Green Paper on National Strategic Planning: Minister's briefing & provincial concerns of three provinces

Meeting report

Briefing by Minister Trevor Manuel: Green Paper on National Strategic Planning
The Chairperson welcomed Hon Trevor Manuel, Minister in the Presidency, responsible for the National Planning Commission, and noted that he would be briefing the Committee on the Green Paper on National Strategic Planning (the Green Paper) against the backdrop of intense public interest and media frenzy on the issues.

The Minister explained the context of the Green Paper. The first issue that the Green Paper set out was the rationale for a planning capability, which had not existed in such a form in South Africa up to the present. It then dealt with some of the process issues. The main focus was on the institutions that would be necessary for delivering the planning. The functioning of the Presidency in regard to these issues was also explained in the Green Paper.

The Minister, by way of introduction, reinforced the rationale for national planning, by referring in brief to two sources. Firstly, he quoted from the Indian Prime Minister Manmohan Singh, as expressed in the foreword to India's Eleventh Five-Year Plan, as follows: “India's commitment to planned economic development is a reflection of our society's determination to improve the economic conditions of our people and an affirmation of the role of the government in bringing about this outcome through a variety of social, economic and institutional means.” He said that this quotation gave a very strong sense that the Indian government did not sit back and observe poverty, but instead, that government recognised that it had a responsibility to deal with the measures that were social, economic and institutional.

Later in the same foreword, the Indian Prime Minister had said that the Eleventh Five Year Plan addressed itself to the challenge of making growth both faster and more inclusive. Rapid growth, which had been achieved in the past several years, demonstrated that India had learnt how to bring about growth but it was yet to achieve comparable success in inclusiveness. The Minister commented that this was the same kind of challenge faced by South Africa.

The third quotation from the Indian Prime Minister's foreword said that planning in a market economy, which was becoming increasingly integrated with the world, was bound to be different from what it used to be in the earlier years. Much of what governments used to do, including their establishment of production units, producing manufactured goods and commercial services, was now being done by the private sector. India was blessed in a having a long tradition of private entrepreneurship. The private sector had responded magnificently to the new opportunities opened by economic reforms. However this did not mean that government's role had to shrink. On the contrary, the government had to play a much larger role in some areas even while shifting some others. Mr Manuel commented that this ultimately brought back a very important debate on the Developmental State, how it functioned and how putting planning back into play became a fundamentally important issue.

The Minister also quoted the words of economist James Galbraith, from his book “Predator State” in which he tried to explain the role of planning. Mr Galbraith stated that planning, when properly conceived, dealt with the use of today's resources to meet tomorrow's needs. Planning specifically tackled the issues that markets could not solve, the choice of how much, in the aggregate, to invest and therefore to save, the directions to be taken by new technology, the question of how much weight and urgency was to be given to environmental issues, education, scientific knowledge and culture. Decisions in these matters involved representing the interests of the future, which were poorly represented by the markets. In the modern world, planning was what corporations basically existed to do. The issue was whether the planning function was to be left entirely in the hands of private corporations, and therefore to a business administration and a banking elite, some of which was domestic and others were foreign, or whether government and the public were allowed to play a role.
 
The Minister also submitted that much of the Green Paper dealt with institutions, namely the National Planning Commission. The Minister's briefing also dealt with the outputs, although they were not the main focus, purely to give a sense of how matters would inter-relate, and the coordination functions of the Presidency. Many South Africans had the privilege and responsibility of witnessing the destruction of apartheid. However this carried a responsibility to build a democracy, and one of the issues that came through clearly was that the Constitution did not give options of what to do.

The preamble to the Constitution was very strong. It was quoted in the Green Paper and it required South Africans to heal the divisions of the past and build a society based on democratic values, social justice and fundamental human rights, which laid the foundations for a democratic and open society in which government was based on the will of the people and every citizen was equally protected by law. The objective that government had engaged with more sharply for planning purposes in the Green Paper was the objective to improve the life of citizens and free the potential of each person, and to build a united and democratic South Africa that was capable of taking its rightful place in the sovereignty of nations. He stressed that although the quality of life and the potential of each person was the single most important element of the preamble, it did help to focus the mind for the purpose of planning.

Minister Manuel continued that the Green Paper argued very strongly that government did not simply want to see a series of announcements about policies, but they wanted to focus very much on integrating what could and could not be done. He though that government was in a very privileged position, because what the world had experienced in the past 15 months drew attention very clearly to some of the issues. The Green Paper said that a plan was not enough, and that there was actually a need for policy and the ability to implement.

The Minister referred the Committee to a lecture that he had delivered at the Wits Graduate School of Public Development Management [see document]. He had tried, in that lecture, to deal with the issue of a developmental State in terms of policy, implementation, measurement, evaluation and accountability for action. However, it was unfortunate that in South Africa people seemed to debate policy, but when differences of opinion arose then they could not talk about issues any more. In consequence, they failed to understand the issues of implementation. The developmental State, therefore, had to have the necessary capacity to carry out the plan.
 
The Minister submitted that planning was not a straight road, and had to take into account the bends and curves, as trying to force a straight path would lead to huge mistakes. The planning function needed the ability to measure and then evaluate its own performance, and then make necessary adjustments that all mechanisms of planning could not avoid.

The Green Paper, towards the end, listed some of the experiences, and there was a volume of literature about planning right and planning wrong. One of the clear issues arising from the information was that economies that had grown a lot faster had tended to focus on the planning function. Countries like China, South Korea, Malaysia, and Brazil had all withstood the global meltdown. South Africa had benefited, in terms of growth, from a strong commodity boom and an extension of credit reflected in a very strong middle class. However, South Africa had not actually been able to plan for continuity, so the biggest challenge was to get out of the big boom phase or cycle, since it was impossible to have control over commodities.

When it came to exploring the type of planning required, the first issue was that each and every South African citizen, regardless of how they voted, would probably have their own view of the future. Therefore, there was a need to ask them how, for example, they wanted South Africa to be in 2030, and how they would like to see the future for their children. This would probably lead to some overlaps in views. It was important for the National Planning Commission (NPC) to realise this and to get people involved in setting those goals and horizons, the end goal and what to do along the way. He cited, by way of example, the document known as the India 2035 plan, which illustrated long-term thinking. There was already an eleventh Five-Year Plan to take the country through to 2012, but by that time another plan must already have been formulated. It was important that every department had planning capacity, and they would not be relieved of that responsibility by the fact of the National Planning Commission.

Page 12 of the Green Paper set out this point. A paragraph spoke about allowing departments to have the kind of policy that would take them into the longer term, but also stressed the need to create shorter-term horizons as well. In making the point about each government department having its own planning capacity, the Minister wanted to emphasise that the provinces and the municipalities would be asked 'to hasten slowly'. They did not all want to try to play catch up. He had seen, during the few years that he had served in government, that when there was an initiative, people would set up a new industry. This had happened with the Reconstruction and Development Programme (RDP), HIV and AIDS agenda, disability and Accelerated Shared Growth Initiative of South Africa (ASGISA). Each time a new “tower of babel” had been constructed. All the institutions, in their own municipalities, had ideas about the world and the space, and had a different view of how they got to their goals. National Planning would adopt a different approach. For example, if the notion of national planning, as described in the Green Paper, was accepted, then an outside agency would not take over the responsibility of the department, as this carried the risk of lessened accountability of departments to the legislature. Instead, if there were deficiencies in the way that institutions were planning, the NPC would draw attention to those, and the departments and institutions would remain responsible. They had to be clear about the link between the present and the future. There was a need to “nudge” decisions about the future, to clear some of the contradictions, and the NPC would draw on the experiences of colleagues in performance monitoring and evaluation did. For, example, in the area of life expectancy, there had already been work done that drew on the outputs of StatsSA , checking against the outputs of society in general, which were also used by the United Nations Development Programme (UNDP) to give weight to the Human Development Index (HDI). The trends would then be drawn together, for instance, to find out causes of death and then ask a series of tough questions.

On the issue of life expectancy, Minister Manuel said that the average age of death was falling. There was therefore a need to understand the impact of HIV and AIDS, crime and fatal road accidents. They pointed to the need for behavioural change. In Malaysia, there had been much emphasis placed on non-communicable lifestyle conditions such as diabetes, cardiac conditions, hypertension and obesity, drawing on health statistics, and had drawn a plan to get more Malaysians involved in physical exercise. In a similar way, South Africa would feed off what was done by performance monitoring and evaluation, use the statistics in an innovative way, and introduce more evidence-based outcomes into the planning.

The major issue was that South African departments would not be treating the budgeting process as if it were competition. A clear system was needed. In his experience, under the current system, submissions from departments were for about four times the available resources, and he stressed that departments’ requests should not be so far removed from the reality. The powerpoint presentations were impressive, but the NPC needed to achieve better sequencing and less competition for the available resources. The key point was not how strong or large an entity was, but how it worked to achieve government aims.

There was, at the moment, no dedicated agency for planning, monitoring and evaluation. The current plans aimed for an enhanced capacity in the Presidency, to pull together and deal with the issues and then deliver.  The NPC was “impimpi zika President” and it was its responsibility to see what was happening in the departments and to report on any discrepancy. There had been a big debate in the press about structure and policy coordination. He explained that the NPC was where the detailed evaluation happened.

He pointed out that on 27 January 2010, the matric results would be announced. If the results were similar to, or worse than, last year’s results, the media would abuse the Minister of Basic Education and the MECs. If the results were better, the same media would praise the parents and the learners. These discussions ignored the fact that if people waited until the end of 13 years of schooling to know whether 19 year olds were capable of reading and comprehending, absorbing and processing information, and achieving in mathematics and science, this was far too late. Interventions should be happening at a far earlier stage. Those were the kind of changes that would now happen, led by the Ministry of Basic Education. The NPC therefore wanted these formal structures to operate quite differently in how they delivered the outputs.

In terms of the long term vision, the issue of the developmental State was often misinterpreted. He referred to an interview of the Brazilian President, Lula De Silva, in which he had responded to criticism with uncharacteristic defensiveness, and had said that he had doubted whether, at any time in Brazilian history, the private sector enjoyed as much State respect, or made as much money, as it was doing presently. The self styled “economic patriarch” was more at ease when asked about the State's role in the economy. The usual discussion about the state of the economy had ended, as a result of the global crisis. For a long time people had said that the State had failed and that the markets ruled everything. President Lula De Silva had continued to say that he was opposed to the State being the ruler of everything. Whilst he agreed that the State had to be strong, its strength should be as a catalyst of development. The Minister commented that the Brazilian President had learnt from his own experiences, adopted a mature approach and argued in the context of the developmental State.

Minister Manuel stressed that he was not saying, however, that the State should throw overboard sound economic and fiscal policy. He noted that the NPC wanted to see a longer term view and to see this investment with greater confidence. He referred to the role of education, science and engineering. He gave the example of Korea, which had realised that there were far too few people with knowledge of maths and science to be able to achieve the Korean plans for development. Korea had worked its maths and science teachers incredibly hard, asking them to work two shifts a day, six days a week, to enlarge the pool and ensure that universities could receive the larger pool and then the country had been able to invest very significantly in research and development and create the sort of leading edge Information Technology society that South Korea had become. This was all in consequence of specific and focused planning towards achieving the objective of high growth and high skills. Being able to construct the link between present and future became fundamentally important in planning.

Discussion
Mr B Mashile (ANC, Mpumalanga) commended the Minister for coming up with what he termed a “wonderful document” in the Green Paper. He commended the Minister further for embracing the President's vision on National Planning. The Green Paper would instill trust and belief in South Africans. However, he was slightly worried about use of the phrase “blazing a new trail” in Slide 1, because having a coherent plan alone was not enough; the developmental State had to be constructed with the necessary capacity to carry out the plans.

Mr Mashile commented that the imperative of National Planning was not only focused on the ruling party but included everyone in South Africa, who had to have a shared vision for their country. The Minister had said that consultation was being conducted. It was unfortunate that the Green Paper had been produced fairly quickly, that the Select Committee was lagging behind the Planning Commission, and had little influence on National Planning.

Mr Mashile wanted to raise the long term horizon or vision of the ruling party, and asked how this related to the NPC. The ruling party clearly knew the direction it wanted to take, and it was elected to lead the country, but he wondered how the concept of getting other ideas and visions would tie in with the vision of the ruling party.

The Minister responded that the planning was not to produce a plan “for government” but for all of South Africa, not limited to party or even provincial lines. There had to be very strong overlaps between the views of the electorate. Obviously, the majority view would tie in with the views of the majority party. However, there was a need to allow all people to state their problems. Government was confident that people would be able to recognise and articulate what they wanted for their future. Public officers in South Africa were held together by issues far stronger than those that divided them – whether regard was had to economic or social policy issues, despite their differing political backgrounds.

Mr T Harris (DA, Western Cape) asked a question on the over-arching ideology and intention. He was glad that the Minister had brought up the quote from Lula Da Silva. In another portion of his address, Lula Da Silva had also said: “I am against the State being the manager of the economy. The State has to be strong, but as a catalyst of development...” Mr Harris commented that, to his mind, there was a confusion in the Green Paper between the role of the National Planning Commission and the role of the developmental State. It would make the Green Paper clearer if those two issues were separated.

The Minister responded that the Brazilian President had said that the usual discussion on the role of the State had ended as a result of the global crisis. For a long time, people had said that the State had failed and the markets could rule everything. The Minister thought that this was very instructive. He reminded Members that on 9 November 1988 the Berlin Wall had fallen. For the last twenty years, there had been a unipolar world, where market dominance was supreme, until October 2008. South Africa was now in a post-financial dominance period in world history. This was unprecedented and should be appreciated. The discussion this weekend in Scotland by the G-20 Finance Ministers had been a discussion that Gordon Brown, President of the United Kingdom, had introduced on the idea of a pact on financial services. A year ago, Gordon Brown had taken a very different view on this matter. Therefore these ideas did not have to be treated as static. The French Minister for Finance, who was very close to the French President, had been a strong supporter of the debate, and this was surprising, because he came from the right wing of French politics. This was illustrative of the point that today, there was much greater confluence of ideas.

Mr Harris commented further that the idea of national planning had great merit and he thought it should be actively pursued. However, the Green Paper assumed that if there was national planning, then this meant that there was a developmental State. He was not necessarily opposed to the idea of a developmental State, but it was a very broad term. The East Asian concept of a developmental State had a very specific time and role in history. The Green Paper reflected on some of the pre-conditions of that stage, as it spoke about the specific geo-political environment in which it had evolved, and the general political dynamics of the Cold War era. It also spoke about the forms of government, which in some cases entailed authoritarian commandeering of resources, and the actions of some of the social parties. He would like to add the idea that the East Asian developmental State had a bureaucratic government. Everyone must acknowledge that the public sector in South Africa was extremely far from being an elite at present. If that model of the developmental State was to be followed, then people had to realise that South Africa was very far from those conditions. He was not sure that South Africa had the capacity to be the manager of the economy. The President of Brazil was talking about the State being a catalyst of development, which was more akin to the State having a guiding hand as opposed to an interventionist hand.

The reason why he wanted to differentiate those two types of developmental State was that, on page 7, the Green Paper gave a fairly searing indictment of where South Africa was at present. He saw these areas as being those where the State had either clumsily blocked the progress of the private sector, or had actually crowded out private sector development and hence held back economic growth. To his mind, State intervention had therefore actually caused the problems on page 7. Secondly, he referred to page 8, which spoke of the need for a coherent plan. He agreed absolutely with that. However, the four preconditions were listed – namely, a capable and effective State, sound institutions, an active electorate and strong partnerships between social actors. In fact, these pre-conditions were actually just conditions for a democracy.

He noted that Galbraith referred to what a developmental State would need to tackle, in terms of the aggregate amount that would need to be invested in new technology, environmental issues, the role of education, science, technology and culture. Mr Harris believed that these required a guiding hand, rather than an interventionist stand. On page 10, there was reference to the systemic relationship between the State and the markets. There was mention of providing public goods, using the fiscus as an instrument to enhance distribution, regulating market activity promoting structural enhancement of the economy, macro-economic policy and efficient and effectively priced economic infrastructure. He did not think that this was anything to do with the developmental State. The State was here having a guiding hand on the economy but was not becoming involved directly. It was actually, in his view, making out a case for a non-interventionist State. He would have argued that, fully supporting this idea of national planning, there was a need to use an appropriately regulated market to achieve the country's objectives. Mr Harris asked if the Minister could comment on this issue.

The Minister responded that when speaking of a developmental State, he had made it very clear that this did not refer to a single model. For instance, the analysis showed that there were differences between the earlier developmental models analysed. The creation of the Dutch East India company, for instance, in 1568 in the Netherlands defined itself very differently from the Spanish colonialism of the time, which was part of a developmental State notion. The United Kingdom, when it had the Industrial Revolution , the Soviet Union and the East Asian economies had also undergone similar transformations. It was important to understand that there was no single model of a developmental State. The key issue was to focus on the outcomes. A developmental State had existed in market-dominated economies, in strongly centrally-planned socialist economies, and in strong States where the initial impetus may have been considered rightful, such as in South Korea. The literature seemed to suggest that there was a confluence of ideas. One of the authors that had argued for the shrinking of the State's role, and it was also argued, in a recent article, that it was impossible to manage climate change issues unless the State had a responsibility for planning. He stressed that there were not only demands, but needs that were squarely placed before government. It would not be possible to deal with the needs unless also dealing with the outcomes. Government had to sequence its decisions, and there was a need to plan around the gaps.

Minister Manuel then said that it was necessary to consider what measure should be used, for example, for education. A measure of expenditure as a percentage of GDP would give a fairly satisfactory-looking figure. However, he noted again that if the country were to look at its needs for maths and science, as well as what had come out of studies into reading and comprehension levels, this would show the need for careful planning. Money could be thrown at the problem to the extent that it could bankrupt the country, and still not improve the outcomes. Planning, on the other hand, sought to remove the element of chance from the equation and direct the spending to where it would make a difference. One of the biggest challenges of this period was the growing inequality in almost all countries across the world. The last measure for the global Gini Coefficient was 0.62, the highest it had ever been. As people acquired skills they became more mobile and, even if they were living in their own country, they would demand a much higher return. Planning would look at the issues and the risks attendant upon them.

 Mr Harris asked some technical questions about the Minister’s reference to the role of economics and the use of scarce resources. Planning was not about how resources were used, but it was about economics. On page 21 of the Green Paper the Minister had specified what the NPC would not do. Micro-economic planning was listed here. He commented that if it was accepted that planning was not about the use of resources, which was actually an economic issue, then this seemed to suggest that the planning function would actually encapsulate micro economics and not macro-economics. This was all very well, and to an extent it resolved the questions around the Department of Economic Development and the NPC. However, it did not comment on the legislatively-defined role of National Treasury as the department responsible for macro-economics. The important thing was to accept that resource management was, in actual fact, economics.

The Minister responded that planning was about the ability to influence. These formal and informal linkages became fundamentally important. It was possible to pass legislation, or to influence the system. He noted the example of the Financial Sector Charter. For many years, the banks maintained that they did not want to deal with customers who had low income. However, when pressure was brought to bear on them to actually discuss the needs and the issues, the Mzansi account system started, and within four months, had 4 million account holders. This was an example of achievements without legislation.

The Minister also responded to the issues raised on page 21. One of the concerns held by many in government related to apartheid spatial planning. In Johannesburg the poor were settled on Orange Farm, far away from communication and work opportunities. There was still a problem in Tshwane with people living in kwaMhlanga and travelling by bus every day for two to three hours each way to work. In Cape Town, settlements such as Langa still had little access to resources. These kind of issues had not been resolved. There was clearly a need to establish a different kind of ordering. Although the Development Facilitation Act of 1994 had been a kind of interim measure, government had not yet tackled the issue head-on. Most countries had very firm planning norms and standards, developed centrally and implemented at Ministry level. There was a time when Cape Town had allowed its Central Business District (CBD) to be “disemboweled”, and it had then allowed its infrastructure and resources to move to provide bulk services to places like Century City and Durbanville. The CBD of Cape Town was now effectively dead. In order to revive it, there would need to be an approach that dealt with each issue and each item, which was micro-planning. It was not envisaged that the NPC should become involved in this level of micro-planning, although it recognised that it needed to happen in a specific way.

Mr Harris noted that the Minister had mentioned that progress on this issue “hastened slowly”, around the idea that the provinces should not build institutions to support the idea of national planning until the idea was mapped out properly. He asked what the provinces had to be doing at that point, what was the next step that had to happen, and at what point the provinces would become involved. Ultimately, once the system was in place, he asked then how the Minister would see the central planning function interacting with the provinces’ planning function.

The Minister responded that the Presidential Coordinating Council (PCC) Inter-governmental Forum, established under President Mbeki before the Green Paper had been published, had convened a discussion with the nine premiers and representatives of SALGA, to bring them on board. They had shown strong support for planning. Some said that they expected national government to lead, and they would tell government if the latter began to cross their functional lines. The NPC did not want to dismantle something already established. 

Mr Harris posed a question of ideology, with reference to page 17, and asked the Minister about the Vision 2025.  One of the issues was to afford the private sector an environment in which it could invest and make competitive returns, while promoting the common interests of the nation. He asked if there were any private sectors, internationally, that acted in the interests of the nation. He believed that for hundreds of years the idea of economic development was that companies should act in their own interests, but, through proper regulation and coordination of such actions, then the common good was achieved. He was not arguing for free market fundamentalism here, but he thought that this was the way to achieve the common interests of the nation.

Mr Harris stated that he was confused about the role of the President's Coordinating Council (PCC). The presentation did not indicate where the PCC sat, or what its role would be going in the future.

Mr Harris noted that, on slide6, the Minister had spoken of the agreed long-term vision on the country's future direction. He wanted to ask a question about the history. He was interested in the notion that one of the gaps in the system was that South Africa did not have a long term vision towards support for all sectors. He had thought that the New Economic Development and Labour Council (NEDLAC) Summit was meant to achieve this. The process had been ongoing for the past 15 years, and he wondered why the goal had not been achieved. He was also more broadly interested in knowing the Minister's view of what would probably have occurred if this had been put in place in 1995.

The Minister responded that the NEDLAC issue was a very interesting one, because part of it was the difficulty inherent in bargaining, which was effectively done by those who were present at the bargaining table. The Minister asked who would represent the views of those who were not at the bargaining table. There were some statistics that were very difficult to deal with. The Gini coefficient was poor in South Africa. However the bigger problem was that 50% of young African men and women had never had a job. The Minister asked who represented such voices if there was no necessary forum for such a dialogue. The NEDLAC Summits tended not to deal with those issues in the best possible way, although he did not wish to suggest that they did not play any meaningful role. That social dialogue was always fundamentally important, but the risk was always that it was corporatist, and that it represented the views of those who were inside NEDLAC.

The Minister also responded that government was trying to take a longer view on this issue, which in some senses distinguished between the Medium Term Strategic Framework (MTSF) and the long term vision. The MTSF was born of the electoral mandate . The Minister had been having discussions with the Premier of the Western Cape, Ms Helen Zille, as to whether the ANC's electoral mandate was ultimately the same as the DA, and what separated them. The Minister had asked what was considered tolerable and what was not. If, for example, the ANC’s electoral mandate, which was then converted into the MTSF, contained an aim of ensuring that all households had access to free basic services. If the DA electoral mandate did not oppose that principle, even if it was not specifically contained in it, then it would not be offensive for the Premier to align with that aim. Of course, if the DA were to decide that there should be no free basic services, then the parties would have to decide how to take the issues forward. Another example was that to introduce a voucher system in education. There was therefore a need to get a better level of synchronicity between institutions. What the Minister thought was a better approach was one that said that the country would advance by feeding the poor of South Africa.

Mr Mashile also asked for clarity regarding the institutional arrangements and authority lines of the NPC in relation to the Presidency. It seemed as if the authority lines crossed each other, especially in light of the diagrams shown in the presentation. He asked if his interpretation that the NPC had higher authority than the Presidency was correct. He noted that only its output would influence the output of the role of the Presidency.

The Minister responded that the NPC would make inputs, and receive them, and carry those inputs into Cabinet. The President, in Cabinet, in accordance with the Constitution, would receive these issues to exercise Executive authority. It would be quite unconstitutional, therefore, to establish a body that was supreme over the President.

Mr Mashile also asked for clarity on the Minister's submission related to sectoral planning that led to a long term vision that would bind the Presidency. He understood that the medium term strategic framework was that which guided departments to actually come up with implementation. He was, however, confused about the authority and the relationship of these institutions to produce the final output and authority lines.

The Minister responded that one of the real difficulties with the sectoral planning was that the Green Paper was a document for consultation. There were some clumsy formulations in it,  for which he wanted to apologise to the Select Committee. In consequence of this consultation, government would try and fix many of the inconsistencies. A key issue with sectoral planning was that sometimes the words “planning” and “policy” had a tendency to replace each other. The Minister reflected on a conversation that he had recently held with his colleague Dr Blade Nzimande, about the need for the Human Resources Council to be fully staffed, and the need to identify the resources to attend to that. Dr Nzimande had suggested that this was part of the planning function, and that NPC should deal with such an issue. NPC knew that, even if it did ultimately take such a role, it would need to be able to understand almost immediately what was the history and background, what skills were available, and then be able to raise these issues so that the implementation was planned by the relevant Ministry and Department. NPC would then have to sit together with and get feedback from the Ministry to understand how they could circumvent the presently prevalent and recurrent problem of people entering the labour market without adequate skills. Sometimes the departments had to catalyse their actions without doing the sectoral planning.

Mr Mashile said that he had understood strategic planning and planning to be two different things. In the Green Paper, there was not always a reference to “strategic” planning, but only to “planning” and he had understood that “strategic planning” went further than normal planning. He asked for clarity on the issues and whether the lack of consistency would not confuse understanding of the intent behind the establishment of the NPC. If the word “strategic” was dropped, there was a danger that the planning done by the NPC could interfere with the work done by other planning institutions within government.

The Minister responded that the word strategic was perhaps used too loosely throughout the document.

Mr Mashile suggested that it should be used more firmly.

The Minister said that he and his colleagues were taking advice on that matter.

Mr M Makhubela (COPE) asked about issues beyond the control of people, which could include something like the price of oil, or the small size of the South African economy. He believed that the world could live without South Africa, despite assumptions to the contrary when the South African economy was doing well. It may well be that the world might not be able to live without a huge economy like that of China. However, South Africa could not live without the world.

The Minister responded that a good example was perhaps to look at a country like Zambia, and understand its fortunes against those of the copper price. When the copper price was strong, Zambia's economy amassed wealth over the years. However, when the copper price collapsed, as it did in the first quarter of 2008, then Zambia' s economy went through a very difficult time. Although the Zambian economy and government did not have control over the copper price, they were heavily dependent on it. This raised issues not only in respect of South Africa, but more broadly for all countries in Africa. Countries needed to reach the situation where they were not dependent on the vagaries of something like copper or other commodities. They needed to define a different kind of impulse for the economy. In the World Trade Organisation (WTO) the big emerging market countries were fighting for survival. Brazil wanted access to agricultural markets and this country was doing incredibly well. It did not matter what animal husbandry product was involved – whether beef or chicken, Brazil could afford to produce chicken more cheaply than South African markets, and could therefore dump it in South African supermarkets. Brazil wanted market access, but South Africa's poultry farmers were not so keen on it. India wanted access to services and therefore claimed that it could do any kind of business process outsourcing more cheaply than anybody else in the world. China wanted access for manufactured goods. South Africa was primarily a commodities producing economy, and had become stuck because it did not control that. This was part of the lessons to be learned.

Mr Makhubela asked how the NPC would deal with lethargy in the public service, which was unacceptable. There was a need to stop people creating their own little “turfs” and “kingdoms” in the public service.

The Minister responded that the continuum of the State and more importantly, the need to build a capability in the State, was beyond policies and implementation. The State would not be able to implement unless it could turn public servants and those in the public service unions into first line development cadres. If it failed in this field, then it would fail everywhere else. If teachers were not doing what was expected of them, then the State would not be able to build capability. The Secretary General of the ANC, Mr Gwede Mantashe, had been very strong on this issue in the previous week, when he had asked how it was possible for people to demand a 30% wage increase without putting forward any promises about the quality of services to be delivered in return. This was a very strong message, and the Minister felt that it clearly provided the signal as to how issues fitted together.

Mr Makhubela also asked how the NCOP's role was viewed, in the discussions on the Green Paper in Parliament. He enquired whether there was a need to wait for the debate in the National Assembly, or whether the NCOP could deal with the matter on their own.

The Chairperson responded that this would not be the last deliberation on the Green Paper. It was part of a process in which the provinces would be involved. There would not be a debate “from the top down”. Provinces were participating in the debate, and the Members would have to report back to their constituencies about what had taken place in Parliament regarding the NPC and the Green Paper.

South African Local Government Association (SALGA) input to the Green Paper on National Strategic Planning
Mr Mayur Maganlal, Executive Director: Economic Development and Planning SALGA Western Cape presented SALGA's input to the Green Paper. He summarised the detailed submission that had been handed out to the Select Committee, to point out the issues that SALGA wanted to highlight to the Committee [see document]. The Minister had made a presentation to discuss the Green Paper at the SALGA National Executive Lekgotla in September 2009. During October and up to the present, there were a number of provincial Lekgotlas that were taking place that were also engaging with the Green Paper. Although SALGA understood that the deadlines for making submissions had passed, the process of correlating all submissions from the provincial SALGA structures had taken some time.

SALGA wanted to highlight key issues, and these included comments on the planning horizon proposed, the objectives and intent of the Green Paper, comments on the plan and planning system, comments on the institutional arrangements, comments on the cross-sphere or intergovernmental planning, the need for change management; and the importance of development and spatial planning.

The first point Mr Maganlal wanted to make was that the broad principles of the Green Paper were welcomed. There had been no major issues raised when the Minister had made his presentation at the NEC Lekgotla in September 2009. SALGA noted that the vision for 2025 was noted as the time horizon. The Minister had earlier stated that there was a need to get some sense of how the elements of planning would fit together. SALGA believed that the document, in its present form, did not make this clear. The Green Paper had mentioned developing a vision, then a long-term plan, then the Medium Term Strategic Framework and the Annual Programme of Action. A revised Green Paper, or even a White Paper, should make it clearer as to what were the exact components of the planning, and how they hung together. The documents contained some proposals as to how these could be brought together.

SALGA also wanted to make the point that at present, vision statements existed in silos. Gauteng had a 2025 vision, for example. SALGA thought that the national planning process would have to consider the issue of alignment, and at least the context within which these areas’ vision statements (drawn in advance of the national vision statements) were being put together. SALGA also noted its varied experiences in government around setting ambitious targets, which could on the one extreme promise to achieve the building of one million houses over five years (which was making good progress) to the objective to halve poverty by 2014 (which was not making good progress, as there was still no indication of what constituted base line poverty). The Planning Commission could be critical in assisting government to set ambitious targets with clear objectives, and then in ensuring that those commitments were contained in other parts of government. He cited the example of a policy that might, for instance, decide to increase use of renewable energy sources by 25%. There would then be a need to consider how the State-owned entities and municipalities would contribute to that. These entities must therefore be part of the planning process, and these objectives must find their way into the entities’ performance management system. If all stakeholders were informed about the setting of the targets, and incorporated these targets into their plans, then SALGA thought that there would be better successes than would be achieved by just setting up targets at the national level.

A point that had been made indirectly during the morning was that there was a need to understand where the country and context would be, in the long-term of a 15 to 30 year horizon. The idea of scenario planning needed to be contained in the planning process. This was not explicit, but could be implicit in the current framework.  The idea was not to “throw out the baby with the bath water”. SALGA wanted to see if some of the Presidencies initiatives on different matters could be picked up for long-term planning processes.  SALGA thought the Planning Commission needed to advise on resource allocation, adequacy and alignment with stated objectives. SALGA wanted to reflect on Integrated Development Plans (IDPs) and the importance of aligning the budget process to IDPs and to stated objectives. In many cases these stated objectives had become mere high level vision statements and therefore there was a need to improve on that aspect.

The lack of information about what currently existed and what challenges had been experienced so far in the planning process – such as challenges that SALGA experienced with ASGISA and other past processes – created some doubt as to whether any lessons had been learnt and applied.  This was not reflected anywhere in the Green Paper. The point about top-down, bottom-up planning would obviously always come down to the idea of achieving the middle ground, and the question was how integrated planning would actually be achieved. On the one hand, national imperatives must be identified. On the other hand, IDPs were, by definition, neighbourhood or ward plans. The two must be reconciled. Therefore, national imperatives around energy planning or scarcity of water had to be aligned to and integrated with IDPs that were developed through community and ward structures.

SALGA also made further comments on the principle and idea of differentiation, which should be kept as one of the principles in the national planning process. Not all municipalities, nor the provinces, were the same, and so a one-size-fits-all policy would not apply. SALGA enquired how local government would be represented in the composition of the Planning Commission, and how inter-governmental co-operation could be achieved, across the provinces, State-owned entities and Departments, and local government. SALGA also wondered how IDPs and Provincial Growth and Development Strategies (PGDS) would be assimilated and how they would relate to a national plan. The challenge of aligning PGDSs and IDPs was still present, as admitted by the Minister during his morning briefing. There was not yet a perfect system. There was a need to overhaul planning at a provincial and local level.

SALGA submitted that the NPC should not only concern itself with the vertical alignment of planning, but also must inter link with horizontal alignment between provinces and between municipalities. There were a number of challenges in developing IDPs. SALGA suggested that, as part of overhauling of the system, it might be useful to have an IDP in two parts – one that outlined what the municipality would be doing, and one that outlined what national and provincial government would be implementing. SALGA also gave examples of how a number of national programmes were misaligned at national level, such as the Expanded Public Works Programme (EPWP) targets and implementation, and the role of municipalities in the global economic crisis.

The point had been made about the establishment of turfs and silos. SALGA was not just taking cognisance of that. It urged that the planning process needed critically to put in place a clear system of change management. The importance of spatial planning was also highlighted.

In conclusion SALGA proposed that if the Green Paper were to be reintroduced as a White Paper, or a revised Green Paper, then this would ensure further engagement, whilst achieving consensus on the form of planning and the methodology of the national planning proposed. SALGA wanted to caution that any reforms proposed must support institutions and must respect the integrity and the autonomy of the three spheres of government.  The defined role of the NPC, in relation to provincial and local government planning had to be clarified. SALGA was not too sure how the national planning process would link to the issue of corporate governance. There was also a need to ensure policy and planning coherence, and there was a need to move towards more content oriented engagement.

Discussion
Mr Mashile commented on the recommendation by SALGA for a revised Green Paper or White Paper for the purposes of further engagement. He noted that this contradicted the earlier submission by the Minister urging that the matter be expedited, to facilitate the formation of the Planning Commission. SALGA were suggesting that an amended form of the Green Paper would still be made available for discussion or consultation. He asked whether SALGA had changed its view on that particular matter.

Mr Mashile commented that if the Committee agreed with SALGA’s formulation of the NPC, and its national plan, then he questioned how it would expect there to be integration with locally-based plans, especially IDPs. He asked what kind of integration SALGA anticipated. Most locally-based IDPS focused on “bread and butter issues”, and he was not sure whether then macro planning would apply, since local wards were using micro-planning on the ground. The national development plan would be raising issues around macro-planning.

Mr CA Bruyn, Councillor representing SALGA Western Cape, responded that this recommendation had been made before SALGA had realised that the Minister wanted to take this matter forward without further engagement.

Mr Bruyn responded on the issue of integration of IDPs. It was clear from repeated reports that the IDPS become useless, because of a lack of coherent planning in the national departments. He gave the example of a plan for an area. This planning must involve the national department, which already meant that there was a top-down approach, and this was complicated by the fact that sometimes, even after conclusion, that department was unable to specify the policy for the area. He commented that in all the programmes by the Department of Finance there had never been planning that would identify a project with all role players. That was why SALGA was pleading for more coherence across planning. Service delivery, which had become a very critical issue now, highlighted the importance of national planning at a local government level, because that was closest to the people and their day-to-day problems.

Mr Maganlal noted that IDPs had been successful in one way, as they could be seen as a good expression of the needs of the community. However they had probably not been successful in prioritising and planning effectively around those needs at a municipal level. They also had not been successful in being able to integrate what communities were saying, and what provincial government had been doing. The inter-governmental link had therefore been weak. The Minister had indicated that national planning would be aligned to the PGDSs and the IDPs. This was a right idea but the mechanics of that needed clarification, and the problems lay in getting the details right.

Mr Mashile asked SALGA whether it had actually initiated this debate with member municipalities.

Mr Bruyn responded that he did not think that it was possible for SALGA to do that. The municipalities were an organised structure. The provinces debated this at Executive Committees in all provinces. SALGA, at national level, would hand out documentation to the local authorities. It was not always possible to discuss issues.

Mr Harris asked what the state of the IDPs was nationally, and how many municipalities were in breach of the legislation that required them to produce IDPs
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Mr Maganlal responded that he thought that all municipalities had submitted IDPs. The Department of Co-operative Governance and Traditional Affairs (COGTA) had a system of analysing the IDPs. SALGA had been critical of that system, as it was difficult to understand the criteria around classification of credible or non-credible IDPs.

Federated Unions of South Africa (FEDUSA) Submission
Ms Gretchen Humphries, Deputy Secretary General, FEDUSA, submitted that South Africa’s current background was characterised by very uncertain cyclical economic conditions, serious socio-economic challenges and structural problems. There were ideological differences between role players in government regarding various policies, ranging from a totally controlled economy to a free market approach. There was a need for a review of past experiences on policies, such as the Reconstruction and Development Programme (RDP) and Accelerated and Shared Growth Initiative for South Africa (ASGISA), which should be used as learning tools for National Planning processes.

Ms Humphries provided a policy brief on the functions of government and submitted that the two main alternatives to laissez-faire were generally seen as either socialism or the welfare State.  More recently the concept of the so-called ‘developmental State’, with an emphasis on more centralised planning, had also been coined. The content of government outputs could be classified firstly as making regulations, for instance governing private competition, such as enforcing anti-monopoly laws and prohibiting unfair labour practices, as well as making regulations affecting general safety, welfare, and morals. Secondly, government provided direct or indirect subsidies to a private person or group of persons, such as contributions to social security, tariff charges on imported goods, and infrastructure development. Thirdly, governments provided certain services, by way of activities or benefits that were made available at generally lower costs than equivalent services from a private firm – such as the maintenance of armed forces, public schools, and fire prevention.

In terms of the South African context, the South African government’s performance was benchmarked against the World Economic Forum (WEF) Global Competitive Index for 2008/09. This rated South Africa forty-fifth out of 134 countries, down one place from the 2007/08 rating. The Report stated that “the country continues to receive good marks in more complex areas measured by the Index, such as intellectual property protection, the quality of private institutions and goods, as well as financial market efficiency, business sophistication and innovation”.  South Africa faced a number of obstacles to competitiveness, including the lack of labour market flexibility, low university enrollment rates, the poor security situation, and high rates of communicable diseases affecting the health of its workforce. 

According to the Harvard University Index of African Governance for 2009, South Africa had dropped four places due to concerns about the rule of law, transparency, corruption, human rights, safety and security, as well as poverty and inequality.  South Africa now ranked ninth out of 53 African countries, dropping from fifth place in 2008, with Mauritius, Botswana, Seychelles and Cape Verde occupying the top countries on the Index. More recent concerns of foreign investors also included the availability of continuous and affordable electricity, water and transport infrastructure.

FEDUSA proposed that certain hypothetical questions be carefully considered and deliberated upon. These included how to maximise the efficiency of government, as planning was not policy. There was a need to consider how the Planning Commission would find a way to increase effectiveness and efficiency, without involving policy. The role of the Medium Term Budget Policy Statement (MTBPS) and budget cycles in assisting strategic planning must be considered. The role of current Ministries, such as Economic Development, must be clarified within the framework proposed by the Green Paper. There was also the need to consider what the National Planning Commission had to be planning, in the light of the current institutional arrangements of government, with specific reference to NEDLAC.

FEDUSA wanted to recommend that the next discussion document on planning must address these questions.

Ms Humphries submitted further that the Green Paper proposed high level national strategic planning based on an Asian model, to address serious socio-economic problems and restrictions. The Green Paper referred to the term “national”, although the planning process had mainly to do with the government sector. Strictly speaking, the proposed planning process was more of a government strategic planning process than a national process. Government implied that both the public and private sectors were involved, so the respective roles of government and the private sector had to be clearly spelt out in the plan. In South Africa, an important goal could be how to move out of the recession so that attention could be given to longer-term social problems. Centralised planning in a coherent manner was a preference in a developmental State.

During the past ten years, power was centralised within the Presidency and it needed to be broadened. The President, as Executive, needed to ensure that all departments and spheres of Government undertook activities of policy development, strategic and operational planning. He must ensure allocation of proper resources in terms of the MTBPS to fulfill strategic objectives, and implementation of agreed strategic objectives and policies, together with the monitoring and evaluation of policies within clear boundaries. The role of the Minister responsible for the NPC and the Ministry of Economic Development needed to be aligned and clearly defined within agreed parameters.

Discussion
Mr Mashile commented that FEDUSA had made a lot of comments and political statements. His understanding was that there was no Ministry of National Planning, and he wanted to get clarity on why there was a reference to the NPC and the Ministry in FEDUSA’s submission. His understanding was that there was a Minister in the Presidency responsible for planning.

Mr Mashile also asked for clarity on the issues around NEDLAC and the NPC.

Ms Humphries responded that the Green Paper had in draft dealt with the budget office and the draft planning process pertaining to the medium term and the long term planning process. At that stage the issue of having a Ministry for Planning had been raised. It could be seen that it referred to the Ministry of Planning under the Presidency, because that was where it was currently residing.

Ms Humphries also responded to the concerns about social dialogue.  FEDUSA had been part of the process since 1994, when there was consultation at a strategic level between social partners, around the development of various policy processes to ensure successful planning. NEDLAC had often contributed minimally, rather than making contributions to the bigger picture. That was a matter of concern to FEDUSA, which believed that government could play a meaningful role if it became part of that process. It was undesirable to have civic society organisations that were not properly instituted and were legitimately leading the process. There had to be stakeholder representatives that were legitimate and accountable. NEDLAC and social dialogue could assist in this process, as detailed more fully in the FEDUSA submission. Government was also represented on NEDLAC in their various structures and in their various functions.

In terms of the relationship with the NPC, FEDUSA believed that the President had overall authority, and it did not have a problem with the Minister in the Presidency. FEDUSA believed that the President had to head the NPC, and therefore the President would delegate whoever was responsible to deal with those functions. The President, at the end of the day, had decided upon the lead department and he had to be the one delegating authority.

Mr Montsitsi requested clarity on whether FEDUSA was making a proposal for the establishment of a Parliamentary Committee that would exercise oversight over the NPC. This meant, in essence, that there would be a new Committee with a new Chairperson, which would be asking questions related to the line functions of other Committees like Housing, Agriculture and Education, for instance. He wanted to check with FEDUSA whether it would not be more prudent if these Committees could have the NPC asking them those questions, instead of having them addressed by a new Committee.

Ms Humphries responded that the reasoning behind this was basically to look at the submissions that were presented by COSATU and Business Unity South Africa (BUSA), dealing with a Ministerial Committee versus a Parliamentary Committee. FEDUSA’s view was that a Parliamentary Committee would most probably be in a better position to deal with strategic planning than a Ministerial Committee, as the latter could be affected by political interference. That is why there was a reference specifically to a Portfolio Committee. Whether it was an existing Committee or if it was a new Committee was something that could be deliberated.

Mr Montsitsi also asked about the benchmarking of the South African government, and asked if it was to be assumed that these benchmarks were not contested either by South Africa itself or other countries.

Ms Humphries responded that the benchmarks currently used were based on the Harvard system. Whether or not South Africa agreed with them was debatable. However, the norm was that these were international standards that were currently being used to review South African issues. It was important to consider where South Africa stood, in terms of its performance against world standards, to measure South Africa’s development. 

Mr Mashile pointed to the use of the word “regime” by FEDUSA in a section of the presentation, and asked when FEDUSA thought it was appropriate to call a government a regime.

Mr Mashile also asked FEDUSA whether it subscribed to the idea that government had to leave the economy alone. 

Ms Humphries responded that the submission was basically saying that in a development State there were two schools of thought. One suggested a laissez-faire approach that the best government would be the one that governed least. The other approach suggested that the viewpoint of a welfare State must be applied. These were all principles that were broken into the system. FEDUSA was advocating a balanced approach. Government had to govern, but also had to decide where to interfere and where to make input into issues, and where not to do so, as also where to plan, and where to leave alone. A “regime” was defined as the actual institution that had the authority to determine policy.

The meeting was adjourned.