How to “Unfxck” South Africa…

In “How to Fix (Unfxck) a Country,” economist Dr. Roy Havemann unveils a roadmap to reboot South Africa post-State Capture. Through his exploration of the six fundamental “E’s” – Eskom, Education, Environment, Exports, Equality, and Ethics – Havemann offers practical strategies gleaned from global experiences. Drawing from consultations with esteemed entities, he illustrates how nations rebounded from crises, advocating for swift governmental action. This insightful interview with BizNews charts a path for South Africa’s transformation into a powerhouse.

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Extended transcript of the interview ___STEADY_PAYWALL___

Chris Steyn (00:00.912)

How to unfuck South Africa. We find out from Dr. Roy Havemann, the author of How to Fix or Unfuck a Country. Welcome, Roy.

Roy Havemann (00:12.501)

Thank you very much, Chris, and thank you very much for having me.

Chris Steyn (00:15.92)

Roy, you have identified six fundamental E’s. Please list those for us.

Roy Havemann (00:22.549)

So my six Es are ESKOM, education, the environment, ESKOM, exports, equality and ethics. I often use ESKOM twice because I think it’s so important, but yes.

Chris Steyn (00:36.4)

Yes…in darkness and in light. And you’ve come up with practical strategies on how to implement each of those. May we start with ESKOM.

Roy Havemann (00:48.373)

Yes, so Eskom, I think, as we all know, really, the solution for ESKOM is for us to bring in more and more private sector capacity onto the grid. So we’ve all been putting solar panels onto our roofs. We’ve heard great things about the renewable energy, independent power producer projects which have brought up substantial capacity onto the grid. And what I recommend is that we just accelerate that process. There was a report by Meridian Economics in 2022 that said that if the renewable energy programme had continued at the pace it was taking place, then of course we would have been without loadshedding today.

Chris Steyn (01:31.12)

What about education?

Roy Havemann (01:34.133)

So education is one of South Africa’s biggest problems in my opinion.

Our children do very badly in two big international tests. They are PIRLS and TIMSS. PIRLS looks at reading and TIMSS looks at mathematics. And I recommend that we really should find ways that we can improve our scores in both of those. Fundamentally, reading is very, very important. And particularly in this country, often it’s mother tongue reading, just to get children to read for meaning in their own language and also to do mathematics in their own language. And that’s one place where we fall behind. 

Other areas that I look at are, for example, advancing Early Childhood Development, which in many countries has been shown to substantially improve the outcomes of children over the course of their lifetimes. Very interestingly, it’s actually about the child’s ability to learn and to take in information and to manage themselves where ECD helps. 

And then one thing that has really been quite a good intervention on the part of over the last 30 years has been to extend school feeding schemes into many schools. Now, I don’t think we spend enough money on school feeding. It’s remarkable how little we spend, but the impact has been significant for children. You know, many children arrive at school hungry and so unable to learn and unable to concentrate. I imagine a seven- or eight year old that is hungry trying to learn.

And the final one, which is a little bit on the controversial side, is to allow more, a more parent choice in going where their children go to school. I think we know many examples of parents that sacrifice a lot to get their children into better schools, and I think we should support that as far as possible.

Chris Steyn (03:30.544)

About the environment.

Roy Havemann (03:32.981)

So the environment is one of those things where it’s very tempting to abuse it in the short run because we have water and we have, we’re very blessed in this country to have lots of clean water and clean air and so forth. And so it’s very easy to abuse in the short run. But I make the argument that in the long run, this is the worst possible thing for us, because as we know, abusing the environment is not a long-run strategy for anyone. And in particular, what’s happening at the moment is that climate change is affecting all of us. So temperatures are going up and that will hurt the economy in the long run.

There’s been a, I don’t cite it in this book, but there’s been a very recent paper out by the Reserve Bank, which has highlighted that countries are introducing taxes on countries that have high carbon emissions. And this will hurt our exports quite significantly. And I suggested what we need to do is as quickly as possible; clean up our act so that we aren’t hurt by these international taxes.

Chris Steyn (04:39.824)

While we’re on that, exports.

Roy Havemann (04:43.189)

So exports is super important, so I make the point that almost…and what I do in the book is I have a look at a lot of different countries and which countries have been successful and which countries haven’t. And we all know which countries have been successful because they are remarkable. China is a remarkable story. India is a remarkable story. Vietnam even, I mean it was wiped out by the Vietnam War. And other countries like South Korea, also very successful. Almost all of those have had some element of export-led growth. And that term has been thrown around a lot.

But in this country, one of the biggest problems we have with exports is that our ports are simply not working. So it’s not possible to get goods out through our ports. And so even if you had a great idea and even if you were a farmer with a new type of, I use the example of blueberries because that has been very successful in South Africa, you simply can’t get your blueberries exported through the ports.

You know, the entire motor industry, and I use a very cool example about when Ford, the Model T Ford was first assembled in what was then called Port Elizabeth in an old wool warehouse…And the reason why they assembled it there was because the port was very efficient in those days. That was in the 1920s. One wonders if today people would be building motor cars in the Eastern Cape because of the problems we’ve been seeing with the ports. And so one very big suggestion is that we must accelerate all efforts to get our ports to work better.

Chris Steyn (06:22.448)

Okay, then a big issue is equality.

Roy Havemann (06:27.029)

Yes, so this has often been something, and I think it’s quite correct, that people grapple with the problem of economic growth and equality because what often happens is that economic growth accrues to people with skills and people that have got things already and that is something called the Kuznetsky Economic which is this idea that as the economy starts to be successful what happens in the beginning is that inequality starts to rise and this is a very serious issue for South Africa. Obviously we have very high levels of inequality and we do need to worry about how the types of economic growth…what the different types of economic growth we have, and how they might actually worsen inequality.

And one of the things that many countries have done is introduce quite significant social grant systems. I suggest we should keep what we have, but unfortunately, I don’t think that we can extend it further because it’s very expensive. But just highlighting that I think the social relief and distress grant should be extended further after the elections and that has been very successful in dealing with inequality.

Chris Steyn (07:45.52)

Lastly, ethics.

Roy Havemann (07:47.957)

Yes, so I mean, I use the example of a very interesting thing that happened in New York City where diplomats would park illegally and then would be fined. But because they’d diplomatic immunity, they didn’t have to pay their fines. And the really interesting analysis showed that countries that came, people that came from countries that were generally regarded as corrupt, their diplomats tended not to pay their fines whereas people that came from countries that had low levels of corruption their diplomats tended to pay their fines even though they didn’t have to because they had diplomatic immunity. And it suggests…and this is sort of one of the things…that it becomes almost part of your DNA as a country; this sort of idea of being ethical. And I do highlight that I think what’s happened in this country is that to some extent we, our DNA has sort of changed over time and we have become less ethical. And this is across all different parts of the country, white, black, coloured, government, public sector. I mean, one of the biggest scandals in this country has obviously been Markus Jooste, who is a chartered accountant and has committed significant fraud. Similarly, in the VBS case, one of the biggest areas of fraud was actually the accountants.

And then of course we all know about this issue of corruption in government.

And all the international literature suggests that what you need to do is you need to have strong rules, but you also very obviously need to implement them. So people need to fear the law when it comes to corruption. And a very obvious suggestion, but a very important one, is that we must move quicker to implement the Zondo Commission recommendations and we need to strengthen our system of how we deal with corruption.

Chris Steyn (09:42.576)

Now, Roy, for our viewers who are not familiar with your background, what qualifies you to give this advice on how to reboot South Africa?

Roy Havemann (09:52.661)

A few things: I’ve worked in government for quite a long time. I was in government for about 15 years and I’ve been part of many processes where this is happening. I’ve got two master’s degrees in economics and a PhD. And I think one of the biggest things in economics has always been this big question. And I start with a quote that I first heard when I was a student of economics 20 years ago in my first year class, which comes from a very famous paper. And the question that is asked is, is there something that the government of India can do to make India as successful as Indonesia? And the really interesting thing about that quote is that the question is asked, is there something India can do to become as successful as Indonesia? And actually what India has done is implemented the ideas in that paper. It’s a paper by Robert Lucas called On the Mechanics of Economic Development, and India is now one of the fastest growing countries in the world. And over the years I’ve been traveling a lot for work and for pleasure and I’ve always wondered why is it that some countries grow faster than other countries. So, not only have I got seven years of study behind me and 20 years of working, but I’m actually just absolutely oddly quite obsessed with this question of why do some countries do better than others.

Chris Steyn (11:13.968)

Now, you have obviously given some of this advice, if not all of it, to people in government while you were there. And what progress has been made with the implementation of your advice?

Roy Havemann (11:26.165)

So, I actually make the point, this is not my advice. This is very much a summary of a lot of government policies. In actual fact, the idea of unbundling ESKOM and moving to renewable energy is one of the oldest ideas of this administration. Well, it came out in 1998 in an energy white paper while I was still at school. And when I was at university, this was regarded as being cutting edge in what we were going to do. Of course, that has taken very, very long to be implemented. In actual fact, the National Council of Provinces approved the Electricity Regulation Amendment Bill only last week on the 16th of May, something that was recommended in 1998. 

So there’s a long way of saying that in many ways, the ideas in the books book are very well known to government and our government policy – and it’s something I think everybody in government strongly supports. It’s just been that it’s been taking very, very long for them to be implemented. And so I do have hope that they are being implemented. I actually, like I said, base many of my ideas, my ideas on how to become an ethical and better run country come from the National Development Plan.

Some of the ideas in education come from a number of education white papers, and in a way what I’m trying to do is just sort of distill them into a very-easy-to-understand and clear message as a way for us all to kind of understand them and hopefully put pressure on government to accelerate the implementation of these ideas.

Chris Steyn (13:03.952)

So you have faith that South Africa can be unfucked.

Roy Havemann (13:08.341)

Yes, and I mean many people have asked me the question, you know: Are we fucked? And my answer is no. I mean, one of the most interesting things about the chapter on examples of economic success, where I kind of go through a set of countries that have picked themselves up and got themselves right again, is what, in what terrible state those countries were. Vietnam after the end of the Vietnamese War. South Korea when it was actually a basket case it was being propped up by a subsidies from the United States. China was very, very poor when its economic reform programme began. And I relate the story in India in 1991 where they completely and utterly ran out of money. It was actually so bad that what had to happen is the reserves of the country had to be loaded onto a truck and transported to Switzerland. So these countries were, there’s only one way of putting it – as great as this title is in my book, the word is in my book title because I feel I can use it – these countries really were fucked and in some ways, what we must do is we must I think learn from them before we are in that situation.

Chris Steyn (14:26.48)

So we need to unfuck ourselves before we are totally fucked. Is that what you’re saying?

Roy Havemann (14:30.613)

I think you’ve summarized it perfectly.

Chris Steyn (14:34.256)

Thank you. That was Dr. Roy Havemann, the author of How to Unfuck a Country, speaking to BizNews, and I’m Chris Steyn.

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