Mr President, as you are well aware, our inter-governmental system is not yet fully geared to deliver on this approach in a coherent and effective manner. The recently debated IGR Bill provides a giant leap forward in resolving some of the key problems. However, what remains lacking, despite the advance on institutional architectures coming through in the IGR Bill, is a more nuanced understanding of our inter-sphere governmental system in terms of building a developmental state.
I want to use my presentation to the esteemed House to focus on the informing elements of a developmental state and make a case for how we are to understand the role of Provinces.
Developmental State
As a Unitary State that has to deal with the deep historical legacies of colonialism, slavery and apartheid, we must all acknowledge the importance of a strong national centre that can define policy direction with the benefit of a macro perspective, especially in a context of intensifying processes of globalisation. The national programme of action stands testimony to the fact that national government has taken this role seriously and over the course of a decade, refined a comprehensive gamut of policies and programmes. More recently, this has been further refined through the scenarios exercise of the Presidency to force us all to think whether what we are currently doing today, will in fact result in the kinds of futures in 10, 20 years time that we envisage in our national policies.
However, excellent national policies will dissipate in the absence of effective implementation on the ground where our people struggle to eke out sustainable livelihoods in a context of structural unemployment and deep poverty. This is where the local government sphere comes into play. At its core, the developmental role of municipalities is to ensure the concrete delivery of appropriate goods and services to our people in a manner that cements our people's contract at a community level. It is also around these delivery imperatives that local government can be a vital access points for the exercise of democratic citizenship by shaping, through partnerships, the content and speed of local delivery programmes through appropriate participatory mechanisms. By definition municipalities focus on their juridical boundaries, which is both a source of strength and weakness; A strength because it allows for tactile engagements with ordinary citizens and their organisations; A weakness, because it can make municipalities parochial and many of our development strategies and programmes require taking a broad view to understand the complex inter-relationships between economic, social, environmental and logistical factors that are at play at various geographic scales. On this note, let me introduce a discussion on the meso scale of development, which is the essence of the Provincial Government's role. I do so at the hand of the experience in the Western Cape where local municipalities give the go ahead to golf course development based on their imperatives, but in the absence of a meso-interventions, they proliferate golf courses at the expense of long-term water supply, incursions into agricultural land, etc.
Developmental Role of Provincial Government
Provincial Government is the interlocutor between the macro and micro by focussing on the meso factors in our national development effort. Provincial governments fulfil a vital role in translating the national development agenda into contextualised provincial frameworks. An axiom of sustainable human development, as we all know, is that development must be context-specific if it is to succeed. Abstracted, de-contextualised blue-print development frameworks simply fail. A key role of Provinces is therefore to ensure national consistency in our development efforts but at the same time to set the frameworks for localisation and integration. Mr President, I am obviously getting into the area of institutional systems that underpin our developmental state. I raise this because I believe that the absence of an understanding of institutional linkages in the national development planning system can lead to false dichotomies between spheres of government and areas of development (e.g. economic growth versus poverty reduction, when these should be two sides of one coin).
Let us make this more concrete. If we look at the area of economic growth and development - surely our most urgent priority - it is clear that national sets the macro-economic framework and supply-side support mechanisms. Municipalities, through LED strategies seek to activate support mechanism for small and emerging businesses so that they can migrate from the Second Economy to the First. However, in-between these spheres, Provinces must set sectoral growth strategies that can speak to the natural growth points that tend to spread across particular regions. The sectoral strategies work in terms of the national macro-economic framework and simultaneously inform local LED strategies. However, if we are to ask whether Provinces are currently being empowered financially to fulfil this vital interlocutor role, I believe the answer is: maybe not!
Since this is a serious contention, please allow me Mr President to qualify this assertion by referring to the bruising process of the medium-term budget adjustments we are going through at the moment. As you are aware, the formula for the equitable share has been revised. In essence it boils down to a ratio of poverty to economic growth that is: 3:1. In other words, economic growth and social development becomes a lot less important in terms of Provincial Government's role. Instead, there seems to be an assumption that Provincial Governments must focus on agency functions pertaining to poverty alleviation, i.e. Health, Education and for a short time still, provision of social grants. If this becomes 90% plus of what Provincial Government is foreseen to be suitable for, frankly Mr President, we might have to talk about Provincial Administrations or Agencies as opposed to Provincial Government.
Mr President, let me not make a case through what may be regarded as lamentation, but rather demonstrate the dangers of this path by referring back to the implementation of the National Spatial Development Perspective (NSDP) that emanate from the Presidency in relation to our vital challenge of growing the economy. If we recall, the four principles of the NSDP are as follows:
- "Economic growth is a prerequisite for the achievement of other policy objectives, key among which would be poverty alleviation.
- Government spending on fixed investment, beyond the constitutional obligation to provide basic services to all citizens (such as water, electricity as well as health and educational facilities), should therefore be focused on localities of economic growth and/or economic potential in order to attract Private-sector investment, stimulate sustainable economic activities and/or create long-term employment opportunities.
- Efforts to address past and current social inequalities should focus on people not places. In localities where there are both high levels of poverty and development potential, this could include fixed capital investment beyond basic services to exploit the potential of those localities. In localities with low development potential, government spending, beyond basic services, should focus on providing social transfers, human resource development and labour market intelligence. This will enable people to become more mobile and migrate, if they choose to, to localities that are more likely to provide sustainable employment or other economic opportunities.
- In order to overcome the spatial distortions of apartheid, future settlement and economic development opportunities should be channelled into activity corridors and nodes that are adjacent to or link the main growth centres."
The point about the NSDP principles is that it will take tremendous political will and managerial steel to achieve programmatic and budgetary shifts in line with this spatial vision. Due to the inherently narrow geographical focus of municipalities, it is vital that the strategic trade-off's mentioned in the Ten Year Review, is mediated at a meso scale. This will be a vital element of the developmental role of Provincial Government over the next period. The NSDP further intimates that Provincial Growth and Development Strategies will become muscular policy frameworks that can inform complex trade-off's rooted in a sound regional spatial understanding. However, to fulfil this role requires of that Provincial Governments are allowed to fulfil their constitutional mandates to the full and be empowered to pursue key concurrent economic functions listed in Schedule 4, such as agriculture, industrial promotion, public transport, tourism, trade, regional development and planning and urban and rural development.
Yet, the message sent by budget allocations and the choices Provinces has to make leave provinces no significant development role other than rendering basic services like education, health and social (welfare) services, and only when there is money left over, of developmental services. This is a recipe for imploding the developmental state even before it has had a chance to mature. If we fail to evolve the specific role of each sphere of our Unitary State, the whole of government will suffer.
Mr. President, we are serious about contributing to the debate raised in the Ten Year Review, which states that what is: "required are both focus and decisiveness on the part of government, [?] to weigh trade-offs and make choices, as well as strategies to inspire all of society to proceed along a new trail?" Our belief is that unless we have a shared understanding of the nature and inter-sphere dynamics of the developmental state, we are unlikely to fashion and implement development strategies that will deliver on our people's contract.
In Conclusion
In conclusion, Mr President I have tried to argue that if our primary focus is, correctly, economic growth and job creation to expand the First Economy to catapult people out of the Second Economy, then we need to be clear about the vital role of Provincial Governments. Our core business demands of us to span regional economic growth and developmental interventions that build a meso-macro link between provincial growth and development strategies to the overarching national macroeconomic policy framework. Furthermore, we will build the relevant meso-micro links to empower municipalities to fulfil their developmental functions. This is the interpretation reflected by iKapa Elihlumayo - our provincial growth and development framework -which is the vehicle that will get all our people in the Western Cape to our vision of "A Home for All".
I humbly thank you.
