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Intergenerational Equity and the Political Economy of South Africa

Posted on Feb 24, 2014 in Economy, Ethics, Featured, Politics

Intergenerational Equity and the Political Economy of South Africa

To watch the full keynote address video by Dr. Abedian go to the following link: http://youtu.be/oC5lseYIgxk Intergenerational equity is a complex issue in public policy. The complexities may be compounded when one views it through the lenses of political economy, philosophy, applied ethics as well as in public policy. More often than not, the notion is invoked in discourses around environmental sustainability and or in politics of public debt. The concept, however, is much deeper and wider in scope. There is a range of sub-issues that are embedded in the term “intergenerational equity”. This is so because society is the intermediary among past, present and future generations. All social processes, be they political, economic, technological, ethical, or environmental have a systemic and dynamic impact upon the overlapping generations’ welfare. In the meantime, human beings are predominantly “present-oriented”. In effect, they discount the future heavily the more distant it is or is perceived to be. In effect, the present is more important than the near future and the near future is more important than the distant future. Furthermore, human activities and enterprises are, more often than not, subject to uncertainty and imperfect information. These simple but factual realities do have profound and far-reaching consequences for the success and failure of nations.  Moreover, our use of the natural resources, our approaches to the ecosystem, and the political economy institutions, the social and ethical framework we promote and the ease with which we commit resources to social and human integrity are all affected by our implicit or explicit regard for the principle of intergenerational equity. These issues have preoccupied philosophers since time immemorial and entered classical economic thought. However, the modernist pursuit of economics as a value-free “technical” science, particularly within the framework of neoclassical economics, effectively marginalized the intergenerational topics. The contemporary emergence of institutional economics coupled with environmental concerns and globalization, has repositioned intergenerational issues at the centre stage of the global political economy discourse. For the discipline of Economics, this offers an interesting, but challenging, vista. In reality, ethical values are implicit and exogenous in virtually all models. Economics is yet to fully internalize this fact. For South Africa, at this juncture in its social democratic evolution, intergenerational equity has an added significance. Nearly twenty years into the foundational years of its new democratic dispensation, compelling evidence and complicated syndromes of disregard for intergenerational equity are emerging. From the utter failure of the public basic education system, the widespread collusive and extractive conduct amongst the business corporations, to the near collapse of the public sector administrative and management capabilities, particularly at the local government levels, glaring and worrisome signs are in evidence that social welfare across generations is being disregarded, or even compromised. In the remainder of this chapter, the concept of intergenerational equity will be explored in more detail in Section 2, followed in Section 3, by an analysis of the patterns and trends in resource allocation across generations in South Africa. The analysis of non-pecuniary investments in future generations will be examined in Section 4. Section 5 will look into the challenges of intergenerational equity rebalancing. The final Section will end with some conclusions.   2 – Intergenerational Equity: Definition, Application & Significance Intergenerational equity is a principle of distributive justice which concerns the relationship among past, present, and future generations. We could conceptualize the basic contours of an equitable relationship among generations in many ways. From a social contract perspective, it is instructive to imagine that all generations are partners in an implicit social contract defining rights, duties, and obligations among generations.   The contractarian approach, however, ignores...

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Today’s Global Uncertainties, Tomorrow’s New World Order

Posted on Nov 11, 2013 in Ethics, Featured, Politics, Spirituality

Today’s Global Uncertainties, Tomorrow’s New World Order

Honourable and distinguished guests, honoured members of the National Spiritual Assembly of the Baha’i’s of Swaziland, eminent members of the Auxiliary Board of the Continental Counsellors for Africa, ladies and gentlemen, dear friends, I am most grateful, indeed honoured, for being invited to share some thoughts on the subject of the prevailing global uncertainties and their possible and ultimate outcome’ on this auspicious occasion.   As we gather here to celebrate the birth of Baha’u’llah, the founder of the Baha’i Faith, it is befitting to pay homage to His message of love and unity, peace and prosperity for the entire human race. His mission is to establish a worldwide community, whose hallmark is ‘unity in diversity’. Back in the second half of the 19th Century, Baha’u’llah foretold the inevitability of the emergence of a global society, driven by the quest for the world peace, inspired by the divine vision of a united humanity imbued by spirituality, sustained by the eternal covenant, and founded upon justice and fairness.   At the first glance, the vision that Baha’u’llah offered  could hardly be more in contrast with the prevailing socio-economic and political circumstance in which we find ourselves, in every land on the planet. The prevailing uncertainties, the grinding poverty of so many of our fellow human beings in the midst of the opulence  and the plenty that the “other half” displays, the public and increasingly aggressive and demeaning manner in which societal issues are debated and often not resolved, the growing worldwide emergence of the extent of tyranny against children, youths, and the women, and the pervasive spread of corruption in the use of public and private resources across the international economic and financial system, all these are deeply unsettling and indeed emotionally depressing.  I am sure you have followed on the recent report about the prevalence of slavery, estimated at around 30 million in 2013! It is almost unthinkable that in this day and age, a global ‘slavery map’ highlights the fact that over 5 million slaves live on our continent of Africa, and even a larger number lives in the Indio-China sub-continent[1]. Equally disturbing is the reality that no region of the world is free of slaves! Modern slaves include women, children and men. This of course is but one of the manifestation of our prevailing moral crisis of humanity. There are many other social, emotional, and political manifestations. The upshot of them all is a rising level of despair for a considerable proportion of our fellow human beings.   The world is indeed in the throes of one of the most profound transitions in history. Not only do technological and economic changes have world-embracing effects, but also the prevailing socio-political dynamics has no historical precedence. This is not to say that in the past the world has not had periods of deep and game-changing transitions. For example the advent of industrialization in the 17th and 18th century culminated in the dawn of a new world order in which the West emerged as a dominant economic, military and colonial power. The ancient civilizations of India, Africa, China, Ottomans and Persians were subjugated for a few centuries to come. Yet in comparison with the contemporary transformative forces, the industrial revolution had limited reach and its impact was slow.   The many forces of contemporary transformation in human and social life may be broadly divided into two categories. One group tends to integrate socio-political, economic, and cultural life across regions and continents. Such integrative forces tend to narrow the gaps across communities and nations, build bridges within and across cultures, and...

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Africa Within a World in Transition

Posted on Nov 6, 2013 in Development, Featured, Infrastructure, Politics

Africa Within a World in Transition

The world is indeed in the throes of one of the most profound transitions in history. Not only do technological and economic changes have world-embracing effects, but also the prevailing socio-political dynamics has no historical precedence. This is not to say that in the past the world has not had periods of deep and game-changing transitions. For example the advent of industrialization in the 17th and 18th century culminated in the dawn of a new world order in which the West emerged as a dominant economic, military and colonial power. The ancient civilizations of India, Africa, China, Ottomans and Persians were subjugated for a few centuries to come. Yet in comparison with the contemporary transformative forces, the industrial revolution had limited reach and its impact was slow.   The many forces of contemporary transformation in human and social life may be broadly divided into two categories. One group tends to integrate socio-political, economic, and cultural life across regions and continents. Such integrative forces tend to narrow the gaps across communities and nations, build bridges within and across cultures, and create rising levels of social capital even in the midst of very diverse and segmented groupings.  The emergence of a global and fully integrated financial market is a case in point. Within the socio-political arena, the rise and growth of “borderless associations” such as ‘doctors without borders’, or ‘environmental activists without borders’ (Green Peace), and the like are all but part of the same dynamics.   The other category of forces is inherently disintegrative. Whether in socio-political arena, or within the religious, cultural or economic sphere, such forces are inherently disruptive and conducive to the spread of mistrust within human communities. More often than not, such forces are driven by historic and failed ideologies of narrow self-protection and deep-rooted fear of “otherness”- I call this “otherphobia”.   At present, the integrative and disintegrative forces are at play in every land simultaneously. Interestingly, modern communication technologies and social media platforms have facilitated the spread of both these forces and processes. Access to the worldwide web in real time across the globe, the international availability of technology nearly in all sectors, and the rising awareness of what is possible, viable and desirable, have helped create a variety of new communities- mostly virtual. Such virtual and deeply connected communities are a real threat to the establishments across the world. Globally, financial, economic, cultural, religious, social and political establishments are vulnerable to attacks by these virtual communities.   Fairness and transparency, accountability and value-consistency appear to be the watchwords of the majority of these emerging virtual movements worldwide.  Increasingly, to them the national boundaries and the conventional sovereignty considerations are of little importance.   In this milieu, Africa is facing a multi-layered challenge. The continent’s economic growth has taken roots for the first time, and all indications are that industrial diversification could lead to sustainable growth. Yet on many other fronts the continent is struggling to establish institutions that are the effective conduits for channeling growth into social development and human welfare. Far too often, the post-colonial political establishments clash with the emerging social quest for accountability and transparency. A few exceptions aside, political institutions on the continent are largely extractive by nature. This means political leaders regard the machinery of the state as a means of self-enrichment and control. This, of course, they do in the name of sovereignty and political leadership. Legal and judicial institutions are equally and far too commonly bureaucratic, slow, and at time politically compromised. Economic and financial establishments are likewise typically dismissive of social and environmental care. Often...

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Modernizing Food Security in Africa

Posted on Nov 6, 2013 in Development, Featured, Infrastructure

Modernizing Food Security in Africa

One of the glaring ironies of Africa remains food insecurity and hunger in the midst of plenty. The continent has plenty of arable land, much of it is not used for cultivation and whatever is cultivated it is done so, by and large, without modern technology for production and with little, if any, consideration of optimal financial structuring for the farmers and for the society at large. Consequently, in effect when it comes to food security, much is left to chance and too many risks are unmitigated. Of course, commercial farmers on the continent do the best they can to insure against some of their risks. Te private sector insurance against agriculture is, however, known to be an incomplete market, it is as such inadequate and sub-optimal for meaningful risk mitigation in the sector.   Food security has a substantial ‘public good’ dimension. When droughts, floods, and disease wipe out production, the farmers do suffer, but so does the society at large. Food shortages and sharp price increases are hard to manage for most in the society. Significantly, in the process, the poor suffer the most- many of them go hungry. Widespread malnutrition and even death do obtain. More often than not, socio-political instability also follows.   Given the continent’s rapid growth over the past decade, and in view of the expected rise in living standards, it is a fact that food consumption is set to rise considerably and consistently. Meanwhile, worldwide food production has not kept pace with the acceleration in demand arising from the rapid increase in the standard of living of the population in the emerging economies. In South East Asia alone, an estimated one billion people have joined the rank of middle class with vastly different levels of food consumption. Africa’s own middle class is rising too. It is not surprising that access to land and investment in agriculture activities are in vogue again. On the continent there is a growing scramble by foreign investment houses for arable land. This has raised some socio-political concerns too. Given the history of colonialism and land dispossession, this is understandable.   Mitigating the various risks in food security in Africa requires a number of interventions, amongst them three are the most critical. First and foremost is the clarification of land use regime. Whether in the form of private ownership or via long-term lease arrangements, the commercial use of land requires socio-political and legal clarity.  Second is the application of modern production techniques and the promotion of sustainable institutional structures for ongoing research and development in the complex field of food and agriculture technologies. The third, and a vital, element is the use of appropriate public-private partnership to put in place an effective,efficient and sustainable crop insurance system.   Worldwide, crop insurance has, conventionally, been perceived as a private sector activity and as such left to the insurance market to provide solutions. And, the insurance industry has provided some solutions too. However, the existing solutions are, by and large, inadequate and do not take care of the public good dimensions of food security and agriculture production.   From a national and social interest perspective, crop insurance should be designed as a package of private and public risk mitigation solution. Internationally, there is a growing awareness that the existing private insurance market solutions are not effective. At the same time, governments’ support of the agriculture sector is often in the form of drought relief or some or other disaster relief interventions. These governmental schemes are typically neither timeous nor efficient. As such the combination of both private sector insurance and...

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Marikana Massacre: A Lesson for Africa

Posted on Nov 6, 2013 in Ethics, Politics

Marikana Massacre: A Lesson for Africa

A year after the tragic Marikana Massacre, where over 46 people were killed, the soul of South Africa remains haunted. Last year September, in this column, I dealt with some of the contributing factors that culminated in this tragedy. As South Africa struggles to come to terms with this appalling incidence and its multifarious ramifications, I believe the rest of the continent has much to learn from it too.   The world over, the history has shown that social development assumes meaning only when the public policy consciously and actively promotes the wellbeing of the working classes and the poor within the society. Focusing on poverty alleviation and the working class welfare does not necessarily mean neglecting the broader interests within the society. In fact taking care of the poorer groups is also partly about securing the sustainability of the well-off classes over time.   This is particularly pertinent for Africa at a time when its growth and development process has gathered real momentum. During such periods of sustained growth, two trends emerge. One is the fact that politicians and policy makers   equate robust GDP growth and its resultant rising per capita income with the betterment of the poor. The second fact is that during periods of sustained growth, the income disparity rises sharply before it moderates over time.  This, the so called “J-Curve” of economic growth dynamics, embodies serious consequences for socio-political stability. Operationally, the shape  of the “J” differs vastly from society to society. The first phase, when income disparities rise, can take many years, even decades, depending on the efficiency and effectiveness of the public sector in the country.   During this period socio-political stability is vulnerable to the rising social discontent. In such times, the relative and visible improvements in the fortunes of the rich together with their conspicuous display of wealth do not sit comfortably with the misery of the struggling classes within the society. In effect, in periods of high growth, the public policy makers and political leaders should be more, not less, worried about the plight of the poor and use the available resources to deal with the underlying structural issues of income maldistribution and poverty trap.   In all likelihood, the Marikana Massacre would not have happened if South Afirca’s political and business leadership remained focused on alleviating the crushing burden of workers’ plight- in this case that of the mine workers. Social and other structural imbalances, inherited from whatever past, do not self-correct. Economic growth generates the required resources and creates the general social receptivity for corrective actions, but sustained and honest political will, underpinned by institutional capability, is needed to effect meaningful improvement in the plight of the poor. Political slogans and ideological sloganeering are dangerous substitutes for a value-based commitment to the removal of the drivers of income disparities.   To the extent that Africa’s current growth momentum is driven by the natural resources sector, South Africa’s experience offers many “how-not-do-lessons”. It is a fact that all over the world, the mining industry is synonymous with the destruction of the environment, land disposition and the use of land potentially useable for agriculture and food production. Such dichotomies have to be managed carefully and responsibly via sound and concurrent environmental rehabilitation management practices.   Globally, the extractive industries have come under the spotlight. As is well known, the G8 leaders are focusing on this sector, not only due to the issues of tax evasion, but also because of the broader factors that have turned the blessings of the natural resources to what is now referred to as “the resource...

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