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6. Implementing the RDP

6.1 PROBLEM STATEMENT

6.1.1The processes of planning and development in South Africa have been structurally distorted by the objectives of apartheid and, both by design and default, have failed to meet the needs of the majority. In recent years all parts of South Africa's excessively complex state system have been incapable of implementing their stated goals. Increased waste, unused funds and outright corruption have characterised government. To implement the RDP, a thoroughgoing reform will be necessary to address the following major structural weaknesses:

6.1.1.1Excessive departmentalism leading to uncoordinated, sometimes contradictory, decision-making by various state agencies.

6.1.1.2The allocation of power between the various tiers of government - local, regional and national - does not accord with practical needs. Generally, the central state and some regional governments have excessive and inappropriate power.

6.1.1.3At all levels, the structures of government exclude the majority of the population from participation in decision-making. Bureaucrats do not consult with most stakeholders.

6.1.1.4Decision-making remains largely unaccountable either to the public or to monitoring structures. Typically, civil servants act in secret. They rarely justify or explain their decisions in public, and they often have poor relations with NGOs, civics and other community organisations.

6.1.1.5The potential contribution of NGOs to reconstruction and development is reduced by the lack of an overall framework and integrative programmes. This results in fragmented and isolated projects.

6.1.1.6Implementation of any development programme under circumstances of violence and corruption or clientelism is extremely difficult. The problems worsen in marginalised rural areas where the right-wing or bantustan authorities hold power.

6.2 VISION AND OBJECTIVES

6.2.1The basic principles of the RDP are that it is a coherent programme, that it builds a nation, that it is people-driven, that it provides peace and security for all, that it links reconstruction and development, and that it democratises the state and society. This approach has not been attempted in South Africa, and is a fundamental break with apartheid practices. This imposes major new challenges in how to implement such a programme.

6.2.2Accordingly, specific structures are necessary to implement the RDP; their functions will be:

6.2.2.1to manage policy and the ability to determine spending priorities within a strategic perspective;

6.2.2.2to coordinate resources and actions;

6.2.2.3to incorporate all major stakeholders in establishing, implementing and evaluating policy;

6.2.2.4to establish legislative, procedural, institutional and financial frameworks that ensure that policies can be implemented;

6.2.2.5to ensure adequate funding of integrated programmes and that resources reach the targeted communities;

6.2.2.6to facilitate the management of potential conflict over limited resources and differing needs, and

6.2.2.7to ensure a macro-economic policy environment that is stable.

6.2.3Financing the RDP presents both a challenge and an opportunity to revive our economy and set it on a path to sustained reconstruction and development. We must finance the RDP in ways that preserve macro-economic balances, especially in terms of avoiding undue inflation and balance-of-payments difficulties. This requires a strategic approach that combines public and private sector funding, taking into account the sequence and timing of funding sources and programmes.

6.3 IMPLEMENTING AND COORDINATING STRUCTURES

6.3.1To implement the RDP will require the establishment of effective RDP structures within national, provincial and local governments. These structures must monitor the implementation of the RDP, including the elaboration of planning frameworks and coordination between departments and tiers of government.

6.3.2A prime function of these structures will be to overcome tendencies to fragmentation of different government departments. While not displacing the line functions of other departments, the structures will require real powers of coordination and an appropriate budget. The national RDP structure should also have oversight of inter-governmental financial transfers (national to provincial, provincial to local, etc.) to ensure that these are in conformity with the overall national objectives of the RDP.

6.3.3The democratic government must undertake a review of all ministries, parastatals and other democratic government agencies, in conjunction with the Public Service Commission and the Financial and Fiscal Commission, in order to assess their abilities and willingness to achieve the goals and objectives of the RDP.

6.3.4Democratic government and parastatal programmes must be based on publicly-determined priorities in line with the RDP, and appropriate priority-setting mechanisms must be established. Each institution of government should establish a public priority-setting exercise, whose objectives should be measurable, achievable, have a defined time frame and be accompanied by a plan and budget to accomplish them. A performance audit of government programmes and agencies must be carried out within six months of the inauguration of the Interim Government of National Unity, and regularly thereafter.

6.3.5The RDP national coordinating body must also ensure that the structures of civil society are involved in the programme. It must ensure coordination between the various ministries, parastatals, labour, civic and other organisations. It must link with existing sectoral and development forums at national level, in order to establish effective systems of coordination. Similar bodies should be established at provincial and local levels. In addition, provincial and local development forums are important vehicles for ensuring the participation of local communities and interest groups in the development process. Development forums must be strengthened through the provision of adequate resources.

6.3.6The RDP recognises that access to planning procedures and information is unequally weighted in favour of an already privileged group. The RDP structures must ensure that historically oppressed communities get the resources they need to participate meaningfully in planning processes and decision-making. Particular emphasis must be placed on the role of women in urban and rural areas and in micro enterprises.

6.4 PLANNING FRAMEWORKS

6.4.1The Interim Constitution lays the basis for new relationships between national, provincial and local government. The intention of the RDP is to establish a national framework that guides provincial government and allocates appropriate powers and functions to these levels. This requires considerable interaction and coordination between national, provincial and local structures. The objective is to establish a framework to which statutory authorities should relate, and to guide both public and private investment decisions to ensure the best cumulative results.

6.4.2The democratic government will reduce the burden of implementation which falls upon its shoulders through the appropriate allocation of powers and responsibilities to lower levels of government, and through the active involvement of organisations of civil society. By providing a coherent framework it will be able to mobilise considerable energy behind the RDP and ensure that it meets the practical requirements of designing programmes in different areas.

6.4.3In order to ensure a coherent and effective implementation of the RDP, a planning process must establish a clear hierarchy of areas of responsibility, roles of sub-national plans, guidelines for decision-making, strategy formulation, and procedures. Planning guidelines must also subordinate local planning to metropolitan/district, provincial and national development planning (for example, by reducing the status of zoning and town-planning schemes to the status of local plans which are automatically overridden by higher levels of planning).

6.4.4The RDP must be based on a coordinated and coherent development strategy. This strategy in turn must operate within frameworks at national, provincial and local levels that:

6.4.4.1focus on the development challenges and the strategies to meet these challenges (frameworks at provincial and local level must address institutional, social, economic, fiscal, cultural and physical planning requirements appropriate to that level of authority);

6.4.4.2provide coherent and coordinated guidelines within which appropriate statutory authorities can function;

6.4.4.3guide work programming and priorities, development actions, participatory processes, and priority-based budgeting, and

6.4.4.4guide both public and private investment-planning decisions to ensure the best cumulative effects.

6.4.5RDP frameworks must be tied to the budgeting process, and revised, updated and tabled in parliament annually. New plan-making processes and approval procedures must be developed. These must be simple and easy to understand and capable of speedy implementation. The RDP requires collaborative, integrated planning and decision-making.

6.4.6To ensure the efficacy of the RDP, a national system of monitoring must establish a set of key indicators and measure the impact of the RDP on these indicators. By mid-1994, the central RDP agency must develop criteria for assessing targets and time frames. Every possible step must be taken to ensure that the decision-makers are held accountable for their decisions. They must motivate publicly all decisions with sound reasons. Affected parties must be able to appeal against planning decisions to an independent appeals body.

6.4.7 Regulatory system for planning the RDP.

6.4.7.1A new legislative and regulatory system for development planning is required in order to make the RDP a reality. Current inappropriate and unconstitutional development legislation must be repealed.

6.4.7.2The regulatory system must provide a basis for defining and fast-tracking strategic reconstruction projects, and provide for rapid granting of legal status to widely supported, interim metropolitan/district and provincial development frameworks.

6.4.7.3The system should be consolidated in the form of a National Reconstruction and Development Act, and promulgated as a matter of urgency. Simultaneously a prototypical Provincial Reconstruction and Development Planning Act should be developed for consideration and adoption by each province.

6.5 FINANCING THE RDP

6.5.1The RDP will mean nothing if it cannot be financed. Two questions arise: can we afford such an extensive programme, and will people be required to pay more? If the democratic government were to attempt to finance all the proposals contained in the RDP then the answer to the first question would be a clear 'no' and to the second a clear 'yes' - in other words, the RDP would fail. We must remind ourselves of the six basic principles underlying the RDP as set out in Chapter One. These six principles distinguish the RDP from all other programmes proposed by political parties.

6.5.2The success of the RDP does not only require finance. It also requires labour, skills and coordinated effort in combination with that finance. The six principles allow for this combination by harnessing the underutilised resources of the democratic government, the private sector, labour communities and women, and by utilising these resources in a rational and effective way. Only the ANC and its allies are capable of such a programme. Finance for the RDP will come from revenues, issuing debt (including general obligation and revenue bonds) and grants. The largest portion of all RDP proposals will be financed by better use of existing resources.

6.5.3However, it is clear that government policy and mechanisms of raising finance are crucial to the success of the RDP. If they were to cause excessive inflation or serious balance of payments problems they would worsen the position of the poor, curtail growth and cause the RDP to fail. Government contributions to the financing of the RDP must, therefore, avoid undue inflation and balance of payments difficulties. In the long run, the RDP will redirect government spending, rather than increasing it as a proportion of GDP.

6.5.4The financing of the programme is a national responsibility, and provincial and local governments would not be expected to rely on their own tax bases and resources in its implementation, although contributions from these sources should be made in order to enhance accountability. Allocations from national resources will take into account the existing inequalities between provinces and localities, and will be based on population size, development backlogs, and other objective criteria as may be determined by the Financial and Fiscal Commission.

6.5.5Restructuring the national budget. Despite relatively high levels of government spending, South Africa displays a worse record than many poorer countries in meeting basic needs. This situation reflects the impact of apartheid in terms of both racially skewed spending and corrupt, unaccountable government. In addition, low growth rates and an absence of growth-promoting capital expenditure by the public sector created fiscal problems. A severe imbalance exists at present between insufficient capital expenditure and excessive consumption expenditure.

6.5.6The RDP is, therefore, committed to a programme of restructuring public expenditure to finance the democratic government's contribution to the RDP. Given the fiscal malaise left by apartheid, careful programmes must be developed around financing increased capital expenditure, increasing the efficiency of consumption expenditure and improving the revenue-recovery capacities of the government.

6.5.7The existing ratios of the deficit, borrowing and taxation to GNP are part of our macro-economic problem. In meeting the financing needs of the RDP and retaining macro stability during its implementation, particular attention will be paid to these ratios. The emphasis will be on ensuring a growing GDP, improved revenue recovery, and more effective expenditure in order to make more resources available. In the process of raising new funds and applying them, the ratios mentioned above must be taken into account.

6.5.8The democratic government must end unnecessary secrecy in the formulation of the budget. To that end, it must change the relevant regulations. We must establish a Parliamentary Budget Office with sufficient resources and personnel to ensure efficient democratic oversight of the budget. Transformation of the parastatals and cooperation with forums will also help ensure more efficient and open budgeting processes.

6.5.9Efficient and open transformation of the budget requires the development of a five-year fiscal plan as the framework for multi-year budgets.

6.5.10By combining the ministries of State Expenditure and Finance to form a single finance ministry, we will reduce duplication and streamline decision-making.

6.5.11The democratic government must make the development of effective and open performance auditing a top priority. Auditing of public institutions must broaden from its narrow focus on financial accountability to assess how well expenditures meet RDP targets. The Interim Constitution gives the Auditor-General responsibility for performance auditing mandated by the President. We must begin to define the priority sectors and agencies for performance auditing.

6.5.12The democratic government must mandate the Financial and Fiscal Commission to review the tax structure in order to develop a more progressive, fair and transparent structure. Priorities will include:

6.5.12.1eliminating bias in tax against women regardless of marital status, and recognising women's child-care costs and the unpaid labour they perform;

6.5.12.2reviewing personal income tax to reduce the burden caused by fiscal drag on middle-income people;

6.5.12.3rationalising company tax breaks for health, education, housing and other expenditures which may conflict with RDP priorities;

6.5.12.4simplifying the unnecessarily complex company tax system, which is biased against small and medium-sized enterprises and leads to low effective tax rates despite a fairly high nominal rate, and

6.5.12.5zero-rating VAT on basic necessities.

6.5.13Taxation policies should provide incentives for institutional affirmative action programmes covering race and gender, with respect to employment and education.

6.5.14All macro-economic allocations must be accompanied by social and economic impact analyses on gender, race, urban-rural dimensions, class/income distribution, regional inequalities, and age (to encompass marginalised young people and pensioners). Future budgetary allocations must concretely show the commitment of a future government to women's development and empowerment. The budget should be gender-sensitive. It should contain a social impact statement detailing how budgetary allocations affect women with respect to workload, income, education and career options.

6.5.15Mobilising new funds. The democratic government should establish a Reconstruction Fund (possibly incorporating the wholesale financing requirements of the Electrification Fund and Housing Bank) for elements of the RDP that can generate income streams in the future. The Reconstruction Fund should include some form of dedicated reconstruction bond. In addition, it should draw on specific reconstruction levies. The design of reconstruction levies will depend on the aims of the RDP as a whole, especially in terms of promoting development and growth, but could include levies on capital transfers, land and luxury goods.

6.5.16There is a need for an overall foreign debt strategy. The RDP must use foreign debt financing only for those elements of the programme that can potentially increase our capacity for earning foreign exchange. Relationships with international financial institutions such as the World Bank and International Monetary Fund must be conducted in such a way as to protect the integrity of domestic policy formulation and promote the interests of the South African population and the economy. Above all, we must pursue policies that enhance national self-sufficiency and enable us to reduce dependence on international financial institutions. Further, we must introduce measures to ensure that foreign governmental and non-governmental aid supports the RDP.

6.5.17Socially desirable investments. The democratic government cannot fund the RDP without support from the private sector. Financial institutions must assist both by funding individual programmes to meet basic needs, especially housing, and by improving their services to small-scale producers and the black communities. The democratic government must modify regulations and support innovative financial institutions and instruments that will fund the RDP. It must attempt to mobilise a significant proportion of contractual savings, within an appropriate regulatory and financial framework, for socially desirable investments, without affecting the risk profile or decreasing the returns on investment. If the major financial institutions do not take up socially desirable and economically targeted investments, the democratic government should consider some form of legislative compulsion such as prescribed assets.

6.5.18Other resources. The democratic government must not be alone in accessing resources. Unemployed local labour must be mobilised, through job banks and community-based employment-generation initiatives. Employed workers must be given incentives to use their skills and knowledge in the interests of society. Creative use of local resources - such as building materials - must be encouraged. The power of women in households, in production and in community structures must be fully acknowledged and rewarded. Only through such grassroots-oriented development initiatives can the RDP be brought to its logical fruition as a successful programme for all South Africans.