Will the NDP increase growth or establish a low development for institutions?

Although it might seem narrowed to suggest that the solution to South Africa’s economic and political problems is already on paper (National Development Plan), the truth is the only restriction to this plan is the failure of government and institutions to enforce such a model.  This seems much easier said than done, and the results aren’t guaranteed.  Nevertheless the proposal does appear appropriate.

It seems that the NDP is addressing some of the 7 factors that Peet Strydom introduced as rules to obtain development in institutions, which in turn spurs growth but some flaws suggest the problem is not addressed directly:

Rule of law: The justice system is derived from Roman-Holland’s- law and company law derived from respectable unities in Canada. The current problem in rule of law is not the law itself, but the enforcement of this law.  The NDP does address justice in the way to evaluate the code of conduct and to upturn police into a civilian service.

Protection of property: Primary aimed at the liquidation for collateral.  Unfortunately the Green paper recently passed limits this protection. In addition the current land reform is not a growth factor, however the NFP suggest land reform can only take place in a growing economic environment but not at the expense of a high debt burden.

Stable Government: This is one of the utmost problems facing the South-African economy, by such claiming politics and economics to be the opposite side of the same coin. In addition to political will, corruption has to be fought on three fronts: deterrence, prevention and education. Problems that the NFP addresses are corruption (tender, expenditure and ineffective allocation) and weak management in policy. The proposition is a change of approach away from trying to find new structural arrangements, which is destabilising, towards identifying and resolving specific weaknesses in coordination and capacity.

Investment in People: The NFP addresses the education level and health situation to increase qualified personal and knock-on the increase of employment. The NDP suggest a graduate programme and local government skill development strategy to embolden new candidates.  Early childhood development is also included as a top priority.

Economic stability:  This seems already implemented with the current macro-economic state, but it might be at the expensive of micro economic stability. The NDP introduces microeconomic reforms thought transport, public services, telecommunications and food to lower the cost of living and doing business.

Infrastructure: The NDP placed emphasis in the infrastructure by modernising infrastructure after decades of underinvestment may require higher tariffs. This higher investment, supported by better public infrastructure and skills, will enable the economy to grow faster and become more productive. Rising employment and productivity will lead to rising incomes and living standards and less inequality.

By looking at the current economic state, maybe the only optimism left for South-Africa is in the NDP. Although a few shortcomings are apparent, in which a stable government should already be in place to enforce such a plan and expenditure needed for this bold new venture will be hard to accumulate. The proposed NDP does seem promising for the problems South-Africa is facing, but it is yet to be seen if NDP will help institutions to gain the necessary conditions to flourish.



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