CEO of the HSRC, Dr Olive Shisana
HSRC Council Member, Mr Ever Motala
President of the Black Management Forum and Director-General of Department of Labour, Mr Jimmy Manyi
Professor Charlotte du Toit, Pretoria University
Professor Ben Turok, Member of Parliament,
Dr Themba Masilela
HSRC Executive Directors, Directors and Researchers
Distinguished guests
Ladies and gentlemen
We are all gifted with hindsight and, when we look back on our behaviour leading up to the ongoing global financial crisis, we can see that many of us behaved unwisely, mostly because of our faith in institutions and experts that turned out not to be as reliable as we had thought.
For instance, we were convinced that the world markets were inviolate, that they had established an unstoppable positive momentum and that this would create unending growth and prosperity. What we did not know was that large banks were lending colossal sums of money which they did not have, to a huge group of people who were fundamentally unable to repay them. This was the sub-prime crisis that precipitated the great fall, and left billions of people suffering.
Now we must pick up the pieces, or, as the title of this conference suggests, we must find a way to respond to the global economic crisis, and closely examine how the human and social sciences can contribute to social protection, growth and nation building.
One of the first things that we have to recognise is that human and social scientists have not been blameless in this matter. While we have been led to believe that science is the solution from everything from the production of chewing gum to the construction of satellites, we are all aware that not only did scientists not predict the collapse of the currency markets, but they are also experiencing great difficulty in plotting a plausible timeline for financial recovery, much less finding ways to accelerate it. Meanwhile, as always, it is the poor and resource-challenged who suffer the most.
But, amid the turmoil, there are some grounds for optimism, partly to do with the possibility that Africa might capitalise on its comparative isolation and, not having been among the larger shareholders in growth, might now benefit from having a proportionately smaller share in the fall.
There has also been a significant refocus on the role of government. If we look at the United States, for example, we see that government, long castigated as the enemy of enterprise, is now, rightly, seen as the salvation of enterprise.
Nonetheless, the economic crisis, and its accompanying philosophical shifts will inspire searching questions in the form of civil-society activism, and these questions will require public policy responses that should be informed by the widest possible interrogation, which will require the committed and proactive involvement of the entire human and social science research community.
Several important questions will be asked at this conference.
* In the context of newly identified risks, how can African countries pursue policy and programme options that ensure social protection, growth, national building and regional integration? In other words, can we, in Africa, find a productive way forward that encourages growth, both for ourselves and our neighbouring countries, while protecting the vulnerable against economic hardship?
* What new global governance, economic and financial systems are appropriate to address the challenges of today? Are we brave and smart enough to blaze a new pathway out of the economic wilderness, or is this a pipe dream? Can we persuade our neighbours and our main trading partners to join us in our endeavours?
* What issues in the relationship between global, regional and local knowledge production have been highlighted by the crisis? For example, is globalisation all that it's been made out to be? Are we in a situation where all the lifts in the building are linked to one another, so that when one goes up, all of them go up, and vice versa? If so, is this a good thing?
* What changes in the relationship between research and scholarship, on the one hand, and national priorities and policymaking, on the other, are being occasioned by the crisis? This is a question each of us has to ask ourselves. Is my work up to these challenges? Do I have to change or modify the way I think and what I'm doing in order to make a real difference?
* In which ways has knowledge production in the human and social sciences contributed to the crisis?
* Have we been too self-satisfied with our achievements? Have we overlooked the possibility that we might be wholly or partially wrong? Have we distanced ourselves from the impact of our own shortcomings? Should we be looking to disadvantaged people and communities for answers?
* How will the global crisis shape the work and workings of the HSRC? One thing is for sure. What we're talking about here is not academic or abstract. We're talking about people starving, people being beaten to death, people turning to crime because they don't have jobs. If we are to find realistic solutions we will have to face these facts. If that means a change in the way we work, it will be a change for the better.
* Can the HSRC become even more innovative, flexible and creative in its work? This is the nub. If we are tasked with designing a car we can dazzle people with our knowledge and expertise, but until that car is on the road, competing with other cars in terms of petrol consumption, top speed, comfort, styling, and value for money it's all pie-in-the-sky. The HSRC's job is to design a country. When can we take it for a test drive?
These are important questions, and although they are framed in terms of scholarship and policy-formulation, I stress again, they are not academic issues.
When a poor person gets a job it is an achievement, and there is great rejoicing in their household. When that someone loses a job it has a disastrous impact on their household and increases poverty in the wider community. It undermines a household's ability to buy basic supplies and may have dire consequences, like children being pulled out of school, or not getting enough to eat. This, in turn, undermines the next generation's chances of moving out of poverty or contributing to economic growth. Vulnerable households can easily end up in a vicious cycle of chronic, intergenerational poverty. Constant increases in fuel and food prices are too often almost impossible to deal with. Coping with these body-blows is a daily challenge to millions.
This is why we have social protection.
Social protection acts to mitigate against the impact of poverty, theoretically at all times, but particularly during economic crisis. Our government believes that it is important to prevent people falling into poverty; important to prevent the existing poor and vulnerable from falling deeper into poverty; and important to empower poor people to capitalise on and benefit from economic recovery when it occurs.
How to do this more effectively and more consistently, with a finite budget and without overstepping inflationary guidelines, is an issue worthy of the best thinking of the HSRC.
What is the role of government in this critical issue?
In February 2009 all stakeholders at the Presidential Economic Joint Working Group identified and adopted five key principles as the framework for South Africa's response to the international economic crisis. These are as follows:
1. To recognise the potential for harm. Obviously our primary concern is the potential of economic shocks to undo the work of the past; to destabilise the welfare of the vulnerable; to erode their work prospects, their health and education; to encourage the spread of inequality and poverty. We will do everything we can to prevent or soften these specific effects.
2. To strengthen capacity. We must ensure that all of our activities that are aimed at improving the economy's ability to grow; and creating and protecting decent jobs.
3. To encourage increased investment. We must, at all costs, sustain the planned high levels of investment in public sector infrastructure; encourage the private sector to maintain and improve their levels of fixed direct investment, and vigorously continue with corporate social investment programmes.
4. To plan imaginative interventions, which must be timely, tailored and targeted, as well as informed by the best science and research.
5. To stimulate the manufacturing sector. Bold initiatives, like the broad-based stimulus package signalled in the recent budget, with economic and social dimensions, will help. South Africa's diversified manufacturing base has shown its resilience and ability to compete in the global economy, and this can be an important platform, both for stimulating the growth of other economic sectors, such as the service sector, and for achieving specific outcomes, such as employment creation and economic empowerment.
The framework has been lauded as an example of how countries can respond to the current financial crisis in a sustainable manner. However, the central challenge remains that of ensuring the timely implementation of the measures agreed to. Importantly, several concrete programmes to implement the framework decisions have been developed through engagements with social partners.
In addition, the parties to the framework recognise the opportunities offered by green technologies and industries to combat the negative effects of climate change, and believe that South Africa should develop strong capacity in these fields. For this reason incentives are to be developed to encourage investment in a programme to create significant numbers of "green jobs".
The framework has his to say on South Africa's response to the international economic crisis:
We need social solidarity between all South Africans to ensure that the crisis does not damage the fabric of our society. Those with greater means have a responsibility to those without such means. Our collective responsibility is to work together to withstand the crisis and ensure that the poor and the most vulnerable are protected as far as possible from its impact. We must also ensure that the economy is ready to take advantage of the next upturn and that the benefits of such growth are shared by all our people.
Present-day South Africa, through the very circumstances of its formation, has a well-developed and advanced system of social dialogue, a strong institution in the form of the National Economic Development and Labour Council, and a tradition of working together as constituents to address the social challenges. Ihave no doubt that in addressing the current crisis our people will show a shared sense of moral purpose. We will have to, for although the levels of unemployment and poverty have decreased in recent years, the conditions of the poor and the vulnerable remain perilous, and this simply must be addressed directly and swiftly, through employment-creation programmes, promoting sustainable livelihoods, through public investment, and effective social relief and support.
To achieve our aims we will almost certainly have to consider structural reforms.
In responding to the crisis, developing countries, in particular, have sensed an opportunity to reform the global financial and economic regimes and to increase their influence and participation in the decision-making processes and governance structures, like the Bretton Woods institutions. The role of the United Nations and its Member States is today more important than ever in the ongoing international discussions on reforming and strengthening the international financial and economic system and architecture.
It is also recognised that protectionism and the retreat of investments, a direct result of the economic crisis, represent a serious threat to Africa. It is therefore critically important not only to find appropriate and effective methods to curb the crisis, but to accurately assess its future impact on employment, trade, investment and development, including the probable effects on the Millennium Development Goals.
It is inevitable that there will be fundamental reforms in the global financial system. Earlier this year Joseph Stiglitz, Nobel Laureate in economic sciences, said that the only question is whether these reforms will occur in a random and ad hoc way or if they will be orderly. He pointed out that the crisis had exposed flaws and instabilities in the global economic system and in globalisation that would make a return to the world of the past impossible. Global action is critical, and every country, rich or poor, will have to find a way forward. Stiglitz argues that "there is no certainty except the certainty that we can and must do better than we have".
For growth, prosperity and progress to benefit everyone, they cannot be based on patterns of insatiable greed and consumption, but should be grounded in sound internationally-regulated financial institutions. These institutions should enable inclusive and people-centred development policies; fair and equitable trade regimes; ecological and sustainable food systems; and labour regimes that address the specific needs of women.
I would like the HSRC to take Joseph Stiglitz's remarks as a challenge. For too long, the approach of many of us has been to question what we, a small country at the south end of Africa, can hope to achieve in a high-tech world of over six billion people. But we should not forget that more than half these billions are in the same spiral of poverty and deprivation that we seek to put an end to here. We should see our country as the ideal laboratory in which to develop effective and lasting solutions to the meaningless lives of those who have no jobs, no food, no skills and no hope.
You are this hope. I urge you to listen carefully to what each participant has to say. Don't be too quick to dismiss ideas that don't fit in with your preconceived patterns; open your minds, open your hearts, mingle, network, absorb, speak your mind. Your country needs positive and effective action in the field of human sciences – which is nothing more nor less than the science of growing this nation to prosperity. And you are its best hope to achieve that aim.
I wish you luck and resolve.
Thank you.
Issued by: Department of Science and Technology
17 September 2009
Source: Department of Science and Technology (http://dst.gov.za)
