I have not lived in South Africa for ten years. Black Economic Empowerment and Affirmative Action has been and is a necessity in South Africans and has far stretched benefits for many however it was implemented too quickly and too rigorously. As a result, many people are not adequately qualified for the positions they hold leading to massive failings across sectors. Energy is the current major fail but redressing the access to education crisis in full, the biggest fail of all. Millions of uneducated people result in widespread crime. The second major problem is widespread corruption ( lack of economic stimulation), nepotism and a lack of ethical leadership across the board. Thabo Imbeki, a critical thought leader in African leadership was expelled from the ruling party for attempting to bring criticality into the realm of the parties' leadership practices. I see the impact of BEE on my mom and step dad. My step dad is a land surveyor and he spends his life in court dealing with land claim illegalities. My mom is an estate agent and experiences numerous set -backs in relation to her training and ability to practice. They live in a small town and experience service delivery issues by the municipality as well as load shedding which is access to electricity on a schedule. In simple terms indigenous tribes are having to adopt and operate in a democratic system that they did not design. Our previous President was a Zulu.In the Zulu Kingdom, the village bows down to the oppulent King and there is no such thing as servant leadership. So while in principal our rainbow nation is a miracle there are many, farfetched and complex shortfalls in the wake of colonialism.

• Joanne Anderson

@Cat

The social security program was successful to a degree in helping to alleviate poverty particularly in provinces that have high poverty rates such as Limpopo and Eastern Cape and in rural areas. The impact of social grants was more substantial among vulnerable groups such as Africans as well as female-headed households. It can be seen that tax credits such as the Earned Income Tax Credit and Child Tax Credit are two of the largest anti-poverty programs that have positively impacted children's health and education. There are still issues but having some cash in hand does help to buy staple food for poorer households whose current income does not cover even that.

Affordability of housing: the issues concerned deal with supply and demand but with very many nuances. These are rising costs of living with no increase in salaries leading to many people not being able to qualify for a mortgage as the banks will only grant this at a specific rate of deduction from salary. Also the failure to deliver both
subsidized and affordable housing units due to the issues mentioned has had a significant impact.

Will have to do much more research on the last question. We are still divided as a nation and I am unclear as to what and how the youth perceive this and what they are being taught about it, if anything. Also they are learning from actions of government. Youth that I have had contact with are not concerned about the economy. They seem to see a world of corruption and joblessness. The educational system seems to be failing as well and is pushing out learners that may, at best, have an entry level certificate from high school instead of an actual certificate that represents the level that they should be at. They see promises from government but many (apparently half) do not even see the benefits of voting and do not concern themselves about it.

• Nina Wakefield

@Nina
Thanks Nina for sharing more about the situation in SA.
I feel that's part of the problem when people do not have CEL - and behind the opaqueness, even highly educated people do not know how to question the policies that often seem to be knee-jerk and band-aid solutions.

You pointed out something so important - while these cash transfers and subsidies are helpful, but there needs to be a composite approach including building adequate affordable housing, otherwise the problems do not get resolved.

I read about SA economy in the news recently,
https://www.bbc.com/news/articles/c3ggn22zymyo

Wonder what you and Jo think about what this now?

• Cat Ho

Russia has very high interest rates for mortgage - about 11-16% annually, which made the property for the young families unaffordable. With the recent geopolitical events many people left the countries , especially those males who could ensure their income can be earned in the distance or that can be easily employable in any other country, i.e. software engineers , IT programmers etc. The outflux has been so dramatic that over the past year government decreased the mortgage rate to 3-5 % for those working in IT sector obviously to make the skilled workers ( of a particular industry) stay in the country. Underpinning the policy it is important to note the key role of the technology in the country stable development rate. So by losing highly qualified labour (which is time consuming to educate) the government wont be able to continue sustaining effective systems in place ensuring the work and development of bigger companies in key industries.

• Kristina Pilgueva

@Kristina Pilgueva,
This is so fascinating, Kristina, and shows the power of our learning process or PAR; i had no clue that interest rates were so high previously - which really brought about much more financial burden to households in home ownership.

To think, now it's more than halved....one must wonder if mortgage rates is just a function of the price mechanism or controlled by another form of invisible hand? And the impacts this has on peoples' lives and choices.

And yes, hopefully all these talented and educated young people will also be able to return home soon - brain drain is truly a price that often does not get calculated in decision making (a form of externality too?)

• Cat Ho

Wow Kristine, that is mind-blowing! 5% is considered really high in most countries nowadays. Have house prices been going up over the decade and how is the currency doing at the moment?

• Tammy Cheng

One of the key population that has affected my family and my country is the birth control policy. While the 1 child policy in China is the starkest example, Singapore actually introduced its own 2 child policy in the 70's when i was born. For context, at that point, Singapore was a newly independent, developing country with no natural resources. Literacy rate was low while fertility rates were high (this is why i am youngest of 9 children!). By the time I was born, my parents were fined as they had more than 2 children. Fast forward 30 years and the situation is almost comical when the government was now giving money to entice families to have babies....to no avail. Over the years, the baby bonus (as they are called) have increased dramatically. Currently, it is at 20,000 S$ (or 100,000 CNY) for the first child alone!

One of the key economic underpinning and understanding of population is through the lens of labor. Unfortunately, humans do not seem to be valued for the fact that they exist, but only for what they can contribute to the economy. This is why governments are incredibly worried when fertility rate drops, because they are worried at what this portent for the economy in the future.

Unfortunately, such an understanding is often also part of educational policies - what should young people learn and do they have the requisite skills that the economy needs?

Some of the consequence of such an economic imagination is that an iron cage is created where people feel confined and in many ways, dehumanized. People make choices including what they want to learn in school or even on whether to have a child based on the economics of cost-benefit analysis. I wonder how many people can live more full and fulfilling lives if they felt more of a freedom to pursue what truly resonates with them? Would we as a global community be better off too?

Similarly, as the GDP doesn't include areas of work such as caring for the young or old, these caregivers are not given the due respect or support that they deserve.

What if governments decide to count caregiving as part of GDP? Suddenly, many countries' GDP would go up! What would be the new impacts it would create in our world?

• Cat Ho

So we have many economic policies in Malaysia over years and they are quite similar even after they have been revised. I would like to point out that quite often small business and enterprises do not file their tax properly and therefore, showing up as low income household under the government system. Meaning that whenever government scholarships are assigned to the children of these households, you end up in a situation that the rich kids are still getting the most financial support because more educated group has the most information!

• Tammy Cheng

@Tammy Cheng,
Tammy, you bring up a good point. Often, policies meant to help make things more equitable, such as scholarships, often can out of reach of the people who need them. Part of the problem is that people who need them do not know they exist or how to access them.

I recall how my mom was so resourceful that she found out about Lee Kong Chian scholarships in Singapore, which funded my older siblings' college education in National University of Singapore. Not all people are as savvy as my mom (who was illiterate) to hunt down such resources.

Conversely, we also know that the rich have many possible tax avoidance strategies that can result in them paying less tax than the average middle class household.

One of the key underpinnings of Neoliberalism is to lower tax rates in the staunch belief of the trickle down effect, which unfortunately has been shown in the 40 year history of Neoliberalism, that it does not work; but that kind of economic underpinning is still pervasive in culture and peoples' economic imagination.

• Cat Ho

South Africa has a mixed economy in which there is a variety of private freedom, combined with centralized economic planning and government regulation. South Africa has adopted an economic policy called the Reconstruction and Development Programme (RDP).

Economic underpinning: This emphasizes the importance of creating a strong, balanced as well as a dynamic economy on the back of wide-ranging education and training opportunities coupled with rising literacy levels and a dynamic youth sector.

One of the divisions is the RDP housing programme. This was introduced to redress the imbalances of the apartheid legacy by providing decent housing to poor people who were victims of the land segregation policy by the apartheid government.

The impacts are as follows: RDP was successful in some areas such as social security in which the government established a very extensive welfare system. The system tries to cater for the aged, disabled, children in need, foster parents and many others too poor to meet their basic social requirements. Unfortunately, there has been failure in this endeavor due to few factors that are as follows.
The housing system has been abused and not used for the direct purposes it was intended for. The collapse of many houses whereby the contractors allowed people to build houses without proper training. Other issues include the size of the houses being too small, no proper ventilation as well as having too many structural defects to be of any functional use for the occupants. Also affordability is a big problem affecting middle income earners as well as absence of sufficient land for huge scale housing ventures. Findings/investigations are showing that most of the housing problems are caused by corruption and mismanagement.

• Nina Wakefield

@Nina Wakefield,
Thanks Nina for introducing to us the RDP.
Its goal and purpose definitely seems praiseworthy, however, the execution seems to have been problematic, and the outcomes far from desirable.

I am curious about the following -
1. why was the social security program successful wile the housing one failed?
2. since the housing program was meant to help the populace, how did the affordability issue arise?
3. what is understood or explained as a dynamic economy and dynamic youth sector (eg. in the papers, what picture or how is the messaging of this done?)

Thanks!

• Cat Ho

I think many countries have this issues. Affordable housing built for the poor in less desirable location with flood issues etc. I think UK has got the balance by making sure developer has to reserve certain percentage as affordable lots. In Malaysia, some affordable housing might be bought by the rich and rent it out etc. We solve one problem and create another one. Housing is really a difficult issue to tackle!

• Tammy Cheng