Picture: Motshwari Mofokeng/African News Agency File/Taken June 4, 2015 – Then Deputy President of South Africa Cyril Ramaphosa delivers a speech at the 15th national congress of the National Union of Mineworkers, at Birchwood conference centre near Boksburg, Gauteng. From the establishment of the National Union of Mineworkers in 1982, to the chairing of the BEE Commission in 1998 and the introduction of the National Minimum Wage in 2019, President Ramaphosa has driven processes that have put power into the hands of workers, broader economic empowerment and a basic wage guarantee, the writer says.
By Isobel Frye
Over the past two weeks, President Cyril Ramaphosa appears to have given the call for continuing and improving social security grants in South Africa his wholehearted support, always concluding his comments with reference to a future decent Basic Income Grant.
His unambiguous endorsement has been located firmly in empirical evidence on the immediate relief that such an extensive programme provides to the poor and equally importantly, about the clear transformative potential that such a redistributive programme will have on South Africa’s sick and ailing economy.
Could the introduction of a Basic Income Grant (BIG) be a vanity project for the President? If we reflect on his career, both inside and outside of formal politics it seems that South Africa’s wealthiest President may in fact have had the greatest visionary impact on transforming a political economy mired in Apartheid elite accumulation to a broad-based more equal society. If so, it would be fairer to call the BIG a legacy project. And he is in good company as a recent report of a group of global leaders confirms.
Since announcing the introduction of the R350 Social Relief of Distress Grant for unemployed people during the 2020 hard Covid- 19 lockdown, the President has been at pains to keep open the policy space crafted by social justice activists and members of his own Cabinet around the call for a universal basic income grant (UBIG), even to the point of telling successive ministers of finance to get used to the idea.
Last week in his response to questions in the National Council of Provinces (NCOP), President Ramaphosa authoritatively cited a number of new research findings released last week that identified the positive transformative dynamics emerging from the catalyst of the small R350 grant with many researchers questioning the far bigger impact that a decent universal basic income grant could have.
In a country that has failed to generate decent work for 11.9 million adults and the additional 12.6 million adults who live in the limbo of ‘Not economically Active’, a new approach is surely necessary almost 30 years after liberation.
And the evidence, both local and international, suggests that a UBIG, while not a silver bullet, has the potential to radically transform the failing engine of South Africa’s social and economic well-being.
This recent research is part of the Economic Stimulus Programmes initiative convened by SALDRU (based at the UCT’s School of Economics) on behalf of the Presidential Employment Stimulus, with the backing of the Agence Française de Développement and the Delegation of the European Union.
In fact, the R350 grant appears to have inadvertently been one of the largest global pilots of a basic income grant, demonstrating not only the immediate benefits to people’s well-being that the grant income provided, but also how it kickstarted the dying local economies of township and poor rural areas long since stripped of viable economic activity.
The demand-side support for budding entrepreneurs was another clear finding. In fact, no number of supply-side SMME initiatives can be successful if the local consumers have no purchasing power.
And this research affirms the study undertaken by Professor Alex van den Heever on econometric modelling of the affordability and viability of UBIG support commissioned by the Minister of Social Development, Lindiwe Zulu, and the International Labour Organisation, research by Duma Gqubule for the Social Policy Initiative, as well as work done by the Institute for Economic Justice to name but a few.
The idea of a need to delink income from the failing traditional workplace has resonance with the multi-year investigation of the Global Commission on the Future of Work that President Ramaphosa co-chaired with the then Prime Minister of Sweden Stefan Lofven between 2017 and 2019.
And it also resonates with one of the fundamental recommendations in the recent report published by the Earth4All global initiative. The report, A Survival Guide for Humanity, was published in late 2022. Some of the founding institutions behind the broader initiative include the prestigious Club of Rome and the Potsdam Institute for Climate Impact Research.
The report sounds an urgent call for radical change, with a dramatic warning that the beneficial survival of the planet and humanity depends on this change. The data demonstrates how the continued growth of unequal societies is responsible for gross over-consumption amongst the rich elite, amid widespread hunger and poverty of billions of people. Both patterns have driven severe ecological damage, they have led to a complete erosion of social cohesion in many societies and this inequality itself has undermined democracy and allowed for the rise of authoritarian leaders and leadership styles.
To aid the diagnostic and the charting of possible solutions, the initiative developed two scenarios – Too Little Too Late, and Giant Leap.
Too Little Too Late is a scan of our collective dystopic future over the next forty years if we don’t change anything fundamental in our global political economy.
The Giant Leap scenario has a happy ending, but it requires hugely disruptive reforms that force a change to the very basis of our economic and societal orthodoxies. The Giant Leap can only work if it is located in radical transformation through five ‘extraordinary turnarounds’ that are systemically co-dependent.
The five turnarounds are:
1. Eliminate poverty. Guarantee access to a sufficient floor for all, without exception or exclusion.
2. Reduce inequality. Through taxation ensure that the richest 10 percent take less than 40 percent of national income and distribute a fair share to all through a UBIG or universal basic dividend.
3. Empowerment. Introduce universal decent social protection, education and pensions.
4. Transform the food system. Eradicate perverse subsidies, adopt food-efficient systems and eliminate waste from farm to fork, especially through wasteful global food chains.
5. Transform the energy system. End energy poverty and waste, and ensure sustainable energy for all based on universal electrification with abundant renewables.
The idea of a universal dividend or regular cash grant is a radical way to stop the ongoing marginalisation of millions of people from the economy, a functioning democratic society and command over their own lives.
It also follows a line of reform initiatives that Cyril Ramaphosa has championed or catalysed since the early 1980s.
From the establishment of the National Union of Mineworkers in 1982, to the chairing of the BEE Commission in 1998 to the introduction of the National Minimum Wage in 2019, President Ramaphosa has driven processes that have put power into the hands of workers, broader economic empowerment and a basic wage guarantee.
Each of these initiatives signalled a radical disruption to a colonial and apartheid economic system driven by elite extraction.
The championing of a universal decent basic income grant by Ramaphosa seems an appropriate strategy to cover the millions of people who fall outside of the labour market and economic activity by the reach of a societal safety net of social security.
It will be radical, and it will take visionary leadership. But it is a reform that is endorsed by a stratum of world leaders and its efficacy has already been proven by a wide range of independent local and international research.
Will Cyril Ramaphosa prove to be the billionaire president champion of true upliftment of the poor? Stranger things have happened.
Isobel Frye is Executive Director of the Social Policy Initiative
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