Grade 11 Economics

Grade 11 Economics, Paarl Boys High
Radical socio-economic Transformation
An essay on political and economic change in South Africa
Kent Fobian
9/1/2018

Abstract
This essay will define the political, social and economic landscape of South Africa, and seek to understand the concept of radical socio-economic transformation, the context from which it arises, and how various political parties in South Africa relate their policies to it. Within this essay I will also discuss my own interpretation of the challenges that South Africa faces going into the future, and how the government should go about achieving equality for its citizens.

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I. Introduction: The context of South Africa
“The national wealth of our country, the heritage of South Africans, shall be restored to the people; the mineral wealth beneath the soil; the banks and monopoly industries shall be transferred to the ownership of the people as a whole; all other industries and trade shall be controlled to assist the well-being of the people.”
A promise, given to the South African people when the African National Congress and its members pledged to fight for a new South Africa in 1955 through the establishment of the Freedom Charter, and although a promise which great progress has been made towards achieving , still has not been fully realised. This promise of social, economic and political equality is perhaps the main goal of the post 1994 democracy of South Africa, and while that democracy has done well to ensure political equality, economically the South African society is still deeply unequal.
The Gini coefficient, a statistic used to measure the inequality in a country (where 1 being completely unequal and 0 being totally equal) sits at a staggering 0.70 in terms of South Africans’ income and 0.95 in terms of their wealth. This is in the context from which the term “radical socio-economic transformation” arises, and a context which provides many challenges for any political party in today’s South Africa.

II. Content
a. A deeper look at context
We’ve already established that South Africa has a problem with inequality, but where exactly does this inequality come from? Which citizens’ own the wealth and income? In order to answer these questions we need to look at the history of the country, one which I’m sure any South African reading this is familiar with. The political system of apartheid structurally altered the economy to exclude people of colour in South Africa, the majority of the population, from accessing mid to high level incomes and any ownership of wealth, leaving the white majority not only in political control, but economic control as well.
While a lot of programs such as the NDP (National Development Plan) and GEAR (Growth, Employment and Redistribution Programme) have seeked to remedy this, their success has been limited. The systemic manipulation of the apartheid government still influences the economy today, particularly when looking at the labour force. If we refer to the graphs below, despite making up a small minority of the population, white males are recruited more than any other race in South Africa. Looking further to the management positions and promotions of workers, we again see a disproportionately large representation of white males.

What we can conclude from these graphs and statistics, is that in the context of South Africa the high earning occupations and the opportunity to reach them is still limited for the majority of the population.

Figure 1,2,3 showing the participation in the labour force referring to specific demographics
b. Radical socio-economic transformation
The above discussed context is where the term “radical socio-economic transformation” originates from, but why ? What correlation and causation exists between the use of this term and the context of the South African economy ? Perhaps the biggest promise the then newly elected 1994 ANC made to the citizens of South Africa, was that they would redistribute the wealth so that the opportunities and ownership were more evenly distributed across all races.
While there has been some progress towards this in the past 20 years, it has happened extremely slowly and not substantially enough. Unemployment and poverty rates are still extremely high, and the inequality in South Africa has actually increased from 1994 if we look towards the Gini coefficient.

“After the advent of democracy in 1994 the African National Congress (ANC) pledged restitution, usually in the form of land, for those expelled from their homes and for labour tenants. Mr Mshengu lodged a claim in 2000. In 2007 the Land Claims Court said he met the relevant criteria. Yet deeds never arrived. Despite many petitions the authorities failed to act on his claim. On August 13th Mr Mshengu died, aged 104. “He believed he would die a landowner,” says Mandla Mshengu, his youngest surviving son.” – The Economist
As we can see from the above article piece, a lot of South Africans have been disappointed by the government in terms of changing their economic standing. This is largely due to the complicated and oftentimes controversial process of redistributing wealth and including people into the job market. Despite the enormous amounts of bureaucracy surrounding such policies, a lot of people stand against them, proportionate with how radical the policies are. Whether it is true or not, if you were tell someone we need to give land to this group of people or include this group of people into the economy, they immediately assume that means you’re taking away land or excluding someone else. This is particularly a scary notion for prospective investors in the South African economy.

This has caused a great amount of friction towards any policies seeking to achieve economic change ( refer to the devaluation of the rand when such policies are announced), and the ones that do land up being passed are thus watered down and quite moderate, and rely mostly on Keynesian economics (government spending in the economy) to try and create jobs and include more South Africans in the economy.

Thus, because the government is dissuaded from being too radical in trying to implement change, the rate of change has been quite slow. As a result there is a great cry from the people for a more radical form of change (perhaps best exemplified by the formation and substantial support of the Economic Freedom Fighters, a more radical political party than the ruling ANC), and this cry grouped with the cries for increased service delivery is what I would argue is the source of the term radical socio-economic transformation and what it adresses.
Because in reality when the term was used by President Hon. Jacob Zuma, there was a vagueness surrounding its true meaning in terms of what policies would be implemented. Even the Chairperson of the African National Congress, Stephan Grootes, admitted in an interview around the time that there was still no clarity around the phase, but he was sure once it was defined the people would rally behind it. It’s therefore up to the individual to interpret what exactly our previous president meant, but what I would argue he was referring to is an initiative from the ruling party to be more radical in their pursuit of empowering the previously disadvantaged, to increase both their social and economic standing.

I would say that my claim is justified, because at the heart of it, President Hon. Jacob Zuma was a politician, and it is within a politicians best interest to align his goals and aims with what the people want which at the time was more radical changes in their standard of living and economic inclusion
Thus, radical socio-economic transformation, refers to a more radical focus on fixing the issues of not only unequal distribution of income and wealth between races, but also the solving of such issues like unemployment and poverty, which are oftentimes closely linked.

Figure 2 President Hon. Jacob Zuma, speaking on radical economic transformation