How well has the ANC government done in the first decade of democracy? By its own assessment, rather well: economic growth has been restored; the monetary environment stabilised; the economy restructured for greater competitiveness; and the provision of social goods like welfare and housing increased.
Since 1994, welfare payments to the poor have more than tripled, reaching R30bn; housing and land programmes have put R50bn of assets into the hands of the poor gratis; and the matric pass rate has risen from 54% in 1996 to 69% in 2000.
The policy trade-offs made - for instance, fiscal austerity versus greater social spending - were the right ones, and there is no evidence to suggest that any other option was possible.
This is according to government's 10-year review report, a synthesis of a swathe of research papers produced both independently and by government departments, to assess government's policy objectives over the past decade.
So is it worth ploughing through reams of government's self-assessment, especially at a time when such a thing is sure to take on a pre-election gloss?
Definitely; the review gives good insight into government thinking and where policy may go in the next decade. And, perhaps surprisingly, the news in the review is not all good.
For instance, it says that since 1994:
- More households have fallen below the poverty line. In 1995, the portion was 28%, by 1999 it had risen to 33%. (There are, however, a greater number of households because family units have become smaller);
- Life expectancy has declined from 57 to 55 years; and
- Though the matric pass rate has improved, the number of pupils who actually make it to g rade 12 has edged up by only 2%. The number who make it into tertiary education shows a similar minuscule improvement. So, after nine years of democracy, as much as 71% of the adult population has not completed secondary school.
It's indicators like these that lead government to the conclusion that SA has two economies: a modern, industrial first economy and a second economy made up of the "unemployable".
The implication of this for policy in the next decade is that greater efforts need to be directed at the second economy, which, despite quite large social transfers from government, has slipped deeper into hopelessness.
This is the first of the "four big ideas" for the next decade which is to target the marginalised with a huge public works programme; improve their skills to enhance their chances of entering the first economy; and make micro credit available to them, through new government lending agencies.
The jobs crisis is clearly government's biggest challenge for the decade ahead. According to opinion polls conducted for the review, a rising proportion of people (84%) regard jobs as the most serious problem, an indication that the ANC's time is running out if it continues to fail in this area.
The review puts forward a new analysis of the rocketing unemployment experienced in the 1990s. First, it argues that growth has not been "jobless". In fact, between 1995 and 2002, the economy created 1,6m net jobs. ( Though the review report doesn't go into detail, the background research papers informing it say that these were mostly in the informal sector.)
But during the 1990s a social "revolution" occurred, which resulted in an influx of people into the urban areas and a far greater proportion of the population actively looking for work. In economic terms, the economically active population grew by 35% over the period - at three times the rate at which jobs were created.
The number of "work seekers" grew at a rate of 4%/year, while the overall population grew at only 2%.
This analysis, based on an independent research paper by University of Cape Town academic Haroon Bhorat, appears to be a vindication of government's economic policies. But government may be too quick to believe what it wants. T he possibility that its policies may have hastened this upheaval and social dislocation is not entertained.
Two problem areas spring to mind. The first is labour market policy, which has failed to take into account the rising pool of labour. Coupled with increased pressure on the competitiveness of firms, a large number of formal-sector jobs have been destroyed, to be replaced by casual, sub contracting arrangements.
Even though employers - in a survey commissioned by the department of trade & industry earlier this year - list labour market rigidities as their number one concern, government, in its review, insists that the labour market is flexible.
Flexible or not, the result of the regulatory framework is that employers have gone through the back door, making use of labour brokers (many operating illegally) to get the flexibility they want. The outcome is that all workers, except for the skilled ones (who are now better paid), have been left poorer and more insecure.
Background research by the Human Sciences Research Council's Miriam Altman, in one of the many papers that informed the review, says that the pattern of the 1990s is one of slow formal employment and growing informal employment, within the context of a growing labour force. Added to this is the dynamic that productivity steadily improved, jobs were shed and more was squeezed out of fewer people.
So, though jobs were created and there was a net gain of 1,6m jobs, the reality is that over the past 10 years greater numbers of people have had to depend on fewer wage earners. To put it bluntly, the result is that workers in general have got poorer and are caught in a vicious downward cycle. The casual jobs that have replaced formal jobs are not as well paid and don't provide social security benefits.
The potential for the informal sector to continue to create jobs has also run out as trends show that it is slowing and even falling.
The second problem area is government's rural policies, which may well have intensified the rural exodus that has pushed people into the cities. The review doesn't entertain this at all.
The Land Tenure Act, which gave farm workers land rights to farms they lived on, was preceded by a wave of evictions. Researchers say nobody has managed to measure the impact of the evictions as yet.
Similarly, the minimum wage for farm workers has been set at a rate far higher than the market level - and has been pre-empted and followed by extensive lay-offs, adding to the numbers of rural poor. Policy researchers warned government at the time that even wage levels set below the poverty line would lead to as many as half of all farm workers losing their jobs in some areas.
Aggravating this is that agricultural support programmes in the former homelands all but collapsed in the transition phase, adding to the wave of migration and rural poverty.
Government's certainty that the labour market is not at fault is reflected in the second of the four big ideas for the next decade: the need for a social compact.
Investment over the past decade has been low, averaging 16% of GDP. This is due in part to low public investment because of fiscal austerity, but also to the failure of private investors to come to the party. The problem underlying this is trust, or the absence of it, says the review, and a poor understanding by both domestic and foreign investors of the democratic SA.
The trust issue is a particularly stark problem in SA, the review says, where the political and the economic leadership are "quite distinct in terms of race, culture, background and lifestyle".
SA needs a vision to unite all sectors, says the review, so that all parts of society can act together. The growth & development summit in June was a critical step in this direction, but a pact should involve commitments on investment, wages and inflation.
Big idea numbers three and four are to improve the efficiency of the state and to improve the regional political and economic environment.
But after the reams of research and impact studies have been assessed to bits, the biggest priority for the next decade is the most obvious : jobs.
Government admits that without jobs it runs the risk of "discounting" social delivery because people are too poor to use it effectively.
The example it gives is electrification: 70% of poor households now have electricity, but only 41% can afford to use it for heating.
There are many others that the review doesn't detail.
Education, too, could be described as "discounted" as investments by households and the state are increasingly wasted. The HSRC's research shows that without formal job opportunities, the returns on education are decreasing. Individuals with the same educational levels earn less in the informal sector, and what is being spent is potentially wasted.
If it doesn't solve the unemployment problem, government's successes in other areas will ring hollow.
