Professor Hamman
Mr Francois Bonnici
Ms Bulelwa Makalima-Ngewana
Distinguished delegates
The world is facing a series of complex challenges that threaten humanity on a number of levels. In many ways, we should agree that simple, linear decision-making belongs to the past century. The increased connectedness ushered in by the era of globalization and technology advancements has created unprecedented opportunities, and risks that were hitherto unforeseen. In fact we lack the skills for decision-making on complex and systems processes. In diverse fields such as medicine, communications, transport, agriculture, energy production, etc., innovation has delivered remarkable benefits. However, the same forces have increased risks and vulnerabilities.
The global economic vulnerabilities were exposed during the 2007/8 financial crisis and the world economy has not fully recovered from its ravages. What started as a financial crisis in the banking system of the United States, quickly spread to the rest of the economy and to different parts of the world. Jobs were wiped out and livelihoods destroyed within a short period of time. We have to reflect on the fact that that the collapse of a bank in the United States has created part of the problem that has brought down the system
Some economists estimate that it may be only after 2017 – a decade later – that the world economy returns to pre-crisis levels of growth. It will have to be an economy that looks very different to the one that the world lived off going into that crisis.
Through our trade and investment links with the severely affected economies of Europe and United States, our economy was also affected; nearly a million jobs were lost; and our country is going through a protracted period of slow economic growth.
Other complex problems facing the world include the impacts of the problem of resource utilisation, climate change, the provision of healthcare, food insecurity, income inequality and youth unemployment. If we take a single resource element like the ocean and look at the depletion of protein sources, changes in the pH, oxygen-depreciation and biodiversity concerns, then we must begin to understand the extent of the problem. If we address similar issues in the terrestrial sphere, we see stark comparisons.
The models we have relied on to respond to these challenges are proving inadequate. We should understand some of the advances that previously seemed superior are now dated and realise how close to the precipice we are. Advances such as the closing out of privacy – what does it mean for decision-making? What does it mean in law and how do we apply the skills that we have in order to solve the problems?
The problems are compounded by the breakdown of trust between those who have the means to make a difference and those who face the consequences of inaction; between rich and poor countries; between the rich and poor within countries; between governments and citizens; between workers and employers; between the employed and unemployed.
I was privileged to serve on the Oxford Martin Commission for Future Generations which published its report on 16 October 2013. The Commission brought together a range of people with wide-ranging experience from across the world to try and understand the extent of the challenges that the world faces. I want to draw attention to five principles for action contained in the report that is designed to assist policymakers, business leaders and other decision-makers.
They include:
- Investing in multi-stakeholder partnerships to prompt deeper change, learning and practical action. There cannot be a single sector that solves problems; it has to be a combination of government, NGOs, business and labour
- Ensuring that the 21st century institutions and measurements are open, fit for purpose and steered towards long-term resilience. Many of the decision-making institutions that we have in the world were established at the end of World War II such as the UN, the World Bank and the IMF. It is a generation of institutions built for a very different era with the power to take key decisions resting in the hands of a few countries that had been historically dominant.
- Adjusting political, legal and economic structures in favour of future generations. The generation of ‘baby boomers’ has consumed more than its fair share leaving very little for the current ‘baby bust’ generation. How we invest for future generations through a whole range of institutions is fundamentally important.
- Fostering a more inclusive and empowered society by prioritising and accelerating efforts to address child poverty and create new employment and training opportunities for young people.
- Establishing a common platform of understanding – noting that the ability to address today’s global challenges is undermined by the absence of a collective vision for society.
These principles are as important for global challenges as they are for domestic challenges and can be applied to any situation anywhere in the world. We need to recognise that the same lack of vision, the same short-termism, the same inability to take forward ideas, to recognise what inclusion is about, is at the epicentre of so much of what is wrong with the world right now.
The question about how we select the wicked problems that we should discuss has to some extent been made for us by the Constitution. There are commitments made in the Preamble to the Constitution that was drafted by a previous generation who had, in fact, demonstrated some vision. There is a clause that asks us to raise the living standards of all South Africans and to free the potential of each person. It requires a set of active measures.
How do you raise the living standards? What measures do you use and how do you free the potential? How do you even know that the potential exists when opportunities have not been made available? How do we respond to the constitutional imperative? What informs the values that we live by? The writer Tony Judt says that we need to be a little harder on ourselves.
He says:
“What of exclusion, opportunity – or its absence – or lost hope? Such considerations mean much more to most people than aggregate or even individual profit or growth. Take humiliation: what if we treated it an economic cost, a charge to society? What if we decided to ‘quantify’ the harm done when people are shamed by their fellow citizens as a condition of receiving the mere necessities of life?”
The question for this morning’s discussion is what are the kinds of issues that we need to apply our creative minds to? How do we innovate? Let me address five wicked problems with you. All of them are embodied in the National Development Plan.
Spatial divides
The first of these is, how do we reorder city spaces? I grew up in Cape Town, attended schools in the city centre and while I now live in Johannesburg, this is still home. So I know who lives in Bishopscourt, mainly; I know who lives in Bonteheuvel, almost exclusively; I know who lives in Khayelitsha, almost exclusively; I know who lives in Rylands, almost exclusively but it has been twenty years since the repeal of the Group Areas Act.
How does this present itself to us as a challenge? How do we re-order space so that it is far more friendly, engaging and creates accessibility and opportunities for people? How do we link up people differently between where they live and where they work? How do we link up people in different parts of the city with reliable, affordable public transport and not only the continuation of the old norms of dormitory townships but places where we can convene to recreate differently?
If we don’t put that very high up on our list of priorities of wicked problems in this city, in this country, we are selling ourselves short. It is quite easy for many of us to ignore the reality because we are able to get by without having to ever confront it. But there is a very different, very mean reality that people in the city wake up to everyday.
The housing gap market
The second wicked problem is in respect of housing and the housing gap market. We have made remarkable progress in providing housing to millions of our people. The majority of the beneficiaries are poor and unemployed people. This is correct because in a properly functioning housing market, employed people should be able to access a range of housing opportunities tailored to their income levels provided by the private sector. In our case, this appears not to be happening.
It is not possible to build a stable democracy that is inclusive and responds to the requirements of our Constitution when the majority of working people is excluded from housing. They earn too much to benefit from state housing and too little to approach a mortgage originator or a bank to negotiate a bond. Many of our working people are unable to afford houses that are available on the market. The rental market is similarly failing to close the gap due to excess demand and limited supply.
Unless we apply our minds creatively to resolving what is called the housing gap market in South Africa we are sitting on a powder keg. It is not beyond the pale, it does seem like it is a mathematically or otherwise, a difficult problem. We can also understand the challenge against the backdrop of what happened with the subprime crisis in the United States. Unless we think of how we deal with these issues flexibly, we will retain this terrible situation where we exclude the majority of people.
Even if there were enough houses, of the 19 million credit active people in South Africa, nine million have impaired credit records. That means they would not afford their houses in the medium to long term. Private investment into housing at the lower end of the market is slow and some private developers hold the view that inclusion of products affordable to the gap market will increase their risk and compromise project viability. Authorities are also not helping to mitigate this perceived risk.
If we look at the experience of many cities around the world such as the development of cities in the UK about a century ago or the development of French cities, we see how different skillsets come together to resolve these issues. It is one of those areas that we have not yet found adequate solutions to and here government, developers, banks, municipalities, environmentalists, town planners, universities and NGOs are just some of the stakeholders that have to work together to find innovative solutions to the problem of the housing gap.
Resource utilisation
The third wicked problem is one where I would like to bundle a few issues together and to talk about resource utilisation. There are issues such as electricity and bear in mind that we are up against the reserve margin for electricity generation. Issues such as energy where there is a lot of work going into paying attention to the supply requirements. A lot more work has to be done and it is an area fraught with difficulties. However, with regard to the issue of water we must understand that there are no renewable sources.
We have been living so high on the hog we haven’t even started thinking about recycling. We fail to understand where we are; we fail to understand what a water-scarce country should be doing. If we look at the scale of wastage we will understand that clearly we need to stop this behaviour and intervene differently but we can only do it if there is a set of incentives that operates differently. Then there are issues of access to land – and I want to applaud the people who are involved in the movement for urban agriculture in Oranjezicht and Khayelitsha.
We need to understand that as a nation we are so spoilt because if you take just these three issues that I have mentioned thus far – the urban space, the housing challenge and the resource utilisation – we need to understand it in the context of our behaviour and how we make decisions. Cities were designed primarily to accommodate a few ex-pats and when they left at the point of decolonisation, more and more people came in without any urban policy being put in place, without any change in behaviour, without any big interventions and everyone wants to live like the colonial masters did before they fled. It is just not possible in the democracies that exist on this continent.
Youth unemployment
The fourth wicked problem I would like to draw attention to is that of youth unemployment. This is not a party political issue, nor is it a national issue. This is a challenge to which many countries are struggling to find a solution. On a global scale more than 70 million young people are out of work with the number set to grow and the rate of youth unemployment is more than double the unemployment rate of the labour force as a whole. With young people constituting the largest share of the population in South Africa and approximately 70 percent of all unemployed people, this is a challenge we cannot afford to ignore.
Gainful employment helps build people’s sense of dignity, self-esteem, independence and social usefulness. If we fail to harness the energy of young people, the development of our nation will be severely compromised.
A number of factors compound the problem. They include the inadequate skills that our young people possess which is a result of the poor performance of our education system; the distances from places of employment due to the lingering effects of the Group Areas Act – and this raises the cost of searching for work and results in a large number of discouraged work-seekers; many young people lack networks in the labour market; and the changing nature of work with fewer low-skilled jobs being created.
Low-skill intensive sectors such as mining and agriculture have been on the decline for a long time while skills-intensive sectors such as finance and business services have been growing. Increasing globalization, competitive pressures and rapid technological change impact on the type of demand for labour. These factors make the youth unemployment problem a complex one.
Often it is not about where you are born or where you are schooled but about the enabling environment. I have been amazed by the intervention of a group of young people called Ikamva Youth and the 92% pass rate in mathematics that they were able to secure in, what may this province’s poorest school, Makaza.
When we encounter these instances, you realise that it is not about birthright, it is not about genetics, it is not about how leafy the suburb is – it is about care and attention to detail, it is about systems of support and it is about creating opportunities in the lives of young people that will drive this change. There is a nurturing that will need to happen very differently.
We’ve lived through the perverse debate in this country about whether we should support employers to do what is in their own interest in employing young people. The Employment Tax Incentive legislation has been passed by both Houses of Parliament and will hopefully begin to signal change.
Early Childhood Development
The fifth and last wicked problem I want to put on the table is Early Childhood Development (ECD) and many of our divisions start there. The challenge for us is to ensure that all our young people have access to ECD of the highest quality possible. Early Childhood Development is pertinent because it concerns the developmental needs of children and is critical for children to reach their full potential. ECD includes parental support from conception, healthy pregnancies and postnatal care to give children an optimal start in life; nutritional support for pregnant and breastfeeding women and young children; birth registration, social security and other state provisions for the poorest families; support for parenting; quality learning by young children at home and in groups, programmes and centres; and preparation for formal schooling.
Children from poor communities lack access to quality ECD which severely stunts their physical, emotional and cognitive development. Of the 5, 685 451 million children between the ages of 0 and 4, only about 35% of them have access to ECD programmes. Children with access to good ECD are more likely to cope and stay at school which in turn improves their labour market prospects. Without adequate ECD children are not prepared for schooling, they continue to play catch up throughout their schooling career - which results in a high failure and repetition rate.
The benefits of adequate ECD includes better school enrolment rates, retention and academic performance; higher rates of high school completion; lower levels of anti-social behaviour; higher earnings; better health and longevity.
The National Development Plan (NDP) proposes that the provision of holistic care from conception should be given priority. It recognises that the first 1000 days of a child’s life are critical towards its development; in those first 1000 days children need capable caregivers, adequate nutrition including micronutrients, immunisation, stimulation and protection from destitution.
Some of the challenges identified in the NDP in relation to ECD include funding for infrastructure and staff; training for teachers; learner support material and equipment; strengthening of support agencies; reaching the most vulnerable children and families; ensuring that government departments responsible for different aspects of early childhood development work together.
There are several government departments which have a role to play towards implementation and regulation of ECD. This list includes the departments of Social Development, Health, Home Affairs, Public Works, Higher Education and Basic Education. These departments have a collective responsibility to create the conditions for ECD to thrive. Private service providers and NGOs are the core providers of services in the 0-4 age cohort.
Future prospects
Those are the five wicked problems that I draw out of the National Development Plan and I put these five on the table simply because taken together they cast a long shadow over the future. If we solve them, we can bring a lot more sunlight into the lives of future generations but it is not just about the future, it is about present.
Amongst the issues of the present is that we failed because we do not innovate, we mimic. In fact, we mimic the worst of the world. That difference tends to be the biggest divider in many parts of the world that are taking development seriously where innovation is the order of the day while the rest of us mimic. We mimic what we think is the norm in the United States when in fact it is not a reality for the majority that live in that country. The problem is that if we all try to live at that perceived level that the wealthy live, this planet will implode.
It requires of us to think about things differently and I want to quote a New Zealand physicist, Ernest Rutherford who said ‘Gentlemen, we’ve run out of money, now we have to think’. Let me correct that in more ways than one and say - Ladies and Gentlemen, we’ve run out of money, and land, and oxygen, and water and space and our young have run out of patience, we now have to innovate.
Sometime we also need to draw on the ideas of dead economists and I want to draw on the words of JM Keynes.
He says that:
“It is not sufficient that the state of affairs we seek to promote should be better than the state of affairs that preceded it; it must be sufficiently better to make up for the evils of the transition.”
That may give some perspective on what we need to try to do and I hope that I have been able to provoke some discussion about solving the challenges.
Thank you very much.
