'Rijken zijn blank, armen zijn zwart'

Engeltalige transcriptie van het interview dat MO*redacteur Stefaan Anrys had met Alan Hirsch.
How is your assessment of the economic policy of South Africa since Mandela and Thabo Mbeki. The gap between poor and rich has widened?
Economic policy since Mbeki has put more emphasis on industrial policies and how to support domestic diversification of the economy to increase sustainable job creation. It is far too early, after one year, to speculate on its impact. The gap between the rich and the poor has grown, data indicates, since 2000.
However this is the same period during which poverty was reduced due to higher employment levels, rising per capita income and stronger social transfer programmes including the Social Old Age Pension, the Disability Grant and the Child Support Grant. The gap has grown because the richest in society grew rich faster than the poor grew richer. This was largely because of asset price appreciation in South Africa in the 2000s, and because of the premium paid for skills.
The cliché is that the gap between black and white has been replaced by that between haves and have-nots? Is it correct and could it have been different, with other policies or approaches? The gap between whites and blacks, in Bantustans and under apartheid in general, was much worse anyway, not?
Most of the rich are still white and almost all the poor are black. A small proportion of the rich are black and a much larger proportion than before of the middle class is black. I have explained why the rich got richer above. The main remedies for poverty are better education and skills development programmes for black people, and more effective support for business development. Education and skills development (along with health care) are the highest priorities of the Zuma government. 
Another commonplace is to say that whites gave up political power, but kept economy in hands. Which groups keep the reins of SA economy nowadays? Most of the economy, as I already mentioned, is still owned by whites, and by foreign investors. Empowerment programmes need to be continued and improved until there is a fairer distribution of wealth. The fact that the political elite is largely black and the economic elite is largely white leads to peculiarities in the distribution of economic power in South Africa.
None of the daring promises of Zuma, neither the nationalisation of mines as was stated by ANCYL-president Malema, has come true. Do you see the hand here of powerful pressure groups within SA economy or the influence of international capital(ism)?
You appear to be confused by political noise.  The promises or threats of Malema are not made on behalf of President Zuma. Malema’s position is currently being examined by the ANC in terms of its disciplinary procedure, on charges of defying ANC policies and codes of behaviour. Zuma’s position is clearly articulated in the ANC 2009 election manifesto, and in the Medium Term Strategic Framework of government published in mid-2009. Both are widely available and accessible on the internet. These positions are reiterated in President Zuma’s speeches. (None of them refer to support for the nationalisation of the mines, for example.) I am not aware that the policies of government have departed from the ANC Election Manifesto or the MTSF in any significant way.
 
SA Economy has been growing until financial crisis made growth figures drop below zero, for the first time since the fall of Apartheid. Analysts said SA is particularly vulnerable by the nature of its economy – banking sector geared toward world market, heavy weight of car manufacturing, etc. Correct?
The South African economy and its exports are not sufficiently diversified, which makes it vulnerable to major changes in the price of and levels of demand for commodities. This is why more diversification of the economy is desired. It is also a very open economy with few restrictions on the movement of funds, which means that local markets react quickly to world events. However, South Africa was less affected by the crisis than many middle income countries, including a number of European countries, because of its prudent macroeconomic management and the high quality of its regulation of banks and the credit market in general.
Regarding banking, South Africa has strong national banks, which are playing a significant role in African development. Unlike many developing countries, very few South African banks are foreign controlled, and they were generally not affected by the poor banking practices followed in the United States and some European countries.
 
Where is growth to be awaited in the coming years?
Growth will come from an expansion of traditional sectors (agriculture and mining) and from stronger growth in manufacturing and services. Much of the employment creation will come from non-tradable services including government and community services, which have plenty of room for expansion.
Where should the focus lay, in your view?
The focus of the government, as laid out in the election manifesto of the ANC, is on education, health care, crime prevention, rural development and job creation. This is a sensible set of priorities for the South African government in my view.
Sometimes I wonder if all the efforts SA made, to lower inflation, to keep an
economic discipline as asked by Bretton Woods institutions, have been useless. SA maybe copes with bigger problems, such as its geographical (isolated) location, its lack of an internal market or clients in neighbouring countries.
It is difficult to get the balance of macroeconomic policies right, between inflation, the exchange rate and fiscal balances. In my view, more consideration needs to be given to the effects of an overvalued exchange rate, which are the result of the strong foreign investment flows into South Africa since about 2003. African economic integration does need to proceed much faster, and will provide South Africa with a major additional growth impetus. As Sub-Saharan-Africa is now the third fastest growing region in the world, and has been for several years (after China and India), and is expected to continue to be in the future, African growth holds tremendous opportunities for South Africa.
Is it the mixture of a capitalist economy and socialist principles such as BEE that has made things impossible? I remember Brian Pottinger writing in his book ‘The Mbeki Legacy’ that –in his opinion- the main error was to think one could realize the ‘undoable’, namely put up an economy with a lacking skilled force, for example.
South Africa follows a fairly conventional social democratic approach to the role of the public and private sectors in economic development. The problem of the skills shortage has to continue to be addressed urgently. It has taken longer than expected to roll back the effects of “Bantu Education” under apartheid. As I mentioned, education and skills development (with health care) are the highest priorities of this government. One additional issue I would stress is the need from strong social partnerships at various levels between government, business and labour.
How, if wealth grows, can it be better distributed?
Mainly through major improvements in education and skills development and through social infrastructure and social services.
If not, will SA become a ticking time bomb? And is unrest considerably growing, as never before?
Unrest was far worse before, especially in the early 1990s. We have social delivery protests, which sometimes become violent. They occur when citizens believe that politicians are not sufficiently accountable. They are not correlated with the degree of poverty or inequality, but mostly with the quality of political representation and leadership. If political accountability improves, the social delivery protests will diminish.
Is SA losing its leading position to other countries such as Angola?
The South African economy is one of the success stories of the 2000s. A report about to be published by the OECD Development Centre includes South Africa amongst the middle-income countries whose standard of living is converging towards the conditions of the wealthy countries.
This will continue if the current policies are continued and if the quality of leadership in all spheres of South African life is strong. Of course, there are many things we could do better, and five priorities of the ANC mentioned above identify the key weaknesses quite well. In economic policy we simply need to diversify our labour intensive exports—we are progressing well in some of our attempts to do this, but better and faster skills development is the biggest challenge.
Even here, we should not forget that South Africa has by far the best higher education system on the African continent. Oil exporters such as Nigeria and Angola are growing faster than South Africa, but it will be decades before the standard of living and per capita income in those countries exceeds South Africa, or before their economic and physical infrastructure catches up to South Africa. In the meantime their growth is beneficial to South Africa too.
Who in the economic policy making now would you send to the bench and whom would you place in the forefront?
I work in the government. I can’t answer a question as subjective as that.