As mentioned above, the speech focuses on inclusive growth and inclusive transformation. To quote: “In actively correcting for the injustices of the past, we have a choice between extracting privilege and wealth for the few, or wider participation and broad-based empowerment.”
A recent study by the Brussels-based Bruegel think tank on inclusive growth in Europe argues that “Growth is considered inclusive if it provides opportunities for all segments of the population and shares them fairly. To understand inclusive growth, we must first understand inequality”.8It is self-evident that this observation is extremely pertinent to South Africa.
Minister Gordhan’s speech also did not shy away from the potential conflict between growth and transformation. I have argued in the past that South Africa needs a better balance between these objectives and that we should avoid growth being handicapped by transformation imperatives. It is therefore heartening to note the minister declaring that “We have a choice between approaches that merely transfer wealth and approaches that create new enterprises, new assets, new jobs and a more open growth path”.
Inclusive growth and transformation are rather seen as complementary to one another. Hence, inclusive growth is seen to mean opening up opportunities and broadening participation in an expanding economy, meeting the service delivery demands of marginalised communities (viz. addressing capability deficiencies), creating decent work prospects for all, and providing good-quality education at all levels to all communities.
Furthermore, inclusivity will be promoted by the quality of education, the pace and pattern of urbanisation and housing development, industrial development and the expansion of employment, trade and commerce, and social protection services, including access to healthcare and social security.
It would be easy to conclude that inclusive growth is merely about equality of opportunity and that, as long as all formal obstacles standing in the way of access to opportunities are removed for everybody, everything will be fine. However, it is not as simple as that. Bruegel states that “There is growing recognition that economic growth in itself does not provide equal opportunities to different segments of society. In most countries disadvantaged people find it difficult to progress”.9 In other words, before there can be equality of opportunity, the capability deficiency of the poor to which Sen refers must be addressed.
The most telling deficiency is to be found in education because of its importance for social mobility and employability, including self-employment. With the attention in South Africa currently being focused on higher education, it is appropriate to remind ourselves of the crucial importance of early childhood development for life chances.
8Darvas and Wolff (2016), p. 1
9Darvas and Wolff (2016), p. 9