Positive signs for 2030, say futurists

A global shift is under way, and Africa stands to gain a new status as the desired continent, not the pitied one. As Africa’s powerhouse economy, South Africa can attain new social, economic and political capital from this global shift, according to a document called “2030 Conversations” produced by an eminent think tank.

The document records the results from a conference organised by the South African chapter of the World Future Society entitled, “Energy, Environment, Education and Economics: Imagineering South Africa’s Future for 2030.”

Under the heading “Economics” (dealing with “systems of wealth production and exchange of goods and services, patterns of consumption”), demographer Dr Bärbel Haldenwang of the Institute for Futures Research (IFR) sketched key population trends to 2030:

• There will be about 52.2 million South Africans by 2030, compared with 49 million presently;

• Sixty-five percent of the 2030 population will be in the working age group of 15-64 years; and

• By 2030, 71% or 39 million members of the population will be urbanised.

Urbanisation

Rapid ubanisation and rural depopulation will be key demographic factors between 2010 and 2030.

“The economic opportunities, for a population in which 65% falls in the working age group 15-64, are immense”, the document states.

“Increasing and nurturing South Africa’s urban middle class must rank as a high-priority goal for the South African economy to 2030. This should be combined with engaging and empowering the low-income population groups in both civil society and the economy.”

Dr Jakkie Cilliers, founder of the Institute for Security Studies, pointed out to the conference that economic inequality is a major source of conflict: “A country with $250 per capita income has a 15% likelihood of internal conflict over five years – many times greater than the 1% risk of an economy with $5 000 per capital income.”

There is a robust relationship between demographic growth and economic growth; as well as a robust relationship between urbanisation and per capita income.

Nearly all countries become about 50% urbanised before reaching middle-income status. All high-income countries are 70%-80% urbanised.

Since Africa has a young urbanising population, these two pre-conditions for economic growth are in place. However, South Africa is one of the world’s most unequal societies, with 40% of the population being extremely poor.

“This represents another key challenge for South Africa. Crime rates tend to be higher where there is high unemployment, high socio-economic inequality and lax gun laws,” said Dr Cilliers.

Mega trends

He sketched some mega trends he anticipates would characterise a world of 2025 to 2030:

• The rise of emerging powers, China and India in particular;

• A historic transfer of relative wealth and political power from West to East;

• A more heterogeneous world through influence of non-state actors;

• An increasingly global, multipolar world with a deficit in global governance;

• Ageing populations in the developed world and youthful populations in Africa and Asia;

• Growing energy, food and water constraints; and

• Worries about climate change.

On the downside, Dr Cilliers foresees increased conflicts over resources such as water, diamonds, wood, oil and food during the 21st century.

In particular, there is a huge challenge of food security for the region. “According to the FAO [Food and Agriculture Organization], 265 million people in sub-Saharan Africa now suffer from food insecurity. This is an increase of 100 million (or 60%) since 1991,” he said.

South Africa, 20 years down the road

Professor André le Roux, director of the IFR, in a presentation entitled “South Africa’s Economy 20 Years Down the Road”, said the country needs to move far up the Happy Planet Index (measuring life satisfaction and life expectancy to calculate happy life years) where it lingers in the 118th position – four below the United States, the document reports.

Le Roux, however, shared some big trends that favour Africa’s future, which he explained as a possible global shift where finite natural resources plus ageing global workforces could see the restoration of Africa’s strategic importance.

“There is a chance to restore Africa’s global stature in this evolving context.

“Africa can gain a new strategic importance because it has resources the world needs and the populations of the developed world are ageing significantly, while Africa’s populations are young in comparison. Africa is becoming the youngest continent,” the document states further.

“The world is waking up to limits of growth through scarce resources (oil, water, even food) and new powers like China and India are looking closely at, and investing in, Africa’s untapped natural resources and land.

“A global shift is under way, and Africa stands to gain a new status as the desired continent, not the pitied continent. As Africa’s powerhouse economy, South Africa can gain new social, economic and political capital from this global power shift,” the document adds.

Africa has:

• a positive demographic future to 2030 in terms of being youthful, compared to the ageing populations of the developed world; and

• only about 28% of its arable land is in use, meaning over 70% of its potential arable land is not yet in use.

African Renaissance

Le Roux argues that there can only be an African Renaissance if the rule of law and governance are strengthened and implemented in Africa, and if the continent develops natural resources-based economies. Corruption, strengthened by company bribes – including those by international companies – needs to be rooted out.

He outlined two preconditions for South Africa’s economic growth:

• Developing legitimate and effective leadership and governance, based on the rule of law; and

• Developing a diversified economy which is to be based on extensive natural resources.

In addition to these preconditions, Le Roux stated that South Africa has the following challenges to overcome:

• A high unemployment rate at 25%;

• Structural inequality;

• Poverty; and

• A poor savings rate.

He stressed that economic growth cannot take place in a vacuum. South Africa must grow its social capital at the same time as its economic resources.

“Society cannot develop economically over the long term if, for instance, it is found lacking in its search for truth, and in its respect for liberty, for ethical behaviour and for beauty.”

Thirteen countries have recorded an average growth rate of 7% per annum for 25 years or longer: Botswana, China, Hong Kong, Indonesia, Japan, Korea, Republic of Malaysia, Malta, Oman, Singapore, Taiwan and Thailand.

On the positive side, however, Le Roux said that South Africa’s gross national income per capita rates and our gross domestic product per capita rates are on a long-term upward trajectory.