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Sep 23, 2008

SA identifies key drivers to affect development with ‘Scenario 2025’ report

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Presidency Policy Unit head Joel Netshitenze discusses technology as a driver of South Africa's development.
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Shifts in global economic and political power, resource constraints, the country's economic growth, governance, social fabric, and technology were likely to be the key driving forces (KDFs) that would affect South Africa's development up to 2025.

This was identified by the Policy Coordination and Advisory Services (PCAS) unit of the Presidency, as part of its Scenarios 2025: The future we chose? report.

PCAS stated that these scenarios were not predictions of South Africa's future or roadmaps, but rather "informed speculation" about some plausible paths that the country could have taken between 2009 and 2025.

"We are not saying this is what is going to happen. [These scenarios] identify probable, but plausible, trajectories for the evolution of South African society and the global environment as it impacts on us," the Presidency Policy Unit head Joel Netshitenze, said at the launch of the report in Pretoria on Tuesday.

PCAS had conducted 65 interviews with people from a range of backgrounds, including the media, businesses, government, trade unions, academics and civil society, among others.

Out of these interviews, the unit identified 24 factors that would shape the future of the country, which was then further defined to form the seven KDFs that were likely to affect South Africa's development.

Firstly, the unit noted that the industrialisation and growth of China and India, as well as their growing demand for resources and markets was changing the world, making a shift in global economic power a possibility.

The report pointed out that China's gross domestic product (GDP) was expected to be similar to that of the US by 2025, if current trends continued.

The US's GDP was currently more than double the GDP of China and India combined.

This meant that China's GDP, over a period of three decades, would have to grow at double the rate of the GDP of the US or the European Union by 2025.

The report also noted that it appeared that the growth of Brazil, Russia, India and China, as well as the "oil bounty" of Middle Eastern countries, would do more for Africa's economic growth in the next 20 years than 60 years of investment and aid from Western countries had done.

However, the unit noted that there were also dangers, as China and Russia could be "as cavalier in their disregard for democracy and human rights as the US and ex-colonial powers have been in the past".

Further, Netshitenze commented that the fastest growing economies in the world would be those that increased their ability to trade, adding that trade would account for more than half of global GDP by 2025.

The unit also noted that by 2025 Africa's "economic clout" would also have grown significantly, but that South Africa may not be the main driver behind this.

The report noted that other continental powers could grow faster, or could be led more effectively than South Africa.

Meanwhile, the report also noted that a shift in global political powers was the second KDF, with shifts in international power relationships partially reflecting a shift in economic power.

The report explained that the US's military budget remained larger than those of the next 15 biggest economies in the world, combined.

Despite the US expected to still have the "most formidable" armed force by 2025, this would be on a much smaller scale than in 2008.

Further, PCAS noted in the report that a multi-lateral approach to global problems was likely to have been followed by 2025, which would have led to an expansion of early intervention mechanisms, the rapid deployment of peacekeepers and more united action by the UN, the G8, and other similar organisations.

It was expected that, over the next decade, there would be fewer armed conflicts in the world.

However, this could be offset by possible conflicts over resources, the report stated.

Meanwhile, South Africa could, in future, no longer be the leader in "reshaping elements of international discourse", with other power blocs in East and West Africa challenging its role in this regard.

South Africa was also likely to pursue more narrow national and regional interests in future, noted the report.

The report, meanwhile, asserted that nuclear, hydrogen, solar and wind energy would be the predominant emerging energy sources by 2025, with the world moving away from fossil fuels.

However, it explained that this transition to new fuel sources might not be managed well, leading to higher food production costs and negative effects on international tourism.

Further, Netshitenze said that the growing shortage and deterioration of other critical resources, such as soil, air and water, were likely to become global issues.

LOCALLY MIRRORED DRIVERS

PCAS explained that three additional KDFs would mirror the aforementioned global drivers, in the local arena.

Firstly, South Africa's economic performance would be a key driver, with the speed of growth, the competitiveness and productiveness of the local economy, and the sustainability of job creation all important aspects that the country had to consider.

Further, the report questioned whether the decline in South Africa's manufacturing, mining and agricultural sectors, in relation to their relative contribution to GDP, could be arrested and reversed and how this would be done.

In addition, it stated that South Africa's relationship with Africa would be a very important factor in the country's economic growth.

Secondly, governance in South Africa was another KDF, with the report stating that the country's ability to deal with health, education, crime and corruption would be important going forward.

Also, government would have to have the ability to promote competitiveness in order to grow the economy, and should not inhibit innovation, productivity and social inclusion.

Further, the report stated that government had the resources to "fashion" a basic sense of nationhood and some sense of human solidarity, which would cut across gender, race and ethnic divisions.

The creation of social cohesion would, thus, be another KDF for South Africa's development going forward.

TECHNOLOGY

Meanwhile, Netshitenze noted that technology would be an important, crosscutting KDF, which would assist in "promoting democracy and openness".

It was expected that billions of people across the world would have access to always-on, high bandwidth communications devices by 2025.

The report explained that while access to technology was likely to remain uneven, the poor were embracing technology, "exploiting it as a key avenue out of disconnectedness and penury".

Further, the report noted that South Africa, in particular, could benefit from the increased use of fuel-cell technology.

The country could also benefit if the "oil age" gave way to the "hydrogen age" and if South Africa's pebble bed nuclear technology was more widely applied, stated the report.

THE REPORT

PCAS stated that this report was a "companion piece" to the Fifteen Year Review report.

It would be supplied to all tiers of all government departments, who could then test their policies against these scenarios to see whether there were any potential future pitfalls or options that they could adopt or avoid.


Edited by: Mariaan Webb
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