Vol.1 No.10, 13 September 2001
Africa, Economic Rights, Citizenship and Dignity,
Africa, Economic Rights, Citizenship and Dignity
by Norman Kudawana Reynolds
Dr Norman Reynolds spent nearly ten years in India and South Asia as the Rural Development Officer for the World Bank and then the Ford Foundation. He was chief economist to the Zimbabwean government from 1981 to 1986 - the early years and mostly successful years of Independence. He has held fellowships at Harvard, Cambridge and Cape Town Universities. He currently lives in South Africa acting as an economic adviser on national, city and township and rural issues. His ideas for local economic development are somewhat similar to those put forward by SANE. His paper on economic rights is based largely on his experience in Zimbabwe where his ideas were voted for by all District Councils but vetoed by President Mugabe. They are now supported by the MDC. The paper has been adapted somewhat and abridged - with his permission - for the purpose of offering it as a SANE Views submission.
Africa, Economic Rights, Citizenship and Dignity
Norman Kudawana Reynolds
Africa remains in bondage to western economic and trade domination despite a range of alternative policy options and calls for renewal, like the African Renaissance of Thabo Mbeki.
The tragedy of Africa is the massive loss of 'competence' by ordinary people and the accompanying loss of dignity. Competence is here used in the old English meaning, "the ability to look after yourself, your family and to contribute to the well being of your community". It is a good working interpretation of "Ubuntu".
A fundamental African problem is the application of the economic thinking for highly developed countries to those of Africa. There is no clear acknowledgement that within today's Africa there are not one but two economies, and two societies, namely:
African governments cannot afford to provide the services, training and infrastructure required to rescue citizens from poverty into membership of the modern economy through formal job creation.
With very few exceptions, African governments have never trusted their people with resources and ownership, and thus with decision-making competence. They have never built them or their communities into competent wholes. Economic rights are neglected, both constitutionally and politically. They are treated as consumption rights; never as economic participation and investment rights.
In African societies power is traditionally about "delivery" - allocation of rights and property by the chief to his tribesmen. This quickly descends into patronage when there is not enough to go round. Patronage demands citizens as 'grateful children' of the state and party, as supine vote banks. It sets up artificial beliefs in the right to rule no matter what the cost to citizen rights and welfare.
Without bringing the mass of people into a working economy, the national economy will never create the jobs and tax revenues needed for the modern economy to incorporate all citizens. Politics will remain stunted at the level of crippling patronage. For many, escape from the second-tier, marginalised, non-functioning economy can only be by crime, direct or indirect. Indirect crime arises when the dictates of morally bankrupt political leaders result in people aligning themselves with politically organised thugs to position themselves for state handouts, no matter how detrimental to the mass of decent citizens (a sequential happening as with Robert Mugabe in Zimbabwe).
Yet there are good, dynamic economic policies and programmes that can be adapted to provide practical correctives to the technical and human failures of contemporary African governance. Policies and programmes can be designed in accordance with cultural and sustainability imperatives. Such policies would build up the dignity and financial autonomy of citizens and engage and mobilise them in highly visible, responsible, local-investment driven and quickly demonstrable ways. They would lay the foundation of new economic rights, exercised by fully competent and 'adult' citizens capable of partnering the state financially and organisationally. This would bring the second economy into line with the needs of a mass market for basic goods and services which would in turn create a potentially more highly performing national economy based on local rather than on imported products and capital.
There are three core components to such an 'economic rights' driven reform: those of Work rights, of Community rights and of rights to effective local Ecoonomic Structure.
1. Work Rights
Work Rights offer a set number of days of community public work activity to all citizens at a wage rate set by government authority (local or national) or by some other funding source. They are issued annually to all registered citizens. A Work Rights programme also requires the provision of matching allocation of funds for materials required for public works and services programmes. Since not all citizens wish to or be able to work, work rights can be bought and sold in local markets. Families, groups, villages and local governments can assemble the work rights and use them in chosen and approved projects. If these result in positive benefit streams, public or private, the beneficiaries will have to accept the liability of a matching loan, thus drawing in the far larger resources of national and international banking.
Work rights could be financed by the state entering a social compact with its citizens. Local, citizen-driven and government-partnered 'community public works' would enjoy a high local multiplier. Wage rates would be low and people would employ each others within communities. The state would spend increasing proportions of the large 'social consumption' budgets (health, education, welfare) and the proceeds of debt relief as investment through its citizens by way of work rights. Citizens in turn, motivated by extra activity and wages, local investment and greater cash circulation generated by work rights, would enter into a partnership with the state to assume an increasing share of the costs of schooling and of health and locally transformed welfare systems.
Not only would there be savings on state health, welfare and school expenditures, but the vast wasted expenditure on security would also be cut dramatically. It is estimated that currently some R50 billion is spent annually on security by families, businesses and agencies over and above that spent by the state on police, courts and prisons.
The marginalised areas of most of Africa, its townships and rural areas, are highly dependent upon the formal economy. Consequently, cash circulation before it departs to the modern economy is very low, typically about 1.3. Money hardly stays to work! With work rights, it should be possible to raise the multiplier to between 3 and 5. One of the methods to achieve this is to pay wages and most of project services and materials in a local currency. Much of the expenditure will then go to support locally produced goods and services. This links with the third economic right, that of working local economies. That would create many local opportunities for rewarding economic activity, generating the potential for a large mass market for locally produced basic goods and services. Such a strategy is absent in most poor countries. Yet it places little demand on foreign exchange in terms of investment or consumption and has strong economic benefits including generating tax revenues and providing a larger local economic base for a higher performing national economy.
2. Community Rights (The Village Trust Company):
African villages have become broken down 'user' communities. There is no means to conserve, manage or invest in the productive base. Most members are effectively disinherited; they do not farm or graze.
The traditional birthright to a free good, that of abundant land, is now a false myth. Membership has to be transformed into equal adult ownership of common assets. This will restore cultural values of common purpose and mutual insurance within a modern legal body, holding assets for past, present and future generations and extending equal rights to women.
Rights of Use of resources should be issued equally to all community members. These could be bought and sold. This establishes for the first time rental prices over assets, a local cash and finance system, and dividends for ownership. With these financial and economic tools in place, communities can make decisions related to:
The result is a significant combination of agrarian reform combined with a major capacity of village communities to enter the land market and to invest in other areas and other sectors.
All fifty five District Councils of Zimbabwe participated in a programme to design a Rural Structural Adjustment Programme, 1987-90. The RSAP contained the three economic rights proposed in this paper. The RSAP was approved at a national conference in 1990 and, after considerable delay, was submitted to Cabinet. Half the Cabinet were known to be in favour. Robert Mugabe praised the RSAP as just what the country needed but added that, if introduced, rural people would become autonomous economic agents and so would not have to vote for the party. On these grounds, he put the RSAP aside until another time.
3. Rights to a Working Economic Structure (Periodic Markets and Service Delivery):
South Africa suffers from a legacy of spatial planning used to control people, notably to make the regular congregation of many people difficult. The corrective is to add time to place.
Market days can be based on a rotating schedule for villages, so that marketers and service providers can enjoy a full week's work. On the market day of a village, marketers from the modern economy travel to marginalised areas. Such periodic markets effect economies of scale, low unit cost, cash circulation and a diversity of goods and services. Citizen access to periodic markets rewards local economic activity (lower transaction costs for buying and selling, gaining information and services, and meeting and dancing). Periodic markets provide the organisational framework for service delivery and for regional planning. They also add viability to work rights and Village Trust Company investments.
In the late 1980s and early 1990s Zimbabwe introduced state run periodic markets in three poorer rural Districts. A joint Italian / Zimbabwe evaluation found that agricultural output had doubled in the first three years. It concluded that, " not in the hundred years since colonialism and the twelve years since Independence has there been such a serious attempt to merge rural areas with the formal city based economy." Rural Planning department, University of Zimbabwe, 1993.
South Africa's Rural Development Framework, 1997, states that all citizens have the right to live in working local economies and that by 2010 the whole country must be covered by periodic markets as the main instrument to achieve that goal. Since then the Government has done nothing to institute periodic markets. Ministry of Lands, November 1997, Pretoria.
In Africa there has never been a genuine start to building upon the energies, knowledge and wisdom of her people - to realise economic rights within harmonious creative citizen relations. Yet that was implicitly what the world expected of African countries when they began to gain political independence nearly a half-century ago.
In the light of deeper understanding of the economic requirements for sustainable, people-centred development as presented here, there may be another opportunity for the development of local African communities in the face of the disintegrating social and environmental forces of the modern global economy.
© South African New Economics Network 2006. Page generated at 17:18; 24 September 2006