Paul Janisch

GIVE NOTHING AWAY

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What Scotland could teach South Africa about an economic programme

Scotland is a beautiful country, once you’ve got past the whisky there’s a lot more to experience.  I only spent a few nights in Edinburgh about 30 years ago, but it was enough for me to develop a love for the country.  I got lost in their literary heroes reading Burns and Robert Louis Stevenson (no so much Walter Scott).  Some of my favourite musicians come from Scotland.  There’s very little not to like.  The Caird logo comes from James Caird, a Scottish industrialist who financed Shackleton's Endurance Expedition,

I’ve done a lot of research on the country.  Here are some basic stats

• In 2022 it’s GDP was estimated at £160Bn (excluding oil)
• Population is 5.4 million
• It occupies a third of the land mass of the UK
• Accounts for 8% to the UK economy
• It belongs to the UK and is subject to their laws
• It’s estimated that more than 50% of the Scots want out of the UK
• 62% of Scots voted against Brexit

Oh.  Don’t forget the scotch.  It makes sense that Scotland would embark on an economic empowerment programme, they are desperate to up their game and a fair percentage of the population want out of the UK.   Dubbed the Scotland National Strategy for Economic Transformation (NSET) the policy’s gal is to (and I quote)

The overriding vision for the strategy is to deliver a “wellbeing economy” for Scotland, which the Scottish Government defines as “an economy where good, secure and well-paid jobs and growing businesses have delivered a significantly reduction in poverty”.

This vision is to be achieved through five programmes of actions;

• Entrepreneurial People and Culture,
• New Market Opportunities,
• Productive Businesses and Regions,
• Skilled Workforce, and
• A Fairer and More Equal Society.

These feed into three ambitions – for Scotland to be fairer, wealthier, and greener. The five programmes of actions have been chosen by the Scottish Government as they are the areas where it considers progress is likely to have the greatest impact, with the supporting evidence and stakeholder engagement supporting these areas of focus

As far as discussion documents go it’s fairly detailed.  It shows where Scotland’s strengths are and its weaknesses.  The same weaknesses seem to be somewhat universal, poverty and regional inequalities (with a suggestion that broadband distribution is not as wide as it is in South Africa).

Couched in strong nationalistic language the strategy recognises and rues that they are limited in what they can do by their being part of the UK

Our ability to address these long-term structural challenges is made more difficult by a lack of economic powers. For example, our ability to directly effect change in the labour market is limited as long as employment law remains reserved. And without migration powers we cannot design and implement an immigration system to address our demographic challenges.

The boldness of the strategy lies in their plans for the next ten or so years and how it all ties in with the goal to become greener and striving towards a net zero economy.  Every programme and planned milestone is linked to the five outcomes. It’s very inclusive

We have the opportunity to design and deliver employability services tailored for local areas and people, using place-based and person-centred design, building on our No One Left Behind approach.

On the subject of inclusivity the strategy notes

It is vital that every region in Scotland benefits from, and contributes to, a more productive and innovative economy. Every part of Scotland has unique strengths, assets and opportunities and all businesses and communities, rural and urban, can bring innovation and creativity and support the resilience of the economy.

Where South Africa has fallen dramatically short of this policy is that they have set their sights on the top ranking countries top ranking countries on the WEF Inclusive Development Index and their Global Competitiveness Index ranks.  These include Norway, Luxembourg, Switzerland, New Zealand and Iceland.  Yes they are strong economies but South Africa chose to dwell in its fundamental mediocrity.  On top of this the various documents discuss the inclusive Growth and Development Framework.  The graphic below speaks wonders about foundations.

South Africa fails dismally in the first three, namely Education and Skills, Basic Services and Infrastructure and Corruption and Rents.  You can think of these as the most basic Maslovian requirements.  Without that foundation you cannot attempt to start a black economic empowerment process.  The fault there lies entirely with an inept government that neither appears to care nor is particularly bothered to fix it.  In fact they blame the private sector on all of their failings.

I could wax lyrical about this programme and I will.  The next post will be about what South Africa could teach Scotland about an empowerment programme, and there is a lot that they could teach them not to do but there’s a fair amount they could teach them to do.

Launch of our BEE channel

We did a very comprehensive course on BEE for organs of state.  It's now available on Udemy.  However there was a request that we couch the benefits of a public sector BEE implementation.  The codes are clear about the applicability of the codes

3. APPLICATION OF THE CODES
3.1 The following Entities are measurable under the Codes:
3.1.1 all Organs of State and Public Entities;

What there gets really interesting is the type of scorecard an organ of state would need to use.  It's understood that the Specialised  entities' scorecard is the correct one for organs of state.  But then again it might not be applicable to all organs of state.  The specialised entities' scorecard is applicable to

1.1.4 Public entities and other Enterprises exclusively owned by organs of State;

With a public entity being defined in the BEE Act as

“public entity” means a public entity listed in Schedule 2 or 3 to the Public Finance Management Act, 1999 (Act No. 1 of 1999);

This excludes municipalities.    Yet municipalities are an organ of state and are measurable under the codes

• Broad-Based Black Economic Empowerment Act 53 of 2003
  “organ of state” means—
  - a national or provincial department as defined in the Public Finance Management Act, 1999 (Act No. 1 of 1999);
  - a municipality as contemplated in the Constitution;
  - Parliament;
  - a provincial legislature; and
  - a constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No. 1 of 1999);

What we have now (and Rob Davies must be held responsible for this - just another reason why he was so useless) is municipalities that are measurable under the codes yet they don't have a scorecard. 

AND - do you know that the BEE Act imposes no sanction for public entity non-compliance.  The rabbit on about fronting.  It's likely that the only sanction is the the Auditor General will give municipalities a qualified audit if they don't comply with their BEE obligations. 

If you want to see the presentation, it's available on YouTube.  Please like and subscribe.