Ann Bernstein is the Executive Director of the Centre for Development and Enterprise, South Africa. An independent think tank, CDE is South Africa’s leading development policy centre, with a special focus on growth, jobs, education, cities and the role of business.
Moderated by Soraya Mohideen, Harvard South Africa Fellow and HKS Mid-Career MPA '23, this discussion was held on October 31, 2022 at Harvard Kennedy School.
DISCLAIMER: This webinar transcript was loosely edited and there may be inaccuracies.
Soraya: So Ann, to dive right in, can we start with understanding the core question, Why does South Africa a country with so much potential still flounder?
Ann: Let me say how delighted I am to be here and thank you for the invitation and lots of friends in the audience. That's great to be interviewed by a South African. So South Africa is one of the few mineral rich countries that is middle income, and we are a society with enormous potential. We were a democracy with a constitution that works pretty well. There are few countries in the world developed or developing, whose President is called up on National Tv at the Zondo Commission and asked to account for his actions as President of the Anc. As Deputy president of the Anc. And as leader of the country. We have an independent judiciary. We have an enormous country, really a very big country, with very beautiful, enormous potential for tourism. And of course we have lots and lots of minerals, what you might call some of the old stuff, or what Ricardo would tell us some of the new stuff for growth. We have one of the developing world's. Most effect of financial sectors, and We have a system of cities that is unusual in the developing world. Most developing countries have one big city that's kind of overwhelmed, as the country urbanizes. South Africa, has eight metropolitan areas, of which at least five or six or reasonable places which absorbing people in different ways. So we have a lot of advantages, and of course we have great people, i'm not so sure about the politicians.
Soraya: South Africa is mineral rich. We've come through a peaceful democratic transition. We have a few strong institutions like our financial systems and private sector companies. However, on many global indices like inequality, one hundred and fifty education, unemployment, health and housing. South Africa is falling wealthly short. Why are we in this position?
Ann: So this is an important question, and they are probably different answers. Let me start by saying South Africa was always going to be a hard place to govern after apartheid in centuries of discrimination, a very powerful and terrible system of apartheid that affected millions of people's lives. This was always going to be difficult. On the other hand, I think there are three reasons why we are in the terrible situation we are in now. He first is what our President likes to call the nine wasted years which are the nine years under his predecessor, President Zuma, who, Protestations of black economic empowerment, notwithstanding, enabled a family from India to come and, together with South Africans, black and white, essentially looted the State on an industrial scale, and in so doing their undermined institutions. That's his explanation. But I don't buy that. I think he neglects to remind everyone that he was deputy president of the Anc. At this time he was chairman of the Deployment committee for the five years at the height of State capture, when people were put into think it's in an inadequate explanation. Nine wasted years as the that was somebody else, and I i'm the new guy, and I think in some respects you have to say we've had for the last five years a flailing reformer. He raised hopes he seemed to want to do the right things. He has done some things. We are now starting to see a range of people who participated in destroying institutions being charged with fraud and other crimes. Nobody yet in orange overall overalls, but i'm hopeful. But the process is starting, and I hope a lot of people are getting very worried. So he has done that, and he has what's been people who are not correct to do that. He has also made one or two policy decisions that potentially really important in the energy area, for example, with South Africa is in deep trouble. Um. We are now allowing beginning to allow a market to for energy to appear, but we're very, very. We're at the very early stages of that, and no guarantees. We'll get there erez agmoni. I think so. We've had a flailing reformer who has failed to do a a range of things from improving education to having people in his Cabinet who are both corrupt, and some are completely incompetent. One who knows the marriage of the two, or what that means. But at the top levels of government. Increasingly. There are people who it's hard to ask a South African audience name me a minister you respect who can actually do their job outside of some pockets of excellence which are the South African Reserve Bank and the National Treasury, and perhaps parts of the Presidency. But The third reason we are in deep trouble is, whatever the Harvard technical term is bad policy decisions. They are bad policies that have come out of the Anc. And have been implemented, of which the most important cadre deployment, where they've appointed people to key positions to this day because of loyalty to the party rather than competence to do the job, and then the other.
The thing, I think, has been absolutely critical is they fail to appreciate. Never mind, understand the power of markets and firms to help transform South Africa. And so, even when famously, Nelson Mandela came back from Davos in the Ninety S. And said, I've been persuaded We have to understand markets, global markets and deal with global markets and essentially move towards a social Democratic rather than a Communist position. At no time did he or his successor and Becky two Persuade anyone else of why they had changed their minds. So there wasn't a big campaign to explain to members of their party or their government why they had moved to a very different approach to how to govern South Africa's economy. So to this day. We have Marxist language, and we have far too much faith in a developmental state whatever you might think of this ideologically, is just a joke. When we have a weak and corrupt state. So the Anc. To this day and the President want the the State to lead the State to direct the economy. And this is just ridiculous. The current level of capacity, competence, and integrity of the State from top to bottom.
Soraya: Those outcome sound bleak, and I think, despite those big outcomes, perhaps you and I share some optimism about our country. You recently shared in a talk that South Africa is one of the top three countries after the US. And Canada in its Coquit citizenship. And I'm curious, what then is the role of South African business to maximize the corporate citizenship for the development of South Africa?
Ann: You posing to three very important questions. Let me take the easier one, which is, I have very strong views on the role of business in society, in any society. I think the most important place to start that conversation is not where most people start it. Most people want to start with, what more are you going to do for our society? And they take for granted the running of a profitable, legally compliant institution? I want to start the conversation with any successful modern business, and most of them do comply with the law. Any company or firm like that is providing a service to society already, otherwise no one would buy their products. But they do much more than that. So, being a profitable company, means you're providing careers for the people who work for you. Probably health care, unemployment, insurance pensions for them and their family. You pay taxes. These are the most legally compliant institutions in the history of humankind. That's where the conversation should start. That is their most important contribution to society, whether it's through innovation or the corner store that I could go to, or the pharmacy in the middle of the night. So that's I think, really important. Before we start the conversation about, what more can you do for society? And a lot of the time, like companies all over the world, this involves ad hoc projects. It's kind of nice picture opportunities for the Ceo to open a new school or do something like that. It has started to change in the biggest companies who are trying to collectively have a bigger impact systemically on, say, education, one hundred and fifty. But it's not nearly advanced enough, and my guess is that's the case in many other countries. So I think corporate's investments. Social investment is a really important. It's free money. It's money that doesn't have to be spent on teachers, salaries, or all the things that public money has to be spent on, and that's then one hundred and fifty implies much greater thought about how to use that money strategically and to have a real impact and the best advice I ever heard on this, which it's easy to say, but harder to do. Is there is an American who said to me, You know, if you think of education, however generous the American private sector, Canadian or South African, which at the time were the top three in the world terms a proportion of money donated to social investment one hundred and fifty. It's less than one percent of the National Education budget. So, according to this person which I agree with private dollars, should be used to influence how public dollars are spent. That's how you have
impact in society, and that's easy to say as I said, it's harder to do, but it is possible, and it requires a different kind of approach to how most people think about this, and i'm not talking about. Let me be polite. Um. The current debate on Wall Street and elsewhere about Esg funds. A lot of this is marketing. A lot of it is hype coming out of companies and the industry around social investment Shouldn't believe anyone don't believe all their reports destroying many trees on inputs. They tell you all, we spend this one on entrepreneurship, and that on something else. And then, in case I want to know about output, and most of them never tell you about output. So this is a much more complex area than I think is often allowed. Lots of let's just call it marketing that goes into this rather than reality, and we should be pushing much harder for serious engagement on serious issues, and to pretend that E. And S. And G. Can all be being together in one little happy phrase, ridiculous. And so i'm opposed to this glib sort of staff. But it's very important kind of precious money. In a society it should be used much better.
Soraya: In addition to the the dollar contribution, one of the ways that business can make a meaningful social impact is on job creation. And so this is an area that is a lot of sleep, particularly in South Africa, one hundred and fifty. And if we were to matter in on that topic specifically. How can businesses make more meaningful contribution to job creation and gift people onto that first run in employment?
Ann: Sure with respect to the where you phrasing the question. South Africa has one of the highest unemployment rates in the world, So there's a lot of chatter about job creation as though business people get up in the morning and say, how many jobs can I create today? Most business people, ninety nine percent of them don't get up and think that they get up And think, How am I going to make sure my company survives and we can make a profit? That's what they're thinking about. Jobs are a consequence of growth and firm development. So it's important to think about this properly, and I wish South African business would push back more with the Government for this loose talk about this. So one the real issue in South Africa, I think, is it's twofold. You have to create an economy, but And you facilitate economic development that deals with the the workforce we actually have and not the skilled workforce. We we think we have, or we wish we had. So you need jobs for the kind of workers that we have. How do you do that? Well, Firstly, you have to one hundred and fifty facilitate it. You have to make it easier to create firms. And now i'm going to reference Ricardo in some ways. On the one hand, you have to think about South Africa's spatial legacy, and how expensive it is for poor people to get close to economic opportunity. Apartheid was all about keeping people away from the centers of economic growth, and inadvertently, not deliberately. The democratic government has Erez Agmoni had a housing policy that has pushed the poor further away and not brought them closer to economic opportunities. So that's so. Transport is clearly one big issue. The labour market is a second issue, where one the government, when the ends he came to power. They wanted a high-wage, high-skill sort of economy, which is fine, but they didn't bother to train the workforce. They have not improved basic education in any significant way, and our skill system, vocational skills is expensive and and doesn't produce the numbers.
People trained to do what our economy needs. So we haven't done that. But we also have encouraged,
if you like, the top end of the economy, to do deals in a factory or an earth, a workplace where the urban elite in the workforce make a deal with the employers, and then the Minister of labor extends the wages and conditions and hours, and so on to everybody across the country.
And that's very harmful. So we don't create nearly enough low-skilled jobs for the population that we have one hundred and fifty, and we keep talking about as to people in America and elsewhere, and the Eu they want decent jobs. I just want jobs for people to get a first foothold in the modern economy, and I think the more adjectives you put in front of the word jobs, the less jobs you'll get.
Soraya: If we then abstract the questions a little bit. I'm wondering about what preconditions are required for business to co-author, a prosperous future for South Africa, or our preconditions of policy?
Ann: So co-author is an interesting way of putting it South Africa needs a very different approach to how we run our economy. That requires a very different understanding of the role of the State. The so current South African State is struggling to do the basics that any State should do protect people's, lives, protect property, small businesses are destroyed when crime happens and they're broken into and so on. So I think the South African State should concentrate on rebuilding professionalized, and focus on the basics, fix the roads, or or get someone else to fix the roads but the basics, and they should free up as much of the country as possible, and as much of the economy as possible for private sector actors to operate in competitive rules.
The enormous opportunities to do that. The the rest of Africa is Some parts of it are really growing fast, and South Africa can play a really important role there in some ways, like Hong Kong did for China. That should be how we should be thinking about South Africa for the rest of Africa.
But we have to stop monopoly provision of very basic services for the economy. It's one thing to be a monopoly, to be a useless monopoly to not allow competition to not provide services, and the few services you provide you provide very at a very expensive rate. That's electricity. Our ports are some of the worst in the world, and they should be some of the best. And our railway system, which was a real asset, is, is not working very well, so there are a whole lot of things that need to be fixed, and, in my view, so one of the South African dilemmas, and then our stop is a lot of people know we have to reform. The conversation goes like this. We have to do the following kinds of reforms: You've got to reform monopoly, provision of railway power ports, etc. We need to fix the roads. We need to do change the education system. We need to the telecommunications needs to be completely modernized and much more competitive, and so on.
But they said, the State is very weak, but we all not our heads, and then five seconds later, they tell us the State must do the following things to reform, and i'm the voice in the room that says, Hang on this State is going to really struggle to manage the reforms we need. The only capacity in the country of real significance lies outside the State, mainly in the private sector, which is an impressive private sector for a developing country, and they could do a lot more if the Government would open up the seriously open up space for South Africa's, some of our world-class companies and our financial institutions to play a much bigger role in. Yes, to make profits, but to help rebuild the country, and that's I think, the key variable.
Soraya: Thank you. I think, before we turn to questions from our audience. I'd like to end with a broader question. We've got many students in attendance who will work at the intersection of the public and private sectors after leaving HKS. What should these future policymakers do to unlock the potential of private sector in driving national growth?
Ann: Well, let me restrict this to I don't know the way. It's a big question, so think the history of the last period globally has shown the enormous power of markets operating in competitive circumstances in imperfect countries. You, don't need perfection. I think that people who go into the State Should understand the power of markets, and how to use that to help develop countries. On the other hand, you know, after all, if a clever state can get the markets to do all sorts of things, or enable them to do all sorts of things, and then claim this as their victories. It's not as though you have to you. Then say, look what we've done. It's not that you're giving credits all the time. So there clever ways to do that. On the other hand. I think that people who go into the private sector dealing with the dreaded e is. G. I think you need to be strategic. You need to think about the real role of companies and the enormous power of markets, core companies not. And then what else you can do as corporate citizens in a particular country, and I don't know, Don't believe anyone sort of do your own work and be skeptical about. Hi, but think hard about the role of the market and the state, and how you can use that to change, to improve things for the better. But don't be fooled by a lot of the I don't know the chatter about all of this. I'm not sure if that's what you were looking for. But thank you, Anne, thanks so much. We'd like to welcome questions from our audience. Thank you. I believe we have a mind.
Attendee: Thank you, Ann, for a very informative discussion. Um, i'm also South African. So probably a little bit biased in terms of my questions. But I hope to. The first is um related to States and the private sector. I think I feel like there's an inherent distrust between the two, probably along political and racial lines in terms of the private sector being inherently white because of history in the country and government being historically black because of new emerging transition. That's happening. And how do we break down that barrier and create more trust between the two, so that we can actually overcome some of these blockers. And then the second question is related to the State itself in terms of government. I think we seeing such an amazing emerging class of well-educated South Africans across all spheres and how long the anc continued to have a hold In terms of old ways of governing with such young vibrant energy coming through. And what does that look like?
Ann: I think there are two things about business and government. I'm very hesitant about using the word we need. Three years ago people would say, Oh, we need greater trust between business and government, and I was on a platform the other day, and I heard someone say that. And I thought, Yeah, a lot of crooks in government. I don't want business to have greater trust between with them. We know what happens then. I think there is an ideological issue. The ruling Anc. believes in a developmental state, a sort of fantasize about an East Asian State, but they aren't one until you break that fantasy. In my view, it's going to be very hard to make real progress. That's the one issue. The second issue is the business sector is obviously not perfect, and there were leading companies involved in State capture leading international companies from Bain to Mckinsey.
Don't go and work there, everybody. If you behaved appallingly Um and other companies S. And P. And others, they should be charged, and people should go to jail if they broke the law. And I support the South African Government, saying they are not going to work with being in future. And the yeah Uk Government. Perhaps you could talk to this government. So there's an ideological issue, and it's our history, and it's almost like you want to say things are so bad. Can we talk about the future?
We're lucky as a country to have the private sector that we do with all its imperfections when covert hit. The South African business community responded so quickly, and I have yet to find another country where the business community responded in the way that they did. They put up enormous sons of money for the public good. They organized themselves to help deal with, remember the days of PPE, and so on, and then the vaccine. Without them we would not have been able to vaccinate the percentage of the population that we have. Not that it's fantastic. So I think they did an incredible amount. They also pulled together a whole lot of people to write the world's longer strategy document for the economy of one thousand pages. But you know the enormous detail and commitment and seriousness. This needs to be recognized when there needs to be a whole different attitude. Our business also needs a different attitude to government. They think what's wrong with these people. Governing is easy, and it's not so. There is some fault on either side. Um, which I think needs to be dealt with, and how you cut through that. Well, of course it's always the option of a new government. You can throw the rascals out and put a new bench in.
Sorry. What is your second question about? Oh, right? What about young people? Well, you have to stop cadre deployment first and foremost. So cadre deployment is the term in South Africa for the Anc. Government and C Political movement. Having a committee chair by the deputy president of the Anc. Who's normally the deputy president of the country, who sits and they discuss. Who are we putting up for the judiciary? We have an independent process to choose judges, but this committee decides who they are going to put up who they're going to put up for top positions. Head of Escam, head of the ports of everything you can imagine. Now they say, this is just like any other country, the ruling party We're making suggestions. And then in the government there is an independent process of recruitment. But this is doesn't hold water. Why would you have such very senior Cabinet ministers, deputy ministers generally of the country chairing this political parties Committee on who should get which jobs it's just, you know, doesn't matter. I don't believe it. Nobody believes it. And, in fact, the deputy, that Deputy Chief Justice of the country, now the Chief Justice of the country, in his report on State capture, said that he thought Cadre deployment was both illegal and unconstitutional.
There's no doubt in my mind that it's been a key factor in undermining state capacity, because it would be. Are you loyal to us? Will you give us a cut by making it up of the loot you get? Will you make sure the procurement goes in a certain way you can imagine the conversation that takes place and not. Are you a competent engineer? And how many years of experience do you have? And why should we put you forward for a very important position?
So you have to cut this, and the answer is divided on this. See some leaders saying we should cut it now. But the key for South Africa is to hold the educated people that it is training, and we now have many more black South Africans coming through our universities. More black engineers, more black teachers we're doing, not fit. Consider our past. We're not doing badly. It's improving. So there are lots and lots of people coming through the system, but they need to. Then, like all of us work well-run institutions where you can learn on the job. This is the home of know. How do you get know how you watch? And the people running the engineering firm or the legal firm actually do their job, and you put in your years learning and then improving as a professional. And that's not happening well, partly because of carto deployment, and partly because one, I think, a very badly implemented approach to black economic empowerment.
Attendee: I'm originally a Brazilian, But in the summer working and I also a venture capital fund in the city, and one of the notice. It was very hard for the fund to make investments that want right men to be Africans, and it also used to be on their second or third entrepreneurship endeavor. And I think that there is a lot of conversation in the country at least, that I participated this summer. That spoke a lot about how entrepreneurship can move the country forward. I'm curious on your thoughts about how you can be able to leverage entrepreneurship that goes beyond The Africans white Western Cape kind of uh environments. And if you have any thoughts about how the private sector can do more things to do that beyond. Like Allen Gray founders and that kind of stuff.
Ann: Lots of layers here. Great question. I would stop the way it's currently legalized and implemented. I would fix education, you can start making a difference in six years. But it really makes a difference. Some seventy percent of South African learners in our schools can't read right? Add up in any serious way at all, so we can't discuss entrepreneurship within. We should stop talking in my view. Nonsense! Which is, we look at a whole lot of unemployed young people, and we say you should all become entrepreneurs, and they are people who generally come from homes where nobody works, or a community where nobody works. You just set them up for failure very bad strategy. So we should stop wasting time there. One hundred and fifty, I think we have a reasonable, but i'm not an expert sort of venture capital sector, and it's growing, and there's lots of money in the banks and financial institutions to invest. So we need to allow the real entrepreneurs to emerge without preconditions with the bee kind of preconditions, and then we have to fix the environments in which they would operate. Okay, maybe sort of people don't know enough about this. These are an ever-expanding set of regulations which to new investors, for example, you're about. You've discovered you want to explore for minerals in South Africa, and you'd like to set up a mine. You have to give away half your profits before you have any by finding a black partner. It doesn't have to contribute anything. They just have to be black before you can get funding before you can conform with the government's laws. So that's just one of the issues um, and they they're a range of other. Be constraints that hold back new investment and new invest tools. There are other issues. So, leaving aside that take minerals. Okay, South Africa has not invested in new exploration for the last. I think it's twenty years. It could be at least fifteen. Why, there's real possibility for all sorts of minerals, but there is dispute about the property rights system, and what rights the mining companies will have their disputes about who owns which piece of property And because we don't have an effect of cadestral system. The mining sector has said, We'll pay for another one. No, it says the department will do it. But there, one hundred and fifty incompetent. They have vested interests. They all sorts of swirling accusations are not competent to assess. Why does this all take so long? So there are there are a range of issues. They're told back entrepreneurs, I think, in some respects at a big level. There is a lack of confidence in how the country has been governed a lack of confidence in where it's going. We don't have a vision for the future that's plausible, and the politics is unstable. So they are big factors. The economy is generally stagnant, and that's partly because big investors are not seeing. The environment is one in which they can risk their money. So that's a part Answer to your question.
Attendee: Hello! My name is Douglas Barrios. I'm the Director of Policy Research at the Growth Lab so many here, or several here are in their training students, and one element that, at least in the MPA/ID program they share about thinking about policy design is that good policy. It needs to consider what is technically correct, what is administerably feasible and what is politically supportable. And I think we've heard a a lot of the direction in which how policy making could improve in technical terms, and where a state capacity could grow. But I was wondering if you have some inklings inside thoughts about what are elements of a political equilibrium, or in a political narrative, or a political coalition that would support these types of reforms, eh? As Lant Pritchett would say, the current equilibrium is an equilibrium for a reason, because there is political support to what has happened. So what what could be some ah ideas about an alternative political equilibrium that would favor it.?
Ann: It's a vital question. Let me start by saying I run a non-party political organization. So bear that in mind, and one of the hopeful things about South Africa is that until about two thousand and sixteen our elections were racial referendum because of our apartheid past you could predict how people were going to vote. And it was race. It was the past, and it was race two thousand and sixteen, a whole lot of mainly Anc voters stayed home. They didn't vote about three million, which is significant in the country of ours. The number of people who vote in our country. And this phenomenon has increased to last year's two thousand and twenty-one municipal elections with they will run. It's really a referendum on the president his face was all over the country. It wasn't like the local candidate. It was the President. They got less than fifty percent of the vote. They've lost the big cities, the current government, the electorate.
So we are entering an era of much more competitive party politics, which is healthy after all. We Haven't had a change of government which some of the theorists would say is the key marker of a really democratic society. We have had a change of government in. We have provinces or states. We have nine of them, and in one the Anc. Has lost power, and what happened there is, they lost power initially by a very small margin, and it just gets, It's big now, but in no other part of the country, except in the Metro governments and some smaller towns as well so much more competitive politics. We are heading towards a general election. One scenario is that the current ruling alliance really, which is the Anc. The Communist party and the one of the the biggest trade Union movement, although that's now split in two directions that they retain a very small majority. But they will lose seats which won't make people in their party happy. So that's one scenario, probably the most likely. As we sit here today, there is another scenario which is that the Anc. Goes below fifty percent. Now, if they go below forty, five percent, they're going to struggle to form a government unless they go in with the the third party in South Africa's system, which is the economic freedom fighters which sits at about ten, eleven percent of the electorate and are a very bad party make me just say they have a style of politics. That's fascist. They are racist. They're violent, often, not all the time. But these are not a model Westminster-style party. Um, Now there are many people in the Anc. Who fear getting into bed with the ef is young and quite. They're smart, as many Populists are. They're smart, energetic, and I think it would lead to a breakup in the Anc. That's one possibility, and I think it's it's a possible alliance, but it would. It's unlikely, in my view, one that it's possible. So if the Anc. Doesn't get into bed with them, what about the opposition. Now, if they around forty, five percent or less, if they're above forty five percent, they can do a deal with. They're lots of little small parties, and we have a Pr. system for a whole lot of reasons, which unfortunately, is not a great system for South Africa, but it encourages smaller parties, so above forty, five you can find smaller parties to align with below forty, five, and you don't go in with them then what happens? That's the big question, so could there be an overture to the official opposition at twenty five percent as we sit here today, Will the official opposition get into bed with them a dying party correct? What are the pros? What are the cons? What's the deal? Or can the official opposition be the anchor for an opposition alliance that can take over government, perhaps as a minority, And that is not laughable. A few years ago you would have told me to get out of here. It's a really ridiculous idea, but it's not laughable. So South Africa does have more competitive politics, which is good. Our good constitution has some imperfections. There's a big debate at the moment about whether or not independence should be allowed to stand for election, and how you do that in a Pr. System too complicated to explain. I think the Government has backed this issue. Unfortunately, because there is a solution. There is a was a committee appointed a few years ago, which many and then another committee recently that supported a mixed-German type system which more or less, would in most People's view, be a much better alternative, but we don't have that for two thousand and twenty. Four. Constitutional reform is on the table now. So there isn't a simple answer to your question. But I think this: the situation in eighteen months time is going to be worse than it is today. The politics of that start looking interest the politics not living there, but the politics start looking much more interesting. I think there are going to be at least one new political party early next year of reasonable. Social Democrats, let's call them, which will be a break with the Anc. And it will be black. So this is the space to watch. It's very hard to predict as we sit here now, all right quickly. Thank you. Sorry for the moderation.
Attendee: Thank you. Ann. I'm Mark from Haiti. I'm a mid career here. I'm more curious about the role South Africa can play in the region you mentioned a little bit Asia Um. So today we're looking at Nigeria, Egypt. We're actually ahead. Now. What rule And how do you think South Africa could actually help shape the continent?
Ann: Second, look at how they calculate that they're ahead of us. But leave that aside. Um! I learned really Key, i'm not an Africa specialist, but I think there are enormous opportunities.
One of the issues about South Africa. The region is migration, which I think is a really important issue. The country needs South Africa needs skilled migrants, we have an ambiguous policy on that. But it's ironic. We have so much unemployment, and we desperately short of skills, even when we're growing at one percent. If you give to three, then we really need many more skills. So I think South Africa should be much more open to skilled people. We can discuss where you draw that line and where we make it as hard as possible at the moment. On the other hand, our borders are porous, more porous than they need to be in a policy area that's hard to have perfection. We make it pretty hard for unskilled people to come in legally.
Of course, these corruption, so you can buy your papers. Who knows how many? It's very murky area? We also don't know how many people they are in South Africa. So we're talking. I don't know who to believe. If you believe anyone in the state they're generally angling for more, a bigger budget for the police or the Border Patrol, or the this, or the that, or home affairs. And whenever you talk to the Academics the number is dramatically lower. So I think we don't really know if we're honest. We did a lot of work on this about ten years ago, and was quite clear that the numbers were vastly exaggerated in the media one hundred and fifty by interests, who want more money from the budget.
But I don't know how much things have changed. Really, it's bigger. I don't know about how much the migration is clearly a critical issue in terms of the region. That's the one thing i'd say. The other thing i'd say is that the future of Satsar and Africa will be drastically affected if South Africa goes bad and that should be prevented at all costs. So that's you know. I think we've not been very effective on trade, and so on. But i'm really not an expert. I'm afraid in that area I can't help much collective business initiatives to address systemic challenges, and it'd be interesting. You mentioned that sort of Covid response in business for South Africa. What other examples are you seeing of sort of large-scale collective and industry, efforts and education, or the national business initiative are These are These affect a farther as a model that could be relevant elsewhere. South Africa's business sectors got become more organized. As the situation has got worse, they've got more organized. They also speaking out more than they used to. They tend to do a lot behind the scenes, trying to influence the Government policy I personally have advocated. They should do a lot more in public, and ensure that they are their voice and their vision; for South Africa is communicated much more effectively to the society as a whole rather than behind closed doors. They are collective efforts of different kinds, the covert one, notwithstanding. We put a lot of energy into trying to get South African business to spend the vast majority of their social investment on education, to move away from Ed Hope projects about ten years ago, and we've They have been movements and significant initiatives set up to do that They're different ones. His debate about effectiveness, this debate about have you made the State more dependent on the outside players rather than a stronger state, which we know is a danger, and we would argue that too few of the business initiatives are independently evaluated. So there's lots of hi, but very few independent evaluations. So it's hard to actually comment with with famous lots of energy, lots of marketing, I think, in in education where we have done a lot of work they has. They are really significant initiatives. There are also a lot of questions about them, and this. It's really hard for me to take it further than that in public. Ah, because I don't know enough Now the other people who would come here and say to you, the national business initiative is doing a great deal of work on climate change. It's not my area. Don't know anything about it. They people who would say that individual companies, big South African companies, are doing an enormous amount, and one of the points I wanted to make about a comment earlier is oh, very simplistically. talk about white capital, And you know the black government. I think the government is predominantly African now, and the Anc. Is ninety nine percent An African party now, which most people don't talk about. It is increasingly, racially exclusive. But you know, I go to talk to a lot of boards in corporate South Africa, and a few years ago I was caught short because I just assumed I would be talking to a lot of white men, and I walked in. It was very clear. I've made a mistake, and I was changing my talk midway because I hadn't appreciated how much corporate South Africa has integrated.
So there are big companies now where the mid-level of the company is ninety percent black not through affirmative action, but through internal training or just pressure of numbers, and people are starting to come through the ranks in a normal way which is fantastic. They are useless at communicating this to the rest of society. So I think there's lots happening, training and all sorts of things, but it's hard to be authoritative on a lot of it, because distinguishing he from reality, is very difficult.
Soraya: Thank you, Everyone on that note more close of the talk. Thank you so much, Anne. It's been a delight to speak with you and to your insights. Thanks very much.