Public+service+not+equipped+for+development,+Ben+Turok,+S+Times



=Public service ‘not equipped for developmental role’=

Ben Turok, Sunday Times, Johannesburg, 4 November 2007
The public service is not ready to plan, co-ordinate and implement the developmental state, a high-level seminar on development has concluded.

A strategy for a more interventionist state is central to the policy proposals that will be put to the ANC’s national conference in December.

The developmental state debate argues that as the economy improves and revenue increases, the challenges of poverty, unemployment and inequality come into greater focus.

There is a firm conviction among ANC members that the private sector will not overcome these vast problems alone and the state must intervene. But how it does so, without disrupting the market system in which we operate, is critical.

This question was put to the seminar in Pretoria, hosted by the minister of provincial and local government, Sydney Mufamadi, and attended by top officials and experts.

What emerged was concern that the public service is not geared for the task, and that the scale of planning and co- ordination across the whole sphere of state institutions, including parastatals and financing agencies, leaves a lot to be desired.

Among the required changes are greater integration and co-ordination, major investment in public infrastructure such as decent offices and facilities, compulsory joint planning, and longer terms of manager contracts. The case was also made for a single but decentralised public service.

Another concern was the lack of co- ordination and accountability of state- owned enterprises. Participants stated that there was no available document on the role of these institutions, their assets, or their overall contribution to the economy, including downstream and upstream value additions.

Instead of focusing broadly on development, these enterprises are driven to enhance dividends and profits as well as pay large salaries and bonuses for executives in competition with the private sector.

For real development to happen, state- owned enterprises have to work in co- ordination with development finance agencies such as the Industrial Development Corporation and with government departments. This kind of co-ordination would enable organisations like Eskom to use pricing muscle to force private-sector corporations such as steel producers to provide their products at reasonable prices, not those used in foreign markets, which include transport costs. Issues of co-ordination and planning were raised repeatedly. Questions were raised about the undue intervention of the Treasury in departments and beyond. There are instances where monetary and fiscal policy march in different directions. Also, although development finance institutions are subject to government oversight, they tend to operate in isolation without a common strategic thrust. They and the state-owned enterprises should intervene in the case of market and institutional failures. A push for development must identify those measures that will have a great impact on poverty, unemployment and inequality — the most urgent challenges facing government.

The new industrial policy framework has the potential to make a difference, but it must face the fact that we are a resource- rich country, contributing substantially to our export revenue (about 60%) due to the commodity pricing boom, yet that revenue is spent on imports leading to a trade deficit. These funds should be going into a special fund for development spending. We should also show far more commitment to promoting infant and labour-intensive industries. Both of these require flexibility as regards tariffs and state support, for which there is some room, in spite of World Trade Organisation rules. Advanced countries grew their industries behind protectionist walls but now want open doors for their exports. Some developing countries, such as China and India, are managing to manoeuvre within the international rules, and we should not be more compliant than others, as has been the case. Considerable attention was devoted to agriculture and rural development. The tendency in agriculture is towards capital and land intensity in land use. There is much vertical integration and private-sector manipulation. Black economic empowerment is being implemented only at the top.

In the case of communal areas, there is no obvious vision for rural development and, as a result, underdevelopment is the rule, extension services are poor, and these areas are largely dormitories for the cities, yet they do have productive potential.

Finally, although there was some disagreement about the nature of the first-second economy divide, there was much concern about the living conditions of the poor in urban townships and the former homelands. It was accepted that although the state has a primary role in upgrading these conditions, there is ample scope for civil society and the private sector also to play a role. But these have to be defined.

These proposals go against any notion that going along just as before will bring the transformation the ANC seeks to achieve. There has to be some fundamental change in the way the state conducts its business.

Ben Turok is an ANC MP and editor of New Agenda. Papers presented at the conference will be published in a special edition of New Agenda.


 * From: http://www.thetimes.co.za/PrintEdition/BusinessTimes/Article.aspx?id=603867**

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