Dawie Roodt: Govt’s ‘confused ideology’ fuelling crime, unemployment

Economist Dawie Roodt tells Tim Modise that South Africa still has the capacity and goodwill to turn back the tide of crime and high unemployment. Reflecting on his recent experience of violent crime, Roodt says to save the young, unemployable and sometimes violent South Africans, the government needs to resolve the ‘confused ideology‘ pursued by the political leadership. He says South Africa has the capacity and potential to grow the economy at 5 percent but is held back due to wrong policy choices and a ‘contemptuous’ public sector. – Tim Modise

Mr Dawie Roodt, thanks very much for talking to me. Let me start by extending my sympathy to you and your family, following the traumatic experience you had recently. I hope that the family’s doing well and that you are doing well.Everybody’s doing much better, Tim. Thank you so much for the invite. It’s very nice, talking to you.

This made you reflect deeply on the state of affairs in the country and the future of our country obviously, because you subsequently wrote an article in that regard. Do you think we are on a slippery slope in South Africa, at the moment?

Well Tim, as an economist I know the numbers, I’ve been following the numbers, analysing the numbers, and commenting on the numbers but the numbers have a different meaning to me now. We were attacked in our home and what I saw there, in a way, was South Africa’s future. I’m very concerned about South Africa’s future because clearly, South Africa’s future is young. South Africa’s future is unemployed (or unemployable, perhaps) and South Africa’s future is certainly, a lack of skills and South Africa’s future is violent. That’s what I saw there. All of a sudden, the statistics have a much more personal meaning for me and I’m more concerned about South Africa in way, today but I’m also less concerned about South Africa because that evening, I think I saw evil in South Africa but I also experienced the amazing spirit of South Africans.

My neighbours were just, absolutely amazing. The hospital personnel…everybody was just, absolutely amazing. If I have to weigh up the bad and the good in South Africa, without a doubt, the good far outweighs the bad in South Africa but we need to draw a line in the sand. That evening, I decided to stop this torture that was happening to me and my family, and we need to stop what is happening to the South African economy as well – we South Africans.

Two things happened here. As an economist, you obviously reflected back to the numbers that you know you deal with on a day-to-day basis and of course, the personal trauma that you and your family suffered that made you reflect and apply this to the real world. The experience led you to contemplate your future. At one point, you were thinking of emigrating. People were asking you questions about that. On reflection, you decided that a few things, if attended to, could improve the situation. Can you talk me through those?

Tim, we have a Constitution. We have a Parliament, a Cabinet, a President, a Constitutional Court, and all these institutions and things in South Africa. The only reason why we have these things – the only reason (there’s no other reason) – is to serve us, the people of South Africa. We, the people of South Africa are the most important people in this country and those things are supposed to make our lives easier. If you look at the civil servants in South Africa – and by that, I mean the very broad definition – I include state-owned enterprises like Eskom, SAA, PetroSA, and airport companies, etcetera – all those state-owned enterprises as well as all the different departments such as the Department of Education, and the Department of the Police, etcetera. The reality is that those departments (those state-owned enterprises) are generally, very badly run. In fact, the price of Eskom to the South African economy is far in excess of R300bn annually, and that’s because of bad political leadership.

What I’m trying to say by saying that all civil servants need to resign and reapply for their jobs is that we need to get a world-class civil service in South Africa. Civil servants must be employed only on merit and not because of political connections or whatever the case might be. I’m afraid that many of them are employed because of political connections and the like. That’s what I mean with that. My second point is that you need a world class education system (skills development system). Despite the fact that education is the single, largest expenditure item for the Minister of Finance, it’s really bad. It’s not only bad sometimes, but it’s the worst in the world. How on earth can we run a modern economy with the worst skills development system in the world? We need to fix that. The third thing we need to do is we need to make it easy for anybody who wants to work to actually, work.

There are so many obstacles in the way of people trying to find jobs. [Inaudible 04:47] militants and very well organised labour organisations in South Africa and the fact that we have labour with government (in government), governing labour. Those are the sorts of things, which we need to fix. I guess, before we get to that, we need to get a political leadership that treats us with respect and not with contempt, the way that our political leadership is currently doing. Our political leadership has been treating our institutions with contempt. Take the Public Protector as an example or the courts, recently, as an example. Perhaps that’s the first step we need to take. Apart from that, get a proper, working civil service. Get good education and of course, allow people to work if they want to.

Do you get a sense that the system in South Africa discourages people who want to create employment for themselves?

Without a doubt. Is South Africa in a macroeconomic environment, a friendly environment? Is it an environment in which, we business people want to invest? Let’s look at the numbers. The Rand is under pressure because foreigners are taking the money out of South Africa. The local investors do not invest in South Africa, despite the fact that they have hundreds of billions of Rands on their balance sheets. Why don’t they invest? I promise you. They will invest if it’s an investment-friendly environment. I think that one of the most important reasons has to do with our political leadership. Of course, there are international issues, which are affecting the local economy. Of course, we had the financial crisis. All of that is playing a role in the South African economy. It seems to me as if we go out of our way to exacerbate a difficult situation. We need to get proper political leadership – political leaders who take responsibility for what they do and not political leaders who treat us with contempt.

The letter that you wrote was to all fellow South Africans, as you said.


Some of the readers have responded to your letter. Mmusi Maimane of the DA, addressing the first point that you raise about civil servants, saying that would be very difficult to implement, but he agrees with you and the Secretary-General of the ANC (Gwede Mantashe) saying the letter is grandstanding on your part and that he cannot, and will not, engage with you. Of course, the President of COSATU says that your methods are neo-liberal, orthodox, and may not work in the South African context. What’s your response to that?

Well, we have to remember that politicians are politicians. They serve a certain market. They want to achieve something. They want to be elected and of course, politicians will not necessarily always tell us the truth. No politician will say all civil servants need to reapply for their jobs. Whether that’s good advice or not, no politician will say that, simply because it’s too dangerous to say that. You cannot tell this to the teachers; that they need to reapply for their jobs because the teachers will not vote for you and only a stupid political leader will actually advocate what I’ve suggested there. I still stand by that and I realise who they are. They are political leaders and therefore, they simply cannot support me in public, quite often. I know about the criticism I’ve picked up in the press from Mr Mantashe. He said that this is only publicity (if he was quoted correctly).

Do I really want to get publicity by having my arm cut off (or nearly cut off)? Is that how I want to get publicity? No, I don’t think so. I’m not really surprised to get that sort of comments, which we are getting from politicians (and I’m talking about all of them). I must say that I picked up a bit of a hostile tone from Mr Mantashe. Personally, I do like him. I’ve met him. I think he’s a very nice guy, but there’s a bit of a hostile tone and that’s certainly not what I want to achieve. I don’t want to make enemies of anybody. I want the South African economy to grow. I do not want poverty. I want people to be employed and I want all of us to be happy in this amazing country of ours and I really, am so saddened sometimes to see how things go wrong. I think it’s time for us, the people of South Africa, to draw a line in the sand and say, “Listen, so far and no further. We want this country to be a success” and I know we can achieve that.

We have a difficult history as we know, and transformation is one of the key points – black economic empowerment being key there. Considering all factors there, the reality as it is in South Africa today, what do you think the potential of South Africa is in 2015? How should we be performing as a country? Our economy as well as redistribution of wealth and opportunity.

Tim, let look at the capacity or the potential for South Africa first. The South African economy, without a doubt, can grow at a rate in excess of five percent per year. If we can get this economy to grow at five percent per year, all wonderful things will happen. We will reduce unemployment. We will create job. All kinds of amazing things will happen to this economy. If we can grow this economy at five percent per year for ten years, this country will suddenly, become a wealthy country – much wealthier than what we are, already. The capacity and the potential, without a doubt, is there. You’re referring to our history and of course, we have a history. How do you really empower people? Do you empower people by giving them something? I disagree with that. The only way that we’re really going to empower people is by giving them skills.

Giving them skills and allowing people to get the necessary skills where they can be used, and where they can use these skills in modern economy (firstly). Secondly, if you really want to empower people, you must allow them to take the jobs. Those are the most important tools if you really want to empower people sustainably. Of course, we need to make some adjustments here and there and I’m not against that, but the only sustainable way to empower people to get this economy to grow, is to get people skilled and allow people to work.

What’s stopping us from realising the potential of five percent growth at this time, notwithstanding the global economic slowdown?

Well, a number of things. I can go through all sorts of things. Technically, I can mention things such as the labour legislation, which is a big influence. Even the tax system…we have a Tax Commission. I hope they’re going to make the tax system easier now in South Africa. More importantly, I think it’s the quality of leadership as far as the civil servants are concerned and then, I think the overall ideology our government is currently following… From 1994, the ANC followed the typical neo-liberal macroeconomic policy approach. That resulted in economic growth, sometimes in excess of five percent per year. Unemployment came crashing down. We created a lot of wealth and of course, there was a financial crisis. From round about 2007/2008, which was also the beginning of the new administration in South Africa, things started turning around. If you look at the comments that our political leaderships are making, it’s very clear to me that they are ideologically confused.

We do not know what we are. We do not know what policy [inaudible 12:14] and quite often, the policies are contradictory. I can give you many examples of contradictory macroeconomic policies. The result of that is that it has a huge impact on the economy. The result of that is we get the [inaudible 12:28] growth and increase in unemployment – all the bad things that go with that. What we need are really, responsible political leadership and I’m afraid there’s no shortcut. It will take us years to become wealthy but we can become wealthy and we can reduce unemployment. Unfortunately, sometimes we have to take those unpopular steps like, for example, getting rid of civil servants who are not performing. Another example is to privatise and get some of the state-owned enterprises to become much more efficient than they are.

Final question, Dawie: is our problem politics or ideological choices?

It’s the same thing. Politics and ideology is pretty much the same thing. I’ve studied communism as an example. I know the Communist Party in South Africa is pretty much the ideological space for the Tripartheid Alliance. They always have been from round about 1994 to about 2007. They’ve lost that position but suddenly, they’ve regained that position and unfortunately, the Communist Party in South Africa (the intelligentsia of the Communist Party) are just, not there anymore. We do not have communist and that makes them, really, much more dangerous because they don’t even understand their own ideology. They’re not communists anymore. They are ‘bling communists’. The Joe Slovo’s are not there anymore and I’m afraid the intellectual base in a Tripartheid Alliance is simply, not there anymore. I think its ideology, but also, that results in good or better political leadership and I’m afraid to say we just don’t have that.

Dawie Roodt, thanks very much for talking to us.

Tim Modise, thank you and thank you very much for your support.

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