caused by economic deprivation, social and class exclusions, migration, cultural conflicts, and industrialisation. In a profound way, his call for interdependence among members of a community, glued together by a willingness to work together to foster social and economic equilibrium to help them survive and succeed, is as relevant today. In South Africa’s case, the pursuit of social cohesion should be aimed at unifying society across its diverse backgrounds through the creation of a shared vision and a common economic development agenda. This should result in social justice based on a sustainable economic distribution model that brings value to every citizen. This is also why the National Development Plan (NDP) 2030 emphasises the need for a more prominent role for social cohesion in the national policy framework (RSA, 2012). However, unless we, as a nation, embrace a mutually acceptable and practical understanding of what social cohesion is, and collectively implement substantial, measurable programmes that respond to our socio-economic realities, its attainment will remain a pipedream. In the context of South Africa, no programme or intervention will bring about true social cohesion if it ignores the facts. These include the impact of the various forms of gender-based violence perpetrated in our country, the abuse and killing of women and children, general inequalities, spatial disadvantages, homelessness, unemployment, unequal job opportunities and unequal pay, the demeaning cycle of poverty, economic deprivations, and exclusions. In addition, no effort aimed at achieving social cohesion will succeed if it chooses to ignore the serious violations of human dignity our nation continues to witness. Instances of racial, religious, and cultural intolerance and prejudice seem to be escalating, with some among our communities shamelessly refusing to accept that the Constitution endows all of us with equality in all its forms. Those on the receiving end of this abuse cannot be blamed for seeming less interested in a cosmetic concept of social cohesion. Their lived realities call for a meaningful experience of social cohesion – a social equilibrium that substantially empowers them in ways that will prevent them from being social outcasts in their own country. Such a meaningful form of social cohesion should be propelled by an unwavering resolve to address the aforementioned challenges being justly guided by the principle that all human beings are born free, equal in dignity and rights, which dignity is inherent, inalienable and independent of any state or system. Therefore, this equality in dignity should under no circumstances be denied, harmed, or devalued by anyone, whether governments, systems, individuals, communities, or socio-economic conditions. Our actions and interactions should be firmly grounded in justice-based values that lead to genuine transformation in our communities. Importantly also, everyone must be unambiguously committed not to be party to any attempt to enforce a social cohesion paradigm of “unequals,” as that may be no more than injustice by another name. Notwithstanding its various challenges, our country is endowed with the positive value of ubuntu, which offers enormous potential to help realise a social cohesion paradigm that is meaningful to all. Fundamentally, ubuntu encompasses what social cohesion is truly about – a deep bond among human beings based on a sense of belonging and connectedness that acknowledges that an individual’s humanity can only be actualised in relationship to others. Practising ubuntu in South Africa has to empower all of us to embrace, respect and uphold our compatriots’ dignity, as my humanity is inextricably linked to yours, and yours to mine. If I dehumanise another, I de humanise myself, because, though we are different, we belong together and, so, we can live together (Phasha & Condy, 2016). This is the kind of social cohesion that ac knowledges our diversity as the glue that binds us rather than walls that divide us. It is for this reason that the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities (or “the CRL Rights Commission” for short) was established. The commission finds its mandate in the Constitution as well as the Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities Act 19 of 2002. Its task is to help create a truly united South African nation whose cultural, religious, and linguistic diversity is a source of strength that contributes to a common and indivisible bond of loyalty to the country and its people. It is against this context that the CRL Rights Commission has been collaborating with other state agencies to protect the rights of communities, thereby giving actual, real-life, meaningful content to the concept of social cohesion. In implementing its programmes, the commission seeks to contribute to socio-economic development, the restoration of human dignity and the creation of national unity among cultural, religious, and linguistic communities on the basis of equality, non-dis crimination and free association. The CRL Rights Commission continues to run campaigns, initiate engagements, and conduct research in an effort to promote dialogue and mutual understanding among our communities, and thereby help advance the dis course on social cohesion. Navigating our way out of a few months’ COVID-19 lockdown will be difficult but can be done. The tougher challenge is to cast off the shackles of our decades-long socially locked-down existence as South Africans; to move from superficial to significant social cohesion, which will make us stronger in the face of disasters. This is the challenge the CRL Rights Commission invites each and every South African to tackle as we move forward. Prof David Mosoma addressing an Inclusive Society Institute Social Cohesion Dialogue in Pretoria, February 2020. References Berger-Schmitt, R. 2000. Social Cohesion as an Aspect of the Quality of Societies: Concept and Measurement. Mannheim: Centre for Survey Research and Methodology. Phasha, & Condy, .2016. Inclusive Education: An African Perspective. Cape Town, South Africa: Oxford University Press Southern Africa (Pty) Ltd Republic of South Africa (RSA). 1996. The Constitution of the Republic of South Africa, Act 108, 1996. Pretoria: Government Printers Republic of South Africa (RSA). 2002. Commission for the Promotion and Protection of the Rights of Cultural, Religious and Linguistic Communities, Act 19 of 2002. Pretoria: Government Printers Republic of Republic (RSA). 2012. National Development Plan 2030. [Online] Available at: https://www.gov.za/sites/default/files/Executive%20Summary-NDP%202030%20-%20Our%20future%20-%20make%20it%20work.pdf [accessed: 29 May 2020]. Contextualising note from the CRL Rights Commission by Renier Schoeman CRL Rights Commission, and Chairperson: Committee for Corporate Linkages and International Liaison This occasional paper followed a social cohesion dialogue hosted by the Inclusive Society Institute (ISI) in Pretoria earlier this year. The paper is important not only because of its immediate relevance to South African society, but also in light of the fact that social cohesion has been selected as a major theme of the CRL Rights Commission’s new term of office. As such, the paper sums up the commission’s agenda for the months and years ahead. Therefore, the CRL Rights Commission will be circulating it widely and strategically, both nationally and internationally, advocating for a socially cohesive society and the benefits the South African nation stands to derive from it. This will be done in key national and sectoral structures such as Parliament, academia, business, think tanks, etc., on a wide and representative level. Internationally, the CRL Rights Commission will also share the views expressed in this paper with countries and organisations aligned with South Africa, as well as with appropriate non-governmental organisations with international linkages. Working in partnership with the ISI will no doubt add considerably to the commission’s impact and will support efforts to advance social cohesion in both a local and global context. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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

Occasional Paper 1/2023 Copyright © 2023 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. JANUARY 2023 by Dr Klaus Kotzé BA Social Dynamics, BSocSci Honours Political Communication, Master in Global Studies, PhD Rhetoric Studies Abstract “The Constitution belongs to all of us, not just the ruling party, or one section of South Africa. We all wrote this collectively with our blood, some with their lives, with our tears and with our sweat. We claim it as ours, it enshrines the rights that make us live as South Africans, and we will protect it because it belongs to us” (Ramaphosa, 2012). Introduction South Africa faces an existential crisis. Our extensive national failings demand that significant intervention and change are required to save and restore the democratic edifice. At its core, South Africa is at an inflection point. It is not sufficient to only isolate and prosecute suspected parties. The crises cannot be resolved by negative action. Instead of another commission or inquisition, the citizenry must be broadly central in rethinking and then co-creating a new socio-political order. The citizenry, as those whose interests are directly affected by the condition of the state, must actively reimagine the way the state functions. They must consolidate a comprehensive approach to the state that places positive, transformative action first. Everybody with an interest in the country must contribute to substantial renewal. In so doing, the citizens will be discharging their Constitutional duty and contribute to the fulfilment of the Constitutional goals of transformation and a people-driven state. We should adhere to former Chief Justice Chaskalson directive, that “the Constitution calls for positive action to confront the apartheid legacy of poverty and disempowerment and build a truly non-racial society committed to social justice” (Chaskalson, 2012). The Inclusive Society Institute (Institute), through this position paper, offers a brief assessment of the structure and purpose of the state. After critically looking at its orientation, the paper proposes that the best path towards a socially just South Africa is through a transformative, people-driven state. A state that through co-operative democracy pursues the national interest. In pursuit of these goals, the Institute proposes that a process be undertaken whereby civil society unites in order to reimagine its relationship with the government and itself and whereby it reactivates its role in the state. The state should serve the national pursuit The structure of a state is not arbitrary, nor is it pre-determined. When South Africa, through its leaders and citizens, decided on a Constitutional democratic structure, it was a product of a multitude of factors. Both external and domestic influences determined the resultant political-economic order. As was the case in the early 1990s, so it remains that decision-makers draw from global standards and influences when determining the pathways and modalities of the state. While it is useful and expedient to draw from global examples, the contemporary international crisis of democracy, detailed broadly by Freedom House (Abramowitz, 2018), the increasing sovereign crises, as well as a general move towards multipolarity (Shapiro, 2021) compel states to pursue their individually articulated national interests. Today, due to international polycrises, democracies can only be strong and serve their people when they are first organized by and give expression to internal demands and cultures. Instead of deriving its legitimacy from the contemporary perception which sees democracy as the sole legitimate form of political organization – a panacea propelled by status quo global powers - a democracy’s authority is instead always derived from and must be representative of the citizenry. Democracy is therefore not an end or a product, as remains erroneously implied about South Africa. Instead of achieving democracy in 1994, South Africa attained the ability to be democratic. Democracy is a way of doing things. Simply, it is a process whereby the expression of power is exercised in the establishment and execution of power. It is from the Constitution, the foundational text and lodestar of the nation, that the form and intelligence of the state are to be determined. Following the South African people’s long struggle against authoritative and repressive state power, the final Constitution of 1996 establishes that the people shall govern. In abolishing the former system of Parliamentary supremacy (rule by law), the enactment of Constitutional supremacy (rule of law) effectively dislodged power from the hands and whims of a ruling party. Instead, it directs all subjects of the state to be guided by the expression of principles and values. The concepts and ideas of the Constitution form the bedrock of South Africa’s national culture. While governmental structure and policy orientation may and do change, the Constitution as grundnorm is the “foundational principle from which the validity of all norms can be drawn” (Oxford, 2022). Instead of witlessly replacing one dominant theory (apartheid) for the next (liberal democracy), it is from the popular transcendence of the differentiated power of the Apartheid system that the democratic order gains its operational and fundamental legitimacy. It follows that for any political action to be legitimate, it must accord to the Constitution’s aspirational and transformative goals. A critical assessment of the government’s policy choices and achievements should first be read in this regard. The question must be: does the policy or action advance social justice for all? It is too often neglected that it is not only government that must pursue the Constitution’s aspirational ends. The citizenry too is charged, in the spirit and deed of republicanism (South Africa is a republic after all) to participate in democratic action. While much is (rightly) made of government’s failures, the republic is doomed when the citizenry fails to go beyond merely being rights seekers. Voting is the fundamental popular action that conveys representative authority. It is a pillar upon which the national order rests. If an electorate majority confers political legitimacy, then the 54.13 % who did not vote in 2021 municipal elections, effectively invalidated the South African political order. This decided political expression (seemingly unbelievable following the long-pursued quest fulfilled in 1994) symbolizes the crisis of legitimacy, which if not urgently addressed portends to unravel the South African project. Not only does this failure suggest that the ruling party is no longer the popular force it once was. But, if power is not claimed through ‘the will of the people’, it will be challenged through alternative, destructive ways. Such a challenge will fundamentally change the basis and thus the entire scope of the national political order. A fatal strike to the heart of South Africa as we know it. Herein lies the vital task for the nation. It is of cardinal importance that the citizenry debates and resolves the question of the national structure. The debate on state practice, the role of government and the role of the citizenry. For the South African state to be legitimate, the citizenry and government must co-operate in constituting the state. The transformative purpose of the state The preamble to the Constitution serves an important role. It describes the national purpose. It sets the scene, offering a national starting point. It then articulates the national goal. Serving as the foundation to the Constitution, the preamble provides primary guidance to the state. The first words of the preamble undertake a significant role. “We, the people of South Africa”, serves to permanently end the previous dominant political theory and the practice of division (Republic of South Africa, 1996). This phrase creates and then instructs the character of the nation, as per the national motto, ! ke e: /xarra //ke (diverse people unite). While the state continued with the democratic handover in 1994, the nation was birthed, as one. Following the formation of a single citizenry, as “we”, South Africans are enjoined to consider and “recognise the injustices of our past”. The declaration of “we” struck a fatal strike to the edifice of apartheid South Africa. It transcended this period and commenced a new era. The momentousness of this strike does not mean dwelling in the past. These two initial markers, the communal ‘we’ and the location of the present in relation to the past, originate the design of the national goal. From before where there was injustice, South Africans of all shades and preferences must together create justice. From before where there was differentiation, we must create unity, peace and shared prosperity. The bulwark of the new South African nation, its ethos, is transformation. For any political, social and economic action to be legitimate, it must give expression to transformation. To “heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights” (Ibid). Significantly, since differentiation is denied through the creation of ‘we’, any interpretation suggesting that transformation refers to the advancement of one racial or ethnic group above another is invalid. This is a lazy perception. Instead, in liberating all South Africans from the over-reach of repressive state power, transformation, is first, the freedom and duty of all to “improve the quality of life of all citizens and free the potential of each person” (Ibid). What does it mean for the state to have transformation as its purpose? In sum, it gives the people and its representative government a mandate to transform. During its time in administration, the African National Congress (ANC) has presented itself as a transformative force. The ANC government, through its various policies and strategies, has undertaken to implement what it calls a Batho Pele (people first) approach. This guiding principle was introduced by the Mandela administration in the White Paper on Transforming the Public Service Delivery. According to the White Paper, Batho Pele seeks to align the orientation of the government to that of the Constitutional Principles. “Access to decent public services”, said Mandela in the foreword to the Act, “is no longer a privilege to be enjoyed by a few; it is now the rightful expectation of all citizens, especially those previously disadvantaged” (DPSA, 1997). The progressive goal of giving effect to people-centred transformation, is both strategic and gives expression to Constitutional principles. While these policy ideas are laudable and correct, their execution has fallen well short. The reasons are manifold and diverse. The failures and corruption of the ANC are well documented and have slowly been receiving prosecutorial attention. This is particularly the case following the revelations emerging from the Zondo commission into allegations of State Capture which showed how policy and administration tools were susceptible to nefarious political influence. The role of politicians and political influencers has become a feature of and a threat to South African democracy. The exploitation of state resources by connected individuals has taken place against the interest of the people. The failures of the state are not only the fault of the influencers and implementers. Beyond the crisis of corrupt officials in pursuit of national control, the very structure of the state has become too centralized around politicians. Inordinate centralization has facilitated the pursuit of narrow interests. The government’s statist approach has built a dependency on an overburdened state. Furthermore, and of particular interest to scholars and analysts, the distinction between a genuinely people-centred state that offers free basic services and one which dominates society has not been established. While its strategic ends are people-centred, its strategic means and ways are statist. It is of significant concern that the public programmes and the business of the state have become dominated by individuals and government departments that undermine constitutional values and avoid responsibility and consequences. This pathology was gravely exemplified by the Zuma administration. The excessive regulation under the COVID-19 induced Disaster Management Act signifies a high-water mark for state interference. Exiting the era of the pandemic and resolving the accusations emerging from the Zondo Commission offers a strategic opportunity for a true reform process that leads through Constitutional principles. According to a law expert writing for the Daily Maverick under the nom de plume Professor Balthazar, there is a tangible threat of authoritarian statism seizing this strategic opportunity and ushering in a second and more rapacious chapter of state capture. “Either enough people of goodwill defend our constitutional model, however imperfect it has proved, or the alternative will be an authoritarian populism that make the Zuma years feel like a Sunday picnic. Constitutions do not survive because of majestic promises contained in the text. They survive because people fight for their continuation in the manner millions fought to defeat the racist authoritarianism that preceded 1994” (Balthazar, 2022). Balthazar confirms that South Africans are all Constitutionally charged to transcend the divisive era and to ensure that we do not again become dominated by an authoritarian state. Uniting in this goal and speaking with one voice should be every South African’s primary goal. This is the act of transformation. At this moment of inflection, it is worth recalling how the political project of the 1990s supplanted the Apartheid state. Transformation is a process that must be put into action. President Mandela was a master influencer. He understood the power of persuasion. He led the country to adopt and express the values and ideas of the Constitution. Through his presidency, Mandela enacted the principles and values of the Constitution. He gave expression to and therefore embodied the transformation of the oppressive old into the inclusive new. In doing so, his leadership inspired ordinary South Africans to do the same. To become active citizens and embody the transformed state through their everyday actions (Kotzé, 2021). To confront our contemporary crises, we cannot wait idly for another generation of leadership. Instead, we can all take from the approach of Mandela (and others) and embody the Constitutional values. South Africa: A transformative and people-driven political order When considering the points raised above, it emerges that South Africa’s political order should be transformative. It should be people-driven. Former Chief Justice Langa reminds us that active, popular transformation lies at the heart of the new Constitutional order (Langa, 2006: 1). Transformation does not only equate to what has been achieved regarding race and representation. Transformative Constitutionalism is an ongoing process. “A way of looking at the world that creates a space in which dialogue and contestation are truly possible, in which new ways of being are constantly explored and created, accepted and rejected” (Ibid, 354). Transformation can therefore be seen as the movement from one normative system to the next. To exemplify this understanding, Langa points to the epilogue of the interim Constitution of 1993 as providing the basis for transformation. “Constitution provides a historic bridge between the past of a deeply divided society characterized 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” (RSA, 1993). The bridge provides an arrangement for transformation. It is only through the personal commitment of the citizenry to cross the bridge, that it has utility. Put differently, the bridge represents the classic social contract between the state and the citizenry. And between the citizenry itself. Symbolically these “represent binding structures that are formative…the social contract forms a constitutional submission of citizens to a central authority”, the Constitution (Kotzé, 2021). Both structures require commitment and personal action of the citizenry. “The signing of the contract and the crossing of the bridge represent the commencement, though not the achievement, of transformation. The act of democracy entirely depends on the democratic practice being shared. Deliberation requires two or more active agents. It is incumbent upon individuals to take stock of policy, to shape and build the nation. In returning to the post amble, we see that it forms a call to action. ‘The adoption of this Constitution lays the secure foundation for the people of South Africa to transcend the divisions and strife of the past’” (Ibid). The Constitution was greatly influenced “by both the public input as well as the deep involvement of civil society in the negotiation process” (Jagwanth, 2003). Speaking and standing up against the former regime provided the normative basis for civil society in democracy. It was through their acceptance of people from other races as equals, the explicit denial of the divisive apartheid system, that the people of South Africa claimed their citizenship. It is a truism that power and independence are never given, it is always claimed through its enaction. Whereas the admission of equality was the condition for a unitary state, the performance of transformative Constitutionalism is the requirement for a thriving democracy. It is therefore that unlike under apartheid where civil society existed in opposition to the state, today this relationship cannot only be an antagonistic or negative one. Through the founding of Constitutional democracy where people claimed their power, today civil society must collaborate with government. It must do so constructively and independently. Civil society does not only have a central role in the execution of Chapter Nine institutions, such as the Human Rights Commission. It has a direct responsibility to ensure the delivery of constitutional goals (Ibid, 13). The citizenry is central to transformative democracy. To suggest that the citizenry is the state is not an exaggeration. The Greek root origin of the word city (today in political terms, the state) and citizen is the same. Citizenship, therefore, means that one belongs to that geographically inscribed political community. As the city belongs to the citizen, the citizen also belongs to the city. Both have the duty to serve the other. In the South African Constitutional context, statism must be transformed into citizen-led democracy. This does not expropriate duty and responsibility of the government. Instead, it supplements and thus supports the work of the government. The contemporarily popular perception that the people must oppose the activities of government is misplaced. The best way to prove its invalidity is to build partnership and reciprocity. The Constitution, much like the Freedom Charter, stresses the significance of public participation in the practice of governance and statehood. A just government would not only have to be based on the will of the people, but the citizenry would also have to be consulted and co-operated with actively. Claiming our place in this co-operation is one of the first steps towards the national solution. Today, throughout its social and pollical realm, there is a growing chorus claiming the need for people to take back South African democracy. Theirs is a call to take inspiration from the period leading up to 1994. For citizen-led initiatives to restore the state, they should embody the deliberative political force of preceding years. Former Deputy Finance Minister Mcebisi Jonas, at a recent Defend our Democracy conference, invoked the work of Amartya Sen. He suggested that co-operative democracy (again) be adopted as South Africa’s guiding principle (Jonas, 2022). Co-operative democracy which departs from the consolidation of state control by a governing party sees government administered Batho Pele being supplanted by broader participation. Not only practiced by government officials, but by all citizens. It resolves the tension between a statist and a people-driven state. Sen, in The Idea of Justice (2009), describes a co-operative democracy as one that is defined by public reasoning and government by discussion. He suggests that it is through sharing and discussing our realities and ambitions that we build the edifice of a just society (Sen, 2009). South Africans have an advantage. We have a deliberative recent history and a Constitution that mandates government to work closely with the people. This is the principle of subsidiarity, interpreted from section 156(4) of the Constitution. The principle requires maximum efficiency in the application of government. “The argument is that lower levels of government are closer to the citizen and can therefore make more intelligent decisions on what citizens want” (De Visser, 2010). Subsidiarity is about making efficiency the norm. As such, it is innately about the relation between government and the people. Constitutionally, the government is mandated to devolve power (decentralize) when there is a demand from the people and when such devolution will afford more efficient results. This is an important distinction to make. There must be an active demand, whereby through their interaction with the government, the people take up their civic responsibility as co-creators of the state. The COVID-19 pandemic has been a major driver of civic action in communities. According to Siphelele Chirwa (2020), civil society had become less influential in the last three decades leading up to the pandemic. COVID-19 has removed the veil of unemployment and poverty in South Africa. As a consequence, “civil society is being called on more, we need to collaborate and connect … (During COVID-19) the work happening on the ground in South Africa has been driven by nongovernmental organizations, the challenge remains in working together with the government” (Chirwa, 2020). Both the recognition of and involvement with organizations such as Gift of the Givers has hugely increased during the pandemic. The South African media landscape has become awash with praise for Gift of the Givers and other such civil organisations working to provide social support. An interesting phenomenon emerged where many members of the public have suggested that Gift of the Givers would perform the roles of government better than the government itself (Seale, 2020). The confidence and increased involvement of civic organisations provide an interesting lesson of how government can be restructured and improved. The colossal response to COVID-19 has activated a broad swathe of society to see and act against the immediacy of the hugely mediatized situation. Considering the Constitutional principle of efficiency and subsidiarity, these claims carry the significant potential to catalyse the structure of the state. Thereby empowering civic organisations beyond the existing reach and scope of governmental policy. ANC elder, Mac Maharaj, recently added his voice to the chorus calling for closer cooperation between government and civil society. In an opinion piece from 20 November 2022, Maharaj suggested: “it is common cause that local government is the coal face for the delivery of services…is this not the place where we should be initiating and implementing measures, where participatory democracy should be rooted?” (Maharaj, 2022). It is exactly in giving expression to subsidiarity, that government can better perform and for society to receive just service. “Our legislation provides for establishing ward committees. Despite our desire to create a people-centred and participatory democracy, little has been done to make ward councillors engage in the ward committees in ways that involve the communities…This again is an area relating to the building of our democracy that cannot be left solely to the elected councillors. Civil society needs to carve out a role as an active partner, making our democracy participatory” (Ibid). The task of carving out its role is an important observation. As witnessed with the distinction between people-centred and people-driven democracy, the citizenry cannot wait to be handed participatory access and recognition. Nor can it expect constructive and strategic outcomes when it does not first consolidate a comprehensive position in its relationship with the state. We can draw inspiration from the struggle against apartheid as an active embodiment of real power. The unified voice expressed towards a singular outcome did not only crush the apartheid regime. It represented the purpose and structure of South Africa’s future democracy. A new deliberative moment Breaking and building a state is a deliberative act. When through giving its voice to the anti-apartheid movement, by naming and shaming its injustice, and when claiming unity through reconciliation, the popular movement incorporated and embodied the principles and therefore the edifice of the new state. Constitutional democracy was legitimized and realized through a robust democratic process. A process where different groups, pursuing their respective ends recognized each other in committed deliberation and negotiation. At the time, people like Desmond Tutu showed the way. He advocated for koinonia, a fellowship between different groups. He implored the engagement between diverse people, thereby denying the strategic principle of apartheid. Through koinonia, it was possible to manifest a united voice without losing individual distinctiveness. According to Salazar (2002), South Africa presents a remarkable example of a democracy that “both magnified and predated European colonialism, a democracy that has broken that mold without a revolution and its usual sequels…It also offers the striking case of a democracy won at the negotiating table and also won every day in public deliberation” (Salazar, 2002). In being birthed through robust consultation, the process to renew South Africa must return to the Constitution as a process and artefact. In the manner of the Tutus and Mandelas, the people again must speak and act the nation. The present moment in South Africa resembles the latter days of the apartheid state in several ways. The governing party has several factions pursuing differing strategies. It has lost its authority and the ability to maintain order. Increasingly there is a chorus of voices calling for change, for a new way. Unlike before, where the defeat of apartheid and the ushering in democracy was the widely held goal, today such a broadly agreed destination is absent. Instead of advocating for systemic change, the calls today are for the competent and just execution of the state. As referred to at the beginning of this piece, the global democratic crisis exists in that it lacks the arguments (and proponents) for itself. Democracies, including South Africa, have become lame; presumptive of an inevitable future. This arrogance has resulted in democrats assuming a negative approach, rebuking others while not bolstering their own foundations. Instead of chastising others, democrats must consolidate arguments and processes for effective democratic discharge. South Africans (and the global community) can take from the democratic moment in the mid-1990s. The citizenry must seize the national moment to engage and to deliberate on the processes needed to resolve the crises. The form and conduct of the process is important. It must be open, inclusive and robust. Instead of any group or political affiliation dominating, it should be guided by the Constitutional principles. Accordingly, such a process will avoid capture and take place through mutual recognition. Whereas some may be quick to deride deliberation, tautologically referred to as mere rhetoric, the act of deliberation sees citizens claiming and expressing their political power. Through deliberation and civil acts, common ground is found, and leaders emerge. The reference to Gift of the Givers and its acclaimed founder, Imtiaz Sooliman, serves as an excellent example. It is from leaders that deliberately recognise the needs of the people that a national voice emerges. Conclusion: Towards a new national accord If the strategic ways of democracy is deliberation, what should we seek to achieve through it in 2023? For co-operative democracy to embody transformative constitutionalism, we need to do what South Africans cohered to do in the early 1990s. We need to establish a new national chorus. While civil organisations have different approaches to their interests, they need to agree on and then sing from the same proverbial hymn sheet. South Africans need to come together to agree upon the details of this score. In the early 1990s disparate groups with the goal of ending Apartheid and crafting a better society came together in different formats. While we can take inspiration from the Convention for a Democratic South Africa, civil society organizations should look to unite, to again form a patriotic front. In a conference in October 1991, a broad array of organisations signed the Patriotic Front Declaration. The Declaration set out what the delegates from different formations agreed on the socio-political conditions to be. Through setting out a consolidated national comprehension, they were able to articulate and then dedicate themselves to a course of action with specific outcomes. While the substance and approach of the new declaration will be different, much in the manner of process, structure and organization can be drawn from the Patriotic Front Declaration. Neither the potential value of such a process nor its mobilizing force should be underestimated. Today there exists a national yearning for such a united front. The concluding paragraph of the Patriotic Front Declaration serves as a fitting starting point for civil society today. It calls “upon our people wherever they are to join and engage in this process emanating from our Conference to create a nation that will be at peace with itself” (United Nations Centre against Apartheid, 1991). To realise the transformative goals of the Constitution, civil society organizations must come together to discuss and agree on the process, content and direction of a new national declaration. To give effect to the people-driven state, civil society should undertake a thorough and democratic process to agree upon and then speak with one voice. References Abramowitz, M. 2018. Democracy in Crisis. [Online] Available at: https://freedomhouse.org/report/freedom-world/2018/democracy-crisis [accessed: 1 December 2022] Balthazar, 2022. Authoritarian statism is a real danger to our entire system. [Online] Available at: https://www.dailymaverick.co.za/opinionista/2022-10-04-authoritarian-statism-is-a-real-danger-to-our-entire-system/ [accessed: 19 October 2022] Chaskalson, A. 2012. Without fear, favour or prejudice: The Courts, the Constitution and Transformation. Former Chief Justice Speech at the ‘Challenges facing Administrative Justice Conference’, University of Cape Town, 26 January. Chirwa, S. 2020. “The rise of civil society in South Africa”. Mail & Guardian, 31 May. [Online] Available at: https://mg.co.za/coronavirus-essentials/2020-05-31-the-rise-of-civil-society-in-south-africa/ [accessed: 19 October 2022] Department of Public Service and Administration (DPSA). 1997. White Paper on Transforming Public Service Delivery. [Online] Available at: https://www.dpsa.gov.za/dpsa2g/documents/acts®ulations/frameworks/white-papers/transform.pdf [accessed: 5 October 2022] De Visser, J. 2010. Institutional Subsidiarity in the South African Constitution. Stellenbosch Law Review, 90. Jagwanth, S. 2003. Democracy, Civil Society and the South African Constitution: some challenges. Management of Social Transformations, Discussion Paper 65. Jonas, M. 2022. Mcebisi Jonas: Standing up to defend our democracy is the only option. [Online] Available at: https://www.news24.com/citypress/voices/standing-up-to-defend-our-democracy-is-the-only-option-20220702 [accessed: 1 October 2022] Kotzé, K. 2021. 25 years of the South African Constitution: Reflections and Realisations. Konrad Adenauer Stiftung, The Midpoint paper series no. 6/2021. [Online] Available at: https://www.kas.de/documents/261596/0/The+Midpoint_6_2021_Kotz%C3%A9+%282021%29+25+years+of+the+South+African+Constitution+-+Reflections+and+Realisations.pdf/5499af37-ee4b-503a-ba48-7df94202e21c?version=1.0&t=1631103664304 [accessed: 1 November 2022] Langa, P. 2006. Transformative Constitutionalism. Stellenbosch Law Review, 17(3): 351 – 360. Maharaj, M. 2022. What we must do to set our country compass right. [Online] Available at: https://www.news24.com/citypress/voices/mac-maharaj-what-we-must-do-to-set-our-country-compass-right-20221118 [accessed: 1 December 2022] Oxford Reference, 2022. Grundnorm. [Online] Available at: https://www.oxfordreference.com/display/10.1093/oi/authority.20110803095910371 [accessed: 1 December 2022] Ramaphosa, C. 2012. Conversation on the Constitution. Nelson Mandela Foundation. [Online] Available at: https://www.nelsonmandela.org/news/entry/conversation-on-the-constitution [accessed: 5 December 2022] Republic of South Africa (RSA). 1993. Interim South African Constitution. [Online] Available at: https://www.gov.za/documents/constitution/constitution-republic-south-africa-act-200-1993 [accessed: 18 October 2022] Republic of South Africa (RSA). 1996. South African Constitution. [Online] Available at: https://www.gov.za/documents/constitution-republic-south-africa-1996 [accessed: 5 October 2022] Salazar, P-J. 2002. An African Athens: Rhetoric and the Shaping of Democracy in South Africa. Lawrence Erlbaum Associates: London. Seale, W. 2020. Government ministers could learn from Gift of the Givers’ Dr Imtiaz Sooliman. [Online] Available at: https://www.news24.com/news24/opinions/columnists/guestcolumn/opinion-government-ministers-could-learn-from-gift-of-the-givers-dr-imtiaz-sooliman-20200817 [accessed: 5 November 2022] Sen, A. 2021. The Idea of Justice. Harvard University Press: Cambridge. Shapiro, J. 2021. The Arrival of Multipolarity and its impact on US-Russia relations. [Online] Available at: https://valdaiclub.com/a/highlights/the-arrival-of-multipolarity-and-its-impact/ [accessed: 5 December 2022] United Nations Centre against Apartheid, 1991. Patriotic / United Front Declaration. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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

Occasional Paper 11/2022 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. NOVEMBER 2022 by Dr Klaus Kotzé BA Social Dynamics, BSocSci Honours Political Communication, Master in Global Studies, PhD Rhetoric Studies Abstract When the African National Congress meets for its National Elective Conference in December, it will have to resolve significant concerns beyond the election of a new leadership. In what could be a watershed event for a party facing existential challenges, the decisions on and details of its conference resolutions will prove to be fundamental to its future. Whereas it has previously committed to internal and operational renewal, the detail and direction of such renewal may prove to be critical to both the party and the country’s future. This article pursues understanding of what renewal has meant for the ruling party and what renewal should mean if it is to achieve its goal of building a capable, ethical and developmental state. It argues that it is critical for the next leadership to pursue an agenda that advances a people-driven state. True renewal would, therefore, be underscored by a positive power structure that enables all people to be actively involved in the development of the state. The building of a devolved, cooperative democracy and thus a departure from the statist, centralized power structure would signal a return to the consultative, collaborative approach the party employed with great fortitude and success when it first came to power. Introduction The African National Congress (ANC) will convene its 55th National Elective Conference (NEC) in December 2022. The NEC is the party’s highest decision-making body. At each NEC the party dissolves its leadership structures and through a broadly democratic process elects new representatives to reflect on the approach and achievements of the preceding administration. The conference then designs the party’s path forward. At its 54th NEC, the ANC resolved to address the various concerns facing the party, its role in the government and the state at large. Chief among its resolutions was that the party must be renewed. In its 2022 policy conference documents, captured in a special edition of Umrabulo, the party recognises that the shift from being a liberation movement to being in government has given rise to problems associated with the capacity and functionality of the state. These problems are associated with the self-enrichment by opportunists and the over-centralisation of social and economic control by the state, respectively. The policy conference documents call on the party to resolve its inward-looking, overly centralised focus (ANC, 2022). As redress, the policy documents advance the need for broad party renewal; for stricter vetting processes; that the ANC deal with its internal issues and that it repositions itself as an effective and trusted leader in society. For it to renew and deal with its concerns, it would be incumbent on the leadership to determine the required processes, structures and intended outcomes – determining what a renewed party and state would look like. And what role the party, state and citizenry would play. At the 54th NEC and again at the recent National Policy Conference (NPC), the party has resolved to urgently build a capable, ethical and developmental state. This can be read as its interpretation of renewal. With this target in mind, the appropriate and pragmatic policy is required to comprehensively catalyse the roles of the party, state and citizenry. Due to the sizeable task at hand, as well as the existing limitations, policy must create an enabling environment that stimulates active participation by all stakeholders. The ruling party, in its commitment to renew itself, must embrace pragmatism and through a comprehensive approach guide a social compact that will bring all hands on deck. By virtue of the ANC’s influence on the state and society at large, this article intends to contribute to the debate by discussing concerns and pathways toward renewal. Through assessing the ANC’s approach and strategy, the article seeks to draw causal perceptions and recommendations that will further the constitutional goals in general and the development of a capable and renewed state in particular. In order to plot and pursue these ends, we commence with a short discussion on the composition and function of the state. South Africa’s developmental state model The developmental state refers in general to significant state-led macro-economic planning and policy. The term was conceptualised by Chalmers Johnson, who defined the developmental state as one where the state shapes and drives economic development for the social wellbeing of the people. The role of the state is to “single-mindedly mobilise society to achieve industrial modernisation” (Gumede, 2009: 4). The developmental state has become a term synonymous with East Asian states such as Japan and South Korea, states that share a “major preoccupation to ensure sustained economic growth and development on the back of high rates of accumulation, industrialisation and structural change” (UNCTAD, 2007: 60). While East Asian nations have been synonymous with the developmental model, these states also traditionally have an overly authoritarian approach, a modality that is employed more as a matter of culture and practice than one which is universally most appropriate for development. Instead of necessarily being those that centralise political power, developmental states are those that guide and enable stakeholders to take up responsibility in, and share amongst themselves, the distributive ends of development. Developmental states are thus those that create and enable development. In successful developmental states, the state functions as an entrepreneurial agent that crowds in private investment and “rally business, labour and other social partners behind its efforts” (Gumede, 2009). Instead of following a defined course, successful developmental states select their pathways according to that which would ensure the goal of social economic improvement for the society at large. The ends of the developmental state, as socio-economic development of the citizenry, are more defined than its ways. The distinction between statist (centralised) and people-driven (distributed) developmental paths is a foremost strategic determination to be made by all countries undertaking such a path. In South Africa, due to incapacity, historical disparity and insufficient resources, together with a constitutional mandate for meaningful citizen participation, a statist approach is inappropriate and insufficient. While the public policies of the democratic government have and must continue to advance the ends of socio-economic justice, the case for an East Asian-type developmental state runs contrary to the democratic principles of the state, as well as those of the ANC. While some may suggest that ANC policy, as well as strategy and tactics, documents assert state-centric interventions, these documents must be read in response to local realities, as well as in recognising the various recent failures. Instead of serving the interests of the public, the state service has drifted to advance narrow personal and party-political ends. Nepotism and cronyism have been witnessed in far too many state institutions, doubtlessly brought to light by the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector (Zondo Commission). The findings of the Commission do not only point to gross irregularities, such as the landing of a private jet belonging to the Gupta family at Waterfkloof Air Force, or to corrupt proceedings, such as siphoning off millions of rands at the Vrede Dairy Farm, in a projects-for-friends arrangement managed by senior government officials (News24, 2018). The exploitation of state resources by leaders and their acolytes is revealed to have been nothing less than procedural, a pathway of propping up the interests of individuals at the cost of the people. The Zondo Commission reports play a key role in discerning this reality. It effectively illustrates a number of examples, such as how the State Security Agency was central to state capture. Under President Zuma, the Agency was instrumentalised to serve him and not the people of the country. Covert and irregular operations such as ‘Mayibuye’ saw millions of rands allegedly being siphoned from the Agency to Zuma. It represents “a collection of operations designed to counter threats to state authority. In practice, they and others sought to shield Zuma from a growing chorus of criticism of his misrule. The commission found that the project destabilised opposition parties and benefit the Zuma faction in the ruling African National Congress” (Duncan, 2022). Throughout the other volumes of the Zondo Commission reports, the picture emerges clearly of a state service that was procedurally weakened so as to advance personal interests. The breakdown of Transnet, where Gupta allies were appointed to strategic positions, and the sustained damage brought by chairperson Dudu Myeni to the national carrier are but two examples. The politicization of state infrastructure extends well beyond those implicated in the Zondo reports. The appropriation of state resources by a politicized civil service is indicative of a national situation where the distinction between ANC and state has been obstructed and has become systematically blurred. It has emerged that the party is in charge of the civil service, too often serving itself and not empowering the people. The Zondo Commission reports have definitively shown that a statist developmental state does not and cannot work in present South Africa. So, which path should South Africa then follow? According to Gumede, “a successful developmental state involves getting the nature and relationship between different social institutions right, and managing conflicts within and between these, whether through social pacts or through national consensus” (Gumede, 2009). Gumede goes on to say that there are essential conditions for a successful developmental state. These include having a developmental vision, an efficient bureaucracy, an efficient coordinating centre to manage development and an integrated long-term developmental plan. It is compelling to note that each of these factors have been front-and-centre to the present administration. It has stressed the need for a capable state, it has bolstered the presidency as a coordinating centre, and it has the National Development Plan 2030 as its long-term vision. While these factors lie within the ambit of the government, Gumede mentions one more important condition which does not: “a developmental partnership between government, business, labour and civil society” (Gumede, 2009). It is through this partnership that the developmental state (in a democracy) achieves the appropriate relations between social partners. It is key to ascertain a national consensus that places the citizenry centrally, both in delivery and service execution. Accordingly, a South African developmental state cannot copy the authoritarian, undemocratic models applied in East Asia. Instead, a local developmental state must do the opposite. It must, through being people-driven, deepen democracy. Herein, it is imperative that the state must successfully persuade the citizenry, not only to buy into, but also to help create such a model. The example of China is useful. While the Chinese state is extremely hierarchical and rigid, it has a clear mandate for both the people and the government. The people must both buy into and help shape the party’s direction – the party being the expression and will of the people. This, while the government must, according to policy and practice, unceasingly open up and reform. “In most successful developmental states, the state and the private sector work out a constructive partnership, which involves trade-offs both ways, but with the ultimate goal of radically transforming the economy: lifting economic growth levels, reducing unemployment and poverty and making the country competitive vis-à-vis its competitors … at the heart of such social pacts must be an appearance of not only the burden of suffering, but also the benefits of economic growth, being equitably distributed across society” (Gumede, 2009). From these observations it becomes clear that a South African developmental state should not only empower the citizenry and be entrepreneurial, but it should also be people-driven. ANC policy and orientation Appropriate policy is that which deals best with the strategic environment that an entity finds itself in. In the case of the ANC, it is guided by several core documents, declarations, principles and values. The Freedom Charter of 1955 functions as such a document. It presents a set of core principles and is characterised by its founding statement, “the people shall govern” (SACA, 1955). It lays the foundation for the kind of state that should be sought. The Freedom Charter sets out a hugely ambitious and transformative programme whereby people working in democratic concert, achieve self-actualisation. The Freedom Charter served as South Africa’s lodestar to dispel the subjugation of colonialism and apartheid. As a united declaration of an undivided, sovereign people, the Freedom Charter informed the drafting of the new South African Constitution, finalised in 1996. In its preamble, the Constitution gives expression to the principles and goals of the Freedom Charter. Its preamble does not only declare, “we, the people of South Africa … believe that South Africa belongs to all who live in it, united in our diversity”, thereby overcoming separation or apartheid. The Constitution also takes forward the conviction that the people shall govern. It empowers and charges all people to actively participate in building a transformed country. Collaboratively, “we” must “heal the divisions of the past and establish a society based on democratic values, social justice and human rights … and build a united and democratic South Africa” (RSA, 1996). Herein, the Constitution, much like the Freedom Charter, lays great significance on the participation of the citizenry in the practice of governance and statehood. A just government would not only have to be based on the will of the people, but the citizenry would also have to be consulted and cooperated with actively. To legitimately lead South Africa, the ruling party, in abiding by the constitutional principles and goals, would have to be people-centred in its orientation, while its administration would have to function in collaboration with the people, or be people-driven. People-centred state Through its various policy programmes, the ANC government has undertaken a people-centred approach. Its foundational Reconstruction and Development Programme (RDP) stressed that “no political democracy can survive and flourish if the mass of our people remain in poverty, without land, without tangible prospects for a better life. Attacking poverty and deprivation must therefore be the first priority of a democratic government” (RSA, 1994). To ensure a people-centred policy framework, the ANC government introduced the 1997 White Paper on Transforming Public Service Delivery. The White Paper sought to align the work of government to the constitutional principles under the guiding concept of Batho Pele (people first) (DPSA, 1997). Batho Pele and the RDP, while noble in their orientation, centred power inwards in the administration. It placed the country on the path to delivery dependency. The government placed a huge burden on itself to counteract the racialised delivery programme of the former regime. The White Paper sought to guide a government that did not have governing experience, never mind the capacity to overcome the biased system it inherited. The White Paper, in seeking to drive transformation, produced policy tools that would be government-driven and therefore susceptible to political influence. The party’s policy formulation meant that the maxim of “the people shall govern” became suffixed by: “through political representation”. Whereas Batho Pele comprised noble foundational principles, such as that service delivery should be guided by “value for money”, the party deployees often had too much sway in decision-making. In his foreword to the White Paper, former President Mandela stressed that: Batho Pele should entail “the relentless search for increased efficiency and the reduction of wastage within the Public Service” (DPSA,1997). Instead of formulating policy where the state works with the people, policy increasingly became cloistered under ANC control. While this approach started as cultivating a culture of service in the ANC-led government, centralising the force of power inward led to perverse personal aggrandisement. Instead of ensuring value for money, a culture developed where the politically connected overextended the power they held – serving the self vis-à-vis serving the people of the state. Not unique to South Africa, the power that the incumbent ANC afforded its deployees created cults of personality. The egalitarian people-first principle would be moot from the start when those charged with enactment were first serving themselves, as noted in the NPC discussion documents, mentioned above. The result: the people were first no more. The ideals of transformation became subverted in the distorted discharge of the state. Service had been rerouted from a progressive approach to one that served the connected and state employees, first. In 2020, government had spent more money paying its 1.3 million public servants than it did the 18 million South Africans receiving social grants (Mahlaka, 2022). The well-documented failures of service delivery illustrate the failure of translating principles into the corresponding action. While corruption, practiced in the name of Batho Pele, is central to the state failures, it is not the only problem. The statist, government-driven path has not achieved development and transformation. Instead, it has built a dependency on an overburdened state that has become increasingly corrupt and incapable. The distinction between a state that cares, one that offers free basic services, and an overly redistributive, welfare state has not been established in South Africa. The translation of pursuable strategies by leadership, for adoption by the public, is sorely needed. The present South African social welfare (dependency) policy is worth noting. In addition to its social grants programme, the number of informal settlement dwellers has been growing unabated since 2000. Among other welfare proposals, the NPC discussion documents suggest: “Since the dawn of democracy in 1994, about 4.8 million houses have been delivered in South Africa, providing safe shelter to over 25% of South Africa’s households ... Approximately 2.8 million households in South Africa do not have access to improved sanitation services. The ANC has resolved to eradicate the bucket system in order to improve sanitation services. By December 2020, a total of 41 290 out of 52 249 bucket sanitation systems were eradicated. Furthermore, a total of 14 235 rural households were served to eradicate sanitation backlogs” (ANC, 2022:100). The numerous social protection programmes supporting deserving households are valid and pursue the principles of both the national Constitution and ANC conference resolutions. However, given the limitations and failures of the state, South Africa cannot develop only through redistribution. There are real restraints to South Africa’s welfare state, not least the lack of resources. People-driven state The report of the 54th National Conference states that “the ANC’s approach to state power is informed by the Freedom Charter and the principle that ‘The People Shall Govern’” (ANC, 2017). The report continues to explain that the “attainment of power by the ANC is a means to fulfil the will of the people and ensure a better life for all” (ANC, 2017). This articulation continues the path of dependency of ANC power as the expression of people power. It assumes the same centralist (or statist) position as previous NEC reports. But this position is not the only one expressed by the party. In recent years, also at policy and elective conferences, the ANC has articulated new approaches for itself and the state. In 2012, the National Planning Commission, which sits in the Presidency, released the National Development Plan (NDP). The NDP was formulated to form a long-term perspective for South Africa. It offers a comprehensive plan to execute the mandate of the Constitution: to build a transformed state whereby poverty and inequality is eliminated. The NDP, therefore, presents an impression of and a path to state renewal. While it carries the official support of the ANC, as supported by NEC resolutions, its reformist approach to distributed, or people-driven, power has been widely rebuffed by ANC leaders, not least when it did not receive formal approval and endorsement at the National Policy Conference, in 2012 (Mogotsi, 2013). While there are various reasons to explain this disparity, the most important, according to this analysis, is the NDP’s push to reorganise power relations in South Africa towards being more people-driven. Principally, to devolve control away from the national government and create a developmental state where, through the active involvement of the citizenry, truly the people shall govern. The NDP stresses that “South Africa can realise its goals by drawing on the energies of its people … To accelerate progress, deepen democracy and build a more inclusive society, South Africa must translate political emancipation into economic wellbeing for all. It is up to all South Africans to fix the future, starting today” (NPC, 2012). In shifting focus to the extended capacity and capability of the citizenry (people-driven), it moves it away from the government (people-centred). The NDP is therefore not simply a plan for government, but a plan for the people of South Africa. It defines renewal and presents a whole-of-society approach. This is evident from the six interlinked priorities that are set out in the NDP: “Uniting all South Africans around a common programme to achieve prosperity and equity; Promoting active citizenry to strengthen development, democracy and accountability; Bringing about faster economic growth; higher investment and greater labour absorption; Focusing on key capabilities of people and the state; Building a capable and developmental state; Encouraging strong leadership throughout society to work together to solve problems” (NPC, 2012). The citizenry is clearly the decisive agent in each priority area. The plan indirectly acknowledges the limitations of government and strategically shifts power to a people-driven state. It provokes a whole-of-society approach, where each citizen is called upon to collaboratively build the renewed state. “Its success will depend on all South Africans taking responsibility for the plan, led by the President and Cabinet” (NPC, 2012). The NDP continues to make the bold statement that “an unintended outcome of government action has been to reduce the incentive for citizens to be direct participants in their development. To prevent this practice from being entrenched, the state must actively support and incentivise citizen engagement … Active citizenry and social activism is necessary for democracy and development to flourish. The state cannot merely act on behalf of the people – it has to act with the people, working together with other institutions to provide opportunities for the advancement of communities” (NPC, 2012). Government power centralisation and its failure to appropriately facilitate public involvement is a theme that arises in various areas of state affairs. As an example, the Medicines and Related Substances Amendment Bill was introduced in Parliament in 2011 and signed into law on 23 December 2015. The South African Veterinary Association approached the Constitutional Court, submitting that Parliament had failed in its constitutional duty to facilitate public participation in the law-making process. In its judgement, the Constitutional Court declared the Act unconstitutional. It held that Parliament did not undertake meaningful public consultation (Constitutional Court, 2018). This failure of an arm of the state is not a unique example. It instead points to a recurring theme that requires broader recourse. A further example of excessive statism is seen in the control exercised by the Department of Mineral Resources and Energy. For years the Department resisted cooperative ventures and was reluctant to raise the embedded generation threshold. While the Department has since acquiesced to greater people-driven measures, the research group Meridian Economics shows that the current energy crisis could have been significantly averted had the Department not prevented the Renewable Energy Independent Power Producer programme from being rolled out. The programme’s additional capacity “would have allowed Eskom to eliminate 96.5% of load shedding in 2021” (Comrie, 2022). Towards the 55th National Elective Conference The African National Congress held its NPC on 29-31 July 2022. In his foreword to the compendium of policy documents, ANC President Cyril Ramaphosa proposes that the “Discussion Documents outline the ANC’s strategic approach to policies and how it shapes and impacts our transformation agenda” (ANC, 2022: 3). The NPC and its policy discussion papers prepare the party for its December 2022 elective conference. It sets a path for the party’s next administration. The NPC and discussion documents do two things. They reflect on the decisions emerging from the 2017 elective conference, which gave the current administration its mandate. They then guide the party towards achieving its goals, while considering the strategic environment within which the party finds itself. The NPC and policy conference functions as a crucial transitional mechanism in guiding the party through successive administrations, seeking to enable adjustments that improve upon previous decisions, while maintaining momentum. As the ruling party, it is imperative both for the party and for the state, that the party undertakes a critical assessment of the path towards its goals, based on its strategic environment. The 2022 NPC took place in “the year of unity and renewal to defend and advance South Africa’s democratic gains” (ANC, 2022). This theme is meant to provoke reflection on the resolutions taken at the 54th National Conference, in 2017 – to guide the policy considerations, so as to advance its resolutions. The theme champions the first resolution of the 54th National Conference: organisational renewal. In order for the party to arrest its decline and renew, it “has to continually review its organisational state and capacities, and its relationship with the people and society” (ANC, 2017: 11). The report undertakes to recognise and address its shortcomings, which it describes as “a loss of confidence in the ANC because of social distance, corruption, nepotism, arrogance, elitism, factionalism, manipulating organisational processes, abusing state power, putting self-interest above the people” (ANC 2017: 13). It is only through a singular, renewed spirit that is awake to the realities of the land, that the party can continue to play a defining role in South Africa’s future. This theme presents a snapshot of the organisation’s larger condition. The party faces a decline in support that could lead to it losing an outright majority for the first time since 1994. The 54th National Conference report suggests that “organisational renewal therefore is an absolute and urgent priority, and we may go as far as to say, to the survival of our great movement” (ANC, 2017: 14). The report thereby charges the next administration with the priority of formulating approaches and policies that will give effect to organisational renewal. According to its president, the party must change its ways; “to counter these negative aspects, we have to intensify our efforts with the renewal process and revitalisation of ANC structures” (ANC, 2022: 3). The renewed function should restructure the party, away from the self-serving cronyism that it has become associated with. It must be reorientated towards serving the country at large. In Ramaphosa’s words: “Our focus has to be the improvement of the quality of lives of people, rather than an often narrow, internal party focus” (ANC, 2022: 4). In perceiving and directing both the NPC and the Elective Conference, the President, who is also seen as a forerunner for another term in the top job, paints a clear picture of the party’s strategic position and the approach needed to first retain electoral support and to govern effectively. It is only an ethical and capable state that can administer and deliver the services required to retain popular trust. Recommendation: Towards ethical renewal To ensure electoral trust and a further mandate to govern, the ANC needs to truly commit to ethical renewal. At the NPC, Ramaphosa – among other leaders, such as Minister of Co-operative Government and Traditional Affairs, Dr Nkosazana Dlamini Zuma, herself a contender for the ANC’s top position – condemned the collapse of the ANC, not on ideological differences, but on the failures of ANC members. “There are not divisions about policies or ideology”, said the President, instead party issues are “driven by the competition for positions, the contestation of structures and the pursuit of access to public resources … These divisions manifest themselves in patronage, gatekeeping, vote buying and manipulation of organisations processes … We can see how our divisions have weakened governance in many areas, undermined public institutions and hampered the maintenance of infrastructure and the provision of services … This situation has contributed to declining levels of voter participation in elections and diminishing support for the ANC” (Ndaba & Sadike, 2012). Ramaphosa submits that the ANC’s failure is due to internal weakness. He charges that without shedding the yoke of corruption and greed, the party will lose power and its mandate to rule. This strategic assessment follows his extraordinary letter to ANC members on 23 August 2020 where he accused the ANC of being “accused number 1”. “Leadership positions are seen by some as the most direct route to, in the first instance, employment and, in the second instance, to influence in the award of tenders and the distribution of other government resources. The people see how organisational principles and structures are corrupted for personal gain … Our lack of discipline and failure to deal with the issues in our movement have eroded our organisational ethos and standing … we must have the political courage and the honesty to acknowledge that ANC leaders, public representatives and members have on numerous occasions been implicated in such forms of corruption” (Ramaphosa, 2020). While renewal has been widely pledged, details thereof have remained scarce. In concluding his letter, Ramaphosa distinguishes two sets of measures that “demonstrate clear political will”, are “unflinching in restoring the values, ethics and standing of our organisation”, and will help “win back people’s trust”. These, says Ramaphosa, are not his own views, but rather, it is the mandate received by the 54th National Conference. It represents an approach to critically providing meaning and operation to a renewed organisation. The first set deals with ANC members. It describes the measures to be undertaken to “implement without delay the resolutions of our 54th National Conference in dealing with corruption” (Ramaphosa, 2020). It is only by punishing offenders, by acting and being seen as acting to restore discipline, that the party can become ethical and have any chance of truly renewing itself. Recommendation: Towards a people-driven, capable state The second set enumerated in his letter pivots toward greater cooperative democracy. Ramaphosa calls for the mobilisation of “a ‘whole-of-society’ response against corruption and ANC members must support progressive organisations in their stand against corruption” (Ramaphosa, 2020). Rallying for such an approach performs an important leadership role. It determines upon aspirational concepts, describing the capable state to be one that is distributed and people-driven. It gives meaning to the complex set of concepts, while detailing what a preferable path will look like. Furthermore, it delineates signification and responsibility. This distinguishment, the engagement of civil society in the process of restoring faith and building a capable state, is itself an act of renewal. Cooperative democracy is an important concept that should be enumerated in the South African context. It refers to a state where government acts in consultation with the citizenry. According to former Deputy Finance Minister Mcebisi Jonas, the various aspects of renewal should be subject to democratic public reasoning. He suggests that South Africa adopts cooperative democracy “as a guiding principle” (Jonas, 2022). Cooperative democracy departs from the ANC practice of consolidating state control, regardless of capacity and capability. It resolves the tension between a statist and a people-driven state. To retain power, the party must lead and not dominate the state. This entails a capacitating or consultative role for the party. An illuminating example of such a change of course is the President’s comment during the State of the Nation Address: “We all know that government does not create jobs. Business creates jobs” (Ramaphosa, 2022). This comment, an act of conceptual and strategic direction, reverberated throughout the country. An act of renewal, it presented a watershed moment that closed a period where the state was seen to have the core developmental responsibility. This comment, recognising its limitations, initiates a new chapter, where development necessitates cooperation between all who have an interest in the state. It should not be seen as reneging or giving up power. Instead, as is illustrated by the decision to permit up to 100MW of private power generation, it shows a state that enables itself when it enables others. The consultative process should again be used to deliver renewal and unity. Deliberation and engagement are required for true cooperative democracy. These are not only historical principles of the ANC but have also been its traditional strengths. When it first came into power, it employed a consultative and collaborative approach with such skill, it strategically outplayed its political opponents. True renewal would, therefore, be underscored by an enabling power. Inclusion can yet again be used to the advantage of the party. “To be effective”, says Ramaphosa, a capable state underwritten by a comprehensive social compact “needs to include every South African and every part of our society. No one must be left behind” (Ramaphosa, 2022). Conclusion The ANC faces considerable challenges on its path to renewal. The various NPC and strategic documents show that the party is alive to the reality that goals are determined by the strategic environment, and not vice versa. The NDP is instructive. It states that: “A plan is only as credible as its delivery mechanism is viable. There is a real risk that South Africa’s developmental agenda could fail because the state is incapable of implementing it … a capable state does not materialise by decree, nor can it be legislated or waved into existence by declarations. It has to be built, brick by brick, institution by institution, and sustained and rejuvenated over time. It requires leadership” (NPC, 2012). This paper concludes by pointing to the fact that the ANC has resolved to renew and that its leadership has started to articulate what such renewal would entail. It is critical that the future leadership invigorates the renewal process. That it not only maintains its focus on capacitating an ethical, people-driven state, but that it must also actively design and implement the measures that are needed to establish it. To do so, the party must actively advance meaningful and real consultation, and cooperative democracy. References African National Congress (ANC). 2017. 54th National Conference: Report and Resolutions. [Online] Available at: https://cisp.cachefly.net/assets/articles/attachments/73640_54th_national_conference_report.pdf [accessed: 5 October 2022] African National Congress (ANC). 2022. Umrabulo: Policy Conference 2022: Special Edition. Comrie, S. 2022. The Collapse of old king coal part two, Daily Maverick, 10 October. 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[Online] Available at: https://theconversation.com/zondo-commissions-report-on-south-africas-intelligence-agency-is-important-but-flawed-186582 [accessed: 5 October 2022] Gumede, W. 2009. Delivering the democratic developmental state in South Africa. Development Bank of Southern Africa. [Online] Available at: https://www.dbsa.org/sites/default/files/media/documents/2021-03/DPD%20No%209.%20Delivering%20the%20democratic%20developmental%20state%20in%20South%20Africa.pdf [accessed: 5 October 2022] Jonas, M. 2022. Standing up to defend our democracy is the only option. [Online] Available at: https://www.news24.com/citypress/voices/standing-up-to-defend-our-democracy-is-the-only-option-20220702 [accessed: 5 October 2022] Mahlaka, R. 2021. State tries to curb its spiralling R 650-billion wage bill. [Online] Available at: https://www.dailymaverick.co.za/article/2021-03-14-state-tries-to-curb-its-spiralling-r650-billion-wage-bill/ [accessed: 5 October 2022] Mogotsi, I. 2013. 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Economic development in Africa: Reclaiming policy space. Domestic resource mobilisation in developmental states. Report by the United Nations Conference on Trade and Development. New York and Geneva, 26 September. [accessed: 7 October 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

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NOVEMBER 2022 by Robert Mopp & Daryl Swanepoel Contractionary fiscal consolidation vs Expansionary fiscal stimulus in the context of SA's budget Implications for growth, employment and debt Picture source: superforex.com Abstract This essay will first look at austerity as the policy that gained currency in the post-2008 Global Financial Crisis (GFC), particularly in the United Kingdom (UK), Greece, etc. The counter policy of fiscal stimulation has a much longer genesis that can be traced to the Great Depression era. In the stimulus versus austerity debate, there are also shades and overlap between the two approaches. Both have pros and cons and should be viewed against the background of South Africa’s current fiscal and economic situation. South Africa’s fiscal space has shrunk due to low growth, but there has been an improved revenue intake from higher commodity prices, resulting in a much improved main budget deficit for the 2022/2023 fiscal year, compared with the national budget presented in February. The main budget deficit narrowed to R42.7 billion in August, from R129.5 billion in July. This has provided additional space in the upcoming Medium-Term Budget Policy Statement (MTBPS) in October – giving Treasury additional wiggle room. This essay advocates for a more gradual decrease of the budget deficit, as opposed to the current plan of higher levels of cuts. This should be in conjunction with structural changes to the economy to spur higher and faster growth, with infrastructure spending kick-starting the process. Introduction Joseph Schumpeter reminded us in 1934 that "public finances are one of the best starting points for an investigation of society; the budget is the skeleton of the state stripped of all misleading ideologies, the truest reflection of the distribution of power and influence”. It is where the governing party shows its prowess and resolve to grow the economy sustainably and improve the quality of people’s lives. Former President Mbeki further elaborated on this profound observation in his 2006 SONA address, when he said that “the spirit of a people, its cultural level, its social structure, the deeds its policy may prepare, is written in its fiscal history”. Professor Ben Clift (2018) asserts that austerity remains the central economic policy debate of our age; it goes to the nub of the issue under consideration. Over the last few years, this has become the case for South Africa too. He continues by asking how far governments should contain public spending, given increasing fiscal deficits and debt levels. Clift further asks, what should be accorded the highest priority: “reducing national debt to secure economic credibility or using fiscal and other policy levers to bolster economic growth”? This summarises the tension at the heart of the budget, namely contractionary “fiscal consolidation” versus an “expansionary fiscal policy”. These posers are pertinent to South Africa, in light of the upcoming budget statement by the minister of finance and “austerity by stealth”, which many say has been integral to the budget over the last period. This stance should be viewed against the current worsening global economic climate – after the two years of Covid-19 restrictions and initial recovery experienced in 2022 – of high inflation (high prices); high food and energy prices (accelerated by the conflict in Ukraine); glitches in the global supply chain mechanisms; de-globalisation and rising economic nationalism and the retreat into regional economic and political blocs; rising protectionism and trade barriers; deflation; stagflation and hysteresis (which increases long-term unemployment). It should also be seen against the increasing decoupling of the USA from Russia and China, ushering in a new “cold war” – seemingly at an end with the dissolution of the USSR, finding expression in Francis Fukuyama’s now famous axiom, “the end of history”. This maxim noted that the liberal-democratic system has triumphed, with no rival paradigm to challenge it. Predictions are that these challenging economic issues are not transitory, but will be medium to long term in nature. Currently, the world faces an unprecedented “cost of living crisis”. Fiscal Consolidation (Austerity) versus Fiscal Expansion Austerity is often couched in the understated and misleading term of “expansionary fiscal contraction”, which will ostensibly lead to increased growth levels, resulting in more jobs being created and the attendant positive outcomes. Austerity opponents state emphatically that this is not the case, based on empirical evidence dating to the 1930s (Germany then) and post-2008 Global Financial Crisis, in the European Union (EU). This debate also references the notion of Keynesian “countercyclical” economic measures, especially in crisis periods. Genesis of the Austerity Idea The austerity doctrine has a long genesis, dating back to philosophers and the classical economists. It can be traced to David Hume and Adam Smith in the 17th century, with John Locke, the antecedent. Blyth notes that the sentence, “the state: can’t live with it, can’t live without it, don’t want to pay for it” defines the liberal dilemma as the basis for austerity politics. Locke wanted to limit the attitude and ability of the state to increase debts at will. At that time, this was mainly directed at kings who arbitrarily taxed subjects for their vanity projects and to wage wars. Hume went further with his assertion that public debt can destroy a nation; again, to be seen within the context of monarchs with their unbridled power. In the modern era, there are checks and balances in place to counter this type of arbitrary exercise of power. He believed that the problem of public debt is unsolvable and potentially limitless; he also believed that debt can be passed on from generation to generation. According to Blyth, Adam Smith deduced that the free-market system would not survive if a country was not prepared to make certain sacrifices. Smith, as a notable abstemious person, had a very high opinion of “saving as an actuator” (Blyth, 2013). For Smith, a cardinal problem is that states are not savers, individuals are. These three theorists approached cost (debt) from a moral perspective – to them, saving is a virtue and spending is a vice. Later theorists associated with the neoclassical economic paradigm associate Smith with assigning a minimalist role to the state, the so-called “night watchman” role referred to in his 1776 classic, Wealth of Nations. According to Reisman (1998), Adam Smith “was not a single-minded advocate of a laissez-faire market in which the minimal state had no more than a protective function. Rather, he was a pragmatic social thinker who in each case selected the tool that was the best suited to his meta-objective of rapid economic growth”. Thomas Malthus, another classical economist, argued in favour of the need to maintain aggregate demand and to support key sectors of the economy. He greatly influenced Keynes. Malthus is referenced by Keynes as the “grandfather of his theory of effective demand” (Skidelsky, 2003). In 1930, Keynes warned the establishment of a rising disaster, if they continued on the path of an unbridled free-market, gold-standard orthodoxy and fiscal and monetary policy austerity. As it turned out, shrinking markets and balanced budgets exacerbated the unemployment problem, which remained obstinately high, leading to the 1929 stock market crash and the “Great Depression”, and, ultimately, war amongst nations in Europe. This scenario came to bear once more in 2008 with the Global Financial Crisis. Austerity Definition Professor Mark Blyth defines austerity as a “form of voluntary deflation in which the economy adjusts through the reduction of wages, prices, and public spending to restore competitiveness, which is (supposedly) best achieved by cutting the state’s budget, debts, and deficits”. Its adherents believe that it will inspire “business confidence”, since the government will either be “crowding out” the market for investment by amassing available capital through the issuance of debt, or adding to the nation’s already considerable debt, which they regard as too large and unsustainable in the long term. For Blyth, the goal of the exercise goes beyond a mere reduction of the fiscal deficit or public expenditure; it also aims to enhance competitiveness. Barry Ritholtz describes austerity as “the desire to slash government spending and cut deficits during a time of economic weakness or recession” (Andor, 2018). Professor Joseph Stiglitz, former World Bank Chief Economist and one of the critics of fiscal consolidation, compares austerity with an obsession with balanced budgets and a fixation on fiscal deficits. Stiglitz makes it clear that the main problem with the approach is that it makes cuts in expenditures (especially social spending) a policy priority when public revenues fall at a time of an economic downturn (what we are experiencing currently). Austerity measures refer to procyclical interventions during an economic downturn or recession, as opposed to fiscal stimulus measures that stress countercyclical measures. Treasury View and Neoclassical Economics The policy of fiscal consolidation, small government and balanced budgets is associated with the neoclassical economic framework. The neoclassical school posits that market economics have an automatic tendency to full employment equilibrium, are efficient and generally function well (Stiglitz, 2014). This school further believes that markets are more efficient than governments in allocating capital; state spending and taxes should be kept as low as possible; and budgets should be balanced (Skidelsky, 2020). Left to its own devices, the market would not provide the above, as we witnessed with the 2008 Global Financial Crisis and with the downturn occasioned by the Covid-19 pandemic. New Consensus Macroeconomics, which replaced the New Keynesian synthesis as a dominant framework in central bank and finance minister circles, has a long history and many labels, according to Blanchard (2009). Perhaps the earliest popular term to describe its essential character, is the “Treasury View” – a term attributed to Keynes when he was employed here. Keynes was critical of Churchill’s defence of austerity in the beginning stages of the Great Depression. Two major features define the Treasury View: reduce the public debt, and the budget deficit as a percentage of GDP at all times. Padayachee describes the Treasury View as predicated on “fiscal restraint/conservatism, low budget deficits, holding down expenditures and public debt, tightly controlling and directing the public purse and sound money”. It became synonymous with the Washington Consensus. The argument is that such austerity will not adversely affect the economy, but rather that the opposite will happen, as government cuts will be met by increased private-sector spending. Increasing the budget deficit will, in this view, “crowd out” more productive private investment and should be strongly discouraged. The neoclassical doctrine of “expansionary austerity”, of cutting public expenditure and reducing budgets, is largely associated with the work of Alberto Alesina, a Harvard economist. Alesina used statistical techniques that supposedly identified all large fiscal policy changes in advanced countries between 1970 and 2007, and claimed to find evidence that spending cuts, in particular, were often “associated with economic expansions rather than recessions”. The reason advanced is that spending cuts create confidence (business), and that the positive effects of this increase in confidence trump the direct negative effects of reduced spending and exclude the possibility of any revived inflationary pressures. Inflation is currently at record highs, globally. However, the evidence does not bear this out under all circumstances and conditions. The 2013 Economic Report of the President, produced by the US President’s Council of Economic Advisers, notes that where states have pursued the economics of austerity, the result has been continually declining growth. In contrast, the US, Australia, etc., experienced positive economic growth. Similarly, the social democratic welfare states with the biggest levels of fiscal stimulus experienced the least loss of jobs and economic contraction during the Covid-19 pandemic, with accompanying massive global economic downturn. Reinhart-Rogoff Controversy In 2010, two well-known Harvard economists, Carmen Reinhart and Kenneth Rogoff, claimed in their now infamous paper, Growth in a Time of Debt, that 90% debt is a critical threshold; that once debt reaches more than about 90% of GDP, the risks of a large negative impact on long-term growth become highly significant. George Osborne, the then British Chancellor of the Exchequer, and many other finance ministers in the developed world, seized upon this conclusion to justify spending cuts and sharply lowering government debt. Three economists, Herndon, Ash and Pollin, from Amherst-Massachusetts, in a critique, replicated the Reinhart and Rogoff analysis and discovered a crucial spreadsheet error. When corrected, they came to the conclusion that growth rates in fact averaged 2.2%, not -0.1%, over the same period for the same group of countries. In their conclusion, they said: “In particular, it has established that policymakers cannot defend austerity measures on the grounds that public debt levels greater than 90% of GDP will consistently produce sharp declines in economic growth.” According to Professor Eric Widmaier (2013), in mistakenly characterising the historical relationship between rising debt and falling growth, Reinhart and Rogoff inadvertently omitted strong performers like Canada, New Zealand and Australia from their calculations. Widmaier continues by saying that more important, however, than their spreadsheet errors, was their “lack of theoretical insight, as they failed to recognise that the relationship is best seen as one of reverse causality: rising debt does not cause falling growth, so much as falling growth causes rising debt”. Subsequently, in 2013, Reinhart and Rogoff stated, “Our consistent advice has been to avoid withdrawing fiscal stimulus too quickly, a position identical to that of most mainstream economists. Given the likelihood of continued weak consumption growth in the US and Europe, rapid withdrawal of stimulus could easily tilt the economy back into recession.” Despite their erroneous calculations and subsequent partial volte-face, the Reinhart and Rogoff paper remains highly influential in the United States and Europe, and even in developing countries in the Global South. New Deal’s State-Led Approach In contradistinction to the fiscal consolidation approach, is an expansionary fiscal approach, undergirded by an effective, capable state. The New Deal, under former President Roosevelt, is regarded as a highly successful state-led economic development to counter the Great Depression travails. Roosevelt took America off the gold standard, devalued the dollar and targeted growth and development (Rauchway, 2015). He further targeted what was seen as the biggest challenge at that time, namely “deflation” (decrease in the general price level of goods and services) and secured a sustainable economic recovery. President Roosevelt was advised by Keynes – some budget items were cut, but overall spending was up. Massive public works programmes were created during this time. When asked if he intended to balance the budget, he responded thus: “It depends entirely on how you define the term, ‘balance the budget’ … We will balance the budget as far as the ordinary running expenses of the government go. But fighting the Depression required borrowing, to put people back to work and keep human beings from starving in this emergency. As desirable as a balanced budget might be, the needs of recovery come first” (Rauchway, 2015). By all accounts, the measures taken with the New Deal were a resounding success; growth was high, about 9% on average (Rauchway, 2015). Most scholarly accounts will concur with Keynes’s observation that “the extent, variety and spread of the recovery is outstanding in economic history” (Rauchway, 2015). Stimulus or Expansionary Fiscal Spending Evidence and results from the Great Depression and the 2008 Global Financial Crisis demonstrate that for fiscal stimulus, the “most effective way of cutting deficits is to resist recession and to combine deficit reduction with rapid economic growth” (Sen, 2015). Furthermore, Roosevelt’s words that, “as desirable as a balanced budget might be, the needs of recovery come first” (Rauchway, 2015) also apply in the context of expansion versus contraction. From the mid-1940s to the mid-1960s the public debt to GDP ratio was considerably larger in Britain than it has been at any time since the 2008 financial crisis, with high growth rates. Britain was also establishing its welfare state at the time, developing a foothold for the welfare state in Europe, and then globally. According to Sen, Britain’s debt to GDP ratio in 1948 was more than 200%, more than double what it has been over the last two decades. Keynes is credited with advocating for countercyclical fiscal measures to counter unemployment and low growth, rather than the procyclical approach followed in South Africa. Keynes famously said that the “boom, not the slump, is the right time for austerity at the Treasury” (Skidelsky, 2003). In his General Theory in 1936, he suggests that cutting public expenditure is a problem, rather than a solution. Keynes introduced the notion that “demand is important as a determinant of economic activity, and that expanding rather than cutting public expenditure may do a much better job of expanding employment and activity in an economy with unused capacity and idle labour”. Many have misinterpreted Keynes’s point, saying he advocated reckless spending. However, Keynes was mindful of the context of spending, but within the broader framework of the macro economy. It was about the collective will of all stakeholders to deal with the challenges. Austerity does not assist the recovery process, as cutting public expenditure “adds to the inadequacy of private incomes and market demands” (Sen, 2015), leading to higher levels of joblessness. Most of the stimulus packages to counter the 2008 Global Financial Crisis were replaced by austerity packages in most of the developed countries. Sen said a “hybrid policy of somewhat weakened fiscal austerity with monetary expansion” then came into play, with mixed responses. South Africa’s Disquieting Political Economy South Africa has its own unique socio-economic challenges, characterised by high levels of unemployment, poverty and inequality. We are regarded as one of the most unequal societies in the world. World Bank data that has measured the Gini coefficients of 146 countries since 2010, indicate that South Africa had the worst score, of 63. Unemployment stood at 34.9% in Q2: 2022, according to Stats SA. The aftermath of the 2008 Global Financial Crisis saw South Africa lose about one million jobs, only replenished on the eve of the outbreak of the devastating Covid-19 pandemic. A bigger number was subsequently lost in 2020, mainly recovered in 2021. In 2012, South Africa adopted the National Development Plan (NDP) 2030, which sets out a long-term vision for the country on how it intends to bring about fundamental socio-economic transformation. The aim of the NDP is to attain an ever-improving standard of living for all South Africans, through higher economic growth and the reduction of poverty and inequality. The NDP set a number of ambitious targets that have by and large not been met by the actual outcomes (NPC, 2020). Given the devastation wrought by the Covid-19 pandemic – due to the lockdown of economies allowing no or reduced production, trading and consumption – South Africa’s economy shrunk by 7% in 2020. This is the worst performance since 1920, according to statistics. Then the world was battered by the “Great Flu” pandemic and the aftermath of the First World War. It would be an understatement that the 2021 budget was awaited keenly by everyone in South Africa. The expectation was that there would be economic improvements, and that this would raise our hopes for the future. But the entrenched fault lines in our political economy have only been aggravated by the economic, social and psychological ravages inflicted by the Covid-19 pandemic. It should be noted that our economy was already performing poorly prior to the onset of Covid-19, with many challenges on the fiscal, monetary, labour, productivity, indebtedness front, plus low growth. Covid-19 has simply highlighted fault lines that can no longer be hidden or wished away. We have suffered low nominal growth –1.2% annually over a five-year period, 2013-2018. By comparison, we averaged growth of 4,7% in the 2005-2008 period. The number of unemployed persons increased by 132 000 to 8,0 million in Q2: 2022. The total number of persons employed is now 15,6 million. The official unemployment rate was 33,9%, and 44,1% for the expanded definition. The economy shrunk by 0.7% in Q2, denoting weaker economic activity, less spending power and weaker confidence overall. The NDP set a target of reducing unemployment from 25.4% in 2010 to 14% by 2020 and 6.0% by 2030. Achieving these goals would have entailed the creation of 2.2 million jobs between 2010 and 2015, at an annual average of 436 000, on the back of an average GDP growth rate of about 4.6% per annum. Between 2015 and 2020, the average rate of job creation should have risen to 505 000 per annum, creating an additional 2.5 million jobs. Instead, the small business sector, so critical for job creation and sustaining livelihoods in most economies, dropped from 64% in 2008 to 55% in 2015 (NPC, 2020). The South African economy’s small business composition is one of the lowest in Africa and globally. And yet, the NPC 2020 review report makes the truly astonishing claim that “the NDP does not prioritise informality”. This is linked to our inability to turn townships into areas of thriving economic activity. This is the case in many countries, especially at local level where the focus is on enhancing growth and creating jobs. On the poverty and inequality front, while poverty rates dropped significantly in the 2000s, this has tapered off since 2011, with some indicators degenerating (NPC, 2020). The percentage of the population designated as poor in terms of the South African Multidimensional Poverty Index headcount was 17.9% in 2001, dropping to 7% in 2016 (Stats SA, 2018). According to World Bank data, 19.5% of South Africans were trying to survive on the equivalent of USD1.90 per day in 2018 (PPP adjusted), representing a reduction from the equivalent figure of 36,6% in 1996. The NPC (2020) states that the “persistence of deep poverty is most likely due to slow job creation, rising food prices, and rapid increases in utility costs that have outpaced income growth”. Fiscal Direction of Budget and Consequences Let us now determine the “spirit” of our fiscal direction, as outlined in the 2021 budget. Most economists have characterised the budget as “austerity by stealth”, due to the cutbacks in funding on health, education and social assistance (in real terms). The then Finance Minister, Mboweni, proposed reducing the deficit from 14% in 2020/2021 to 6.3% in 2023/2024 in order to stabilise debt at 88.9% by 2023/2024. This will primarily be achieved by cutting R265 billion spending over the three-year MTEF, with hopefully higher income proceeds for an upturn in the economy. The Financial and Fiscal Commission (FFC, 2021) says that the tabled budget implies a real reduction in per capita non-interest spending of around 14% over the next three years. The FFC, in its March 2021 supplementary note, states that the consolidated expenditure on emergency medical services will be R7.2 billion in 2021 (R8.2 billion in the 2019 fiscal year). The estimate for 2023 is R8.1 billion – i.e., below its nominal level in 2019. Expenditure on central hospitals will grow at 1.3% per annum between 2019 and 2023 – below the average inflation rate of around 4%. The cutting of funds contradicts the idea of using the health crisis to strengthen the health infrastructure as we transition to the National Health Insurance (NHI). Consolidated expenditure on basic education will increase by less than 2% per annum between 2019 and 2023, below the average rate of consumer price inflation over theperiod. This will result in fewer teachers, meaning larger class numbers, especially in township schools. Funding for students at tertiary level has also been cut, resulting in the absence of many deserving students from disadvantaged backgrounds. The sober tones of the FFC should give us pause for reflection. The FFC notes that the “budget 2021 is the first time since the adoption of the Constitution in which a budget tabled by the executive hasunambiguously proposed a substantial reduction in the real value of allocations to public services that undergird these socio-economic rights” (FFC, 2021). Infrastructure Spent to Spur Economic Growth According to the Presidential Economic Advisory Council (PEAC, 2020), government has been issuing bonds worth about R80 billion a month for current spending needs. Since the additional funding is already committed, there is very little room for bulk investments. Investment flows have lagged the targets set by President Ramaphosa, despite the diligent efforts to attract such. However, government notes that the market has the capacity and the appetite to invest in long-term infrastructure projects via public-private partnerships, provided they are bankable. The private sector is prepared to do this without government having to commit initial kick-start funding. But it would want a “clear regulatory framework, transparency, zero political interference and a clear project pipeline” (PEAC, 2020). These infrastructure projects – in water, electricity and the build environment – would then create spin-offs for ancillary industries. The PEAC also envisages green projects to be prioritised. Yet, FirstRand Chair, Roger Jardine, in the group’s 2021 annual report, has been extremely critical about the “painfully slow” pace of government’s proposed infrastructure programme. Jardine says that over two years ago President Cyril Ramaphosa pledged an infrastructure programme that was “the flywheel for economic growth and large-scale job creation”. He says Ramaphosa “has regularly acknowledged the crucial importance of South Africa’s “infrastructure programme as a key driver of his economic recovery strategy. Yet, it is hard to identify one government-led infrastructure project of any significance that has actually been executed. Progress, in other words, has been to date, glacial. The pace does not correlate to the stated ‘extraordinary’ nature of the measures required. Extraordinary suggests urgency, immediate action and focus.” Despite the general negative sentiment, Jardine denotes “some promising developments, particularly in the energy space”. Jardine notes a disconnect between President Ramaphosa’s plea and the lack of delivery. Jardine says that the primary reason “is the historical unwillingness to crowd in the private sector”. This refers to the lack of close, cooperative ties between government and the private sector since the post-1994 period. This historic mistrust has not sufficiently receded as hoped in that initial euphoric period. PEAC on South Africa’s Fiscal Trajectory The Presidential Economic Advisory Council (PEAC, 2020) states that GDP has declined over the last few years, mainly due to “declining Total Factor Production” and that “fiscal policy had been unsustainable” prior to the onset of Covid-19. They express misgivings about our procyclical fiscal stance, as debt levels have been on the rise. In the same breath, the PEAC notes that austerity is essentially anti-growth. The PEAC aligns itself with Professor Burger’s view, which proposes a “more gradual and realistic fiscal adjustment path”, as Treasury’s ambitious plan is neither economically nor politically feasible in a low growth, high interest rate environment. For Burger (2020), higher growth rates are imperative, coupled by a more gradual rise in the primary surplus by 2016/2017. To achieve this more gradual, realistic, less procyclical scenario, it needs to be “accompanied by visible structural change in order to be time consistent and credible, including wage bill reduction and fundamental restructuring of SOEs” (PEAC, 2020). This more feasible trajectory must not only contain unnecessary perks and expenditure, engender savings by eliminating wasteful and inefficient expenditure, but it must also grow incomes via growth enhancing reforms that will result in more jobs being created. The PEAC notes that whilst the “imperative for fiscal consolidation is therefore compelling, it must also be balanced by the need to support post-Covid recovery and for a buoyant tax base”. SA’s Debt, is it Too Onerous? There is a general prevailing narrative that South Africa’s debt ratio to GDP is too high. It currently stands at 70.1% (IMF, 2022), which, by international standards and the average of South Africa’s debt level, is not onerous. The other plus in the case of South Africa, is that most of our debt is rand-denominated (local currency); about 90%, “shielding government from some volatility in debt costs due to fluctuations in the exchange rate” (Treasury, 2020). The world average is 97% – advanced economies, 120%; emerging markets, 66%; upper income, higher than 66%; Asia, 73%; and Latin America, 72% (IMF, 2022). Japan is a staggering 256% and has suffered from deflation for more than a decade. The interest rate on our debt is high, at 8-9%. By comparison, developing countries’ average debt cost on external borrowing is three times higher than that of developed countries. In the low interest environment of the last decade, developed countries borrowed at an interest cost of an average of 1% (Spiegel & Schwank, 2022). The problem is that there is no belief from financial entities that government will stick to its promises to lower the debt through fiscal consolidation, higher taxes or efficiencies in spending. Treasury has committed itself to a budget surplus by the 2023/2024 budget – which is odd, given the current depressed global economic environment. This move is intended to send a signal to the “market” and financial institutions that Treasury is committed to a “fiscal consolidation path” and to instil confidence. On the expenditure front, we should be mindful that spending should be in areas that will spur economic growth and not go into consumer spending, especially on luxury goods. Consumption is already high as a share of GDP in South Africa. It means that households are consuming more than their income, as statistics clearly show, signifying high levels of debt. Indeed, debt levels are very high in South Africa – too high for too many. Private consumption as a substitute for government spending to invoke higher levels of growth will not add substantially to the economy. In fact, it is likely to make the economy less productive in the future, not more productive (Baker, 2012). Dean Baker notes that “high levels of private consumption are associated with a negative savings rate”. The savings rate (not in a mechanistic manner) is important for the domestic investment rate. The Covid-19 crisis has showed that many more things are possible with commitment. Conclusion South Africa’s economy has not been robust for some time, with debt on an upward trajectory, dampening growth prospects. Our debt is not onerous by international standards, and it is overwhelmingly rand-denominated. At the same time, social ills are in abundance in our society, and some fiscal easing is necessary to tackle the cost-of-living crisis with its accompanying high prices of goods, especially food and energy. Our growth rate is low and that must urgently improve. Economic policies and choices need to be firm and consistent to ensure that there is confidence in them. The appropriate policy mixes, contextual to our situation, should be implemented so that our economic turnaround can occur in the short term and be sustainable. This paper argues for less severe budget cuts within a more gradual, realistic, less procyclical framework and a more longer-term fiscal recalibration path – as endorsed by the President’s own economic advisory council – than the current Treasury one, which is too ambitious in its outlook. Given the current dismal global economic scenario (likely to continue into the medium term), Treasury’s fiscal consolidation plan is not regarded as economically and politically attainable in a low-growth, high interest rate, higher inflation environment. A more realistic fiscal approach should then result in a more gradual rise in the primary surplus in the years ahead, rather than a short, sharp shock approach, which will dump the economy into a recession, with all its negative attributes. There are enough areas to cut in government spending with the amount of waste and inefficiencies prevalent. These views should be articulated in the Medium-Term Budget Policy Statement (MTBPS) on 26 October, as a much-improved main budget deficit for the 2022/2023 fiscal year is forecast, compared with the national budget projections in February. The tax take shot past the February budget outlook by R162 billion, narrowing the main budget deficit to R42.7 billion in August, from R129.5 billion in July Zwane, 2022). Fiscal consolidation has “costs” attached to it, like a reduction in government personnel, less funds for services and infrastructure maintenance. “Rigidly sticking to fiscal orthodoxies in a crisis is not always wise, as much as it needs to be balanced with boldness” (Financial Times, 2022). We have seen how Europe has put price caps on energy prices and introduced windfall taxes for the oil companies, given the astronomical profits generated over the last period due to its high prices. Shell’s profits more than doubled for the third quarter of 2022, to a whopping USD9.5 billion, compared to 2021 alone. Shell’s chief executive Ben van Beurden, for example, urged governments to tax energy companies via a windfall tax to ‘protect the poorest’ in society (Euronews). Stiglitz (2022) states that windfall profit taxes are necessary in “controlling key prices – such as those for electricity and food – and encouraging government interventions where necessary”. The mining industry in South Africa has generated 85% of the windfall profits generated over the last year. However, and crucially important, this expanded fiscal space generated by less severe budget cuts, combined with the windfall profits, should be spent on economic infrastructure development and job-enhancing projects and programmes and not on consumption. Economic infrastructure development will undoubtedly lead to higher economic growth and a bigger market, with an accompanying increase in tax revenues and more social and political stability; a win-win situation in South Africa. Wasteful expenditure and unnecessary perks should be ruthlessly erased from budgets; SOEs should be radically restructured and better governed, underpinned by the necessary structural reforms of our economy. It was noted by the PEAC that the market has both the appetite and capacity to invest in infrastructure programmes. More importantly, the private sector is prepared to do this without government even committing the initial kick-start funding; this is a big plus. There has been positive development in the energy sector with the opening up of the various bid windows of the renewable energy independent power producer’s procurement programme (REIPPPP) and with other components of the national energy programme. The twin reforms of austerity related to consumption spending and debt expansion to accommodate economic infrastructure development will enable both growth and future tax revenue enlargement capable of servicing the newly acquired debt. In the immortal words of Joan Robinson, “when it is forbidden to admit error there can be no progress”. We must disabuse ourselves of the notion that incantations will deliver the magical silver bullet; that is the height of idealism. The economy needs lubrication, as well as dealing with the debt that has grown exponentially. In an ideal world, we should be implementing Keynes famous dictum that the “boom, not the slump, is the right time for austerity at the Treasury”; it remains as true now as then. Unfortunately, the world is imperfect. Forging an agenda of shared objectives between the government, labour, business and civil society will be critical in advancing a growth and development agenda for the country. The structural deficiencies in the South African economy have to be addressed simultaneously. Our low growth rate of the last period, likely to be less than 2% for 2022 (Treasury, 2020; IMF, 2022), should be urgently boosted. The budget and its implications require a thorough discussion of the appropriate policy options for the country’s future. Spend on economic infrastructure development Source: Treasury projection: http://www.treasury.gov.za/documents/national%20budget/2021/review/FullBR.pdf (grey line); illustrative alternative debt model : Inclusive Society Institute (red line) Annotation Austerity or “fiscal consolidation” can be defined as “a form of voluntary deflation in which the economy adjusts through the reduction of wages, prices and public spending to restore competitiveness, which is (supposedly) best achieved by cutting the state’s budget, debts and deficits”, which will “inspire ‘business confidence’”. Blyth considers it very dangerous, because it was the failed “classical” response to the Great Depression, 180 degrees in opposition to the Keynesian prescriptions, and also exactly what Germany has been prescribing today for Greece, with predictably disastrous results (Blyth, 2013). Barry Ritholtz describes austerity as “the desire to slash government spending and cut deficits during a time of economic weakness or recession”. Prof Alberto Alesina, a Harvard economist, was positive about the effects of austerity of fiscal consolidation. His perspectives were based on a study of large fiscal policy changes in advanced countries between 1970 and 2007. Alesina claimed to find evidence that spending cuts, in particular, were often “associated with economic expansions rather than recessions”. The reason advanced is that spending cuts create confidence (business), and that the positive effects of this increase in confidence trump the direct negative effects of reduced spending and exclude the possibility of any revived inflationary pressures. Classical economics refers to the English school of economic thought that originated during the late 18th century with Scottish economist, Adam Smith, and that reached maturity in the works of David Ricardo and John Stuart Mill. The theories of the classical school, which dominated economic thinking in Great Britain until about 1870, focused on economic growth and economic freedom, stressing laissez-faire ideas and free competition. Many of the fundamental concepts and principles of classical economics were set forth in Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations (1776) (Encyclopaedia Britannica, 2022). Most consider Smith the progenitor of classical economic theory. However, Spanish scholastics and French physiocrats made earlier contributions. Other notable contributors to classical economics include David Ricardo, Thomas Malthus, Karl Marx, Anne Robert Jacques Turgot, John Stuart Mill, Jean-Baptiste Say, and Eugen Böhm von Bawerk (Young, 2022). The Classical economists believed in free market efficiency, given a series of assumptions known as the First Welfare Theorem. The conditions of this theorem are that there is perfect information in the market, zero transaction costs, a large number of buyers and sellers, no externalities, and all transactions are voluntary. According to the classical school of thought, free markets functioned better than regulated markets as long as the conditions of the First Welfare Theorem held. (Econ488.blogs) Deflation is when the overall price level decreases so that the inflation rate becomes negative. It is the opposite of the often-encountered inflation. A reduction in money supply or credit availability is the reason for deflation, in most cases. Reduced investment spending by government or individuals may also lead to this situation. Deflation leads to a problem of increased unemployment due to slack in demand. Central banks aim to keep the overall price level stable by avoiding situations of severe deflation/inflation. They may infuse a higher money supply into the economy to counterbalance the deflationary impact. In most cases, a depression occurs when the supply of goods is more than that of money (The Economic Times). Hysteresis is from the Greek term “hysteros”, meaning "a coming short, a deficiency”. The term “hysteresis”, coined by Sir James Alfred Ewing, a Scottish physicist and engineer (1855-1935), refers to systems, organisms and fields that have memory. In other words, the consequences of an input are experienced with a certain lag time, or delay. In economics, hysteresis arises when a single disturbance affects the course of the economy. An example of hysteresis in economics is the delayed effects of unemployment. As unemployment increases, more people adjust to a lower standard of living. As they become accustomed to the lower standard of living, people may not be as determined to achieve the previously desired higher living standard. In addition, as more people become unemployed, it becomes more socially acceptable to be or remain unemployed. After the labour market returns to normal, some unemployed people may be disinterested in returning to the work force (Kenton, 2021). New Consensus Macroeconomics (NCM) draws heavily on the so-called new Keynesian economics in its macro-modelling and replaced it after the collapse of the Grand Neoclassical Synthesis in the 1970s. The New Keynesian paradigm, which arose in the 1980s, provided sound microfoundations along with the concurrent development of the real business cycle approach, which promoted the explicit optimisation behaviour aspect. Those developments, along with macroeconomic features that the previous paradigm lacked (such as the long-run vertical Phillips curve), resulted in the NCM. The Taylor Rule became the most common way to model monetary policy. Monetary policy as interest rate policy became one of the hallmarks of the New Consensus (prof Philip Arestis). Stagflation is an economic cycle characterised by slow growth and a high unemployment rate accompanied by inflation. Economic policymakers find this combination particularly difficult to handle, as attempting to correct one of the factors can exacerbate the other. Once thought by economists to be impossible, stagflation has occurred repeatedly in the developed world since the 1970s oil crisis (Investopedia, 2022). Stimulus refers to action by the government to encourage private sector economic activity by engaging in targeted, expansionary monetary or fiscal policy based on the ideas of Keynesian economics. The term economic stimulus is based on an analogy of the biological process of stimulus and response, with the intention of using government policy as a stimulus to elicit a response from the private sector economy. Economic stimulus is commonly employed during times of recession. Policy tools often used to implement economic stimulus include lowering interest rates, increasing government spending, and quantitative easing, to name a few (Investopedia, 2021). References Andor, L. 2018. Austerity: From Outrage to Progressive Alternatives [Online] Available at: https://socialeurope.eu/austerity-outrage-progressive-alternatives [accessed: 27 October 2022]. Baker, D. 2012. Attacking the Treasury View, Again [Online] Available at: https://cepr.net/report/attacking-the-treasury-view-again/ [accessed: 27 October 2022]. Blanchard, O. 2009. The State of Macro [Online] Available at: https://www.nber.org/papers/w14259 [accessed: 27 October 2022]. Blyth, M. 2013. Austerity: The History of a Dangerous Idea. New York: Oxford University Press. Burger, P. 2020. South Africa’s debt: Has the budget overpromised? 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[Online] SA doing well, as Reserve Bank hails fiscal position. Available at: https://www.businesslive.co.za/bd/economy/2022-10-04-sa-doing-well-says-reserve-bank-as-it-hails-fiscal-position/ [accessed: 27 October 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

30 November 2022 - 2 December 2022, Wellington The Inclusive Society Institute (ISI) attended the 2022 Conference and Workshop: Centre for Good Governance in Africa, the School of Social Innovation at Hugenote - Co-created Community-based Partnership Local Governance and Service Delivery in South Africa Analysis, Action and Activism. It was held at the Andrew Murray Centre for Spirituality, Wellington South Africa. The workshop took place from 30 November to the 2 December 2023. The workshop was hosted by CiviNovus NPC. The ISI was represented by Dr Motsomai Molefe, Dr Klaus Kotze, Mr Edwin McQueen and Mrs Berenice Marks. Drs Molefe and Kotze presented their papers, Ubuntu and the role of local government, and Realising the constitutional goals: a transformed and people driven state respectively at the conference. The workshop was well attended by political parties, civil society, academia, and well know South African dignitaries. The theme was Community based local governance, analysis, action and activism.

Copyright © 2022 Inclusive Society Institute PO Box 12609 Mill 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 D I S C L A I M E R Views expressed in this report do not necessarily represent the views of the Inclusive Society Institute or its Board or Council members. Author: Melanie Lue Editor: Daryl Swanepoel SEPTEMBER 2022 Content Background Introduction Panel Discussion What drives xenophobia in South Africa? What research tells us? A statistical overview of migration in South Africa – Implications for migration management and addressing xenophobia Reframing interventions: Towards a plan beyond the National Action Plan on Racism and Xenophobia Does immigration policy and laws fuel xenophobia? Aligning policy and legislation to ensure consistency in action Discussion Way Forward Annexure A: Dr Steven Gordon’s full presentation Annexure B: Mr Diego Iturralde’s full presentation Annexure C: Prof Loren Landau’s full presentation References Cover page picture source: istockphoto.com | FourOaks Background On the 17 August 2022 the Inclusive Society Institute (Institute) hosted a roundtable discussion titled ‘Developing an Effective Response to Addressing Xenophobia in South Africa’. The roundtable is the first engagement in a two-part series of discussions. The second engagement is planned at a strategic level with senior government stakeholders and policy makers. The motivation for the roundtable stems from concerns of growing levels of intolerance to migrants and the increasing number of xenophobic attacks. This coupled with anomalies in government’s response to issues of migration have called into question South Africa’s commitment to domestic, regional, and international trade and human rights commitments. Recognising xenophobia threatens the foundation of South Africa’s constitutional values of equality and human dignity; and poses a real threat to the country’s developmental agenda; the Institute decided to host the roundtable to bring together experts and civil society stakeholders to investigate challenges and opportunities to effectively respond to xenophobia in South Africa. The following issues were discussed: What drives xenophobia in South Africa? - What the research tells us? A Statistical overview of migration in South Africa - Implications for migration management and addressing xenophobia. Reframing interventions: Towards a plan beyond the National Action Plan on Racism and Xenophobia. Does immigration policy and laws fuel xenophobia? Addressing the lack of consistency in government responses to dealing with xenophobia? How to align policy and legislation to ensure consistency in action. The roundtable took place in person in Cape Town at the Inclusive Society Institute’s offices and via online streaming. Introduction The discussion is timely given increasing xenophobic outbreaks, and growing lack of trust by South Africans according to recent polls. Invitations were extended to relevant government departments. Panel Discussion What drives xenophobia in South Africa? What research tells us? Dr Steven Gordon of the Human Sciences Research Council presented key findings from the last decade of public opinion research focusing on the drivers/factors informing xenophobia and discussed the implications of this research. Xenophobia is defined in the National Action Plan to Combat Racism, Racial Discrimination, xenophobia and Related Intolerance (NAP) as an attitudinal orientation/ hostility towards international migrants. Xenophobia manifests in different ways - the most visible being violence; and further that it disproportionately affects the poor and the working class impacting those who specifically work in the informal economy and live in the townships. The growing level of populism and exploitation of the immigration issue by politicians and community leaders, and the impact of the coronavirus epidemic which has negatively affected millions and resulted in the largest economic recession in over a century, have fuelled tensions. Key findings from research conducted examining public opinion since 2003 included: It is wrong to classify South Africa as a purely xenophobic society. Only a third of the adult population harbour extremely negative views of international migrants. Posing the question - Would you welcome to South Africa all immigrants, some immigrants or no immigrants? – Results from surveys fluctuated. Researchers examining these spikes found these could be contributed to specific events e.g., a spike in pro-immigrant sentiment in 2008 could be attributed to post rioting media and community pushing back against xenophobic attitudes. Spikes in 2015 coincided with anti-xenophobia media campaigns following widespread violence in eThekwini and Johannesburg in the beginning of that year. Addressing why people have negative views of international migrants, researchers found that 60 percent in a given survey round believed that international migrants were responsible for socio-economic problems. A small minority, saw international migrant’s economic and social contribution positively There is a deep misunderstanding about the actual number of people who are foreign born living in South Africa. Half the adult population think there are between 17- 40 million international migrants in the country. There are in fact only around 4 million of which it is estimated that only half are illegal migrants and the remained legal. This misconception is driven by scapegoating rumours. A key question therefore is where do people get their information about international migrants? Primary sources included the broadcast media, television and most importantly radio. Over the last few years social media has become more important as a source of information. It is therefore important to understand how the broadcast media is reporting on international migration and the extent to which it is challenging myths and stereotypes. The general population is divided on the issue of refugees. A substantial proportion of the population do reject refugees living and working in South African at all. Participation in anti-immigrant violence is increasing. The survey asked people if they have partaken in violence against immigrants. In 2015, only about five to six percent of the adult population were willing to indicate that they had taken part in this type of violence; 13 percent indicated that they had not taken part but might do so; 80 percent said that they had not done it and would never do it. However, over the years a greater share of the adult population has shown a willingness to admit to engaging in xenophobic violence. The reasons advanced for participation in this form of violence included blaming migrants for violence. These were driven by ignorance, misinformation and emotional factors with jealousy being the most important emotional factor listed. Myths about the impact of international migrants on society further perpetuates explanations for anti-immigrant violence. A substantial share of the population called for the expulsion of immigrants when asked what can be done to stop violence against foreigners living in the country. Other solutions put forward focussed on social factors, education, community dialogue, changing the way people viewed the world. Recommendations noted included: The need to address this attitudinal problem through effective communication and education campaigns. A large segment of the population, about a third, have extremely strong and negative views of international migrants fuelled by false stereotypes. There is a need for special communication strategies to shift opinions and attitudes. The importance of encouraging greater integration of international migrants into communities which will help dispel some of the negative and false stereotypes about foreign nationals. That government should consider comprehensive immigrant integration strategies which would help immigrants integrate into local communities. Clearing the backlog and reducing some of the obstacles that refugees and asylum seekers have in accessing documentation – which is a main blockage to successful integration. Challenges noted included: The restrictionism and oppositional view to international migrants by the Department of Home Affairs. The growing politics of anti-migrant sentiment. Dr Steven Gordon’s full presentation is attached as Annexure A A Statistical overview of migration in South Africa - Implications for migration management and addressing xenophobia Mr Diego Iturralde from the Demography and Population Statistics at Statistics South Africa presented empirical research data debunking myths which have fuelled xenophobic sentiment. The size of the foreign-born population: In the three preceding population censuses there has been a gradual progression from 1996 to 2001 from about 830,000 to just over 1 million immigrants; the 2001 to 2011 censuses showed a significant increase to 2.18, indicating 2.2 million foreign born persons in South Africa. This represents 4.2 percent of the population. The data therefore debunks the common perception that there is a large number of foreign nationals in the country as claimed recently by the Minister of Home Affairs, Minister Motsoaledi, who stated there are 13 million irregular migrants in South Africa. Mid-year populations estimate for 2022 indicated that 3.98 million persons are foreign born. This is supported by other indicators such as spikes in deaths or births, consumption of services or size of vat. This dispels the myth that there are millions and millions of undocumented migrants in South Africa. The term ‘foreign’ includes not only migrants but people who have moved to South Africa and have become South Africans over time; people with work permits and study permits; documented migrants; unaccompanied minors; and asylum seekers or refugees. In terms of where foreign nationals come from the top countries on the continent were Zimbabwe, Mozambique, Lesotho and Malawi. One of the biggest contributors to anti-immigrant sentiment comes from misinformation and the irresponsible diffusion of information by people in positions of leadership. This is accompanied by the failure to make use of official statistics for decision making, planning and policy development. Challenges with undercounting of the migrant population would be similar to that of the non-migrant population. Furthermore, it would not be on the scale as proposed by certain groups. The 2022 survey seeks to address the issue of undercounting through the Post Enumeration Survey. Furthermore, other data is considered i.e., population estimates which use a demographic model considering birth, deaths and net international migration. Allegations that that migrants are ‘stealing jobs’ are inaccurate: Migrants have a long-standing employment record in South Africa and have been found to contribute to the economy as indicated in the World Bank study which found that for every employed migrant he/ she creates jobs for two South Africans. On the question that migrants are stealing jobs in specific sectors of the economy. Research indicates that migrants work primarily in the informal sector. Using the ILO decent work framework - immigrants scored worst in eight of the 11 categories. The work migrants do is in fact primarily in the informal sector and is mostly considered as not decent work. The informal sector is dominated by males, people aged 15 to 44 and it occurs, mostly, in non-metros. This debunks another perception that informality is most prevalent in metros but in fact is highest in the Eastern Cape at 66.3 percent; Free State at 71.8, KZN at 65.5 and even Mpumalanga and Limpopo at 62.7 and 64 percent respectively. The proportion of persons involved in the informal sector increased from 11.6 to 12.3 percent from 2012 to 2017; the census indicated there that it’s at 13.05 percent; in restaurants, bars and canteens and shebeens this increased from 8.5 to 10.6 percent – which is less than claims of 40, 50, 60 percent. Given the very small increment over time it is unlikely to change dramatically in 2022. Therefore, claims that certain sectors are overwhelmed by foreign nationals cannot be supported. It would be improper, and there’s no evidence to suggest that all social ills are due to the existence of migrants. South Africa is a signatory to the Global Compact for migration and the Global Compact on refugees. Both are best practice guides on migration and refugee management for state parties. These two documents provide South Africa with a guideline on how it should approach migration and refugee management in South Africa. The establishment of the National Migration and Urbanisation Forum in August of 2021 is an important initiative to assist policy makers. This forum meets every three months with the intention of elevating discussions around migration and urbanisation with the view to inform policy. One of the outputs is to produce a migration profile report which is a government owned resource with migration data, which countries around the world are producing. A national migration data hub be housed at Statistics South Africa. Post-Covid, South Africa is on the road to recovery which should be inclusive of migrants and using all the resources and the contributions that migrants bring to the table. Responding to questions it was noted that: Administrative data is unfortunately unreliable. The Department of Home Affairs was only able to account for about 2 million of the 3.6 million foreign born persons. The Department of Home Affairs is only able to account for people who enter the country and who approach the department. What some countries do in order to plan for services, is to encourage migrants to register on a database which is firewalled from the security cluster, so that their identity and their whereabouts can be protected. The biggest challenge therefore is to get government departments to produce administrative statistics and to disaggregate these by migrant status and, secondly, to share it with Statistics SA. An example of misinformation is the claim a few years ago that there were about 1 million undocumented learners in public schools - however about 900,000 of these learners were actually South Africans who, for a variety of reasons, did not have an ID book. The citizen survey conducted by HSRC found that about four percent of the adult public claimed not to have a 13 digit ID document. This could indicate as a rough estimate the proportion of the adult population, who did not have ID documentation. Xenophobic attitudes not only hurt the foreigners in South Africa. Many investors are choosing to go and invest elsewhere in the region affecting South Africa’s GDP, inflation and other economic indicators. South Africa has signed the Pan-African Free Trade Agreement and plays a big role in the African Union. Xenophobia and this increasing animosity towards international migrants are hurting South Africa’s standing on the continent and preventing plans for regional integration which has economic and social benefits for South Africa. Mr Diego Iturralde’s full presentation is attached as Annexure B Reframing interventions: Towards a plan beyond the National Action Plan on Racism and Xenophobia Prof Loren Landau of the African Centre for Migration & Society, University of Witwatersrand presentation drew from work done on the Xenowatch project which has been tracking data on xenophobia, and other work with migrant rights groups. Addressing attitudes and tackling the issue of scapegoating / xenophobic mobilisation is necessary but there we need to reframe interventions about how we think about security and accountable governance. Anti-immigrant attitudes are ‘pretty strong’ among the population at large and particularly among the poorer population. To this point, a 2021 IPSOS survey commissioned by the Inclusive Society Institute (ISI, 2022) found that only 31,23 percent of South Africans said that they trusted or somewhat trusted immigrants from Africa. Similarly, only 32,29 percent said that they trusted or somewhat trusted immigrants from outside of Africa. But that xenophobic violence doesn’t take place everywhere but in specific areas. So, while it’s useful to do public education and try to change and reframe attitudes - this not the proximate cause of the violence. If we want to change South African attitudes across the board, this is a multi-generational long-term project. But if we look at the people getting involved in xenophobic violence or mobilisation it is not about information or people not knowing about the rights of immigrants. The most important factor in the outbreak of xenophobic violence is that it occurs where there is contested authority. Examples cited included: In 2008, it occurred during the breakdown of the ANC and its structures at the local level as they became fragmented over debates over Mbeki’s response to HIV and, then Zuma’s rise in power. People tried to take advantage of a weaker fragmented system and establish themselves as political authorities in specific areas - ‘township governance’. Another example is in Robertson and the conflicts between labour brokers which are not being regulated by the police, party structures, the church, religious institutions or NGOs. Where there are stable institutions that can do conflict resolution and where the police respond quickly – xenophobic attacks don’t happen. The attitudes might remain, the ignorance, the dislike of immigrants but what we are not seeing is that overt violence. The need to reframe interventions by: Placing this issue on the agenda - to go beyond this outrage of xenophobia and think about how do we address people like the Dudula’s? Addressing the question - how do we address the community-based organisations that are leading the xenophobic violence? These groups do use a human rights language – promising to deliver to poor South Africans human rights, welfare, security – ironically they are fighting for social justice. We need to recognise that their claims, not the accusations against immigrants. Their concerns are about justice being denied, increasing inequality, inflation, violence and economic insecurity. Understanding that immigration is not really the issue that we should be debating here because that’s not what is underlying the continued inequalities and injustices that South Africans are facing. We need to address the issue of xenophobia and xenophobic violence and re-centre this discussion. We need to move the discussion away from migrant rights and what should be done for migrants because South Africans are not interested in having that discussion. The more we focus on this the more we fuel the Dudula’s and the other organisations whose interests is that South Africans should come first. In conclusion, it was noted that it is necessary to reframe this discussion about what is good for South Africa and South Africans (regional trade is important), but we need to be talking about what is going to make South Africans safer and townships (the places where the violence is happening) more governable, more sustainable and more secure. The question is not about immigration at all but, gangster government - the way vigilantes have taken over the law. Myth busting must continue by not allowing certain types of accusations to go unchallenged, but we need to reframe these discussions about what is important to the South Africans who are getting involved in these organisations. To try to hear their pain and to try to address those issues and reframe them in ways that people can redirect their attention to the source of their challenges - which is the failure of government to provide security, jobs, development and to give people hope for a better life. Prof Landau’s full presentation is attached at Annexure C Does immigration policy and laws fuel xenophobia? Unless we work assiduously so that all of God's children, our brothers and sisters, members of our one human family, all will enjoy basic human rights, the right to a fulfilled life, the right of movement, of work, the freedom to be fully human, with a humanity measured by nothing less than the humanity of Jesus Christ Himself, then we are on the road inexorably to self-destruction, we are not far from global suicide; and yet it could be so different. (Archbishop Desmond Tutu) Ms Sharon Ekambaram of Lawyers for Human Rights, Refugee & Migrant Rights Programme addressed the issue of government’s response to xenophobia. There is a need to refocus the discussion on xenophobia in the context of inequality, the slow pace of transformation, and the crisis in democracy and governance. Issues identified included: The endemic nature of corruption and its impact on governance (including the Department of Home Affairs). The need to acknowledge the impact of the geopolitics of Apartheid. The current way in which South Africa is managing the movement of people of African descent is reminiscent of apartheid pass laws. The need to rethink how we are managing migration - the criminalisation of migration has actually fuelled and given legitimacy to Operation Dudula and its vigilantism. The impact of populism on policy developments. Citing examples of the Refugee Bill, Gauteng Development Bill, Johannesburg Informal Traders Bill, and the ANC’s new policy document on migration which speaks about withdrawing from the 1951 Convention and presents migration as a threat to national security. The growing use of national security language when discussing migration. The language of national security speaks to the difficulty of determining appropriate balances between security and privacy (citing Prof Duncan). The police have strayed from their post-1994 mandate and become alienated from the community - this is evident in the role of the security system in society and indicates a movement to a climate of heightened repression. The non-existence of Chapter 9 institutions in ensuring accountability. The failure to acknowledge the impact of the climate crisis citing examples of floods in KZN and in Mozambique – and the impact of climate change on displacement of populations. The need for disaggregated data is crucial for a better understanding of the internal and international movement of people and central to evidenced based policy making. The growth of narrow national chauvinism which is resulting in the othering and hatred for anyone who is not South African, is of grave concern. Aligning policy and legislation to ensure consistency in action. Ms Franzman from the Department of Justice and Constitutional Development (DOJ)- the focal agency for the NAP, addressed the work being done on the National Action Plan The DOJ has been implementing a number of actions over the past few years since the Cabinet’s approval of NAP’s five year programme of action. The implementation of the NAP is closely aligned with the government’s medium strategic framework particularly under the Priority Six which is the Social Cohesion Programme led by the Department of Sport, Arts and Culture. The DOJ has commissioned a baseline study (conducted by the HSRC) to determine levels of racism, anti-foreigner sentiment, homophobia, racial incidents, interracial relations and perceptions of national identity. The service directory for victims of discrimination has been developed and is currently a soft copy. An integrated government strategy on public education in respect of anti-discrimination to support NAP has also been developed. The DOJ continues to roll out social mobilisation dialogues to address xenophobia working in partnership with government and other stakeholders. Funding remains an issue, especially for non-government role-players to implement. A funding model has been developed to address this. The DOJ is also part of the United Nations Protection Working Group which is a structure comprising of a number of stakeholders from government, civil society, United Nations agencies, and Chapter Nine institutions led by United Nations High Commission for Refugees. The DOJ is co-chairing a specific group dealing with incidents of xenophobic threats and violent attacks. Threats are referred to DevComm (part of the JCPS Cluster) but there is not as yet a fully operational rapid response mechanism. The setting up of the rapid response mechanism is underway with the United Nations Office on the High Commission for Human Rights. South Africa has reiterated its support for the Global Compact on migration at the International Migration and Refugee Forum (May 2022). The development of a framework for a virtual repository on data collection of disaggregated statistical data in support of the NAP is in progress. The coordinating structure for the National Action Plan was set up in March. The top level of the structure is headed by the Minister of Justice, and it comprises of eight departments including South African Police Service, Home Affairs, Cooperative Governance and Traditional Affairs and others. The next level structure, which is like an implementation structure is to be set up in this quarter. The implementation structure for National Action Plan is envisaged to be a multi-sectorial structure with a number of specific task teams with representation from civil society- some have been identified already to look at issues of research, data collection, public education et cetera. This structure will strengthen alignment across government. The inclusion of more stakeholders, such researchers and academics that come on board to support it, will assist in strengthening and guiding evidence-based interventions. The National Action Plan is close to the end of its first five year plan and needs to be revised. This is an opportunity to gather key government departments together in terms of their specific mandates and engage with research and data. The DOJ will be going back to Cabinet to brief Cabinet on the findings of the baseline study. This provides an opportunity to brief the ministerial structure of the National Action Plan the next time it is convened on findings and research. This could assist in intensifying and strengthening support for the National Action Plan. The DOJ continues work with civil society partners to support implementation for the NAP. Discussion The following additional inputs were made: Governance Challenges: The importance of recognising how fragile and vulnerable South Africa is from a governance perspective. Research conducted by HSRC has found a substantial decline in public trust in key institutions, the police, national government, parliament, and local government. The lowest level of national trust was reached in 2017 during the exit of Jacob Zuma with a brief improvement under Ramaphosa, but in the last two years there has been a further decline across many key institutions. Issues of immigration cannot be sealed off from the wider climate of a very fragile status quo. Limitations of the NAP The National Action Plan has always been constrained in what it can do and assigning the lead to Arts and Culture, for example, has shifted many of the interventions into this realm of attitudes, culture and understanding and away from issues of governance, criminal accountability, urban planning et cetera. that are really at the root of inequality. So, there’s a limit in what the National Action Plan can do in terms of addressing what is at the root of the anger, but also what is the proximate causes of the violence. Securing commitment to actions required buy-in from different departments is a challenge. The artificial compartmentalisation between departments, and the limited view of social cohesion which tend to be relegated to symbols and attitudes, is a challenge. A multi-faceted approach is required given the multiple factors contribute to xenophobia. Clear leadership is needed in the different sectors. Crisis in Policing APCOF explained the research they have been involved in which tried to understand the way in which South African Police Service (SAPS) is structurally enabled and functionally performing in terms of detection, prevention and responses to xenophobic violence and related hate crimes. Key findings of the research included: There are structural limitations both in terms of the legal framework but particularly the policy framework under which SAPS is operating as well as in terms of attitudinal issues. There’s no drilling down of the equality framework to the operational level where there are some discriminatory practices in terms of the policing of foreign nationals. APCOF found that this is manifesting as a dual phenomenon of over policing and under policing. Foreign nationals are being specifically targeted for policing and law enforcement and seen as soft targets. This is driven by attitudinal issues and corruption. There is a lack of training and preparedness at an operational station level. The police are not well trained and do not understand immigration, refugee laws and issues related thereto. The failure of early warning systems and the failure of crime intelligence were also noted. Lack of knowledge about immigration policies and the kind of struggles that migrants face in obtaining documents and asylum permits and implications of police action for example removing immigrants away documents. The absence of a policy by SAPS on issues around non-nationals, migration and xenophobia; systemic and endemic levels of corruption when it comes to migration and non-nationals; and the failure of SAPS to implement original recommendations of more than a decade ago to address xenophobia. There is a significant breakdown in trust in the police. Recent research by the Global Initiative Against Transnational Organised Crime which found extortion rackets prevalent in Khayelitsha and the extent to which the police were completely unaware. There is a serious crisis of the policing system including the roles that, for example, the Civilian Secretariat and IPID should be playing. Poor performance is evident for example in despite a 66 percent increase in the budget of the police since 2012 to 2020, their ability to solve murders dropped by 38 percent, assault and armed robberies dropped by 24 percent. Both those crime categories have gone up massively and there has been a huge growth of organised crime. So, the system is actually deteriorating and continues to deteriorate because the internal accountability mechanisms are dysfunctional - people don’t get held accountable for not doing what they’re doing. Whatever is on paper doesn’t exist in terms of the daily practices of policing on the streets of South Africa. We do not need more police officers - if we want to improve public safety, we have to re-orientate the entire organisation and what it does starting with its leadership cohort. This recommendation he noted goes as far back as the 2012 from the National Development Plan. There are 174 generals at the moment who are fighting with each other, some of them are involved with organised crime, some in corruption, some with deep roots and loyalties to the former president, and some are just waiting to retire. These factors are contributing to the decline and deterioration in all these systems - resourcing, planning strategies, accountability and incentives. South Africa has not had a permanent head of crime intelligence since the end of 2019. The top six people were removed, and more localised intelligence officials are not getting much direction from the top. SAPS, the single biggest law enforcement capability in the country needs urgent attention. There is work going on to fix the National Prosecuting Authority, the Hawks and Special Investigations Unit, but the single organisation that can play a role of providing some kind of security at a local level is deteriorating and continues to deteriorate and is now part of the threat to national security. The police are not underpaid in accordance with the public sector. In fact, they get paid more than other public servants on the same grades and they also get better benefits and so forth. So, the issue is not salaries. Bad cops don’t improve their behaviour because they get paid more. Policing approaches are not evidence based, are not evaluated but driven by political considerations to be seen to be doing something, to be visible to the community, to be seen to be responding to community concerns. What is needed is a complete re-orientation of the organisation itself and what it uses its resources for. The serious crisis within the police and law enforcement is crosscutting, it’s not just the xenophobia against foreign nationals, but gender-based violence, how protests are managed, and police heavy handedness, corruption and crime and extortion. Reasons for poor trust in the police are very inefficient and unable to provide a secure and safe environment and secondly, that the police are not fair and impartial in their provision of justice, often treating people in a brutal and exploitative manner. The issue of vigilantism and alarming findings that 43 percent of the adult population agrees it’s sometimes okay to take the law into your own hands and about 63 percent believe that communities should organise themselves to defend themselves against criminals, is disconcerting. Such support for vigilantism is not concentrated primarily amongst the poorer working class but is found across the socio-economic divide in South Africa. Holding government accountable? Concern was expressed at the failure of Chapter Nine Institutions to hold government accountable. The South African Human Rights Commission (SAHRC) indicated it continues to do advocacy work on countering xenophobia for example in in schools and communities, and has provided training to various institution and departments including the SAPS and Home Affairs. Furthermore, in line with its mandate it has conducted investigations into xenophobia and made recommendations. Way Forward Given the above contributions and discussion, the Inclusive Society Institute recommends government take the following steps: The DOJ ensure the National Action Plan Ministerial Structure and Cabinet is briefed on: Research findings and data The disjuncture in government responses, policy and compliance with international commitments (at national, provincial and municipal levels). The need to comply with best practice guides in terms of migration and refugee management (as signatory to the Global Compact for migration and the Global Compact on refugees). That Government commit to an evidence based policy development approach across all spheres of government and: Put in place measures to monitor compliance. Ensure research and data collected by structures such as the National Migration and Urbanisation Forum is effectively disseminated across government departments and spheres of government to inform policy making. That DOJ motivate for the urgent establishment of the implementation structure for the National Action Plan and: Strengthen participation of research institutions, academia and civils society in the implementation structure and subcommittee working groups. Urgently activate the Early Warning and Response Capacity and ensure this capacity adopt holistic approach (not being purely security centric) as noted above. That the DOJ urgently commence the review of the National Action Plan and ensure the review address the limitations including: The efficacy of Arts and Culture as lead department. Extension of the current focus of National Action Plan as cited above (including contested authority, issues of governance, town planning etc.). Adopting an evidenced based approach relying on accurate research and empirical data. Address both prevention and response in strategies. The review and strengthening of SAPS and law enforcement training and policies in line with international best practice. The SAHRC investigate Government’s failure to implement previous findings and recommendations on xenophobia, and non-compliance with key international conventions. Annexure A Dr Steven Gordon’s full presentation Annexure B Mr Diego Iturralde’s full presentation Annexure C Prof Loren Landau’s full presentation References Edwards L, Netshikulwe A, &Freeman L (2021) Policing and non-nationals - Community Police Forums and xenophobic violence in South Africa. APCOF Report. [Online] Available: https://apcof.org/wp-content/uploads/policing-and-non-nationals-community-police-forums-and-xenophobic-violence-in-south-africa.pdf [accessed: 6 September 2022] Edwards L & Freeman L. Policing and non-nationals - Analysis of police prevention, detection and investigation of xenophobic violence in South Africa. APCOF Report. [Online] Available: https://apcof.org/wp-content/uploads/policing-and-non-nationals-report.pdf [accessed: 6 September 2022] Freeman L, October L & Edwards L. 2022. Policing and non-nationals - External police oversight, accountability and xenophobic violence in South Africa. APCOF Report. [Online] Available: https://apcof.org/wp-content/uploads/policing-and-non-nationals-external-police-oversight-accountability-and-xenophobic-violence-in-south-africa-.pdf [accessed: 6 September 2022] Gordon SL. 2020. Understanding xenophobic hate crime in South Africa. J Public Affairs. Vol 20 (3). [Online] Available: https://doi.org/10.1002/pa.2076 [accessed: 6 September 2022] Gordon SL. 2020. Understanding the attitude –behaviour relationship: a quantitative analysis of public participation in anti-immigrant violence in South Africa. South African Journal of Psychology Vol.50 (1): 103-114 . [Online] Available: https://journals.sagepub.com/doi/full/10.1177/0081246319831626 [accessed: 6 September 2022] Inclusive Society Institute (ISI). 2022. Measuring Social Cohesion in South Africa. [Online] Available: https://drive.google.com/file/d/1XpvT5k1Bg0hQMa9v5Ayr-bPMqLPnT2sG/view [accessed: 6 September 2022] Institute for Security Studies (ISS) 2021. SAPS Resourcing and Performance, 2012-2020. [Online] Available: https://issafrica.org/crimehub/analysis/fact-sheets/saps-resourcing-and-performance-2012-2020 [accessed: 6 September 2022] Misago JP & Landau LB. 2022. Running Them Out of Time: Xenophobia, Violence, and Co-Authoring Spatiotemporal Exclusion in South Africa. Geopolitics. [Online] Available: DOI: 10.1080/14650045.2022.2078707 [accessed: 6 September 2022] Misago JP, Bule K & Mlilo S (December 2021) Xenophobic Violence in South Africa - An Analysis of Trends, Causal Factors and Responses. A Xenowatch Quinquennial Report. [Online] Available: http://www.xenowatch.ac.za/wp-content/uploads/2022/04/Xenowatch-Report_Final_Dec_2021_.pdf [accessed: 6 September 2022] Roberts B & Gordon S. 2022. South Africans Have Low Trust In Their Police. Here’s Why. Human Sciences Research Council. [Online] Available: https://hsrc.ac.za/news/capable-and-ethical-state/south-africans-have-low-trust-in-their-police-heres-why/ [accessed: 6 September 2022] Republic of South Africa. 2019. National Action Plan to Combat Racism, Racial Discrimination, Xenophobia and Related Intolerance (NAP)2019. [Online] Available: https://www.justice.gov.za/nap/docs/NAP-20190313.pdf [accessed: 6 September 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

The Inclusive Society Institute (ISI) did a presentation to a high-level Danish Delegation, on Thursday, 09 March at 6 Spin Street. The delegation included the Speaker of the Danish Parliament, Mr Søren Gade, the Ambassador to Denmark in South Africa, HE Mr Tobias Elling Rehfeld amongst others. Ms Buyelwa Sonjica, Chairperson, of the Institute’s Advisory Council, opened the meeting with an introduction of the Institute. Mr Daryl Swanepoel, the Institute’s CEO, did a presentation on, The People’s State of the Nation. The presentation was based on, a) the gloomy predictions for 2023 from the Ipsos Global Advisor, b) what worries the world in February 2023 with the focus on SA issues, c) Social cohesion in South Africa from the GoveDemPol, May 2022 highlighting governments performance on nation building d) political leaders and parties and trust in parties from the latest political poll results and e) providing context. Mr Dave Strugnell, CEO at Percept, representing our research team did a presentation on the Understanding Youth Inequality report. His presentation focused on South Africa being widely regarded as the most unequal country on earth, where the top 20% of the population earned over 68% of income while the bottom 40% earned just 7% of income by January 2020. He discussed, the country’s inequality being multidimensional, transcending income and wealth to include matters of land, capital and access to quality public services, which illustrated that multidimensional inequality also intersects with gender, race and geography in ways that entrench historical fault lines. There was a robust discussion during the Q & A session.

Copyright © 2023 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. 21 FEBRUARY 2023 Prof Geo Quinot Department of Public Law, Stellenbosch University In 2008, government, via the South African National Roads Agency SOC Ltd (“SANRAL”), embarked on the Gauteng Freeway Improvement Project (“GFIP”). In essence, the project involved declaring several roads in Gauteng as toll roads in terms of The South African National Roads Agency Limited and National Roads Act 7 of 1998 (“the SANRAL Act”). Tolling is done via an e-tolling system that involves gantries logging the passage of vehicles and issuing a bill to the registered vehicle owner (or another registered party) for payment of fees. Tolling started in December 2013. Following years of controversy, litigation and large-scale non-payment of toll fees by road users, the Minister of Finance announced in his medium-term budget policy statement in 2022 that SANRAL’s GFIP debt will be transferred to national and provincial government (in a 70:30 split) and that the province will take over maintenance of the roads. The Gauteng provincial government subsequently announced that e-tolling under the GFIP will be terminated. Gauteng Premier Panyaza Lesufi furthermore suggested that motorists that paid e-toll bills will be refunded. Consultant seeks an analysis of the legal implications of a decision to write off outstanding e-tolling bills. LEGISLATIVE SCHEME The power to levy a toll on the use of any national road is vested in SANRAL by section 27 of the SANRAL Act. In terms of that section, SANRAL may, with the approval of the Minister of Transport (“the Minister”), declare any section of a national road to be a toll road. Once so declared, the Act empowers SANRAL to levy and collect toll for the use of the road. The amount of the toll is determined by the Minister by means of a notice in the Government Gazette. The declaration of a toll road and the determination of a toll levy create an obligation in terms of section 27(5) of the SANRAL Act on all users to pay such toll. A failure to do so is an offence under the Act, punishable by imprisonment and/or a fine as well as a civil fine payable to SANRAL. The operative decisions are thus the declaration of a toll road and the determination of the amount of toll payable. Once these decisions have been taken, liability will be imposed by operation of law based on a person’s use of the toll road. SANRAL may, in terms of the Act, grant exemption from the payment of tolls or suspend the payment of tolls, either to specific users or generally. The SANRAL Act determines that a declaration of a toll road, the determination of the amount of toll payable, an exemption or suspension will only become effective 14 days after the relevant notice was published in the Gazette. The Act explicitly states that the toll, as determined by the Minister, will be payable from a date and time determined by the Minister, which may not be earlier than 14 days after the publication of the relevant notice in the Gazette. In respect of the GFIP, the original notices declaring the relevant road network as toll roads were published in Government Gazette 30912 on 28 March 2008 and in Government Gazette 31273 of 28 July 2008. Various sets of regulations have been issued under the SANRAL Act to govern aspects of the implementation of the GFIP. These include the e-Road Regulations, 2016 that create the conditions for levying toll fees electronically. Notably, regulation 6(2) of the e-Road Regulations determines that “[u]nless payment is made … such registered user shall remain liable for the payment of all tolls in relation to the use of an e-road”. Successive notices have been issued under the SANRAL Act determining the amount of toll to be paid and the conditions of payment. The most recent of these notices, published in Government Gazette 45902 of 11 February 2022, set the applicable toll amounts with effect from 1 March 2022. From the above legislative scheme, it follows that a legislative liability is placed on users of roads forming part of the GFIP, which liability arises at the time of use of the relevant road. This liability does not only constitute a civil debt towards SANRAL, but a failure to discharge the liability automatically gives rise to criminal liability under the SANRAL Act.   EXCUSE OF NON-PAYMENT The legislative scheme does not provide for e-toll liability to be waived once incurred. In terms of the scheme, an individual can only discharge their liability by either paying the toll or by nominating another person as the actual road user and thereby transferring the liability to such nominated person. In Fedsure Life Assurance Ltd v Greater Johannesburg Transitional Metropolitan Council 1999 (1) SA 374 (CC), the Constitutional Court held that the legality principle in South African constitutional law dictates that “the legislature and executive in every sphere are constrained by the principle that they may exercise no power and perform no function beyond that conferred upon them by law.” When this principle is applied in the current context, it follows that SANRAL does not have the power to excuse non-payment of e-toll fees once incurred. Nor does any other organ of state have such power. A further problem with the contemplated excuse of non-payment of e-toll fees is that once the amount of toll to be paid under the GFIP had been determined, the Minister would be functus officio regarding that decision. This means that once the Minister took the decision to impose a particular amount of toll for use of the relevant roads for a specific period and published that decision as required under the SANRAL Act, the Minister’s decision was final, and the Minister retained no power to alter that decision in the absence of specific authorisation to do so. As noted above, the legislative scheme does not contain any authorisation for the Minister (or any other actor) to change the amount of toll retrospectively once it had been set and imposed. Any attempt to subsequently amend the amount payable (including to zero) retrospectively would fall foul of the functus officio doctrine. This does not suggest that the Minister cannot change the amount of toll payable prospectively. The Minister is explicitly authorised to do so, but subject to strict timelines that limit any retrospective effect. The fact that the Minister’s determination of the amount of toll payable is final, is underscored by the explicit rules regarding the date of effectiveness of such determination in the legislative scheme. As noted above, both the declaration of a road as a toll road and the determination of the amount of toll payable for use of that road, which in combination would create the liability to pay toll, are subject to specific timelines regarding operation. The legislative scheme determines that such decisions may not take effect earlier than 14 days after the prescribed notice of such decision is published. It follows that any attempt to determine the liability for use of the road retrospectively would be unlawful as it would amount to an attempt to determine the amount of toll payable with effect earlier than 14 days after publication of the decision. On the same reasoning, a decision to withdraw the declaration of a road as a toll road (under section 27(1) of the SANRAL Act), as is currently anticipated in respect of the GFIP, would not retrospectively affect the liability for the prior use of the relevant road while it was a toll road. The analysis above shows that a decision to excuse outstanding toll fees would be unlawful. It should be noted that the same reasoning applies to a decision to excuse paid fees and reimburse same. In terms of the current legislative scheme, the dismantling of the GFIP can only operate prospectively. Such dismantling cannot alter the existing legal position in respect of tolls that are due. The transfer of the SANRAL debt relating to the GFIP to national and provincial government would also not impact on the outstanding tolls. SANRAL’s GFIP debt and outstanding tolls are distinct liabilities. Even though they were linked (SANRAL partly levied tolls in order to pay its GFIP debt), the payment of one does not automatically lead to the payment of the other. The two liabilities also arose from distinct bases – SANRAL’s debt arose from its contractual arrangements to finance the GFIP while the outstanding tolls arose statutorily from road use. It follows that government’s take-over of SANRAL’s debt does not extinguish road users’ toll liability. While an active decision to excuse toll fees would be unlawful, the same may not be true for a passive excuse of fees. That is, it may be possible for SANRAL (or another public entity) to “excuse” toll fees by simply not enforcing the liability. It is notable that the SANRAL Act authorises SANRAL to enforce payment of toll fees, but does not oblige SANRAL to do so. Section 30(1) states that SANRAL “may institute legal proceedings to recover toll moneys owing to it” (emphasis added). This clearly indicates that SANRAL is empowered, but not obliged, to enforce payment by means of legal proceedings. SANRAL would thus not be breaching a legal duty under the SANRAL Act by simply not enforcing e-toll liabilities that have already vested. An approach by SANRAL that amounts to simply adopting a supine attitude towards outstanding toll fees would arguably not be reviewable. While an omission, such as a failure on SANRAL’s part to enforce payment of tolls, may amount to an administrative action under the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”), it would only be reviewable if such omission breached a duty to act. Section 6 of PAJA determines that a failure to take action would be reviewable if the administrator had a duty to act and failed to do so, either within the stipulated timeframe or, in the absence of such prescribed timeframe, a reasonable time. As the Supreme Court of Appeal noted in Commissioner for the South African Revenue Service v Trend Finance (Pty) Ltd 2007 (6) SA 117 (SCA), the section does not apply when an administrator “has a right, but no duty, to do [something]”. In the present matter, SANRAL arguably falls exactly in this position. It has a right to enforce payment, but not a duty to do so. Accordingly, a mere omission on SANRAL’s part to enforce payment would not merit a review. The position may be different if SANRAL took an explicit decision not to enforce payment. Such a scenario would not amount to an omission on the part of SANRAL, but rather a deliberate positive action. Such an action would be subject to review under PAJA, including on the basis of reasonableness. In such a review, serious questions can be asked about how reasonable it would be for SANRAL to decide to forgo outstanding tolls while it actively enforced payment of identical tolls before. That is, the reasonableness of effectively waiving tolls for some users while it enforced payment against others could be questioned. A final point to note relates to the criminal liability attached to non-payment of tolls, as set out above. No action by SANRAL (or any other actor) can retrospectively change such criminal liability. Section 27(5) of the SANRAL Act states that “any person liable for toll who … refuses or fails to pay the amount of toll that is due … is guilty of an offence” (emphasis added). It is evident that the criminal liability arises when a person refuses or fails to pay a toll that is due. This liability cannot be retrospectively extinguished by SANRAL. The liability could be formally pardoned by way of the presidential pardon powers or by way of a specific statutory scheme, but not by simple administrative action such as a decision by SANRAL (or another executive or administrative functionary) to “excuse” payment of tolls. The criminal liability would continue to exist even after SANRAL has formally abandoned the GFIP. END - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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 Wednesday, 15 February, the Inclusive Society Institute attended the Pioneer the Possible symposium at the invitation of the Swedish Embassy. Borne out of the need for creative solutions to address local and international poly-crises, the host of the day, Ambassador Håkan Juholt, stressed that it could no longer be business as usual. Instead of attempting to tackle isolated events in silos, it is the task of all stakeholders to collaborate in building a more sustainable world. Complex issues would require innovative approaches that not only see obstacles but through working together find creative solutions. As such, it is not about seeing the impossible, but collaborating to pioneer the possible. The first session showed how several companies were successful in building sustainable industries fit for the future. The country manager of mega Swedish textiles company H&M, Caroline Nelson, mentioned several initiatives whereby the company is finding creative solutions to the hitherto unsustainable business model of quick fashion. South Africa, she said, faces an excellent opportunity to rebuild its collapsed textiles industry, catapulting re-generative approaches for a collapsed industry. Instead of merely going back to previous approaches, industry leaders must upskill and invest in South African businesses to build a more sustainable model. According to Nelson, the “possibility to pioneer in South Africa is much easier”. We have the spirit and resilience required to create thriving, sustainable industries. We just have to work together and get things done. In the second session, moderated by the Inclusive Society Institute’s CEO, Daryl Swanepoel, the discussion focused on how a sustainable, circular economy can be pioneered. Dr Roelof Botha spoke about how the introduction of a Basic Income Grant would advance the socio-economic condition of millions of South Africans. His comments follow the extensive work undertaken for the Institute on the feasibility of a Basic Income Grant. Pointing to the success of the Brazilian Bolso Familia programme that not only uplifted millions of people, but also stimulated economic growth, Dr Botha suggested that such a conditional grant programme would offer enormous benefit to South Africa’s indigent and well as to the national economy at large. His analysis is captured in an Institute report that will be released soon. Further sessions focussed on several key national issues. Delegates representing youth and civil society groups agreed that the nation lacks trust in the political status quo. They echoed the call for broader inclusion in formal political structures and the need for civil society to organise and mobilise. Trust was again central when representatives from media and academic institutions agreed that open, critical and creative conversations are required by a broad cross-section of society. After a busy and productive day, stakeholders agreed that a new politics was required in South Africa. One based on trust, cooperation, and mutual benefit. It was agreed that civil society organisations, the media and academia should do more to work with and bring together the private and public sectors in developing South African solutions for South African problems.

The Chief Executive Officer of the Inclusive Society Institute, Daryl Swanepoel, represented the Institute at the seminar on creating stable coalitions that was hosted by the Danish Embassy on 13 February 2023. The event was held at the historic 6 Spin Street in Cape Town. The event served as a public feedback session on the recent political party study tour to Denmark on coalition governance and relevance for South Africa. This was followed by a spirited panel discussion and dialogue on how to strengthen coalition governance in South Africa and how to make coalitions more stable. The seminar was opened by HE Danish Ambassador Mr. Tobias Rehfeld moderated by Professor Richard Calland. The panel was comprised of the party representatives that undertook the tour, which included the UDM, Good, FF+, ANC, Action SA, IFP and One South Africa Movement. Mr Swanepoel, in his contribution, highlighted the Irish approach to coalition formation, which was based on trust and generosity. He said that trust amongst parties was non-existent, and in creating workable coalitions, parties would have to move away from transactional agreements based on relative strength to one that acknowledges coalition partners to be equal. The failure of South African parties to grasp these two concepts will result in unstable coalitions. This ought therefore to be at the forefront of their thinking in the run-up to the next election, which will undoubtedly see a number of coalition governments having to be formed.

ISI CEO, Daryl Swanepoel, met with the High Commissioner of Singapore, Zainal Arif Mantaha on 10 February 2023 at the offices of the ISI in Cape Town. They discussed a range of public policy issues, notably social inclusion from which SA can draw valuable lessons.

ISI CEO, Daryl Swanepoel, met with former Deputy President Baleka Mbete, Chairperson of NaLHISA on 10 February 2023 at the ISI offices in Cape Town. The ISI is excited to partner with NaLHISA to tell the authentic and proud story of SA's liberation.