Observers must watch the right markers in order to determine whether South Africa is now on a reformist trajectory. One set of markers relates to the rule of law, corruption and accountable government. These are getting the bulk of analyst attention. But the second set are even more important and relate to policy reform in areas of empowerment, the labour market, property rights, and education.

Our thesis is this; that the initial post-1994 economic recovery, born of equal measures of good fortune and some sensible policy, made possible a far greater improvement in living standards than is commonly understood. That trajectory was broken in the aftermath of the 2007 Polokwane conference and later global financial crisis. Public frustration (measured in polling and voting data) born of now unmet expectations frightened ruling party politicians who tried to counter the trend with equal measures of ideological dogma and populist policy. The response was wholly counter-productive and stalled South Africa’s post-crisis recovery, even as other emerging markets grew out of the crisis. The ensuing weak economic performance triggered a significant loss of confidence in the ruling party which in turn triggered deepening populism – and hence the slow turning of a dangerous negative spiral was set in motion. This is essentially where South Africa came to stand in November of last year.

Subsequently, a degree of political realignment has taken place in the ruling party. Whether this realignment will be sufficient to break out of the spiral via an economic recovery sufficient to meet popular expectations is the question this analysis seeks to address.

Meeting popular expectations is essentially a challenge of labour market access. If you conduct a polling exercise and ask South Africans what they most want, what is necessary above all else to improve living standards and build thriving communities, the answer, every time, is employment. Many analysts and politicians argue that South Africa has experienced two decades of jobless growth – but this is not true.

[Be aware that an unemployment rate may remain high, or even increase, even as the dependency rate falls as a result of an increase in the rate of labour market participation].

All the above trends brought about great improvements in the lives and circumstances of millions of people across hundreds of thousands of households.

That the extent of labour market expansion surprises many people reveals a problem of a country (and a government) that has, at times, got it wrong in communicating the fine balance that must be struck in any accounting of socio-economic progress or failure.

Speech by Dr Frans Cronje
2 February 2018