By Kathy Gibson, Satnac 2013, Stellenbosch – The probability of South Africa becoming a failed state has increased, although there is still a good possibility that it could remain as one of the world’s top economies. 

The game of IT is where warning flags are going up left, right and centre, says futurist Clem Sunter was addressing delegates at the Satnac 2013 conference being held in Stellenbosch today.

The other major game that is changing is the education game. “It’s just amazing that schools are still teaching kids for the job markets of the 1970s. The nature of work has completely changed and no educational institution has adapted to the fact that most kids are going to have to become entrepreneurs. It’s amazing that the major educational institutions have not changed their game,” Sunter says.

“This is why youth unemployment around the world is so terribly high. We have 50% youth unemployment; Spain comes close; there is a record high in the UK. It’s because kids come out of school totally unprepared for the world that exists.”

While much of world battles with flat growth and ageing populations, he says South Africa has an even chance of remaining in what he calls the “premier league” or to slip off the edge into either the “second league” or become a failed state.

In the premier league, it is a competitive world and you have to produce something the rest of the world wants, he says.

“To do this you need a good education system. We should rank 32 in the world, but we rank 50; and we face a relegation scenario. We need to either get back into the league or slide down to the second division.”

In the second division, however, he warns that there won’t be access to taxes or foreign investment to fund infrastructure projects.

“If the flag of violence goes up we could join the ranks of failed state,” Sunter warns. “For a long time we gave a zero probability to a failed state, but we’ve now raised the probability to 25%.”

The flags pointing to the possibility of a failed state are nationalisation, the clumsy implementation of the NHI, gagging the media and land grabs – the last of which Sunter believes would precipitate an immediate failed state.

More importantly, though, is growing youth unemployment coupled with social media and a youth disconnect with authority – all the flags that were raised ahead of the Arab Spring and which could herald a similar situation in South Africa. Events like Marikana and continuing labour issues have further raised the possibility of a failed state, which is now put at 25%.

“We have changed failed state from a wild card scenario to genuine probability,” Sunter says.

To stay in the premier league or drop to the second league, there are three flags.

“The first is inclusive leadership – countries that do well have inclusive leaders,” Sunter says. “An example is Alex Ferguson who kept Manchester United, united. We had an inclusive leader in Nelson Mandela.
Unfortunately his two successors haven’t come close, we really do need a new inclusive leadership.

“The second is to have pockets of excellence, because then you can replicate them. There are pockets in South Africa,” he says.

“The third flag is to create a balanced economy. For foreign currency we are still one of the richest in resources, but we must get the mining industry together. The other is tourism; we are a cheap destination and the east has discovered it. The third space is being the gateway to Africa – how can we persuade people to start campaigning in Africa from South Africa.”

On the inward economy, Sunter says there is one flag, and that is our attitude to entrepreneurs. “The biggest countries recognise the value of entrepreneurs. In South Africa we have an ambivalent attitude to entrepreneurs. We actually have a hostile environment for entrepreneurs. The only way we are going to create 5-million jobs is be enabling entrepreneurs.

“This is the only way we are going to bring unemployment down.”

Sunter still gives a 50% probability of staying in the premier league; 25% of dropping into the second league; 25% failed state, Sunter says.

“We believe we need an economic Codesa to negotiate the space for a new generation of entrepreneurs. We have got to move on from BEE, into the space where we create new entrepreneurs, some of whom may turn into world-beating industries.”