Can China show the way to deliver South Africa from poverty?
By Paul Tembe
How can South Africa build a moderately prosperous society? Is it possible, under the current South Africa-China relationship, for China to serve as a vector catalyst for building a moderately prosperous society?
The per capita disposable income in South Africa could easily challenge that of prosperous nations such as Kuwait and the United Arab Emirates, and some Scandinavian nations calculated in terms of the gross domestic product and amount of natural resources and minerals the country possesses.
What then is the reason for the pervasive squalor among most South African citizens? Is it possible for the government to intervene and set in place corrective measures that will ensure distribution aimed at poverty eradication, security and the upliftment of the standard of living for all its citizens?
If the momentum and verve demonstrated during the onset and current fight against Covid-19 becomes the norm, the government is more than capable to set in place systems that would deliver most South Africans from poverty, ignorance and half-citizenry.
South African economists have a tendency to argue that governments are not very good for driving economies. They say governments lack the ability to identify industries that merit support and that support is usually ill placed. They argue that governments’ involvement in markets will only burden domestic consumers and taxpayers.
The tune is not exclusive to South African economists who wish to see government play far from strategising and co-ordinating markets. The idea has its roots in the capitalist Western mode of production.
The rationale of this idea is that markets ought to be driven by market dynamics of supply and demand. Such a strategy is aimed at limiting access to technology and infrastructures, and impeding the grass-roots majority from entering lucrative markets.
The rhetoric of excluding the government from business, especially in the developing world, is aimed at continued Western market dominance over the rest of the world.
However, one might begin to wonder if the above rationale of keeping the government outside the markets holds truth in view of the developmental strides China has made in the past 30 years.
Though driven by the implementation of mixed economic policies, it is the government at the helm, steering both public and private enterprise. One would then wonder why is it that Western nations, especially the US and the UK, should complain about China’s economic model?
What Western powers do not understand is that the government does not control market forces in China. Instead, the government offers guidance through sound policies and robust legislation. The government offers eased terms of engagements in crucial industries, aimed at adding value in areas that are meant to catapult the entire society to a world standard of living and beyond.
China has set this year as its target for establishing an xiaokang shehui (a moderately prosperous society). By the look of things, and despite the devastation caused by the Covid-19, China is set to reach its target.
What measures did the Chinese government engage upon beyond policymaking and sound legislation towards establishing “a moderately prosperous society” by this year?
The government made sure to minimise red tape in market processes. It made sure to provide cheap land to the country’s factories. It extended subsidised loans. It directed state companies to produce key materials with the aim to stimulate domestic supply chains.
It encouraged public and private firms to source local goods and to use local inputs. The strategy insured that while local industries supplied the rest of the country, most of the value was retained locally through support for medium and small industries and the creation of employment opportunities.
However, if the African continent is to manage such a feat, it needs to have measures in place for eradicating corruption. There is evidence throughout history that there is no government or society that has managed to reach greater heights of well-being while corruption lurks in the background.
Fighting and eradicating corruption ought to be the norm of governance and statesmanship and not only called upon as an emergency measure during acute social crisis.
For the African continent to succeed in its endeavours of economic and social development, its needs to fight the pervasive stigma of corruption that threatens to undermine its image and the “Africa rising” narrative.
* Tembe is Associate Professor at the Institute of African Studies, Zhejiang Normal University, Jinhua, China. He is also based at the Thabo Mbeki African School of Public and International Relations.
** The views expressed here are not necessarily those of IOL.