THE THEORY OF CO-MANAGEMENT AND ITS APPLICATION IN SOUTH AFRICA’S PFM POLICY
6.2. SOUTH AFRICA IN TRANSITION: A CONFLICT OF IMPERATIVES
6.2.3. The pro-growth economic agenda
The pro-growth economic agenda or imperative differs from the social pro-poor imperative because it emphasises “market-led approaches to business development, which stress competitiveness and investment attraction” (Scott and Pawson, 1999, and Rogerson, 2000, cited in Nel et al., 2002:226). This approach is typified by the Growth, Empowerment and Redistribution (GEAR) policy adopted in 1996. The adoption of the GEAR policy represented a shift in thinking about how growth and redistribution could be achieved. Prior to GEAR, and beginning with the Freedom Charter in 1955, the ANC’s stated approach was the redistribution of capital assets through the nationalisation of key economic sectors. In this earlier approach,
state intervention was central to achieving growth and redistribution. The GEAR strategy, however, replaced these more socialist approaches with a free market approach that has neo- liberalism as its central principle (Nel et al., 2002). The role of the state in achieving growth and redistribution was reduced in favour of a free market approach, where the market would drive the growth and development that South Africa needed and the benefits would trickle down for social development and redistribution. In brief, GEAR outlines a strategy for achieving the RDP objectives.
GEAR is a neo-liberal approach. It has been described as a “package of conservative neo- liberal economic policies” (Hart, 2002:7). According to Hayek (1981), neo-liberalism is a disorderly collection of ideas and theories associated with the desirability of the market as the central plan for the organisation of social, economic and political life. It is a term that has come to describe the “predominantly laissez faire, market-driven economic policies sweeping across the globe” (Cypher and Dietz, 1997:208). In short, neo-liberalism is “export-orientated, market-led economic growth” (Hart, 2002:3) which is the heart of a pro-growth imperative (Nel et al., 2002).
The claim of neo-liberalism is that the free market system is able to maximise human welfare and is therefore the most suitable approach to improving well-being. The free market has been described as comprising “atomistic individuals who know their own autonomously arising needs and wants and who make contracts with other individuals through the mechanisms of the marketplace to satisfy those wants and needs” (Preston, 1996:253). The free market is understood to require minimum state intervention or involvement in order to function most effectively. This approach, encapsulated in the GEAR policy, signified a retreat from the policy of redistributive social change of the RDP (Hart, 2002). In other words, unlike the RDP, which acknowledges state intervention in meeting basic development needs, GEAR looks to the marketplace to address economic growth and thus improve human welfare.
As with other neo-liberal policies, proponents of GEAR maintained that through improved economic performance, redistribution and improved welfare would take place. If a growth rate of 6% per annum by 2000 was achieved, it was believed that this growth would result in increased job creation and increased exports and thereby improve social conditions. No longer was the state expected to have an interventionist role in economics; its role was now facilitatory, with the private sector being the key driver of the economy (Nel, 2000). As a
facilitator to the private sector, the state’s role was to reduce state spending and the budget deficit, reduce corporate taxes and foreign exchange controls and control inflation, which would encourage privatisation and wage restraints.
However, many critics have scorned the neo-liberal ideology (Michie and Padayachee, 1997;
Lester et al., 2000; Bond, 2002; Carmody, 2002) and therefore also the GEAR policy. Bond (2002), who is scathing about the negative impact that neo-liberal policies have had on socio- ecological inequalities, attributes South Africa’s failure to achieve sustainable development (and address these inequalities) primarily to the capitalist mode of production. The market- orientation of decision-makers in government and donor agencies is blamed for the failure of the neo-liberal approach to deliver policies and strategies to provide basic services and achieve land reform. Instead of the anticipated job creation that GEAR should have stimulated, South Africa has experienced increased job losses. Carmody (2002:256) states that “since 1996 when neo-liberal economic reforms were introduced more than a half a million jobs have been lost, in contrast to the 600,000 that were meant to be created”. Instead of job creation, South Africa has experienced ‘jobless growth’ (Nel, 2000; Carmody, 2002). This is a term that describes a situation in which “the economy is expanding mainly in capital-intensive sectors, but simultaneously shedding jobs in the less economically viable, labour intensive sectors’ (Lester et al., 2000:256). This is a common feature of developed economies, and in this respect GEAR is at odds with the national state’s goal of addressing social inequalities because increasing employment opportunities is an important step towards addressing socio-economic disparities.
This feature is problematic for developing countries because a notable feature of these countries is the high levels of poverty.
Further to this, the pursuit of the pro-growth agenda has implications for the manner in which LED initiatives are implemented. This has led Healey and Ilbery (1990, cited in Nel, 2000:122) to describe LED as a “market-driven approach to development intervention”, which is prevalent in a neo-liberal market economy. Owing to state cuts in regional development expenditure, LED initiatives, although often facilitated by local government, are largely driven by private sector interventions and this has necessitated a shift in focus. This shift in approach promotes private sector development, the free-market and reduced state intervention, and is more aligned with the neo-liberal GEAR strategy as opposed to the RDP, which is a more needs-based approach to rural development. Therefore, although LED initiatives still promote interventions that capitalise on the economic advantages of a particular locality, rather than
meeting basic needs and addressing rural development issues, such initiatives have been scaled up and are focussed on creating a niche in the global economy. In other words, through the actions of LEDs “individual cities or areas compete in the global market as centres of investment and comparative advantage” (Nel, 2000:122). For example, Knysna and its surrounds may not be able to compete with London or New York as a world capital, or with California, Australia and the Cape Province as producers of superlative wines, but it can compete for a share in the global tourism and/or forest products markets owing to its scenic beauty and accessible Afromontane forests.
In the context of forestry, the introduction of the pro-growth imperative through GEAR has resulted in the need for DWAF to undergo what has been referred to as ‘external’ restructuring (DWAF, 2003a). Although this is discussed in detail in Section 6.4.2, it is necessary here to mention that this restructuring refers to the change in the Department’s role as a manager of state forests. DWAF, like other government departments, has embarked upon a process of privatisation of state assets. State forests (whether indigenous or commercial plantations) are being assigned, delegated or leased to other management agencies (DWAF, 2002b; Kühn et al., 2002), thus removing the management costs and the responsibility from the state. Privatisation is not automatically a negative process; however it does open up the organisation to the pressures of a free market economy. This affects the determination of what is equitable or economically feasible in the context of the need for private business to be profitable.
This section has discussed some of the features in South Africa that are characteristic of a developed country, and also some features which are more consistent with developing countries. This duality creates a condition where the state is faced with seemingly conflicting imperatives; namely, a social, pro-poor agenda or a neo-liberal pro-growth agenda. By way of elaborating on these imperatives, examples of government policy illustrating these imperatives, and demonstrating how these policies and associated imperatives have influenced indigenous forest management policy, were cited. This should provide an indication as to whether the manner in which PFM was implemented in the southern Cape, and therefore the kind of ecological modernisation that transpired throughout the implementation process, could be attributed to the changing socio-political processes in South Africa.