Is the South African state failing or just fragile? - Ivo Vegter

Key topics:SA shows many signs of fragility, but not fully a failed state.Businesses bear costs supporting government amid crises and inefficiency.Citizens and institutions actively help mitigate failures and foster growth..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.By Ivo Vegter*.A question that bubbled up in recent weeks is whether or not South Africa can be described as a failed state, and if so, what that means.A growing chorus of commentators are of the opinion that South Africa is a failed state.Busi Mavuso, the chief executive of Business Leadership South Africa (BLSA), has been quoted as saying businesses cannot function properly in a failed state.According to the article, “The key signals of a failed state are a failure to provide basic services, economic decline, a loss of state control of critical services like the police, increased social unrest and political instability. Over the past few years, South Africa has exhibited many of these signals.”“Our fortunes as businesses are tied to those of government. If the government fails, the country fails. If the country fails, business fails. This is not sentiment, it is economic reality,” Mavuso reportedly said.This follows hot on the heels of two senior ANC officials, Malusi Gigaba and Senzo Mchunu, warning that the ANC, which leads the Government of National Unity, is “failing” and “on the brink of collapse”. The ANC has vowed to discipline both.Economist Dawie Roodt also recently said South Africa is a failing state which is breaking its compact with its citizens, particularly in regard to keeping its citizens safe. He cited the attempted hijacking of a parliamentary oversight team led by Ian Cameron as an example, though Roodt and his family have themselves recently been victims of an armed home invasion, during which he sustained serious injuries. That safety and security are precarious for all South Africans is, sadly, not news.Professor Bonang Mohale, chancellor of the University of the Free State and a renowned South African business leader, went further. During a recent discussion about the dearth of ethical leadership in South African politics, he told Bongani Bingwa on Radio 702: “In fact we are not teetering towards a failing state; we are already a failed state”.What is a failed state?There are many definitions of what, exactly, constitutes a failed state.Encyclopaedia Britannica offers a narrow definition: “[A] state that is unable to perform the two fundamental functions of the sovereign nation-state in the modern world system: it cannot project authority over its territory and peoples, and it cannot protect its national boundaries.”Robert I. Rotberg, in a paper for the non-profit policy research organisation, the Brookings Institution, gives a broader view: “Nation-states fail because they are convulsed by internal violence and can no longer deliver positive political goods to their inhabitants. Their governments lose legitimacy, and the very nature of the particular nation-state itself becomes illegitimate in the eyes and in the hearts of a growing plurality of its citizens.”The Crisis States Research Centre (CSRC) at the London School of Economics distinguishes failed states from “crisis states” and “fragile states”, and says: “We define a ‘failed state’ as a condition of ‘state collapse’ – eg, a state that can no longer perform its basic security, and development functions and that has no effective control over its territory and borders. A failed state is one that can no longer reproduce the conditions for its own existence. This term is used in very contradictory ways in the policy community (for instance, there is a tendency to label a ‘poorly performing’ state as ‘failed’ – a tendency we reject).”By these definitions, South Africa is not (yet) a failed state, but could be described as “failing”. The government still projects a considerable amount of authority over its territory and people, and while the government under-performs at delivering services, it does still deliver them.A failed state would not be able to sustain welfare payments to a third of its population, for example, nor collect tax from its formal economy.Fragile stateBy the CSRC definitions, South Africa could be better described as either a “fragile state” or a “crisis state”.On fragile states, it says: “A ‘fragile state’ is a state significantly susceptible to crisis in one or more of its subsystems. (It is a state that is particularly vulnerable to internal and external shocks and domestic and international conflicts). In a fragile state, institutional arrangements embody and perhaps preserve the conditions of crisis: in economic terms, this could be institutions (importantly, property rights) that reinforce stagnation or low growth rates, or embody extreme inequality (in wealth, in access to land, in access to the means to make a living); in social terms institutions may embody extreme inequality or lack of access altogether to health or education; in political terms, institutions may entrench exclusionary coalitions in power (in ethnic, religious, or perhaps regional terms), or extreme factionalism or significantly fragmented security organisations. Drawing on insights related to ‘institutional multiplicity’ – ubiquitous in our research so far: In fragile states, statutory institutional arrangements are vulnerable to challenges by rival institutional systems be they derived from traditional authorities, devised by communities under conditions of stress that see little of the state (in terms of security, development or welfare), or be they derived from warlords, or other non-state power brokers.”.Read more:.Mills and Hartley: We the People to bear cost of stubborn ANC’s choice on Trump ‘Black Swan’.That certainly rings true about South Africa.Busi Mavuso was speaking specifically about a government reform tracker launched by BLSA. (For a critique, see Jonathan Katzenellenbogen’s opinion here.)She said that because of the business risks created by government’s manifold failures, many companies were investing in and supporting government programmes to reform and turn the country around.She warned, however, that this came at a cost: skills and capital dedicated to supporting government functions were skills and capital that could not be devoted to growing the business, increasing profits, raising economic growth and creating jobs.The same is happening in towns around the country: private individuals are getting together and donating their skills, money and time to help municipalities clear infrastructure repair or replacement backlogs.Crisis stateSouth Africa also sometimes reflects elements of what the CSRC calls a “crisis state”: “A crisis state is a state under acute stress, where reigning institutions face serious contestation and are potentially unable to manage conflict and shocks. (There is a danger of state collapse). This is not an absolute condition, but a condition at a given point of time, so a state can reach a ‘crisis condition’ and recover from it, or can remain in crisis over relatively long periods of time, or a crisis state can unravel and collapse. Such a process could lead, as we have always argued, to the formation of new states, to war and chaos, or to the consolidation of the ‘ancien régime’. Specific ‘crises’ within the subsystems of the state can also exist – an economic crisis, a public health crisis like HIV/AIDS, a public order crisis, a constitutional crisis, for instance – with each on its own not amounting to a generalised condition of a crisis state although a subsystem crisis can be sufficiently severe and/or protracted that it gives rise to the generalised condition of a crisis state.”The KwaZulu-Natal riots of 2021, load-shedding, corruption, the degradation of national transport infrastructure, the capture of law enforcement institutions, and the collapse of favourable trade relations with the United States can all be considered crises that could lead to a state of collapse.Vox populiThe people of South Africa, however, aren’t seized with the nuances of academic definitions of state failure. More than half believe that South Africa is a failed state.In 2015/16, in response to a Quality of Life Survey conducted by the Gauteng City Region Observatory, more Gauteng residents of all races disagreed than agreed with the notion that South Africa is a failed state.Eight years later, in 2023/24, the same survey found more than half of respondents in every race group agreed. Dissatisfaction was most acute among coloured residents of Gauteng, and least acute among Indian or Asian residents, but on average, 57% of Gautengers believed South Africa is a failed state, compared to only 29% who disagreed (14% were neutral).Vox peritorumNot everyone agrees, however. Nicola Mawson, writing in Daily News a month ago, quotes two experts, Old Mutual chief economist Johann Els and political analyst and author Prince Mashele, both of whom argue that South Africa is not a failed, or even failing, state.Mashele points to the gradual weakening of electoral support for the ANC and the fact that it has not responded by attempting unconstitutional or violent measures to cling to power..Read more:.SA minister requests Budget support amid coalition struggles.Els says when the country is assessed against key economic indicators, institutional strength, and its continued ability to attract foreign investment, South Africa does not meet the definition of a failed state. “We’re moving in the right direction,” he added..On the Fragile States Index published by US think tank Fund for Peace, which ranks 179 states from most to least fragile, South Africa ranks 80th. It is more fragile than it was at any time before 2015, but less fragile than it was at its worst, in 2018. It merits an “elevated warning” rating, but not a “high alert”.OptimismI am inclined to side with the optimists, for now.Under-development is a choice, I wrote in January, and we can make different choices. Citizens are increasingly coming to the aid of flailing municipalities and government institutions, investing their own money and time to help save the country.The knowledge of what needs to be done is out there.Just from the Institute of Race Relations (IRR), we have the IRR Growth Strategy, published in 2023. We have the Blueprint for Growth series: Arming SA’s Pro-Growth Forces, Slash waste, cut taxes; Breaking the BEE Barrier to Growth; Reforming South Africa’s Public Administration; Reinforcing South Africa’s Growth through Infrastructure; Generating Jobs and Skills for Prosperity and Growth; South Africa’s Investment Malaise and How to Escape it; and Solutions to SA’s crime crisis to boost growth.Besides this, the IRR has published dozens of papers and reports on specific topics that help point South Africa in the right direction (of which I contributed several), on electoral reform, pragmatic foreign policy, lessons from Argentina’s radical free-market reforms, socialism as the enemy of growth, tax policy, and much more.And the IRR is not the only think tank whose work is freely available to South Africa’s public policy makers.I agree with Mashele that the gradual and peaceful transfer of power from the ANC to a more representative government is a welcome development, and has the potential to save South Africa from the misery into which the ANC’s ideology has led some of its closest friends and allies, such as Venezuela, Iran and Zimbabwe.South Africa is fragile. It is often in crisis. In some regards, it is failing. But it is not a failed state.That’s not to say South Africa does not face existential risks. A takeover by the unashamedly corrupt wing of the revolutionary movement, a zealous attempt to implement the National Health Insurance Act, or gross misuse of the Expropriation Act can easily derail the country and put it on a fast track towards failure.Yet many of South Africa’s key institutions – including the judiciary, the media, civil society structures and the financial sector – while weakened, remain standing.And while a group of self-appointed natterers representing less than half the country’s electorate yell “comrade” and “amandla” at each other over canapés, many private citizens and companies are digging in and helping to fix what the government has broken.That’s got to count for something, right? A growing South Africa will be worth the effort..*Ivo Vegter is a freelance journalist, columnist and speaker who loves debunking myths and misconceptions, and addresses topics from the perspective of individual liberty and free markets..This article was first published by Daily Friend and is republished with permission

Is the South African state failing or just fragile? - Ivo Vegter

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