As Covid-19 hit South Africa the word humanity was a buzzword. Individuals, civil society and government officials distributing food packages flooded media platforms.
But this dwindled as demands of physical distancing, a waning economy and the ban on liquor and cigarettes affected the nation.
South Africa has been hit hard like the rest of the world. But Covid-19 has also revealed a gaping wound in its social and economic state. It laid bare poverty and squalor.
Prior to Covid-19, the unemployment rate was at the 16 million mark. Four months into Covid-19 it is now at 19 million. To date there seems to be no solution to the rising joblessness. Government financial support initiatives and loans from international financial institutions seem to have had limited impact on the unemployed and destitute masses.
South Africa boasts huge reserves of natural resources, reasonable infrastructure and developed human capital. How is it then possible that year in and year out South Africa’s economic growth trails behind that of nations with lesser resources?
The economy is dominated by huge corporates that tend to suffer from rigidity and “long-tail syndrome”, resulting in a lack of agility required for tackling a crisis.
Is it possible to use the Covid-19 crisis to eliminate “long-tail syndrome” in the economy? Acute economic crises tend to act as a catalyst that forces new ways of thinking and strategising and the agility of finding new ways of production and doing business.
Covid-19 follows a string of global crises that have befallen nations since the early 20th century.
The US and greater part of Western Europe rode the menace of the Great Depression; World War II left many nations burnt to the ground. But Western Europe built on those ashes to become global economic towering giants.
Three decades after WW II, China went through its most traumatic socio-economic changes. Today, it stands as a towering economic global giant among world nations. The rise of China was preceded and almost overlapped with that of the “Four Asian Tigers”, consisting of Hong Kong, Japan, Korea, Singapore and Taiwan in the late 1980s and 1990s.
The common denominator was an ability to use a crisis to rethink and reinvent themselves into strong, agile economic power houses.
First, a crisis helped eliminate old systems and getting rid of long-tail syndrome. Second, it also allowed for developing strong human capital in education, training and placing qualified people in the right jobs. In short, infrastructure, education and meritocracy have served as strong pillars of economic mutability and development. “Economic mutability” refers to the conversion of dormant talents and resources into viable instruments of economic development.
A crisis like Covid-19 may serve as an opportune moment for South Africa to seek ways of engaging the unemployed youth, dormant township and rural economies. Such a move would take away the strain from traditional industrial and corporate centres. Economic mutability, work ethic, rationale of ownership, efficiency and meritocracy form a cornerstone of any successful economy.
South Africa needs to get these qualities right if it is to to achieve economic development. Covid-19 presents South Africa with an opportunity to discard what no longer works. To achieve such a feat South Africa needs to develop its ageing infrastructure, educate and correctly deploy available human capital. China achieved economic development through robust government policy towards economic mutability, infrastructure and human capital development.