South Africa’s Incomplete Transition: UWC hosts World Bank’s Dr Marek Hanusch
“South Africa is one of the most unequal societies in the world, and in spite of progress made since 1994, the legacy of exclusion persists; the transition remains incomplete.”
So said the World Bank’s Dr Marek Hanusch, speaking at the Institute for Poverty, Land and Agrarian Studies (PLAAS) at the University of the Western Cape’s Faculty of Economic and Management Sciences on 30 May 2018.
That incomplete transition is the subject of Dr Hanusch’s book, An Incomplete Transition: Overcoming the Legacy of Exclusion in South Africa. According to the World Bank Group’s (WBG) recently-released Systematic Country Diagnostic for South Africa, progress has been made since 1994 to address the legacy of exclusion in this country, but much more needs to be done.
The report is the result of two years of work undertaken by the World Bank Group, in partnership with the SA National Planning Commission, with input from several South African academics. The Diagnostic was prepared in conversation with South Africans in government, the private sector, unions, the youth, and many more.
“Although we contributed a large amount of new analysis, we perhaps learned even more from these conversations,” Hanusch noted.
The idea was to identify the binding constraints to the WBG’s twin goals: eliminating poverty in a generation, and boosting shared prosperity.
The five constraints identified are:
- Insufficient skills to meet the challenges of a globalised economy
- Skewed distribution of productive and land assets (combined with weak property rights)
- Low competition and low integration in global and regional value chains
- Limited or expensive access to crucial services, and underserviced historically disadvantaged settlements
- Climate change: the challenge of the transition to a low-carbon economy and water insecurity
“I have noticed that these constraints do not seem to surprise many South Africans - which I take as a reflection of having captured what we learned in our conversations,” Hanusch said.
Perhaps the biggest issue - and again, one that will not surprise many South Africans - is this: jobs.
Job creation in South Africa has been too slow since 1994, the report notes, and the country remains the world’s most unequal, with many experiencing economic and social exclusion, putting pressure on the social contract.
“Symptoms of the weak social contract includes low investment, low growth, unemployment, a volatile exchange rate, student protests, rating downgrades, crime and state capture,” Hanusch said.
A Long Transition: Dealing With the Root Of The Problem
Hanusch, a senior economist in the World Bank’s Global Practice for Macroeconomics, Trade and Investment, has a strong professional and academic interest in fiscal and debt sustainability, structural policies for economic growth and poverty reduction, and economy.
“I am German,” Hanusch noted. “I know from my own country’s experience that the promise of a better future can only be upheld as long as there is progress that lends credibility to that promise. The slower the progress, the weaker the promise becomes.”
South Africa can achieve more inclusive and sustainable development with coordinated reforms across a broad range of areas to address constraints to reducing poverty and inequality.
“Change rarely happens overnight, but it can be accelerated - especially if we tackle the root causes of problems,” he said. “It took my country perhaps 20 years to overcome its separation, and there are still many divides. I am keenly aware that given the much deeper historical divisions in South Africa, overcoming the legacy of exclusion under apartheid will take even longer.”
“Dealing with historical exclusion and climate shocks will support progress toward Vision 2030 of the National Development Plan, and ultimately toward reducing poverty and inequality in South Africa.”
WATCH: Dr Marek Hanusch discussing An Incomplete Transition on SABC: