The global mood going into this year’s World Economic Forum (WEF) in Davos later this month is one of “resilient dynamism”, a recognition on the part of global economic decision-makers and opinion-formers that things have to be done differently.
Lee Howell, the managing director of the WEF, this year said: “At one level you have to be resilient because there is going to be another shock… we live in a very interconnected world. We now need leaders to go out and not really play defence, but offence. To deal with the risks you have to take risks.”
At the end of the day, resilient dynamism is what makes some countries bounce back from unexpected economic shocks. For example, despite beginning to emerge from the global financial crisis, there will inevitably be unforeseen man-made or natural disasters that conspire to work against us globally.
One only has to remember last year’s earthquake and tsunami in Japan that had a dramatic impact on global energy and nuclear strategies, and as a result, global economies. The less positive side of global interconnectedness is that as nations, we can all potentially be affected by major shocks around the world.
So what will be the next shock? It could be the continuing economic fallout from the euro zone and Spain, or the precipice that is the fiscal cliff in the US, or problems with Iran.
It is impossible to determine with any accuracy where the next global economic shock could come from, as there are always external variables that can take us by surprise, but the trick is to be able to bounce back from them and emerge stronger.
If the term resilient dynamism means being ready to meet the challenges of the next crisis, then what South Africa needs to do to prepare itself is to be more dynamic in its approach; to take the necessary risks and tackle the great underlying problems that continue to face the country and hamper its economic growth potential.
Howell recognised this fact and said: “We need to focus on finding this dynamism because if we are preoccupied with looking for the next great external shock, we end up with policy paralysis. This inertia is what we have in Europe at the moment as we lurch from crisis to crisis and do not share a vision to get out of the more troubling structural issues that remain.”
Our leaders need to take some risks to move ahead and break through the policy log-jams. For example, in South Africa, there are issues that the government has recognised and has, or is, establishing policies to deal with these. The problem of reviving economic growth, while making sure that it tackles the major crisis of youth unemployment in the region, will be vital. Other major underlying issues in South Africa and Africa as a whole include ensuring energy, food and water security.
In South Africa, we need to look to the National Development Plan (NDP) to provide a possible key to unlocking our own resilient dynamism. By eliminating poverty and reducing inequality by 2030 through uniting all South Africans, the NDP has the power to positively unleash the combined energies of its citizens to grow an inclusive economy, build capabilities, enhance the capability of the state and leaders and work together to solve the complex problems that we are facing today and in the future.
This notion was reinforced by President Jacob Zuma when he delivered the ANC’s annual statement on January 8 on behalf of the national executive committee (NEC). He said decisive action was required to thoroughly and urgently transform the economic patterns of the present, in order to realise “our vision for the future”.
He urged all South Africans to unite behind the NDP, which sets out various measures to tackle unemployment, poverty and inequality. He said the government was already implementing some of the key programmes of the NDP, such as the New Growth Path and the Infrastructure Development Plan.
“The infrastructure development plan has introduced the national and central coordination of the building of dams, roads, bridges, power stations, schools, hospitals, two new universities and other infrastructure that will change the landscape of our country and the lives of our people.”
He also said the government would accelerate the implementation of all 18 strategic infrastructure projects, especially those directed at the 23 poorest districts in the country, ensuring the provision of water, electricity and sanitation, changing the lives of approximately 19 million people. He added that the private sector should view the infrastructure programme as an opportunity to partner with the government for sustainable development and job creation.
Some of the critical milestones of the NDP to be achieved by 2030 include the elimination of poverty, the reduction of income inequality in the country, the increase in employment for citizens, the raising of per capita income and the increasing of the share of national income of the bottom 40 percent in the country.
To achieve these ambitious goals, the NDP will look to implement a number of critical actions. Firstly, it will develop a social compact to reduce poverty and inequality, and raise employment and investment. Secondly, a strategy will be developed to address poverty and its affects by broadening access to employment, strengthening social wages, improving public transport and raising rural incomes. Thirdly, steps will be taken by the state to professionalise the public service, strengthen accountability, improve co-ordination and prosecute corruption. Next, a move will be made to boost private investment in labour-intensive areas, competitiveness and exports, with adjustments to lower the risk of hiring younger workers.
Around the globe, nations that are effectively creating resilient dynamic environments capable of weathering economic storms, recognise the need to build a solid future for their young people.
South Africa has an urbanising, youthful population and this presents an opportunity to boost economic growth, increase employment and reduce poverty. Acknowledging that it is often young people that suffer the consequences of global and local economic shocks and, as a result, battle unemployment and lack of access to opportunities, the NDP has used a “youth lens” to ensure their concerns and challenges have been taken into account.
The African continent is rising, and the benefits to South Africa as a lead player on the continent could be similar to those seen so dramatically in other Brics countries such as India and China. No country plays a bigger role than South Africa in shaping the continent’s economic future. Accounting for a quarter of Africa’s gross domestic product, it is the dominant market on the continent and serves as the gateway to a dozen neighbouring nations. And for all the problems that still exist, a recent survey found investors in Africa are overwhelmingly positive.
It is time to recognise the emergence of the new Africa and to position South Africa at the forefront as a country that recognises the value and power of resilient dynamism to move ahead of the pack.
Miller Matola is the CEO of Brand South Africa. This article first appeared in Business Report.