Time to stop rot in public sector

Growing up in Matatiele in rural Transkei we were aware of the presence of Public Works employees – usually decked out in yellow overalls, working on the roads or building bridges.

Years later, living in Tembisa, the ubiquitous yellow-clad public employees – whether from the municipality or Public Works – were busy erecting the sturdy four-room houses which put to shame some of the RDP houses of later years.

So, there was a time when the state, including Public Works, built and maintained things, employed people to do that work, and trained them to do it well.

Indeed, the department trained and employed artisans and professionals – engineers, architects, quantity surveyors – on a scale required to undertake its many and complex functions, from planning, through construction to maintenance.

Public Works also supplied the private sector with artisans and qualified professionals. Tenders certainly existed, no doubt benefiting those connected to the Nationalist Party, although outsourcing was rare.

Of course, we should not romanticise the past. The artisans and professionals that were trained were overwhelmingly (if not exclusively) white, and the construction undertaken by Public Works was part and parcel of the grand apartheid project to create and maintain geographic segregation and racial hierarchy, and keep black people in perpetual subjugation.

But at least the Public Works department of the past disproves the neo-liberal assumption that only the private sector can deliver.

As the apologists of the FW de Klerk Foundation might point out (if they forget for a moment their own recent conversion to neo-liberalism): at least the four-room township houses that were constructed by the public sector in that era are still standing.

Fast forward to the present Public Works. Despite the existence of pockets of excellence, it currently lacks the technical capacity to undertake direct construction and maintenance functions itself. It therefore resorts to outsourcing and tendering on a grand scale.

Unfortunately, the department’s capacity to process tenders, manage the supply chain and project-manage construction and maintenance contracts has been severely eroded. The resultant lack of financial controls and mismanagement has provided fertile ground for fraud and corruption.

We have become a department of tenders in which corrupt officials collaborate with tenderpreneurs at untold cost to the public.

The scale of mismanagement and corruption is only now coming to light, in large part due to the detailed forensic work of the Special Investigating Unit. I have reported on this at length to the Parliamentary Portfolio Committee.

The department now trains very few artisans and professionals – and has difficulty in retaining the ones it has. The department has recently started to reverse this trend, planning to reopen regional workshops and offer training opportunities once more.

So how did we get to this dark place? I would argue that this destruction of state capacity results from a toxic mix of neo-liberal policies, narrow BEE and outright corruption.

During the last days of the apartheid regime, neo-liberal economic policies were rapidly entrenching themselves: the notion of a “lean, mean state” – right-sized, focused on core business, outsourcing and privatising of non-core functions – underpinned by a balanced budget so as not to “crowd out” the private sector with social spending.

By and large, and despite the adoption of a number of very progressive measures, the neo-liberal orthodoxy – “the Washington consensus” – was accepted by the democratically elected government after 1994 and enshrined in the Gear policy imposed on the movement in 1996. By the late 1990s, the mantras of government were conservative macro-economics, right-sizing of the public service, privatisation of state assets and the new public management doctrine that sought to displace public sector professionalism with private sector management and incentives.

This was the era of “rationalisation and redeployment”, the wholesale closure of colleges and the running down of state infrastructure as short-term budget priorities trumped planned maintenance and long-term infrastructure investment.

Washington, the International Monetary Fund and World Bank applauded SA’s careful book-keeping. Fundamentals were said to be in place. And yet, the much-vaunted foreign direct investment failed to show up, or was of a temporary nature. Meanwhile, the capacity of the state was severely eroded, resulting in skills shortages and an inability to guarantee energy – both necessary conditions for continued growth and development. When growth came, pre-2008, it went hand-in-hand with deepening inequality and structural unemployment.

The neo-liberal trajectory described here was a global phenomenon – the previous two decades had witnessed the spread of Reaganomics in the developed world and structural adjustment programmes in the developing world.

SA – returning to the international community after years of isolation, it was argued – could not ignore the logic of globalisation.

But SA’s economic trajectory was unique in that it combined neo-liberalism with the implementation of a narrow and flawed BEE policy.

Lest I be misunderstood: emerging from centuries of enforced racial segregation and subordination, SA needed – and still does – affirmative action on a grand societal scale to address historic inequities. This includes support for emerging black business, even though the needs of the working class and the rural poor were, and are, more pressing.

Narrow BEE impacted on state capacity in a number of ways. “Transformation” of the state was interpreted to mean the rapid replacement of white with black managers. While it was important to deploy political leadership into the state apparatus – not least to guard against sabotage by the old guard – and to fast-track the empowerment of black public servants, there was a failure to appreciate the value of experience and the fact that technical skills would not be replaced overnight. In a highly technical department such as Public Works, the result of “transformation” – defined in narrow BEE terms – would be highly debilitating.

Meanwhile, in the private sector, comrades were officially enjoined “to enrich themselves” in pursuance of narrow BEE objectives. This enrichment typically took the form of using and abusing access to political power to win tenders, to act as go-betweens and as fronts for established monopoly capital.

What we witnessed was a scramble for resources akin to what happened after the breakup of the Soviet Union. A small parasitic black bourgeoisie emerged and grew fat on state tenders and privatisation – often at the expense of black workers.

Lacking capital and expertise and often dependent on white capital, the surplus to finance the new elite was most likely to derive from inflated prices and cut-price, shoddy workmanship. The public was short-changed and state capacity was further eroded.

These developments we analysed and characterised as the “class project of 1996”.

The class project – as an organised political faction within the ANC – was defeated at Polokwane, but we did not necessarily end class tensions and conflict within the movement. Hence we see the emergence of the “New Tendency” based on tenders and outright looting of public resources.

In the long run the impact of these developments on the moral fabric of the body public – including the ANC – has been devastating.

Corruption has diverted the much-needed resources of the state away from service delivery to the poor, it is demoralising honest officials and it is perverting our political life to serve the interests of a few, setting former comrades against one another.

Less attention has been given to the resultant erosion of technical and managerial capacity in the state – a development which suited the agenda of tenderpreneurs and corrupt elements, making their task easier.

In the early years of the 21st century, opposition to the neo-liberal trajectory mounted, initially from the unions and the Left. The policy terrain began to shift – first in the form of Asgisa, with greater emphasis on skills development, local job creation and inclusive development – culminating in a major paradigm shift and the adoption of the notion of a “developmental state”.

This has been concretised since the 2009 elections with the adoption of the New Economic Growth Path and its commitment to developing a clear industrial policy, the National Infrastructure Plan, with an implementation strategy that includes building the developmental state.

I would argue that this raft of policies and concrete infrastructure roll-out plans amounts to a strategy for sustainable and inclusive economic growth which begins to address the legacy of apartheid, with massive implications for job creation and poverty reduction. This has been the focus of writings on the developmental state.

What requires further and immediate attention, I would argue, is the necessary technical capacity to operationalise the developmental state and implement its mandate.

This requires an honest audit of the current capacity of the state compared with the responsibilities required of a developmental state, and sustainable strategies to bridge the gap.

The work of the National Planning Commission is clearly relevant here.

In concrete terms, every project of government – whether for rural and social development or infrastructure roll-out – has to be accompanied by a schedule of required skills and technical resources and a plan as to how the state will provide or facilitate these.

The shortage of key skills has long been recognised as a barrier to economic growth and development.

The developmental state and government’s new developmental trajectory requires the technical capacity to, among others:

l Plan, construct and maintain state infrastructure;

l Provide practical training and placements for apprentices and candidate professionals and absorb the qualified artisans and professionals.

l Where large projects require it, to manage tenders, control procurement and project-manage contracts.

Looking forward, this brings me full circle to the role of Public Works and the need to reclaim its mandate and rebuild technical capacity as an integral part of the developmental state.

Let me caution: such a task goes beyond simply restoring technical and managerial capacity. It means changing work cultures, reaffirming work ethic and an ethos of public service, and putting in place systems to ensure individual and collective accountability and performance.

A competent and disciplined bureaucracy is a necessary component of a successful developmental state.

These reflections essentially try to address the need for an interventionist developmental state to equip itself with the appropriate capacity at executive and operational levels.

Above all, the government has to go beyond policy rhetoric to ensure implementation capacity is developed to drive policies, programmes and projects – with proper oversight, performance measurement and evaluation.

This also means doing away with “silos” so that we achieve the necessary integration, both horizontally between departments and vertically across the different spheres of government.

In the case of Public Works, people do not distinguish national from provincial departments. What they require is delivery.

n Nxesi is Minister of Public Works but writes this article as deputy chairman of the South African Communist Party