LITERATURE REVIEW ON LOCAL ECONOMIC DEVELOPMENT TRENDS IN SOUTH AFRICA
3.2 The Developmental State
3.2.2 National Development Planning
The South African Constitution (Act 108 of 1996) is premised on the developmental nature of the State (Olivier et al., 2010:112) as documented by the many references in the Constitution to development including:
―s82(2)(b): "developing" (developing national policy), s125(2)(d):
"development" (developing provincial policy), s152(1)(c): "development"
(objects of local government), s153: "developmental" (duties of municipalities), s153(a): "planning and development" (administration,
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budgeting and planning process), s153(b): "development" (participation by municipality), s184(1)(b): "development-orientated" (public administration), Schedule 4(Part A): "population development" (concurrent national and provincial legislative (and concomitant executive) functional domain), Schedule 4(Part A): "regional planning and development" (concurrent national and provincial legislative (and concomitant executive) functional domain), and Schedule 4(Part A): "urban and rural development" (concurrent national and provincial legislative (and concomitant executive) functional domain‖.
Contemporary affirmation for South Africa‘s standing as a developmental state is found in the following development plans:
The New Growth Path (NDP, 2010) is a ten year plan, a broad framework articulating a vision and placing employment at the hub of economic policy. Major sectors identified as having potential for the creation of employment opportunities include: infrastructure development, manufacturing, mining, tourism, agriculture and the "green" economy.
The prioritisation of the agricultural value-chain (comprising farming, fishing, forestry, agro-processing and rural development) to one of the key jobs drivers of the New Growth Path ―follows years during which we have to admit that government paid neither sufficient nor sufficiently consistent attention to agricultural issues (Patel, 2011:6). Furthermore the new growth path commits South Africa to work with African countries to build a single integrated economy, embracing one billion consumers, and to give immediate attention to expanding economic relations with this continent.
Vision 2014 is an outcome of AsgiSA and the Medium Term Strategy Framework (MTSF) with the proclaimed targets of halving poverty and unemployment by 2014.
However the goal of decreasing unemployment to below 15% and reducing the poverty rate to less than one-sixth of households will not be achieved without sustained and strategic economic leadership from government, and effective partnerships between government and stakeholders such as labour and business (The Presidency, 2009).
Vision 2025 is a collective agenda presenting a narrative of the future of the country, a 15 year time horizon from 2010. A suite of strategic objectives define the genre of society South Africans desire by enunciating continuing national growth and human development aspirations and goals, while concurrently providing focus and direction to courses of action. The origin of this visionary document may have been a response to
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the Dinokeng Scenarios (2010) which described the scenes of walking apart, walking behind and walking together in South Africa, where critical challenges could only be dealt with if citizens‘ groups, business, labour and civil society actively join with the state to improve delivery and impose accountability on government (Dinokeng, 2010).
The National Development Plan (2012) sets out an approach to development leading up to 2030 and has been described as an ―overarching‖ programme as it provides government with a clear and progressive foundation on which to develop the work of the state and align the public finances (National Treasury, 2012), that will help South Africa address the problems and challenges it faces. It sets out a coherent and holistic approach to confronting poverty and inequality based on six focused, interlinked priorities translated into ten central actions (Table 3.1), which government policy can press forward with in partnership with the private sector, trade unions and civil society.
The State President, the National Planning Commission and government officials have given much publicity to the plan which is being depicted as a pragmatic and realistic blueprint for promoting economic growth and creating jobs.
Table 3.1 The National Development Plan
Ten Actions (Converted from Six Priorities) A social compact to reduce poverty and inequality, raise employment and
investment A strategy to address
poverty to broaden access to employment, underpin the social wage, improve public transport and raise rural incomes
The Public Service the state to professionalise the public service, reinforce accountability, intensify coordination, prosecute corruption
Private investment to be increased in labour-intensive areas, competitiveness and exports; implement adjustments to lower the risk of
hiring younger workers
Education an answerability sequence with lines of responsibility from the state to the classroom
National Health
Insurance to be phased in with the upgrading of public health
facilities, producing more health professionals, reducing the relative cost of private health care
Public infrastructure investment to reach 10% GDP, financed through tariffs, public-private partnerships, taxes and loans and relating to the sectors of transport, energy and water
The environment actions to ensure environmental sustainability and endurance in respect of future shocks
New spatial norms
and standards compact city dwellers, improve transport, locate employment closer to where people live, upgrade informal settlements, resolve housing market gaps
Reduction of crime by strengthening criminal justice and improving the environment of communities
Source: Adapted from National Treasury, 2012.
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All government frameworks and plans will at this time take the National Development Plan as point of departure, including the Medium Term Strategic Framework. Sectoral strategies and priorities identified in the National Development Plan will, over time, be translated into practical programmes and policies, drawing on the capacity and initiative of both the public and private sectors (National Planning Commission, 2012). The long-term structural reforms outlined in the National Development Plan (2012) are complemented by the nearer-term goals set out in the New Growth Path (2010), the Industrial Policy Action Plan (IPAP) 2013/14-2015/16, and the work of the Presidential Infrastructure Coordinating Commission (2011). It can be surmised that there is nothing novel. Strengthening the arrangements through which planning, cooperation and implementation are achieved will be a key determinant of progress in implementing the plans outlined.
Accordingly the basic structural economic problems in South Africa necessitate a state response and the utilization of available resources to ensure the respectable development of a large part of the population by means of: housing, water, sanitation, electricity, education and transport. The objective is to evolve a country characterised by underdevelopment with millions of people classified as poor. Recently South Africa has experienced instability and breakdown of labour relations in some sectors of the economy, notably agriculture and mining, together with related community-level social unrest related to service delivery and other, more deep-seated institutional and socio-political problems (Department of Trade and Industry, 2013). Todaro and Smith (2006) state that promoting rapid economic growth and reducing poverty are not incompatible objectives and policies converging on reducing poverty levels need not lead to a slower rate of growth.
A national outcomes oriented planning approach was introduced in 2004, whereby government‘s programmes and policies are pronounced at the beginning of each term of office in a Medium Term Strategic Framework (MTSF) approved by Cabinet and published by the Presidency (The Presidency, 2009). The 2009 fourth democratic elections resulted in a new electoral mandate for the period 2009 – 2014. The MTSF document adopted in July 2009, confirming the building of a developmental state as per the tenth MSTF priority (Table 3.2) defined the government‘s strategic objectives and targets. In January 2010, these priorities became measurable deliverables with the Outcome-Based Performance Management (OBPM) System, whereby planning and policy-making were transformed into twelve key outcomes aligned to the ten MTSF priorities (Table 3.2).
Cabinet ministers signed performance agreements linked to these outcomes and detailed
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delivery agreements were developed to extend targets and responsibilities to national and provincial departments, agencies and municipalities. These outcomes in the form of outputs and key spending programmes are further explored with particular reference to ―a responsive, accountable and efficient local government system‖ (MTSF priority 10 and key outcome 9) and ―vibrant, equitable and sustainable rural communities and food security for all‖ (MTSF priority 3 and key outcome 7) in Chapter 5.
Table 3.2 Alignment of MTSF (Medium Term Strategy Framework) Priorities and Key Outcomes and the MDGs (Millennium Development Goals)
10 MTSF Priorities 12 Key Outcomes 8
MDGs 1.Speed up economic growth and transform
economy to create decent work and sustainable livelihoods
Decent employment through inclusive
economic growth (4) MDG 1
MDG 2, MDG 3 MDG 8 2.Massive program to build economic and
social infrastructure An efficient, competitive and responsive
economic infrastructure network (6) MDG 1 MDG 3 MDG 8 3.Comprehensive rural development
strategy linked to land and agrarian reform and food security
Vibrant, equitable, sustainable rural communities contributing towards food security for all (7)
MDG 1 MDG 2 MDG 7 4.Strengthen the skills and human resource
base Skilled and capable workforce to support
an inclusive growth path (5) Quality basic education (1)
MDG 2
5.Improve the health profile of society A long and healthy life for all South
Africans (2) MDG 4
MDG 5 MDG 6 6.Intensify the fight against crime and
corruption All people in South Africa are and feel
safe (3) MDG 2
MDG 3 7.Build cohesive, caring and sustainable
communities An efficient, effective and development-
oriented public service and empowered, fair and inclusive citizenship (12) Sustainable human settlements and improved quality of household life (8)
MDG 2 MDG 3 MDG 7
8.Pursue regional development, African advancement and enhanced international cooperation
Create a better South Africa, a better
Africa and better world (11) MDG 8 9.Sustainable resource management and
use Protect and enhance our environmental
assets and natural resources (10) MDG 2 MDG 3 MDG 7 10.Build a developmental state including
improvement of public services and strengthening democratic institutions
An efficient, effective and development- oriented public service and empowered, fair and inclusive citizenship (12) Responsive, accountable, effective and efficient Local Government System (9)
MDG 1 MDG 2 MDG 3 MDG 8 Source: Compiled from Department of Agriculture Forestry and Fisheries, 2012, and Statistics South Africa, 2010.
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South Africa has, in addition, aligned its national development planning to the Millennium Development Goals (MDGs) (Table 3.2) discussed in the context of local economic development in Africa (section 2.5). According to Olivier et al., (2010), the first Medium Term Strategy Framework (MSTF) priority relates to MDG 1 (the eradication of extreme poverty and hunger), while the objectives linked to the fourth MSTF priority, strengthen the skills and human resource base, relate to MDGs 2, 4, 5 and 6 (universal education, reduction of child mortality, improvement of maternal health, fight HIV and AIDS, malaria and other diseases). These authors are of the opinion that, MDGs 7 and 8 (ensuring environmental sustainability and development of a global partnership for development) do not form part of the main South African MSTF priorities which focus on: reducing inequality; eradication of racism and sexism; improving access to basic services; and improving the safety of citizens. However, the MDGs Country Report (StatsSA, 2010), clearly integrates all South African MSTF priorities as illustrated in Table 3.2. Based on current trends, the country will not reach the MDGs for child mortality (Goal 4), maternal mortality (Goal 5), and HIV/AIDS, malaria and other diseases (Goal 6) by 2015 (Financial and Fiscal Commission, 2011). Thus it is evident from Table 3.2 that the fifth MSTF priority of improving the health profile of the South African society will not be achieved within the prescribed time frame.