tag:theconversation.com,2011:/uk/topics/growth-5534/articlesGrowth – The Conversation2024-01-09T17:02:21Ztag:theconversation.com,2011:article/2203502024-01-09T17:02:21Z2024-01-09T17:02:21ZPlant roots mysteriously pulsate and we don’t know why – but finding out could change the way we grow things<figure><img src="https://images.theconversation.com/files/568410/original/file-20240109-21-g9babz.jpg?ixlib=rb-1.1.0&rect=49%2C12%2C8130%2C5199&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/farmer-close-holding-picking-green-lettuce-2311127081">Nikita M production/Shutterstock</a></span></figcaption></figure><p>You probably don’t think about plant roots all that much – they’re hidden underground after all. Yet they’re continually <a href="https://nature.com/articles/s41561-022-00995-2">changing the shape of the world</a>. This process happens in your garden, where plants use invisible mechanisms for their never-ending growth.</p>
<p>Scientists discovered <a href="https://journals.biologists.com/dev/article/134/4/681/52968/Auxin-dependent-regulation-of-lateral-root">about 15 years ago</a> that genes at the root tip (or more precisely, the level of proteins produced from some genes) seem to pulsate. It’s still a bit of a mystery but recent research is giving us new insights. </p>
<p>What we do know is this oscillation is a basic mechanism underlying the growth of roots. If we better understood this process, it would help farmers and scientists design or choose the best plants to grow in different types of soil and climate. With increasingly extreme weather such as droughts and floods, <a href="https://www.nature.com/articles/s43017-023-00491-0">damaging crops</a> around the world, it is more important to understand how plants grow than ever before. </p>
<p>To really understand how plants grow, you need to look at processes which happen inside cells. There are <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/advs.202303396">numerous chemical reactions</a> and changes in the activity of genes happening all the time inside cells. </p>
<p>Some of these reactions happen in response to external signals, such as <a href="https://theconversation.com/how-scientists-are-helping-plants-get-the-most-out-of-photosynthesis-196226">changes in light</a>, temperature or nutrient availability. But many are part of each plant’s <a href="https://doi.org/10.1242/dev.117614">developmental programme</a>, encoded <a href="https://www.britannica.com/science/plant-development">in its genes</a>. </p>
<hr>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/513999/original/file-20230307-18-3frmra.gif?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/513999/original/file-20230307-18-3frmra.gif?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513999/original/file-20230307-18-3frmra.gif?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513999/original/file-20230307-18-3frmra.gif?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513999/original/file-20230307-18-3frmra.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513999/original/file-20230307-18-3frmra.gif?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513999/original/file-20230307-18-3frmra.gif?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><em>Many people think of plants as nice-looking greens. Essential for clean air, yes, but simple organisms. A step change in research is shaking up the way scientists think about plants: they are far more complex and more like us than you might imagine. This blossoming field of science is too delightful to do it justice in one or two stories.</em> </p>
<p><em><a href="https://theconversation.com/topics/plant-curious-137238?utm_source=TCUK&utm_medium=linkback&utm_campaign=PlantCurious2023&utm_content=InArticleTop">This article is part of a series, Plant Curious</a>, exploring scientific studies that challenge the way you view plantlife.</em></p>
<hr>
<p>Some of these cell processes have <a href="https://www.sciencedirect.com/science/article/abs/pii/S0955067404001759?via%3Dihub">regular oscillations</a> – some families of molecules rhythmically appear and disappear every few hours. The most well known example is <a href="https://doi.org/10.1111/dgd.12242">circadian rhythms</a>, the internal clock in plants and animals (including humans).</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-understanding-plant-body-clocks-could-help-transform-how-food-is-grown-199137">How understanding plant body clocks could help transform how food is grown</a>
</strong>
</em>
</p>
<hr>
<h2>Natural cycles</h2>
<p>There are many other examples of spontaneous oscillations in nature. Some are fast such as heart beats and the <a href="https://www.britannica.com/science/mitosis">mitotic cell cycle</a>, which is the cycle of cell divisions. Others, like the menstrual cycle <a href="https://www.britannica.com/science/hibernation">and hibernation</a>, are slow. </p>
<figure class="align-center ">
<img alt="Man holding plant root while transplanting the flower plant" src="https://images.theconversation.com/files/568422/original/file-20240109-17-38gv4r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/568422/original/file-20240109-17-38gv4r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/568422/original/file-20240109-17-38gv4r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/568422/original/file-20240109-17-38gv4r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/568422/original/file-20240109-17-38gv4r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/568422/original/file-20240109-17-38gv4r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/568422/original/file-20240109-17-38gv4r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">There are intricate chemical processes happening inside those plant roots.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/focus-on-florist-man-hands-wearing-2190385311">Zamrznuti tonovi/Shutterstock</a></span>
</figcaption>
</figure>
<p>Most often, they can be explained by an underlying <a href="https://swainlab.bio.ed.ac.uk/psb/lectures/negative.pdf">negative feedback loop</a>. This is where a process triggers a series of events which then represses the very activity it triggered. This seems to be the case for the root growth pulsation. </p>
<p>Shortly after the root tip gene oscillation was discovered, <a href="https://www.science.org/doi/10.1126/science.1191937">scientists noticed</a> this pulsation leaves an invisible mark. They found this out by using fluorescent markers visible under a microscope. These marks are left at places where the root can grow sideways. This means they provide regular cues that lead to the root system taking its shape.</p>
<p>Its cause is unknown today, although scientists have ruled out theories that it may be driven by circadian oscillations. </p>
<p>We do know there are many feedback loops involved. A plant hormone <a href="https://bmcbiol.biomedcentral.com/articles/10.1186/s12915-016-0291-0">called auxin</a> seems to be crucial to the process. It wakes up some genes coding for proteins, such as those needed for growth. Charles Darwin <a href="https://academic.oup.com/plphys/article/154/2/501/6108610">hypothesised the existence</a> of auxin and its chemical structure was confirmed <a href="https://cshperspectives.cshlp.org/content/2/10/a004572">around 100 years ago</a>. </p>
<p>The genes which oscillate are the auxin “targets”. When auxin enters a cell, these target genes tend to become more active. Some of these genes are related to growth but not all. Auxin triggers the removal of “repressors”, <a href="https://www.genome.gov/genetics-glossary/Repressor#:%7E:text=A%20repressor%2C%20as%20related%20to,of%20gene%20expression%20in%20cells.">proteins which can block</a> the activity in genes. Animals have repressors in their cells too. </p>
<p>But these repressors are activated by the genes they block. It could be that this feedback loop triggers the oscillations we see, but we don’t know for sure.</p>
<p>We know auxin moves from cell to cell via an intricate network of <a href="https://doi.org/10.1242/dev.079111">transporter proteins</a>. The way proteins direct travel to parts of cells depends on the surrounding levels of auxin itself. This is another feedback loop. The pulsation happens in growing roots, where cells at the tip are continually dividing as a result of the cell cycle (which involves separate feedback loops).</p>
<h2>What a conundrum</h2>
<p>Scientists often turn to mathematics to help explain things. Researchers have used geometry since ancient history to study the visible part of plants. A branch of mathematics developed in the 19th century called <a href="https://en.wikipedia.org/wiki/Dynamical_system">Dynamical Systems Theory</a> (DST), has given scientists some clarity about why plant roots oscillate. Scientists have been using tools from DST to try and show how <a href="https://journals.plos.org/ploscompbiol/article?id=10.1371/journal.pcbi.1011646">auxin patterns</a> are affected by rounds of cell divisions.</p>
<p>If these rounds of cell division were well synchronised, we could show that, in theory, this would produce a regular pulse of auxin. </p>
<p>But this doesn’t solve the mystery because cells do not typically divide all at the same time, and so any pulsation of auxin would be fairly irregular. </p>
<p>When my team looked under the microscope for fluorescent auxin markers, we found a lack of regularity in auxin, in the parts of the root where its target genes oscillate regularly. </p>
<p>This suggests that the root tip gene oscillation may be linked to root growth but doesn’t happen at the same time as root stem cells are dividing. </p>
<p>Though still mysterious, we are now better equipped to decipher this enigma. The answer is probably not with one single process, but a result of an interplay between various processes. We know the key players, but the rules of the game they play are yet to be discovered. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-do-cauliflowers-look-so-odd-weve-cracked-the-maths-behind-their-fractal-shape-164121">Why do cauliflowers look so odd? We've cracked the maths behind their 'fractal' shape</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/220350/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Etienne Farcot does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Scientists are still trying to puzzle out strange oscillations in plant root genes,Etienne Farcot, Associate professor of Mathematics, University of NottinghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2182392023-11-26T19:20:42Z2023-11-26T19:20:42ZGreen growth or degrowth: what is the right way to tackle climate change?<p>Nearly all the world’s governments and vast numbers of its people are convinced that addressing human-induced climate change is essential if healthy societies are to survive. The two solutions most often proposed go by various names but are widely known as “<a href="https://www.oecd.org/greengrowth/whatisgreengrowthandhowcanithelpdeliversustainabledevelopment.htm#:%7E:text=Green%20growth%20means%20fostering%20economic,which%20our%20well%2Dbeing%20relies.">green growth</a>” and “<a href="https://www.nature.com/articles/d41586-022-04412-x">degrowth</a>”. Can these ideas be reconciled? What do both have to say about the climate challenge?</p>
<p>The crude version of green growth – the solution that dominates the discourse of developed countries – is essentially that technology will save us if we get the incentives right. We can stick with the idea that economic growth is the central determinant of human flourishing, we just need technological fixes for unsustainable industrial practices. These will emerge if we get prices pointing in a green direction, which is first and foremost about carbon taxes.</p>
<p><iframe id="tc-infographic-973" class="tc-infographic" height="400px" src="https://cdn.theconversation.com/infographics/973/534c98def812dd41ac56cc750916e2922539729b/site/index.html" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Yet this sort of thinking still seems head-in-the-sand. Yes, the <a href="https://www.climatecouncil.org.au/what-is-the-difference-between-absolute-emissions-and-emissions-intensity/">emissions intensity</a> of per-capita GDP growth <a href="https://ourworldindata.org/grapher/co2-intensity?tab=chart&country=USA%7ECHN%7EIND%7EIDN%7EDEU">is generally falling</a>, in part because added economic value increasingly comes from ideas not widgets.</p>
<p><a href="https://ourworldindata.org/energy/country/sweden">Sweden, for example</a>, has increased its GDP by 76% but its domestic energy use by only 2.5% since 1995. But we are still <a href="https://www.nature.com/articles/d41586-023-01702-w#:%7E:text=The%20planet%20is%20on%20track,cross%20the%20line%20much%20sooner.">missing carbon reduction deadlines</a> by wide margins and struggling to enact meaningful carbon pricing.</p>
<h2>Eco-socialism and political suicide: the caricature of degrowth</h2>
<p>The crude version of degrowth is that to ensure sustainability, GDP must contract. Endless growth got us to where we are, and endless growth will kill us. We need to throw out the status quo and make our revolutionary way to eco-socialism. Rich countries need to stop where they are and transfer wealth to poor countries so we can equitably share what we have.</p>
<p>This sort of thinking is <a href="https://www.noahpinion.blog/p/degrowth-we-cant-let-it-happen-here">easily caricatured</a> as political suicide and more likely to undermine enthusiasm for sustainability than achieve it.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/is-nuclear-the-answer-to-australias-climate-crisis-216891">Is nuclear the answer to Australia's climate crisis?</a>
</strong>
</em>
</p>
<hr>
<p>Yet these caricatures can be easily dismissed. While it’s hard to pin down exactly what each camp stands for, since they represent amorphous agglomerations of ideas in a fast-moving discourse, it’s clear many advocates of both green growth and degrowth are sophisticated in their views and <a href="https://www.sciencedirect.com/science/article/abs/pii/S0921800919319615">share many points of agreement</a>. </p>
<h2>Where green growth and degrowth agree</h2>
<p>The first is that contemporary industry is too environmentally intensive – it crosses multiple planetary boundaries in its carbon emissions, ocean acidification, nitrogen, phosphorus loading and so on.</p>
<p>Second, to avoid ecological collapse, sectors such as fossil fuels, fast fashion, industrial meat farming, air travel, plastics and many more need to draw down their economic activity.</p>
<p>Meanwhile, other sectors need to grow. These include clean energy, obviously, but also biodegradable materials, green steel and pesticide-free agriculture, on and on. Effecting this structural transition will require <a href="https://www.energypolicy.columbia.edu/publications/green-new-deal-and-carbon-taxes-can-work-together/">both carbon taxes and more muscular</a> industrial policy of the <a href="https://www.nytimes.com/2019/02/21/climate/green-new-deal-questions-answers.html">Green New Deal</a> sort.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/too-hard-basket-why-climate-change-is-defeating-our-political-system-214382">Too hard basket: why climate change is defeating our political system</a>
</strong>
</em>
</p>
<hr>
<p>Third, environmental damage is both licensed and exacerbated by a narrow policy focus on <a href="https://data.oecd.org/gdp/gross-domestic-product-gdp.htm">gross domestic product</a> (GDP). We need to shift priorities away from GDP and towards frameworks and budgets – such as those used in <a href="https://www.treasury.govt.nz/information-and-services/nz-economy/higher-living-standards/our-living-standards-framework">New Zealand</a>, the <a href="https://www.act.gov.au/wellbeing">Australian Capital Territory</a> and other places – that do a far better job than GDP does of measuring whether we are using our resources effectively to advance human wellbeing.</p>
<p>And many of these wellbeing goals can be achieved using a fraction of the wealth of advanced nations. For example, Cuba, with about <a href="https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=CU">an eighth of the GDP</a> per capita, has similar <a href="https://www.newsweek.com/americans-can-now-expect-live-three-years-less-cubans-1739507">life expectancy</a> and <a href="https://worldpopulationreview.com/country-rankings/literacy-rate-by-country">literacy rates</a> to the United States.</p>
<h2>New ways to measure and increase human wellbeing</h2>
<p>A complementary approach is to <a href="https://www.bennettinstitute.cam.ac.uk/research/research-projects/wealth-economy-social-and-natural-capital/">measure comprehensive wealth</a> – financial, natural, human, and social – rather than income. If economic activity substitutes a relatively small amount of financial capital concentrated in few hands for a huge amount of natural capital, then it isn’t sustainable nor does it increase total wealth.</p>
<p>Finally, we need to measure productivity – the extent to which we can do more with less. Economic growth models stress that only <a href="https://en.wikipedia.org/wiki/Solow%E2%80%93Swan_model">long-run improvements in productivity</a> lead to sustained increases in wealth. Simply increasing investment, of the kind associated with extractive industries, provides only a transitory boost.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-to-beat-rollout-rage-the-environment-versus-climate-battle-dividing-regional-australia-213863">How to beat 'rollout rage': the environment-versus-climate battle dividing regional Australia</a>
</strong>
</em>
</p>
<hr>
<p>Another virtue of productivity growth is <a href="https://www.cmu.edu/epp/irle/irle-blog-pages/schumpeters-theory-of-creative-destruction.html">creative destruction</a>: when innovation clears out outmoded industries, ideas, and ways of working. Today creative destruction is held back by the power of vested interests, <a href="https://theconversation.com/how-to-deal-with-fossil-fuel-lobbying-and-its-growing-influence-in-australian-politics-188515">notably in fossil fuels</a>, to lobby governments to slow the industrial transition required to address climate change.</p>
<p>Quality of life frameworks, wealth accounts, and productivity growth all have problems and present measurement difficulties, but they point us in the right direction. They help us to understand GDP as a means, not an end. Twentieth century statistics cannot measure 21st century progress.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australias-new-dawn-becoming-a-green-superpower-with-a-big-role-in-cutting-global-emissions-216373">Australia's new dawn: becoming a green superpower with a big role in cutting global emissions</a>
</strong>
</em>
</p>
<hr>
<p>Green growth and degrowth advocates also agree that getting people to practise less carbon intensive lifestyles, especially in rich countries, is politically and culturally difficult. Witness the recent <a href="https://www.theguardian.com/world/2022/aug/02/spain-puts-limits-on-air-conditioning-and-heating-to-save-energy">outcry in Spain</a> when the government legislated that public and commercial buildings could not be cooled below 27 or heated above 19 degrees respectively.</p>
<p>That’s why sweeteners are fundamental to the political logic of Green New Deals: for example, the proceeds of carbon taxes can be returned to households as compensation.</p>
<h2>Where green growth and degrowth disagree</h2>
<p>What green growth and degrowth advocates disagree most about is how deeply we need to alter our political economy to survive climate change. </p>
<p>Green growth is broadly optimistic about the capacity of liberal democracy’s incremental style to get the green transition done in time. It has faith in markets, and even as it recognises the need for green industrial policy it is cautious about government’s ability to micromanage it.</p>
<p>Degrowth believes something more radical is in order, with equality at its core. We need to understand what is “sufficient” for people to live good lives, and then redistribute from people who have far more than they need to people who have much less.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-australia-urgently-needs-a-climate-plan-and-a-net-zero-national-cabinet-committee-to-implement-it-213866">Why Australia urgently needs a climate plan and a Net Zero National Cabinet Committee to implement it</a>
</strong>
</em>
</p>
<hr>
<p>This approach would include the provision of energy-efficient social housing, and international aid for green development. Government must adopt the climate transition as its mission in the manner of winning a total war. It must get involved in the economy and society in a big way, including by regulating things like private jets and low emission traffic zones.</p>
<p>The problem for degrowthers is that getting such a radical agenda off the ground requires first and foremost a change in public values. But the movement’s focus on international political economy – its tendency to target its efforts at bureaucrats and quasi-governmental agencies like the <a href="https://www.ipcc.ch/">Intergovernmental Panel on Climate Change</a> (IPCC) – undermines cultural change by feeding populist narratives about technocratic overreach.</p>
<p>Spain’s experience illustrates that citizens haven’t internalised the sorts of lifestyle changes degrowth believes are required. Politically hopeless slogans like “degrowth” that don’t even capture the essence of the movement need to be tossed out, and much more attention needs to be given to marketing the experience of living green in sustainable societies.</p><img src="https://counter.theconversation.com/content/218239/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Fabian does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>One set of ideas runs counter to the mainstream consensus that technology will save us from climate change. Can degrowth ever win enough converts to persuade humanity to change course?Mark Fabian, Assistant professor of public policy, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2134342023-09-20T14:56:43Z2023-09-20T14:56:43ZIdea of green growth losing traction among climate policy researchers, survey of nearly 800 academics reveals<p>When she took to the floor to give her <a href="https://ec.europa.eu/commission/presscorner/detail/ov/speech_23_4426">State of the Union speech</a> on 13 September, European Commission president Ursula von der Leyen largely stood by the script. Describing her vision of an economically buoyant and sustainable Europe in the era of climate change, she called on the EU to accelerate the development of the clean-tech sector, “from wind to steel, from batteries to electric vehicles”. “When it comes to the European Green Deal, we stick to our growth strategy,” von der Leyen said.</p>
<p>Her plans were hardly idiosyncratic. The notion of green growth – the idea that environmental goals can be aligned with continued economic growth – is still the common economic orthodoxy for major institutions like the <a href="https://elibrary.worldbank.org/doi/abs/10.1596/978-0-8213-9551-6">World Bank</a> and the <a href="https://www.oecd.org/greengrowth/48012345.pdf">Organisation for Economic Co-operation and Development</a> (OECD).</p>
<p>The OECD has promised to “strengthen their efforts to pursue green growth strategies […], acknowledging that green and growth can go hand-in-hand”, while the World Bank has called for “inclusive green growth” where “greening growth is necessary, efficient, and affordable”. Meanwhile, the EU has framed <a href="https://www.eea.europa.eu/publications/reflecting-on-green-growth">green growth</a> as</p>
<blockquote>
<p>“a basis to sustain employment levels and secure the resources needed to increase public welfare […] transforming production and consumption in ways that reconcile increasing GDP with environmental limits”.</p>
</blockquote>
<p>However, our survey of nearly <a href="https://www.nature.com/articles/s41893-023-01198-2">800 climate policy researchers from around the world</a> reveals widespread scepticism toward the concept in high-income countries, amid mounting literature arguing that the principle may neither be viable nor desirable. Instead, alternative post-growth paradigms including “degrowth” and “agrowth” are gaining traction.</p>
<h2>Differentiating green growth from agrowth and degrowth</h2>
<p>But what do these terms signify?</p>
<p>The <a href="https://www.sciencedirect.com/science/article/abs/pii/S0921800910005021">“degrowth”</a> school of thought proposes a planned reduction in material consumption in affluent nations to achieve more sustainable and equitable societies. Meanwhile, supporters of <a href="https://www.sciencedirect.com/science/article/abs/pii/S0921800910004209">“agrowth”</a> adopt a neutral view of economic growth, focusing on achieving sustainability irrespective of GDP fluctuations. Essentially, both positions represent scepticism toward the predominant “green growth” paradigm with degrowth representing a more critical view.</p>
<p>Much of the debate centres around the concept of <em>decoupling</em> – whether the economy can grow without corresponding increases in environmental degradation or greenhouse gas emissions. Essentially, it signifies a separation of the historical linkage between GDP growth and its adverse environmental effects. Importantly, <em>absolute</em> decoupling rather than <em>relative</em> decoupling is necessary for green growth to succeed. In other words, emissions should decrease during economic growth, and not just grow more slowly.</p>
<p><a href="https://academic.oup.com/oxrep/article-abstract/30/3/407/552020?login=false">Green growth proponents</a> assert that absolute decoupling is achievable in the long term, although there is a division regarding whether there will be a short-term hit to economic growth. The <a href="https://www.tandfonline.com/doi/abs/10.1080/13563467.2019.1598964">degrowth perspective</a> is critical that absolute decoupling is feasible at the global scale and can be achieved at the rapid rate required to stay within Paris climate targets. A <a href="https://www.thelancet.com/journals/lanplh/article/PIIS2542-5196(23)00174-2/fulltext">recent study</a> found that current rates of decoupling in high-income are falling far short of what is needed to limit global heating to well below 2°C as set out by the Paris Agreement.</p>
<p>The agrowth position covers more mixed, middle-ground views on the decoupling debate. <a href="https://nyaspubs.onlinelibrary.wiley.com/doi/full/10.1111/nyas.14900">Some argue</a> that decoupling is potentially plausible under the right policies, however, the focus should be on policies rather than targets as this is confusing means and ends. Others may argue that the debate is largely irrelevant as GDP is a poor indicator of societal progress – a <a href="https://www.sciencedirect.com/science/article/abs/pii/S0167487008001141">“GDP paradox”</a> exists, where the indicator continues to be dominant in economics and politics despite its widely recognised failings.</p>
<h2>7 out of 10 climate experts sceptical of green growth</h2>
<p>How prevalent are degrowth and agrowth views among experts? As part of a recent survey completed by 789 global researchers who have published on climate change mitigation policies, <a href="https://rdcu.be/diKl4">we asked questions to assess the respondents’ positions on the growth debate</a>. Strikingly, 73% of all respondents expressed views aligned with “agrowth” or “degrowth” positions, with the former being the most popular. We found that the opinions varied based on the respondent’s country and discipline (see the figure below).</p>
<figure class="align-center ">
<img alt="green growth, degrowth and agrowth split according to scientific discipline" src="https://images.theconversation.com/files/549105/original/file-20230919-21-12sur0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/549105/original/file-20230919-21-12sur0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=373&fit=crop&dpr=1 600w, https://images.theconversation.com/files/549105/original/file-20230919-21-12sur0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=373&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/549105/original/file-20230919-21-12sur0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=373&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/549105/original/file-20230919-21-12sur0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=469&fit=crop&dpr=1 754w, https://images.theconversation.com/files/549105/original/file-20230919-21-12sur0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=469&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/549105/original/file-20230919-21-12sur0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=469&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The chart shows the school of thought espoused by 789 global researchers, according to geographical origin and scientific discipline.</span>
<span class="attribution"><span class="license">Fourni par l'auteur</span></span>
</figcaption>
</figure>
<p>While the OECD itself strongly advocates for green growth, researchers from the EU and other OECD nations demonstrated high levels of scepticism. In contrast, over half of the researchers from non-OECD nations, especially in emerging economies like the BRICS nations, were more supportive of green growth.</p>
<h2>Disciplinary rifts</h2>
<p>Furthermore, a disciplinary divide exists. Environmental and other social scientists, excluding orthodox economists, were the most sceptical of green growth. In contrast, economists and engineers showed the highest preference for green growth, possibly indicative of trust in technological progress and conventional economic models that suggest economic growth and climate goals are compatible.</p>
<p>Our analysis also examined the link between the growth positions and the GDP per capita of a respondent’s country of origin. A discernible trend emerged: as national income rises, there is increased scepticism toward green growth. At higher income levels, experts increasingly supported the post-growth argument that beyond a point, the socio-environmental costs of growth may outweigh the benefits.</p>
<p>The results were even more pronounced when we factored in the Inequality-adjusted Human Development Index (IHDI), suggesting that aspects beyond income, such as inequality and overall development, might influence these views.</p>
<p>In a world grappling with climate change and socio-economic disparities, these findings should not simply be dismissed. They underline the need for a more holistic dialogue on sustainable development, extending beyond the conventional green growth paradigm.</p>
<h2>Post-growth thought no longer a fringe position</h2>
<p>Although von der Leyen firmly stood in the green growth camp, this academic shift is increasingly reflected in the political debate. In May 2023, the European Parliament hosted a conference on the topic of <a href="https://www.beyond-growth-2023.eu/">“Beyond Growth”</a> as an initiative of 20 MEPs from five different political groups and supported by over 50 partner organisations. Its main objective was to discuss policy proposals to move beyond the approach of national GDP growth being the primary measure of success.</p>
<p>Six national and regional governments – Scotland, New Zealand, Iceland, Wales, Finland, and Canada – have joined the <a href="https://weall.org/wego">Wellbeing Economy Governments</a> (WEGo) partnership. The primary aim of the movement is to transition to “an economy designed to serve people and planet, not the other way around.”</p>
<p>Clearly, post-growth thought is no longer a fringe, radical position within those working on solutions to climate change. Greater attention needs to be given to why some experts are doubtful that green growth can be achieved as well as potential alternatives focussed on wider concepts of societal wellbeing rather than limited thinking in terms of GDP growth.</p><img src="https://counter.theconversation.com/content/213434/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>This work contributes to the ‘María de Maeztu’ Programme for Units of Excellence of the Spanish Ministry of Science and Innovation (CEX2019-000940-M). I.S. acknowledges funding from the European Union’s Horizon Europe research and innovation programme under grant agreement number 101056891, ClimAte Policy AcceptaBiLity Economic (CAPABLE) framework. I.S. and S.D. further acknowledge support from an ERC Advanced Grant from the European Research Council (ERC) under the European Union’s Horizon 2020 Research and Innovation Programme (grant agreement number 741087).
</span></em></p><p class="fine-print"><em><span>Lewis King ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>According to a survey of almost 800 climate researchers, 73% are sceptical of the idea of green growth. Instead, approaches such as agrowth and degrowth are gaining ground.Ivan Savin, Associate professor of business analytics, research fellow at ICTA-UAB, ESCP Business SchoolLewis King, Postdoctoral research fellow in Ecological economics, Universitat Autònoma de BarcelonaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2055662023-05-18T20:01:27Z2023-05-18T20:01:27ZSaving humanity: here’s a radical approach to building a sustainable and just society<figure><img src="https://images.theconversation.com/files/526658/original/file-20230516-25-er9rcn.jpg?ixlib=rb-1.1.0&rect=30%2C24%2C4093%2C2721&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/sydney-australia-march-15-2019-20-1340782703">Holli, Shutterstock</a></span></figcaption></figure><p>Collectively we are driving Earth and civilisation towards collapse. Human activities have <a href="https://www.stockholmresilience.org/research/planetary-boundaries.html">exceeded planetary boundaries</a>. We are changing the climate, losing biodiversity, degrading land, contaminating freshwater, and damaging the nitrogen and phosphorus cycles upon which we all depend.</p>
<p>We ask how this could happen. Also, why democratically elected governments ignore the wishes of the majority of their people. Why some governments continue to export fossil fuels despite commitments to climate mitigation. Why some go to war in distant lands without any debate in parliament or congress. Why some give tax cuts to the rich while those on the dole struggle below the poverty line.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/526657/original/file-20230516-25-rhn88g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Book cover showing a bulldozer approaching a small crowd of people" src="https://images.theconversation.com/files/526657/original/file-20230516-25-rhn88g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/526657/original/file-20230516-25-rhn88g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=852&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526657/original/file-20230516-25-rhn88g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=852&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526657/original/file-20230516-25-rhn88g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=852&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526657/original/file-20230516-25-rhn88g.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1070&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526657/original/file-20230516-25-rhn88g.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1070&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526657/original/file-20230516-25-rhn88g.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1070&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Book cover.</span>
<span class="attribution"><a class="source" href="https://link.springer.com/book/10.1007/978-981-99-0663-5">Palgrave Macmillan</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The answers to these questions all come down to one thing: decision-makers and influencers are captured by vested interests. That is the inconvenient truth revealed in <a href="https://link.springer.com/book/10.1007/978-981-99-0663-5">our new book</a>, The Path to a Sustainable Civilisation: Technological, Socioeconomic and Political Change. But these forces can be overthrown. </p>
<p>We argue it is not sufficient for citizen organisations and governments to address specific environmental, social justice and peace issues. It’s certainly necessary, but we must also struggle for systemic change. This means challenging the covert driving forces of environmental destruction, social injustice and war, namely, “state capture” and the dominant economic system. </p>
<p>It’s 90 seconds to midnight on the <a href="https://thebulletin.org/doomsday-clock/">Doomsday Clock</a>, so there’s no time to waste. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australia-has-overshot-three-planetary-boundaries-based-on-how-we-use-land-183728">Australia has overshot three planetary boundaries based on how we use land</a>
</strong>
</em>
</p>
<hr>
<h2>Confronting state capture</h2>
<p><a href="https://books.google.com.au/books/about/Shadow_State.html?id=84toDwAAQBAJ&redir_esc=y">Political scientists</a> and <a href="https://www.researchgate.net/publication/351983848_State_Capture_Analysis_A_How_to_Guide_for_Practitioners">political economists</a> argue governments, public servants, the media and indeed the majority of decision-makers and influencers become captured by vested interests. </p>
<p>This is known as <a href="https://australiandemocracy.org.au/statecapture">state capture</a>, where state means the nation-state. The captors include fossil fuel, armaments, finance, property and gambling industries.</p>
<p>State capture can also involve foreign governments. There is justifiable concern in Australia and elsewhere about <a href="https://clivehamilton.com/books/hidden-hand-exposing-how-the-chinese-communist-party-is-reshaping-the-world/">subversion by the Chinese Communist Party</a>. </p>
<p>Yet there is little discussion of the fact that, since 2015, <a href="https://www.washingtonpost.com/investigations/interactive/2022/australia-nuclear-submarines-us-admirals/">six “retired” US admirals</a> worked for the Australian government before the <a href="https://www.defence.gov.au/about/taskforces/aukus">AUKUS</a> announcement on nuclear powered submarines. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/526699/original/file-20230517-27-ontv34.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Infographic describing the forces driving the collapse of civilisation" src="https://images.theconversation.com/files/526699/original/file-20230517-27-ontv34.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/526699/original/file-20230517-27-ontv34.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526699/original/file-20230517-27-ontv34.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526699/original/file-20230517-27-ontv34.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526699/original/file-20230517-27-ontv34.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526699/original/file-20230517-27-ontv34.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526699/original/file-20230517-27-ontv34.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The forces driving the collapse of civilisation, in a nutshell.</span>
<span class="attribution"><span class="source">Mark Diesendorf</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>State capture could explain why Australia’s defence is being shifted to the South China Sea <a href="https://www.quarterlyessay.com.au/essay/2022/06/sleepwalk-to-war">under US sovereignty</a>. </p>
<p>Confronting state capture involves reversing several undemocratic practices. Of particular concern is the <a href="https://www.abc.net.au/news/2019-02-01/donations-australia-federal-politics-foreign/10768226">funding of political parties</a> by corporate interests as well as the <a href="https://australiandemocracy.org.au/statecapture">revolving-door jobs</a> between government and corporate interests. </p>
<p>There is also the concentration of media ownership and the influence of <a href="https://independentaustralia.net/politics/politics-display/the-liberal-party-and-the-institute-of-public-affairs-who-is-whose,8837">so-called “think tanks”</a> funded by vested interests. </p>
<p>The first step is to set up coalitions or networks to oppose the power of vested interests. This would bring together diverse civil society organisations with common interests in democratic integrity and civil liberties. </p>
<p>One example is the <a href="https://australiandemocracy.org.au/">Australian Democracy Network</a>, which campaigns for “changes that make our democracy more fair, open, participatory, and accountable”. The Network was founded in 2020 by the Human Rights Law Centre, the Australian Conservation Foundation and the Australian Council of Social Service. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-monster-rally-for-climate-change-but-divergent-goals-hinder-the-fight-125358">A monster rally for climate change, but divergent goals hinder the fight</a>
</strong>
</em>
</p>
<hr>
<h2>Challenging economic ideology</h2>
<p>Conventional economic theory <a href="https://newrepublic.com/article/155970/collapse-neoliberalism">failed us</a> when it came to recovery from the <a href="https://www.themonthly.com.au/issue/2009/february/1319602475/kevin-rudd/global-financial-crisis">Global Financial Crisis</a> of 2007–09 and the <a href="https://www.theguardian.com/news/2021/sep/02/covid-and-the-crisis-of-neoliberalism">COVID pandemic</a>. Nevertheless, many governments still accept its prescriptions. </p>
<p>The dangerous and destructive myths of conventional economics include the claims that:</p>
<ul>
<li>economic theory can treat the natural environment as an infinite resource and infinite waste dump</li>
<li>endless economic growth on a finite planet is feasible and desirable</li>
<li>wealth trickles down from the rich to the poor</li>
<li>wellbeing and welfare can be measured by GDP </li>
<li>government intervention in the market must be avoided. </li>
</ul>
<p>Although these myths have been refuted many times, even by <a href="https://archive.vanityfair.com/article/2011/5/of-the-1by-the-1for-the-1">world famous economist Joseph Stiglitz</a>, they still determine much government policy. </p>
<p>Australian economist Steve Keen first published <a href="https://archive.org/details/debunkingeconomi0000keen">Debunking economics</a> in 2001. The financial crisis of 2007 gave him plenty of material for a revised edition in 2011. Richard Denniss gave us <a href="https://www.blackincbooks.com.au/books/econobabble">Econobabble</a>: How to Decode Political Spin and Economic Nonsense in 2021. Yet, as John Quiggin so eloquently puts it, dead ideas still stalk the land <a href="https://press.princeton.edu/books/paperback/9780691154541/zombie-economics">(Zombie Economics</a>.</p>
<p>They have devastating impacts on our life support system (the biosphere) and social justice. One of the principal destroyers of our planet is excessive consumption, especially consumption by <a href="https://theconversation.com/affluence-is-killing-the-planet-warn-scientists-141017">rich individuals and rich countries</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/affluence-is-killing-the-planet-warn-scientists-141017">Affluence is killing the planet, warn scientists</a>
</strong>
</em>
</p>
<hr>
<p>A more appropriate economic framework for human and planetary wellbeing is the interdisciplinary field of <a href="https://islandpress.org/books/ecological-economics-second-edition">ecological economics</a>.</p>
<p>Unlike neoclassical economics, ecological economics gives priority to ecological sustainability and social justice over economic efficiency. It works towards a transition to a steady-state economy. That is, one with no global increase in the use of energy, materials and land, and no increase in population.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/526656/original/file-20230516-17-jwvzvk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="An infographic showing the nine planetary boundaries, six of these have already been exceeded" src="https://images.theconversation.com/files/526656/original/file-20230516-17-jwvzvk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/526656/original/file-20230516-17-jwvzvk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=457&fit=crop&dpr=1 600w, https://images.theconversation.com/files/526656/original/file-20230516-17-jwvzvk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=457&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/526656/original/file-20230516-17-jwvzvk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=457&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/526656/original/file-20230516-17-jwvzvk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=574&fit=crop&dpr=1 754w, https://images.theconversation.com/files/526656/original/file-20230516-17-jwvzvk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=574&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/526656/original/file-20230516-17-jwvzvk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=574&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Human activity is crossing planetary boundaries. E/MSY is Extinctions/Mammal Species Years; the biogeochemical flows beyond the safe operating limits are nitrogen (N) and phosphorus (P). Some sectors are not yet quantified.</span>
<span class="attribution"><span class="source">Azote for Stockholm Resilience Centre/Stockholm University</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Since planetary boundaries have already been exceeded and low-income countries must develop, social justice demands that the rich countries undergo <a href="https://www.jasonhickel.org/less-is-more">planned degrowth</a>.</p>
<p>On the pathway to a sustainable civilisation, environmental protection and social justice must be addressed together. Because the rich are responsible for the biggest environmental impacts, reducing the gap between rich and poor is critical. </p>
<p><a href="https://ubshub.files.wordpress.com/2018/03/social-prosperity-network-ubs.pdf">Universal basic services</a> such as improved public health, education, housing and transportation – and a government-funded <a href="https://www.fullemployment.net/publications/reports/2020/CofFEE_Research_Report_2000-02.pdf">job guarantee</a> – can achieve greater equality and give people incentives to support the transition. </p>
<h2>Citizen action</h2>
<p>Why would governments free themselves from state capture and discard economics ideology? Former US President Franklin D. Roosevelt once told a delegation: “OK, you have convinced me. Now get out there and make me do it!” In other words, pressure from voters is needed to make government action politically feasible. </p>
<p>That’s why we need citizen-based environmental, social justice, public health and peace groups to form alliances to challenge the overarching issues of state capture and flawed economics ideology.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/building-the-new-economy-alternative-strategies-for-the-99-7827">Building the new economy: alternative strategies for the 99%</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/205566/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mark Diesendorf previously received funding from the Australian Research Council. </span></em></p>Human civilisation is headed for collapse. Collectively, we are pushing planet Earth beyond the limits of endurance. There has to be a better way. Now a new book makes the case for systemic change.Mark Diesendorf, Honorary Associate Professor, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2018932023-03-15T15:53:34Z2023-03-15T15:53:34ZSpring budget 2023: experts react to UK government’s plan to get the economy moving<p><em>Jeremy Hunt’s <a href="https://www.gov.uk/government/publications/spring-budget-2023">2023 spring budget</a> covers employment, energy, enterprise and much more besides. The plan has already been dubbed his “<a href="https://www.bbc.co.uk/news/blogs-the-papers-64960042">back to work budget</a>”, although he has called it a “<a href="https://www.ft.com/content/7d80ee45-4cb2-4871-bdf8-e1b5f5e92ff5">budget for growth</a>”.</em> </p>
<p><em>Hunt was appointed chancellor in a bid to calm financial markets after last year’s <a href="https://theconversation.com/mini-budget-2022-experts-react-to-the-new-uk-governments-spending-and-tax-cut-plans-191274">dramatic mini-budget</a> under previous prime minister Liz Truss. His ongoing efforts to maintain this mood have included giving away several major chunks of this announcement beforehand. Now that Hunt has provided more of the detail, here’s what our panel of academic experts think of the government’s plans for the economy:</em></p>
<h2>Evidence for ‘levelling up’ measures is mixed</h2>
<p><strong>Phil Tomlinson, Professor of Industrial Strategy, School of Management, University of Bath</strong></p>
<p>The short-term outlook for the UK economy is <a href="https://www.theguardian.com/uk-news/2023/mar/15/five-charts-jeremy-hunt-budget-inflation">better than expected</a>. Economic growth <a href="https://www.ft.com/content/3248741b-b112-43ed-a9af-d75a7916445c?shareType=nongift">picked up in January</a>, falling gas prices have reduced the cost of the government’s energy support package, and public borrowing is likely to be <a href="https://www.reuters.com/world/uk/uks-hunt-has-extra-30-bln-pounds-play-with-march-budget-ifs-2023-02-28/">£30 billion lower</a> than last November’s Office for Budget Responsibility (OBR) forecast. This has allowed the chancellor some leeway to deal with some of the economy’s long-standing challenges. </p>
<p>Since the 2008 global financial crisis, the UK economy has <a href="https://www.ft.com/content/dd195cda-ca12-48a6-9e8b-65a36e4e7c14">been largely stagnant</a>. It remains the only country in the G7 not to have recovered to its <a href="https://www.theguardian.com/business/2022/sep/30/uk-is-only-g7-country-with-smaller-economy-than-before-covid-19">pre-pandemic level of national income</a>. Business investment has been <a href="https://www.bankofengland.co.uk/bank-overground/2019/what-has-driven-the-recent-weakness-of-business-investment">weak for decades</a> (and especially so, since the 2016 Brexit referendum), while the labour market has lost <a href="https://www.bbc.co.uk/news/business-60039923">almost a million workers</a> since 2019. And then there is the “<a href="https://blog.geographydirections.com/2021/06/02/left-behind-places-regional-inequalities-and-levelling-up/">levelling up</a>” needed to reduce the UK’s wide regional inequalities. </p>
<p>Today’s budget seeks to address some of these issues. The childcare support package is geared towards helping young parents return to the labour market. And while benefiting higher earners, changes to the lifetime tax-free pension allowance and the annual cap on contributions are intended to encourage older and highly skilled professionals – especially NHS doctors – to remain in their posts, rather than take early retirement. </p>
<p>The chancellor also announced <a href="https://www.independent.co.uk/news/uk/politics/budget-announcement-2023-jeremy-hunt-b2300026.html">12 new investment zones</a> in the combined authority regions of the north of England and Midlands, and in Scotland, Wales and Northern Ireland. Each will receive £80 million of funding for upgrading skills, specialist business support, local infrastructure and for tax incentives. The goal is to attract new business investment and build innovation clusters in key sectors (such as advanced manufacturing and life sciences) to generate dynamic growth in “left behind” regions.</p>
<p>The funding itself, however, is not overly generous, while the <a href="https://www.centreforcities.org/publication/in-the-zone-have-enterprise-zones-delivered-the-jobs-they-promised/">evidence on similar initiatives</a> (including freeports and enterprise zones) is mixed. For instance, there are concerns such zones merely shift business activity from places located outside a zone to places located inside a zone (rather than attracting new investment). Many “left behind” towns and cities not in a combined authority region will also miss out on this initiative. </p>
<h2>Too little, too late for business?</h2>
<p><strong>Steven McCabe, Associate Professor, Birmingham City Business School</strong></p>
<p>Will <a href="https://theconversation.com/why-the-uk-has-no-clear-party-of-business-128437">businesses</a>, which have suffered so much in recent years, welcome chancellor Jeremy Hunt’s spring statement? </p>
<p>Many will claim what’s offered is too little, too late. Indeed, a lot of businesses are merely surviving because of <a href="https://theconversation.com/gas-prices-are-falling-but-your-energy-bills-still-wont-be-affordable-any-time-soon-199904">spiralling energy costs</a> and increased wages. </p>
<p>Hunt, who owes his political renaissance to the disastrous consequences of his predecessor <a href="https://theconversation.com/kwasi-kwarteng-only-a-desperate-prime-minister-sacks-a-chancellor-192544">Kwasi Kwarteng’s</a> “<a href="https://theconversation.com/mini-budget-will-kwasi-kwartengs-plan-deliver-growth-191285">mini-budget</a>” in 2022, attempts to continue the return to stability with optimism of better times ahead. </p>
<p>He will continue with the intention, which Rishi Sunak set out when he was chancellor, of <a href="https://news.sky.com/story/budget-2023-corporation-tax-set-to-rise-from-19-to-25-in-april-12827274">raising corporation tax</a> from 19% to 25%. This will help to repair damage to public finances caused by the pandemic and made worse by Russia’s invasion of Ukraine – as well as <a href="https://theconversation.com/liz-truss-is-now-a-case-study-in-poor-leadership-192554">Liz Truss</a>’s ill-considered dash for growth. This announcement will be greeted with mixed emotions by businesses. </p>
<p><a href="https://www.independent.co.uk/money/pension-tax-changes-jeremy-hunt-budget-b2301370.html">Changes to pension pots</a> and contributions may help to retain and attract high earners. Hunt also hopes to encourage a significant number of the nine million “<a href="https://www.dailymail.co.uk/news/article-11857639/Britains-economically-inactive-areas-half-people-work-revealed.html">economically inactive</a>” (people who are neither working nor looking for work) into employment. </p>
<p>Undoubtedly the most eye-catching announcement made by the chancellor is funding for <a href="https://www.independent.co.uk/news/uk/politics/budget-announcement-2023-jeremy-hunt-b2300026.html">12 investment zones</a> to “supercharge” high-tech growth across the UK.</p>
<p>Cynics may stress that Hunt’s assertion of the importance of investing in growth and opportunity comes from a government <a href="https://www.cnbc.com/2022/08/09/britain-is-becoming-an-emerging-market-country-analyst-says.html">that’s been in power for 13 years</a>. Indeed, the fact remains that the UK is <a href="https://www.theguardian.com/business/2022/sep/30/uk-is-only-g7-country-with-smaller-economy-than-before-covid-19">the only G7 country</a> with a smaller economy than before COVID. And political inability, striking workers and a disappearing public health system certainly haven’t helped.</p>
<h2>Not not a recession</h2>
<p><strong>Alan Shipman, Senior Lecturer in Economics, Open University</strong></p>
<p>The chancellor has announced that the economy will avoid a “<a href="https://www.theguardian.com/politics/video/2023/mar/15/the-uk-will-not-enter-a-technical-recession-this-year-says-jeremy-hunt-video">technical recession</a>” this year. This is because that requires two-quarters of falling GDP, whereas the OBR, which provides independent economic forecasts and analysis of the public finances, now shows falls in just one-quarter. </p>
<p>But most people would probably still view a <a href="https://www.bbc.co.uk/news/business-64963869">0.2% drop</a> in the size of the economy across the year as a recession.</p>
<p>Hunt has responded to post-Brexit labour shortages with measures to push more of the <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/jobsandvacanciesintheuk/february2020">eight million</a> <a href="https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/economicinactivity/timeseries/lf2m/lms">inactive working-age people</a> into paid employment. That includes the half million sidelined by <a href="https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/economicinactivity/articles/halfamillionmorepeopleareoutofthelabourforcebecauseoflongtermsickness/2022-11-10">health problems</a> since the pandemic. </p>
<p>The need for more workers to revive output reflects the stagnation of UK labour <a href="https://cepr.org/voxeu/columns/explaining-uks-productivity-slowdown-views-leading-economists">productivity since 2008</a>, which has prevented real wage growth in the UK and left it unusually vulnerable to last year’s jump in living costs.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/515529/original/file-20230315-20-m4ry5r.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/515529/original/file-20230315-20-m4ry5r.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/515529/original/file-20230315-20-m4ry5r.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/515529/original/file-20230315-20-m4ry5r.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/515529/original/file-20230315-20-m4ry5r.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/515529/original/file-20230315-20-m4ry5r.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/515529/original/file-20230315-20-m4ry5r.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/515529/original/file-20230315-20-m4ry5r.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://obr.uk/efo/economic-and-fiscal-outlook-march-2023/#chapter-1">Office for Budget Responsibility.</a></span>
</figcaption>
</figure>
<p>The chancellor’s hands are increasingly tied not only by higher public borrowing costs after last year’s inflation and interest rate rise, but also by the need to prioritise extra spending and tax breaks for groups whose votes are needed for the government’s electoral revival. </p>
<p>So there will be more funds for childcare to help new parents return to work and attract younger voters. But still no strategy for the rising and unequally-distributed costs of social care. This is 12 years after the <a href="https://careappointments.com/care-news/england/188558/dilnot-astonished-over-really-distressing-and-deeply-regrettable-delay-to-social-care-reforms/">Dilnot Report</a> which found that the adult social care system in the UK is not fit for purpose and requires more funding. </p>
<p>And nothing to addresses that other early-life constraint, the high cost of <a href="https://lordslibrary.parliament.uk/through-the-roof-housing-and-the-cost-of-living/">renting or buying homes</a> in towns and cities with jobs. </p>
<p>The government’s desire to not hit homeowners or landlords any harder is heightened by the property-market correction <a href="https://theconversation.com/uk-house-prices-history-says-the-market-is-in-for-a-long-slowdown-not-a-crash-186072">that’s already happening</a> with prices predicted to <a href="https://www.bloomberg.com/news/articles/2023-03-15/uk-house-prices-to-fall-10-from-peak-obr-says">fall further</a> over the coming month. </p>
<p>Any worsening of this slide could turn this year’s projected 0.2% GDP decline into outright recession and worsen the already extremely <a href="https://obr.uk/docs/dlm_uploads/OBR-EFO-March-2023_Web_Accessible.pdf">weak growth outlook</a> for the next five years.</p>
<h2>What the budget means for your energy bills</h2>
<p><strong>Catherine Waddams, Emeritus Professor, Norwich Business School, and Andrew Burlinson, Lecturer in Energy Economics, University of East Anglia</strong></p>
<p>There’s good news and bad news for household energy prices. The chancellor has confirmed that the government will <a href="https://www.gov.uk/government/news/energy-bills-support-extended-for-an-extra-three-months">extend support for energy bills</a> for a further three months. But a £400 winter fuel payment will not be renewed, so household costs will still rise in the short term.</p>
<p>The government has also said it will bring energy costs for prepayment meter customers in line with comparable direct debit charges until April next year, while the regulator develops social tariff proposals.</p>
<p>Such targeted support is crucial, not least because some of the most vulnerable people use prepayment meters and experience the difficult choice between <a href="https://doi.org/10.1016/j.socscimed.2022.115498">heating and eating</a>.</p>
<p>The UK has <a href="https://www.theguardian.com/business/2022/jan/31/as-uk-households-feel-pressure-how-are-other-european-countries-tackling-energy-crisis">less effective safety nets</a> for financially vulnerable households than elsewhere. This has resulted in more generous but less targeted support compared with other European countries affected by <a href="https://www.theguardian.com/business/2022/apr/26/ukraine-war-food-energy-prices-world-bank">rising gas prices</a> following the Russian invasion of Ukraine. The government’s recognition of its responsibility for the distributional implications of energy prices is particularly welcome.</p>
<h2>A budget boost for nuclear power</h2>
<p><strong>Jim Watson, Director, UCL Institute for Sustainable Resources</strong></p>
<p>Against the backdrop of Russia’s war against Ukraine and the growing impacts of climate change, Jeremy Hunt is right to emphasise alternatives to fossil fuels. Most of the specific announcements are not entirely new, and they had a narrow focus on nuclear power and carbon capture and storage. There are only hints at a more comprehensive strategy, with further announcements promised for later this month.</p>
<p>As the government’s advisory Climate Change Committee <a href="https://www.theccc.org.uk/publication/delivering-a-reliable-decarbonised-power-system/">made clear last week</a>, the UK is going to fall short on decarbonising the power sector by 2035 unless policies are beefed up.</p>
<p>The chancellor said in his speech that nuclear will have “access to the same investment incentives as renewable energy”. In reality, large-scale nuclear already receives significant policy support, including for two projects at Hinkley and Sizewell. Hinkley is the only nuclear project under construction in the UK, and has a generous 35-year contract for the power it will produce.</p>
<p>He also prioritised smaller nuclear plants – known as small modular reactors (SMRs) – which were <a href="https://www.theguardian.com/environment/2015/nov/24/mini-nuclear-reactors-answer-to-climate-change-crisis">first championed by George Osborne in 2015</a>. More than eight years later, momentum has dissipated. Today’s announcement is an attempt to rectify that. While SMRs may form part of the UK’s energy future, it would be unwise to rely on them until their developers demonstrate they can deliver them on time and at a reasonable cost.</p>
<p>Successive governments have tried to get carbon capture and storage deployed for even longer – since the late 2000s. Today’s announcement confirms the government’s high level of ambition, with £20 billion of support over two decades. Many analysts think this technology will be required to reach net zero. But, just as with small reactors, the construction of real projects is required before we know whether carbon capture can actually deliver.</p>
<figure class="align-center ">
<img alt="HMRC Her Majesty's Revenue and Customs tax paperwork and pound coins, sterling, gbp, business taxes" src="https://images.theconversation.com/files/515511/original/file-20230315-1689-t6bd4j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/515511/original/file-20230315-1689-t6bd4j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/515511/original/file-20230315-1689-t6bd4j.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/515511/original/file-20230315-1689-t6bd4j.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/515511/original/file-20230315-1689-t6bd4j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/515511/original/file-20230315-1689-t6bd4j.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/515511/original/file-20230315-1689-t6bd4j.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The budget included a tax update.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/london-uk-jan-24th-2019-hmrc-1293744619">Ink Drop/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Business tax rise comes with counterbalances</h2>
<p><strong>Gavin Midgley, Senior Teaching Fellow in Accounting, University of Surrey</strong></p>
<p>This was a budget with very few tax policy surprises. Given the recent decline in economic confidence, it was possibly the best the chancellor could hope for. The government may be hoping that anticipated GDP rises and inflation falls will come to pass, distracting voters from a still relatively high tax burden.</p>
<p>The increase in the main corporation tax rate from 19% to 25% – on which the government has flip-flopped in recent months – has now come to pass. Hunt’s justification is that it will only affect 10% of companies and that it remains the smallest rate in the G7. </p>
<p>But this might not be enough to allay Conservative backbenchers’ concerns about their party being responsible for <a href="https://obr.uk/box/corporation-tax-in-historical-and-international-context/">the largest rate increase in the tax’s history</a>. <a href="https://twitter.com/YouGov/status/1635771719289032704">Recent polls suggest</a> the public has little opposition to such as raise, so this increase may only be a problem for internal Tory unity.</p>
<p>The announced rise in the corporation tax rate has been accompanied by two potential major counterbalances: small and medium-sized firms whose research and development costs are over 40% of their total expenditure <a href="https://twitter.com/hmtreasury/status/1635989732688646146">can claim significant further tax credits</a>. However, it’s not clear what proportion of total firms that could benefit from this policy. </p>
<p>Companies can also “<a href="https://twitter.com/hmtreasury/status/1635989349996134400">expense</a>” equipment purchases to reduce tax liabilities. This could provide a significant reduction in a firm’s tax liability but, again, <a href="https://twitter.com/PJTheEconomist/status/1635989961815080963">without more information</a> it will be difficult for companies to plan their spending to take advantage of this. Businesses may see this change as a missed opportunity as a result.</p>
<h2>Difficult to justify new business allowance</h2>
<p><strong>Karl Matikonis, Lecturer at Queen’s Management School, Queen’s University Belfast</strong></p>
<p>The super deduction, introduced from April 2021 to March 2023, was the UK’s most generous investment allowance ever. It was created to improve productivity and help pandemic recovery efforts. Companies were able to write off 130% of the cost of investments in machinery and equipment, and 50% for certain other types of capital expenditure.</p>
<p>This budget has replaced the super deduction with an “expensing” allowance. This is designed to avoid a double blow for businesses next month when corporation tax will jump from 19% to 25%. Companies had warned <a href="https://www.dailymail.co.uk/news/article-11809701/How-business-Industry-chief-demands-planned-corporation-tax-hike-scrapped.html">this tax hike could deter growth</a>, particularly after the super deduction allowance expires. </p>
<p>Although the relief is now reduced to 100%, with corporation tax soon to be 25%, the tax savings are fairly similar versus the previous 130%. According to my calculations, companies will now save £2.50 (instead of £2.47) on their tax bill for every £10 invested. A 50% deduction for special rate capital expenditure also stays the same up to March 31 2026. </p>
<p>A <a href="https://www.gov.uk/government/publications/potential-reforms-to-uks-capital-allowance-regime-inviting-views/potential-reforms-to-uks-capital-allowance-regime-inviting-views#:%7E:text=An%20Additional%20FYA%20would%20allow,qualifying%20expenditure%20spread%20over%20time.">recent Treasury consultation</a> deemed this option the costliest out of all allowances to incentivise growth, however. And the UK is the only advanced economy offering such substantial allowances. Corporation tax uplift will result in greater tax revenue (£40 billion in 2021-22 versus £77 billion in 2023-24), but this allowance still swallows £10 billion in tax takings annually.</p>
<p>Because the allowance is temporary, it is likely to encourage businesses to spend, or at least make planned purchases sooner. But it is uncertain if it will contribute to productivity growth. Many factors contribute to productivity, and <a href="https://doi.org/10.1007/s11187-021-00450-3">research</a> also points to many other constraints to productivity growth aside from investments. If such subsidies do not boost productivity levels, it’s difficult to justify this large tax incentive.</p>
<h2>No focus on health and the NHS workforce</h2>
<p><strong>Karen Bloor, Professor of Health Economics and Policy, University of York</strong></p>
<p>Jeremy Hunt, formerly chair of the health select committee and the longest-ever serving secretary of state for health, knows better than most the challenges currently facing the NHS. Despite this, there were few solutions announced to address the key problems plaguing health and social care in today’s budget. </p>
<p>The NHS currently has <a href="https://digital.nhs.uk/data-and-information/publications/statistical/nhs-vacancies-survey/april-2015---december-2022-experimental-statistics">124,000 job vacancies</a>. Tens of thousands of junior doctors are <a href="https://www.bma.org.uk/our-campaigns/junior-doctor-campaigns/pay/junior-doctors-strike-doctors-guide-to-industrial-action-2023">on strike</a>, NHS consultants have <a href="https://www.bma.org.uk/bma-media-centre/consultants-in-england-ready-to-strike-as-bma-consultative-ballot-shows-overwhelming-support-for-industrial-action">voted to strike</a>, and nurses, ambulance staff and other NHS staff are threatening the same. In primary care, patient demand continues to <a href="https://www.rcgp.org.uk/News/Chancellor-Letter-Spring-2023">grow faster than the number of GPs</a>.</p>
<p>Around <a href="https://www.bma.org.uk/advice-and-support/nhs-delivery-and-workforce/pressures/nhs-backlog-data-analysis">7.2 million people</a> are on an NHS waiting list, and these figures are <a href="https://ifs.org.uk/news/nhs-waiting-lists-unlikely-fall-significantly-2023">unlikely to fall significantly</a> this year. Efforts to clear this record-high waiting list are being severely hampered by long-standing workforce problems and exacerbated by strikes, which delay elective care.</p>
<p>The chancellor’s statement has addressed only one of the workforce challenges facing the NHS directly – that of doctors’ pensions. The pension tax, described as “<a href="https://www.bma.org.uk/our-campaigns/consultant-campaigns/pension/end-the-pension-tax-trap">punitive</a>” by the British Medical Association is believed to be contributing to senior NHS doctors -– both consultants and GPs -– choosing to retire early or work part-time. </p>
<p>But in abolishing the lifetime allowance (for all, not just doctors), the chancellor is rewarding the highest-paid individuals. Retaining staff is crucial to reducing waiting lists and improving NHS performance, but doctors – however well-rewarded – cannot fix the NHS alone.</p>
<h2>Targeting a range of voters</h2>
<p><strong>Despina Alexiadou, Senior Lecturer at the School of Government and Public Policy, University of Strathclyde</strong></p>
<p>The 2023 spring budget gives “goodies” to the traditional Tory voting base (high earners) but also introduces employment growth policies that should be widely popular. </p>
<p>As of September 2025, the state will provide free childcare for 30 hours a week for children over 9 months old as long as both parents work. This is a significant increase in public spending towards working parents with direct benefits for young mothers. </p>
<p>Childcare support for young children has long-term benefits for women’s careers. The <a href="https://www.oecd-ilibrary.org/social-issues-migration-health/drivers-of-female-labour-force-participation-in-the-oecd_5k46cvrgnms6-en">OECD has found</a> “an unambiguous positive correlation between the provision of childcare services for the under-3s and full-time and part-time female participation in the labour force”. This major policy intervention will be welcomed by parties and voters across the ideological spectrum. </p>
<p>Less so for another big announcement, which will mostly benefit high earners. The abolishment of the lifetime cap on pensions and the increase in the annual tax-free pension allowance from £40,000 to £60,000 is a bonus for those lucky enough to be able to save twice the UK median salary. </p>
<p>Though the policy is meant to encourage specialist doctors to stay in the labour market, it is a financial boost for all high earners at a time when average household income is expected to decline at <a href="https://obr.uk/box/the-outlook-for-household-income-and-consumption/">its fastest rate since 1950</a>. </p>
<p><em>Check back for deeper analysis in the coming days of key issues such as childcare funding, employment measures and what this budget will mean for the UK economy.</em></p><img src="https://counter.theconversation.com/content/201893/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Burlinson currently receives funding from UKERC (UKRI) and previously received relevant funding from EPSRC.</span></em></p><p class="fine-print"><em><span>Catherine Waddams currently receives no research funding, but has previously received funding from the EPSRC and the ESRC. She is a member of Ofgem's Academic Panel. </span></em></p><p class="fine-print"><em><span>Jim Watson receives funding from the Foreign, Commonwealth and Development Office (FCDO) and UKRI.</span></em></p><p class="fine-print"><em><span>Karen Bloor receives funding from the National Institute for Health Research, including funding to provide a fast-response analysis programme for the Department of Health and Social Care.</span></em></p><p class="fine-print"><em><span>Karl Matikonis receives funding from ESRC (UKRI) to investigate how the adoption of new technologies impacts businesses in Northern Ireland, including subsidies and tax collections.</span></em></p><p class="fine-print"><em><span>Alan Shipman, Despina Alexiadou, Gavin Midgley, Phil Tomlinson, and Steven McCabe do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Childcare, pensions and support for energy bills are among the main budget plans for the UK government.Phil Tomlinson, Professor of Industrial Strategy, Co-Director Centre for Governance, Regulation and Industrial Strategy (CGR&IS), University of BathAlan Shipman, Senior Lecturer in Economics, The Open UniversityAndrew Burlinson, Lecturer in Energy Economics, University of East AngliaCatherine Waddams, Emeritus Professor, Norwich Business School, University of East AngliaDespina Alexiadou, Senior Lecturer at the School of Government and Public Policy, University of Strathclyde Gavin Midgley, Senior Teaching Fellow in Accounting, University of SurreyJim Watson, Professor of Energy Policy and Director of the Institute of Sustainable Resources, UCLKaren Bloor, Professor of Health Economics and Policy, University of YorkKarl Matikonis, Lecturer at Queen's Management School, Queen's University BelfastSteven McCabe, Associate Professor, Institute for Design, Economic Acceleration & Sustainability (IDEAS), Birmingham City UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1917162022-10-06T14:16:00Z2022-10-06T14:16:00ZLiz Truss: this is what happens when governments pursue growth at all costs<p>When Chancellor Kwasi Kwarteng unveiled his mini-budget on September 23, he was making it clear that the government is prioritising economic growth over inflation – which was one reason the financial markets reacted so badly to his plan.</p>
<p>This clear willingness to risk higher inflation strongly echoed the budget of 1971, when Anthony Barber, the Conservative chancellor of the time, announced a large expansionary package of fiscal and monetary measures. He made it clear that he would not reverse his stance even if it produced sufficient downward pressure on the pound to force the currency, previously fixed in value, to be floated. The pound was indeed floated in 1972, but by the end of 1973 it was clear the boom was unsustainable, and the policy was reversed.</p>
<p>Margaret Thatcher took an entirely different stance when she took over the Tory leadership in 1975. For her, high inflation threatened not just serious disruption to economic activity, but to undermine the fabric of society by pitching all against all in a struggle to maintain real incomes. </p>
<p>This contrast needs to be contextualised against the recent economic history of Britain. For over two decades after 1945, Britain had low inflation, averaging around 3%. </p>
<p>There was an initial increase in inflation following <a href="https://www.nationalarchives.gov.uk/cabinet-office-100/the-1967-devaluation-of-the-pound/">the devaluation of the pound in 1967</a>, but the first impetus for the serious increase evident in the early 1970s was Barber’s <a href="https://www.jstor.org/stable/24473966">“dash for growth”</a>. This “dash” aimed to restore economic growth to the healthy levels of the 1950s and 1960s – levels that had stalled in 1970-71.</p>
<p>At the end of 1973, this policy-driven <a href="https://eprints.gla.ac.uk/85833/">inflationary upsurge</a> was greatly added to by the quadrupling of oil prices, as Opec used its monopoly power in response to the Arab-Israeli war. The result was higher inflation across the world, given how reliant almost every country was on oil. But the rate in Britain was exceptional, reflecting the fact that the Opec-induced rise came on top of domestic factors.</p>
<h2>The social contract</h2>
<p>This was the situation which had to be grappled with by the incoming Labour government in February 1974. The government had been elected following the serious industrial relations breakdown under Edward Heath, on the promise that it could establish a much better relationship with the trade unions. </p>
<p>So central to its attempt to reduce inflation was a <a href="https://link.springer.com/chapter/10.1007/978-1-349-12968-3_14">“social contract”</a>, in which government would make concessions to the unions. It would, for example, implement more favourable industrial relations law – and in return, the unions would limit wage increases, thereby counteracting the <a href="https://www.economicshelp.org/blog/glossary/wage-price-spiral/">“wage/price spiral”</a>.</p>
<p>At the same time, the Labour government announced in the budget of 1975 that it would rein in fiscal and monetary expansion, despite the recession of 1974-5 brought about by the oil-price rise, which was reducing incomes available for non-oil purchases.</p>
<p>This reduced inflationary pressure from the demand side of the economy.
Initially, the social contract had little effect, as workers saw their real wages eroded. But by 1975, with inflation over 20%, the policy started to kick in, and inflation fell to around 8%-10% by the time Labour lost office in 1979.</p>
<p>This relative success in reducing inflation was nevertheless offset politically by the fact that the government had kept wage rises down most effectively in the public sector. Public sector workers, especially the lowest paid among them, suffered serious falls in their real wages. It was they who spearheaded the “winter of discontent” of 1978-9, which was so damaging to Labour’s electoral support in the 1979 election.</p>
<p>When Thatcher became prime minister in 1979, reducing inflation was given the highest priority. Central to Thatcher’s politics was the claim that both poor growth (“decline”) and high inflation were ultimately the result of irresponsible trade unions and the governments that appeased them.</p>
<p>With the traumatic events of 1972-4 and the winter of discontent very much in mind, focusing on inflation and making unions the prime culprit made overwhelming political sense.</p>
<p>But today trade unions are far weaker than in the 1970s, and their power cannot be used to frighten the electorate in the same way. Hence it makes sense for a Conservative government to express its “concern” about inflation, but to focus its policies on increasing growth – everybody’s economic panacea.</p>
<p>This strategy has already caused a crisis and very partial U-turn, but the underlying thrust of policy is the same. The precedent of Barber’s boom suggests that output can be raised substantially in the short run by such policies, but on an unsustainable basis. If sharp boosts to demand could shift the underlying growth rate every government since the war would have pursued this path, but as with Barber and previous occasions, such an approach soon proves deceptive.</p>
<p>The question for Truss is whether any initial signs of growth could be used to deliver an election victory for the Conservatives in 2024 before the inevitable reversal kicks in.</p><img src="https://counter.theconversation.com/content/191716/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jim Tomlinson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The prime minister’s main obsession could lead her down a dead end.Jim Tomlinson, Professor of Economic and Social History, University of GlasgowLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1739022021-12-16T07:53:05Z2021-12-16T07:53:05ZVital Signs. No return to austerity as Team Frydenberg prevails over the budget hawks<figure><img src="https://images.theconversation.com/files/437966/original/file-20211216-17-aobtzw.png?ixlib=rb-1.1.0&rect=833%2C284%2C2443%2C1269&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Lukas Coch/AAP</span></span></figcaption></figure><p>Thursday’s <a href="https://budget.gov.au/2021-22/content/myefo/index.htm">Mid-Year Economic and Fiscal Outlook</a> reminds us of some uncomfortable truths.</p>
<p>In the short term, MYEFO forecasts the economy bouncing back, with deficits shrinking, unemployment falling, and growth rebounding. </p>
<p>But that will largely play out in the next financial year, 2022-23. </p>
<p>Beyond that, the forecasts have us returning to the relatively low-growth economy we endured before COVID.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/frydenbergs-myefo-budget-update-shows-big-election-war-chest-173905">Frydenberg's MYEFO Budget update shows big election war chest</a>
</strong>
</em>
</p>
<hr>
<p>Economic growth is forecast to be 3.25% in this financial year, back briefly in the 3-4% range we used to regard as normal.</p>
<p>Next financial year it is forecast to remain high at 3.25% before falling back to 2.25% and then 2.5%, well within the historically low territory it occupied before COVID.</p>
<hr>
<p><strong>Annual financial year GDP growth, actual and forecast</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/437977/original/file-20211216-27-1k3jm1n.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/437977/original/file-20211216-27-1k3jm1n.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/437977/original/file-20211216-27-1k3jm1n.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=310&fit=crop&dpr=1 600w, https://images.theconversation.com/files/437977/original/file-20211216-27-1k3jm1n.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=310&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/437977/original/file-20211216-27-1k3jm1n.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=310&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/437977/original/file-20211216-27-1k3jm1n.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=389&fit=crop&dpr=1 754w, https://images.theconversation.com/files/437977/original/file-20211216-27-1k3jm1n.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=389&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/437977/original/file-20211216-27-1k3jm1n.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=389&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Financial year on financial year growth, actual and forecast.</span>
<span class="attribution"><a class="source" href="https://www.abs.gov.au/statistics/economy/national-accounts/australian-system-national-accounts/2020-21#data-download">ABS and MYEFO</a></span>
</figcaption>
</figure>
<hr>
<p>Unemployment, which is forecast to fall to an impressively low 4.25% by mid-2023, is forecast stay there in the following forecast years, improving no further.</p>
<p>The broader takeaway is that not only did the government do the right thing by providing massive financial support during the pandemic – some A$337 billion of it – it is continuing to do the right thing by not prematurely withdrawing it.</p>
<p>The ongoing (if significantly smaller) budget deficits in coming years are a testament to the lesson learnt about the importance of spending to get economic growth up, and unemployment down.</p>
<hr>
<p><iframe id="DPiRP" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/DPiRP/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<hr>
<p>Perhaps the most uncertain forecast is for wages. Growth in the wage price index is forecast to increase from 2.25% this year to 2.75% in 2022-23 and then on to 3.0% and 3.25% in the follow years.</p>
<p>Sluggish wages growth has been a persistent problem in advanced economies since the 2008 financial crisis. In the US, wages didn’t really get moving again until unemployment dropped to near 3%. </p>
<p>Perhaps an analogous thing will happen in Australia, or perhaps it might require a terminating unemployment rate lower than the forecast 4.25%.</p>
<h2>We need an economic engine</h2>
<p>Of course, economic and employment growth don’t just happen. They are driven, in no small part, by business investment. </p>
<p>As the following chart shows, this is forecast to bounce back strongly after a big drop during the pandemic. In part this simply reflects that kind of catch-up, but it also follows from an increase in business confidence.</p>
<p>Non-mining business investment, expected to grow 1.5% this financial year at budget time, is now expected to climb 8.5%.</p>
<p><iframe id="NbkGk" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/NbkGk/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>What is now absolutely beyond doubt is that confidence is fragile, and depends on support from the government.</p>
<p>The old days of the 1980s, when it was seriously argued that government spending “crowds out” or frightens away rugged capitalists, are long behind us.</p>
<p>Treasurer Josh Frydenberg’s MYEFO statement makes clear there will be no return to austerity, no return (probably ever) to getting <a href="https://theconversation.com/tax-giveaways-in-frydenbergs-back-in-the-black-budget-114177">back in the black</a> for its own sake.</p>
<p>The massive financial force used during the pandemic worked. </p>
<h2>Government has to keep doing the heavy lifting</h2>
<p>In due course the budget will need to return to something closer to balance. But there is no case whatsoever for a sharp U-turn – not one that Frydenberg and Treasury Secretary Steven Kennedy would countenance.</p>
<p>Team Frydenberg-Kennedy has prevailed over the Coalition budget hawks. </p>
<p>There are plenty on both the Coalition front and backbenches who still think the Liberal Party is the party of thrift. If that was ever true or sensible, it isn’t now. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/16-billion-of-the-myefo-budget-update-is-decisions-taken-but-not-yet-announced-why-budget-for-the-unannounced-173654">$16 billion of the MYEFO budget update is 'decisions taken but not yet announced'. Why budget for the unannounced?</a>
</strong>
</em>
</p>
<hr>
<p>One might think that Herbert Hoover’s disastrous austerity in the United States in the early 1930s proved the folly of that approach. Or the UK’s version following the 2008 financial crisis. </p>
<p>But, in any case, the dominant forces in the Coalition seem to have learnt their economic lesson. As they say in the classics: “however you get there…”</p>
<p><iframe id="tK4Qx" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/tK4Qx/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p><img src="https://counter.theconversation.com/content/173902/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Holden is President of the Academy of the Social Sciences in Australia.</span></em></p>The dominant forces in the Coalition seem to have learnt their lesson: Australia’s economy still needs serious budget support.Richard Holden, Professor of Economics, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1465942020-10-01T14:35:37Z2020-10-01T14:35:37ZNow’s the time to share ideas about the future for people and nature<figure><img src="https://images.theconversation.com/files/360245/original/file-20200928-22-1atxecj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">What does a more desirable future for people and the planet look like.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Nature is under pressure. Ecosystems are being degraded rapidly and a billion species are at risk of extinction. This is the shocking picture <a href="https://ipbes.net/global-assessment#:%7E:text=IPBES%20(2019)%3A%20Global%20assessment,on%20Biodiversity%20and%20Ecosystem%20Services.">set out</a> by an independent intergovernmental body, the Inter-governmental Science-Policy Platform on Biodiversity and Ecosystem Services (<a href="https://ipbes.net/">IPBES</a>). The platform was established to make stronger connections between science and policy. Its view is that the only solution to the crisis is <a href="https://theconversation.com/revolutionary-change-needed-to-stop-unprecedented-global-extinction-crisis-116166">radical change</a> in the way humans live.</p>
<p>Humans are deeply implicated in the crisis underpinned by the notion of the <a href="https://theconversation.com/why-the-anthropocene-began-with-european-colonisation-mass-slavery-and-the-great-dying-of-the-16th-century-140661">anthropocene</a>, which is the time that humans have become the dominant impact on earth. This is highlighted in the current crises of a global pandemic, racial tensions and growing inequalities.</p>
<p>There is a lot of <a href="https://ipbes.net/global-assessment">research</a> on the impacts that human actions will have on the future of the planet. These range from carbon emissions leading to <a href="https://www.ipcc.ch/sr15/">climate change</a> through to <a href="https://www.nature.com/articles/s41467-019-09506-1">plastic waste</a> devastating ocean life. But there’s little research on what sort of future people want. This is even more true for understanding what a better future could look like for different people and in different contexts. Such stories of the future are important tools for decision-makers whose choices will bring about change. </p>
<p>The IPBES expert group on scenarios and models <a href="https://besjournals.onlinelibrary.wiley.com/doi/full/10.1002/pan3.10146">responded</a> to this gap in positive stories of nature. We worked on creating visions that reflect the diverse values that nature holds for people. We also wanted these visions to be applicable in different contexts. </p>
<p>We started with a workshop in New Zealand in 2017, with 73 participants from 31 countries, representing all UN regions. Using a <a href="https://theconversation.com/incubating-ideas-on-how-southern-africa-can-manage-the-anthropocene-69916">method</a> developed from the <a href="https://goodanthropocenes.net/">Seeds of Good Anthropocenes</a> project in South Africa, the participants identified “seeds” of change that they believed would be the start of a better future. These seeds were as diverse as displacing GDP growth as a metric and giving rivers legal standing, and as distinct as centres of distinction on indigenous and local knowledge and gene editing technologies.</p>
<h2>Visions of the future</h2>
<p><a href="https://niwa.co.nz/coasts-and-oceans/research-projects/ipbes-nature-futures-workshop">Seven radical visions</a> of desirable nature futures emerged from this. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/360244/original/file-20200928-24-x6dya0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Graph displaying desireable future frameworks" src="https://images.theconversation.com/files/360244/original/file-20200928-24-x6dya0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/360244/original/file-20200928-24-x6dya0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=466&fit=crop&dpr=1 600w, https://images.theconversation.com/files/360244/original/file-20200928-24-x6dya0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=466&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/360244/original/file-20200928-24-x6dya0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=466&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/360244/original/file-20200928-24-x6dya0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=586&fit=crop&dpr=1 754w, https://images.theconversation.com/files/360244/original/file-20200928-24-x6dya0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=586&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/360244/original/file-20200928-24-x6dya0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=586&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">How the 7 desirable visions generated in the 2017 workshop in New Zealand formed the basis of the Nature Futures Framework that sets out three core values of nature: nature for nature, nature for society and nature as culture. These value perspectives build on the IPBES guidance on multiple values for nature.</span>
<span class="attribution"><span class="source">Authors’ own and images from Mary Brake, Reflection Graphics; Dave Leigh, Emphasise Ltd.; Pepper Lindgren-Streicher, Pepper Curry Design</span></span>
</figcaption>
</figure>
<p>Building from the visions, the expert group then developed the <a href="https://besjournals.onlinelibrary.wiley.com/doi/full/10.1002/pan3.10146">Nature Futures Framework</a>. This is a simple way to show and talk about the ways in which nature has value for people:</p>
<p>● Nature for nature, in which nature has value in and of itself;</p>
<p>● Nature for society, in which nature is primarily valued for the benefits or uses people derive from it;</p>
<p>● Nature as culture, in which humans are perceived as an integral part of nature.</p>
<p>The framework aims to illustrate all the ways nature is appreciated. It’s intended to allow multiple voices to debate what a more desirable future for people and the planet could look like. A recent application of the framework with youth from <a href="https://www.tandfonline.com/doi/full/10.1080/26395916.2020.1821095">around the world</a> illustrated some common features of desirable futures. These included an emphasis on diverse community solutions, a reconnection with nature and a reconfiguration of the economic system to showcase what really is valuable for well-being. </p>
<p>Differences include how technology is employed in the future. This looks into whether it’s a central solution like energy and transport for example, in a hyper-connected world where everyone is educated about diverse cultures and places. It could also be a more locally diverse future that emphasises being in place and where innovation is based on indigenous and local knowledge. What these diverse futures show is not a “better or worse” future, but alternatives that can help inform decisions in the present. People have a diversity of relationships with nature. Only when this is appreciated can the world find its way to a better future.</p>
<h2>A call to arms for participation</h2>
<p>Reaching this global understanding requires buy-in and input from as many people around the world as possible. The newly constituted IPBES Task Force on Scenarios and Models is, therefore, calling on researchers and practitioners to contribute. They can take part in scenario processes or use the framework in their own exercises. </p>
<p>It is especially important to get participation from the <a href="https://ipbes.net/assessment-reports/africa">African continent</a>. The region is often marginalised in global environmental scenarios, despite its bio-cultural diversity. To reach as wide an audience as possible, the Nature Futures Framework’s paper on creating desirable futures has been <a href="https://relationalthinkingblog.com/2020/09/18/qa-laura-pereira-on-a-new-generation-of-nature-futures/">translated into a range of languages</a> under-represented in global research. These include <a href="https://besjournals.onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1002%2Fpan3.10146&file=pan310146-sup-0002-Afrikaans.pdf">Afrikaans</a>, <a href="https://besjournals.onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1002%2Fpan3.10146&file=pan310146-sup-0003-Arabic.pdf">Arabic</a>, <a href="https://besjournals.onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1002%2Fpan3.10146&file=pan310146-sup-0004-Bemba.pdf">Bemba</a>, <a href="https://besjournals.onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1002%2Fpan3.10146&file=pan310146-sup-0011-isuZulu.pdf">isiZulu</a>, <a href="https://besjournals.onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1002%2Fpan3.10146&file=pan310146-sup-0017-Setswana.pdf">Setswana</a>, <a href="https://besjournals.onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1002%2Fpan3.10146&file=pan310146-sup-0018-Shona.pdf">Shona</a>, <a href="https://besjournals.onlinelibrary.wiley.com/doi/10.1002/pan3.10146">Twi</a>, <a href="https://besjournals.onlinelibrary.wiley.com/action/downloadSupplement?doi=10.1002%2Fpan3.10146&file=pan310146-sup-0024-Wolof.pdf">Wolof</a>, and <a href="https://besjournals.onlinelibrary.wiley.com/doi/10.1002/pan3.10146">Yoruba</a>.</p>
<p>Before the outbreak of the COVID-19 pandemic, 2020 was to be a “super year” for nature. Various global decisions that will shape the planet’s future were to be taken, including the <a href="https://www.cbd.int/">Convention on Biological Diversity’s</a> renegotiation of biodiversity targets. As these events have been postponed, and as the world seeks to recover from the pandemic, it is even more essential that decisions about the future consider humans’ diverse relationships with nature.</p>
<p>Such decisions can be supported by visions, scenarios and pathways that are collectively developed and made accessible to all interested stakeholders. New types of globally relevant scenarios are urgently needed to show what could be achieved and catalyse the interventions needed to move towards these more desirable futures.</p>
<p>A starting point can be registering as a stakeholder on the IPBES portal: <a href="https://ipbes.net/">https://ipbes.net/</a>. Building a better future requires everyone’s buy-in. The scientific community is starting to realise how important it is to listen to voices from the ground. Without these voices, targets for the planet will remain out of reach.</p><img src="https://counter.theconversation.com/content/146594/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Laura Pereira does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>What are the visions that reflect the diverse values that nature holds for people?Laura Pereira, Researcher/Lecturer at the Centre for Complex Systems in Transition, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1342892020-04-02T14:28:32Z2020-04-02T14:28:32ZFacing the coronavirus crisis together could lead to positive psychological growth<figure><img src="https://images.theconversation.com/files/324933/original/file-20200402-74895-p7xxv7.jpg?ixlib=rb-1.1.0&rect=28%2C9%2C6202%2C4138&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The "tend and befriend" stress response encourage us to connect with people to reduce anxiety and stress. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/man-wearing-mask-making-heart-symbol-1681748269">Suzanne Tucker/ Shutterstock</a></span></figcaption></figure><p>Although news reports of hoarding, and panic-buying might make it hard to believe, research shows that natural disasters, like the novel coronavirus pandemic, can actually <a href="http://ccfhchicago.org/wp-content/uploads/2012/10/Walsh_TraumLoss.pdf">bring out the best in people</a>. Although times of significant threat or crisis can cause post-traumatic stress, research shows that so-called “adversarial growth” is <a href="https://www.frontiersin.org/articles/10.3389/fpsyg.2015.01043/full">just as common</a> as a response. This is our capacity to not only overcome a crisis, but to actually grow stronger, wiser and more resilient. </p>
<p>When people experience adversity – such as life-changing illness or loss – research shows their <a href="https://sites.uncc.edu/ptgi/wp-content/uploads/sites/9/2015/01/The-Posttraumatic-Growth-Inventory-Measuring-the-positive-legacy-of-trauma.pdf">relationship with the world changes</a>. Often, adversity may help us experience a new appreciation of life, improve our relationships with others, and help us gain personal strength. In other words, what doesn’t kill us makes us stronger.</p>
<p>In situations of social stress, our primal instincts kick in. These innate survival responses protect us against unwanted threats, and can both help and hinder how we cope. Though we may not be able to choose our stress response, there are ways that <a href="https://www.frontiersin.org/articles/10.3389/fpsyg.2019.02964/full">we can train it</a>.</p>
<p>The most common response to threats in humans is the “<a href="http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.535.7921&rep=rep1&type=pdf">fight, flight or freeze</a>” response, where stress triggers a hormonal response that prepares the body to either fight or run from a threat. </p>
<p>But more recent research shows we also have a “<a href="https://wesfiles.wesleyan.edu/courses/PSYC-317-jwellman/Week%207%20-%20Oxytocin/Taylor%202006.pdf">tend and befriend</a>” response. When faced with a threat, this response releases hormones – like oxytocin – that encourage us to build and maintain our social network to reduce stress and anxiety, and build empathy.</p>
<h2>Post-traumatic growth</h2>
<p>Studies looking at natural disasters show the “tend and befriend” response actually reduces incidents of <a href="https://www.researchgate.net/profile/Xiao_Zhou15/publication/309139597_Understanding_the_Relationship_Between_Social_Support_and_Posttraumatic_Stress_DisorderPosttraumatic_Growth_Among_Adolescents_After_Ya'an_Earthquake_The_Role_of_Emotion_Regulation/links/580be9ab08aecba93500d203/Understanding-the-Relationship-Between-Social-Support-and-Posttraumatic-Stress-Disorder-Posttraumatic-Growth-Among-Adolescents-After-Yaan-Earthquake-The-Role-of-Emotion-Regulation.pdf">post-traumatic stress disorder</a> and promotes “<a href="https://www.semanticscholar.org/paper/Posttraumatic-Growth%3A-Conceptual-Foundations-and-Tedeschi-Calhoun/9948d303099caa7915eb23da1df89602f70a0f1d?utm_source=email">post-traumatic growth</a>”. These are positive psychological changes that happen in response to a traumatic event, including increased resilience, self-confidence, greater empathy, and improved subjective wellbeing. </p>
<p>In fact, a study of people from Hong Kong who lived through the SARS pandemic found that although people experienced significant trauma, most <a href="https://www.sciencedirect.com/science/article/pii/S016344530500335X">reported positive changes</a> as a result. The most noticeable changes were increased social support, better mental health awareness and healthier lifestyles.</p>
<p>Research also shows there are benefits to <a href="http://trauma.massey.ac.nz/issues/2017-1/AJDTS_21_1_full.pdf#page=33">facing a crisis collectively</a>, compared to experiencing it alone. Studies have found that social support during times of trauma can lead to better emotional health and <a href="https://www.cambridge.org/core/journals/palliative-and-supportive-care/article/does-social-support-from-family-and-friends-work-as-a-buffer-against-reactions-to-stressful-life-events-such-as-terminal-cancer/92AA3CD38BC2B37295F07DA3B60120D0">less severe stress reactions</a> in the long term.</p>
<p>For example, after the 2010 7.1 magnitude earthquake in Christchurch, New Zealand, one study’s participants reported <a href="http://trauma.massey.ac.nz/issues/2017-1/AJDTS_21_1_full.pdf#page=33">feeling more connected to others</a> because of this shared experience. Having a role to play, helping others and contributing to their communities were some of the key elements associated with greater personal growth and were better able to manage stress and carry on with their normal routine following the earthquake</p>
<h2>Coming together</h2>
<p>So is it possible we might experience similar growth during the novel coronavirus pandemic? Based on <a href="http://ccfhchicago.org/wp-content/uploads/2012/10/Walsh_TraumLoss.pdf">past psychological research</a>, we will. However, researchers also acknowledge that experiencing this <a href="https://books.google.co.uk/books?hl=en&lr=&id=Bs6QAgAAQBAJ&oi=fnd&pg=PA99&dq=post+traumatic+growth+following+natural+disasters&ots=CEcBuSi6DC&sig=vmjYaRSH9HAIUmgj8zAlhilL42Q&redir_esc=y#v=onepage&q=post%20traumatic%20growth%20following%20natural%20disasters&f=fals">level of crisis</a> will bring about painful emotions, uncertainty, physical suffering, and psychological distress. How we cope with this – either through the “fight or flight” or “tend and befriend” response – is vital to our psychological health as individuals and as a community. </p>
<p>The “fight or flight” response tends to happen when we <a href="https://www.nature.com/articles/s41598-019-54954-w">face an outside threat</a> – whereas the “tend and befriend” response happens in order to support those around you. However, during natural disasters and pandemics, there’s no “outside threat”, so the “tend and befriend” response may be more likely to happen.</p>
<p>When we choose the “tend and befriend” response, this means we connect with others, either physically or metaphorically (such as trying to see things from their perspective to understand their feelings and struggles). In doing this, we <a href="https://www.sciencedirect.com/topics/neuroscience/oxytocin">release oxytocin</a>, a neural-hormone, part of our <a href="https://www.ncbi.nlm.nih.gov/pubmed/25915080">adaptive stress response</a>. Also known as the “love hormone,” oxytocin is a chemical messenger involved in <a href="https://pdfs.semanticscholar.org/3d6e/4023f2fdfde9585a3ba444c3db26ee8f8e5b.pdf">important human behaviours</a>, including sexual arousal, trust, and anxiety. Not only is oxytocin produced in large amounts after birth to allow mothers to bond with their baby, it’s also produced when we seek out social support during stress. This helps us bond through hugging, touching, or closeness.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/324935/original/file-20200402-74908-ms4id2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/324935/original/file-20200402-74908-ms4id2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/324935/original/file-20200402-74908-ms4id2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/324935/original/file-20200402-74908-ms4id2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/324935/original/file-20200402-74908-ms4id2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/324935/original/file-20200402-74908-ms4id2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/324935/original/file-20200402-74908-ms4id2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Video calling might help us feel more connected to other during social distancing.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/pretty-stylish-schoolgirl-studying-homework-math-1675198060">Maria Symchych/ Shutterstock</a></span>
</figcaption>
</figure>
<p>Given that many governments are now advising social distancing, we’re now relying on technology to trigger our “tend and befriend” response. Though technology will impact our ability to feel connected and bond with others, studies show being in contact virtually with friends and family can <a href="https://academic.oup.com/jcmc/article/21/4/282/4161794">still enhance bonding</a> and reduce the negative effects of stress. In fact, <a href="https://cyberpsychology.eu/article/view/4285/3330">talking on the phone</a> is shown to be better than texting. Video chats are even more beneficial than phone calls, as you can see the person you’re talking to.</p>
<p>If we can still regularly socialise – even virtually – this can help people bond, and build personal growth and social wellbeing in those <a href="https://www.sciencedirect.com/science/article/pii/S1888899215000355">affected by a collective trauma</a>. This “communal coping” also makes us more open to making new friends. The “tend and befriend” response <a href="https://wesfiles.wesleyan.edu/courses/PSYC-317-jwellman/Week%207%20-%20Oxytocin/Taylor%202006.pdf">encourages empathy and compassion</a>, gives us better social awareness, and makes us better able to understand the needs of others and how to behave in an empathetic and helpful way.</p>
<p>Though stress is an understandable response during a time like this, choosing how you respond to it is important. The “tend and befriend” response will help us consider others in our community, and may be important for social distancing, and increasing charitable responses or acts of kindness. In the midst of a global crisis, this adaptive stress response may not only reduce incidents of anger, prejudice and violence, but may also foster collective humanity and post-pandemic growth.</p><img src="https://counter.theconversation.com/content/134289/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lowri Dowthwaite-Walsh does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>‘Post-traumatic growth’ can make us stronger, more resilient and empathetic.Lowri Dowthwaite-Walsh, Lecturer in Psychological Interventions, University of Central LancashireLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1331802020-03-12T10:30:39Z2020-03-12T10:30:39ZCurious Kids: do grownups still grow?<figure><img src="https://images.theconversation.com/files/319068/original/file-20200306-118913-9k7vq4.jpg?ixlib=rb-1.1.0&rect=0%2C15%2C5266%2C3484&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/japanese-father-playing-daughter-1078058330">milatas/Shutterstock</a></span></figcaption></figure><p><strong>Do grownups still grow? – Emma, aged five, UK</strong></p>
<p>Some parts of grownups do not grow. Some parts do grow. And some parts seem to grow but really do not.</p>
<p>Grownups cannot get taller. The bones of their arms, legs, chest and neck lose the ability to get longer. This is because these bones grow at their ends and these growing ends eventually join together which stops growth in height. </p>
<hr>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/282267/original/file-20190702-126345-1np1y7m.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/282267/original/file-20190702-126345-1np1y7m.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=293&fit=crop&dpr=1 600w, https://images.theconversation.com/files/282267/original/file-20190702-126345-1np1y7m.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=293&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/282267/original/file-20190702-126345-1np1y7m.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=293&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/282267/original/file-20190702-126345-1np1y7m.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=368&fit=crop&dpr=1 754w, https://images.theconversation.com/files/282267/original/file-20190702-126345-1np1y7m.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=368&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/282267/original/file-20190702-126345-1np1y7m.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=368&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><em><a href="https://theconversation.com/au/topics/curious-kids-36782">Curious Kids</a> is a series by <a href="https://theconversation.com/uk">The Conversation</a> that gives children the chance to have their questions about the world answered by experts. If you have a question you’d like an expert to answer, send it to <a href="mailto:curiouskids@theconversation.com">curiouskids@theconversation.com</a>. We won’t be able to answer every question, but we’ll do our very best.</em></p>
<hr>
<p>Your thigh bone (properly called the femur), for example, has growing ends near your hip and your knee. You can see these growing ends, called an epiphysis (pronounced eh-pif-uh-sis), as the red lines in the picture of the growing femur here. The bone grows longer by adding new cells in the red spaces. </p>
<p>You stop growing when these red spaces close or run out of new cells. The picture of the mature femur shows that the epiphyses have closed and growth is finished. This happens to girls when they are about 16 to 18 years old and happens to boys when they are about 18 to 22 years old. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/319844/original/file-20200311-116261-1vtxk9l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/319844/original/file-20200311-116261-1vtxk9l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=475&fit=crop&dpr=1 600w, https://images.theconversation.com/files/319844/original/file-20200311-116261-1vtxk9l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=475&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/319844/original/file-20200311-116261-1vtxk9l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=475&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/319844/original/file-20200311-116261-1vtxk9l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=597&fit=crop&dpr=1 754w, https://images.theconversation.com/files/319844/original/file-20200311-116261-1vtxk9l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=597&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/319844/original/file-20200311-116261-1vtxk9l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=597&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Epiphyseal Plate Line.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:623_Epiphyseal_Plate-Line.jpg">OpenStax College</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Grownups cannot get taller, but they do get shorter. After age 30, people start to become a little bit shorter. They lose about two and a half centimetres of height by the age of 55 years. They get shorter because the connections between bones, called cartilage, get squished together. </p>
<p>This happens even to kids. Measure your height when you get out of bed in the morning and then again before you go to bed that night. You will be a little bit shorter because during the day your cartilage was squished. When you sleep, the cartilage expands, and you are taller again in the morning.</p>
<h2>Muscles can grow</h2>
<p>Grownups can grow bigger muscles if they exercise and if they eat healthy food. Riding a bike or running a lot will make leg muscles bigger. Lifting weights and doing press-ups will make arm muscles bigger. It’s best to do some exercise for all your muscles. </p>
<p>Eating lots of fatty and sugary food, like too many chips, crisps or sweets, can make adults and children put on weight as fat. This is a kind of growing, but not a healthy kind. The best way to stay healthy and grow well is to do exercise and eat a lot of different kinds of healthy foods, like fruit and vegetables, and just a few crisps and sweets.</p>
<p>Some parts of grownups seem to get bigger. Sometimes grownups need to buy bigger shoes and they may think that their feet are growing. But the bones in their feet are not growing. What is actually happening is that the connections between the bones in their feet are sagging and the arch on the bottom of their feet is stretching out. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/319608/original/file-20200310-61148-hjk35u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/319608/original/file-20200310-61148-hjk35u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=393&fit=crop&dpr=1 600w, https://images.theconversation.com/files/319608/original/file-20200310-61148-hjk35u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=393&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/319608/original/file-20200310-61148-hjk35u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=393&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/319608/original/file-20200310-61148-hjk35u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=494&fit=crop&dpr=1 754w, https://images.theconversation.com/files/319608/original/file-20200310-61148-hjk35u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=494&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/319608/original/file-20200310-61148-hjk35u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=494&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Her foot hasn’t actually grown.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/women-wearing-gold-high-heels-her-664561765">Seasontime/Shutterstock</a></span>
</figcaption>
</figure>
<p>Ears and noses of older adults do grow a little bit bigger because these parts are made mostly of cartilage, a type of body cell that can continue to divide into more cells as we age. Noses get just a tiny bit bigger but ears can become almost one centimetre longer. Also, gravity pulls down on noses and ears and as the cells become older they sag down, making these body parts seem larger. </p>
<p>The hands and faces of some grownups do get a little bit bigger as they get older. This happens because the brain produces something called growth hormone, which helps make the bones of kids grow a lot longer and wider. Grownup brains also make some growth hormone, and this can make faces and hands grow. Usually, this growth is very slow, but the brains of a few grownups make too much growth hormone and then their faces and hands can become too big. Doctors can stop this from happening with special treatments.</p>
<hr>
<p><em><a href="https://theconversation.com/au/topics/curious-kids-36782">Curious Kids</a> is a series by <a href="https://theconversation.com/uk">The Conversation</a> that gives children the chance to have their questions about the world answered by experts. When sending in questions, make sure you include the asker’s first name, age and town or city. You can:</em></p>
<ul>
<li><em>email <a href="mailto:curiouskids@theconversation.com">curiouskids@theconversation.com</a></em></li>
<li><em>tweet us <a href="https://twitter.com/ConversationUK">@ConversationUK</a> with #curiouskids</em></li>
<li><em>DM us on Instagram <a href="https://www.instagram.com/theconversationdotcom/">@theconversationdotcom</a></em></li>
</ul>
<hr><img src="https://counter.theconversation.com/content/133180/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Barry Bogin receives funding from Bill & Melinda Gates Foundation; UK Economics & Social Research Council, New Dynamics of Nutrition for Older People/ New Directions of Aging Programme. </span></em></p>Grownups don’t get taller, but they can grow in other ways.Barry Bogin, Professor of Biological Anthropology (Emeritus), Loughborough UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1331832020-03-08T17:05:08Z2020-03-08T17:05:08ZThe impact of coronavirus on the financial markets<p>The rapid geographical expansion of the coronavirus Covid-19 and the high contamination rates – nearly 100,000 infections in approximately 80 countries by March 4 – have spread fear around the planet and disrupted global economic activity.</p>
<p>Investors have naturally been concerned and stock markets around the world suffered trillions of US dollars of losses in a single week (ending February 28) in what was the markets’ worst week since the financial crisis of 2008.</p>
<p>On March 2, mainly due to declarations of stimulus measures by central banks, some markets rebounded and erased part of the previous week’s losses. However, the following day, they were hit by new losses, which indicates a clear instability.</p>
<p>How were the leading global stock markets hit during the February coronavirus crash? How does the crash compare with previous market falls and especially with the previous viral outbreaks? How long will it take for markets to readjust? What are the latest predictions of the global economic growth that is certainly expected to suffer due to Covid-19 outbreak?</p>
<h2>Worst week since 2008 crisis</h2>
<p>Even though the novel coronavirus outbreak started in December 2019, financial markets did not react immediately as there was little information on how long it might last, whether China would be able to quickly contain it and prevent it from spreading to other countries, and the risks that such a spread would entail for the global economy.</p>
<p>With Covid-19’s expansion around the world, it was only a matter of time before the stock markets reacted to the new danger. The crash finally occurred in the week ending February 28, when leading stock markets around the world faced their worst week since the 2008 financial crisis.</p>
<ul>
<li><p><a href="https://time.com/5793506/a-stock-market-crash-was-coming-coronavirus-was-just-the-spark/">U.S. stocks lost nearly 12%</a> and $3.5 trillion was erased for U.S.-listed stocks. <a href="https://asia.nikkei.com/Spotlight/coronavirus/coronavirus-Week-of-Feb.-23-to-Feb.-29-Dow-sheds-12-for-the-week">The Dow Jones Industrial Average tumbled 12% for the week</a></p></li>
<li><p><a href="https://www.nbcnews.com/business/markets/coronavirus-crash-wipes-5-trillion-world-stocks-n1144636">MSCI’s world index</a>, which tracks almost 50 countries, was down over 1% once Europe opened and almost 10% for the week – the worst since October 2008</p></li>
<li><p><a href="https://www.reuters.com/article/us-europe-stocks/european-stocks-shed-1-5-trillion-as-virus-fears-spur-week-long-selling-frenzy-idUSKCN20M137">European shares ended the week down roughly 1.5 trillion US dollars</a> in their worst weekly performance since the 2008 financial crisis. The pan-regional STOXX 600 index fell 3.5% on Friday</p></li>
<li><p><a href="https://www.cnbc.com/2020/02/28/asia-markets-wall-street-in-correction-coronavirus-in-focus.html">Asian stocks</a> incurred significant losses:</p></li>
<li><p>China’s Shenzhen stocks led losses among major markets regionally as they closed sharply lower. The Shenzhen component was 4.8% lower.</p></li>
<li><p>The Shanghai composite was down 3.71%.</p></li>
<li><p>Hong Kong’s Hang Seng index dropped 2.42%.</p></li>
<li><p>The Nikkei 225 dropped 3.67%</p></li>
</ul>
<h2>Historic market falls</h2>
<p>The <a href="https://www.zerohedge.com/markets/corona-crash-sparks-worst-month-stocks-financial-crisis-fastest-correction-history">“Historic Market Falls” graph</a> lists the most important financial markets crashes since the 1929 great depression crash and up to the February 2020 Novel coronavirus crash Clearly the coronavirus crash looks less severe than previous ones as it ranks in the 5th place following the Great Depression, the Financial Crisis of 2008, Hitler’s invasion of France and the Black Monday crashes (in order of impact).</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/319081/original/file-20200306-118913-zmztql.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/319081/original/file-20200306-118913-zmztql.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=375&fit=crop&dpr=1 600w, https://images.theconversation.com/files/319081/original/file-20200306-118913-zmztql.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=375&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/319081/original/file-20200306-118913-zmztql.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=375&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/319081/original/file-20200306-118913-zmztql.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=471&fit=crop&dpr=1 754w, https://images.theconversation.com/files/319081/original/file-20200306-118913-zmztql.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=471&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/319081/original/file-20200306-118913-zmztql.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=471&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.zerohedge.com/markets/corona-crash-sparks-worst-month-stocks-financial-crisis-fastest-correction-history">Financial Times</a></span>
</figcaption>
</figure>
<p>Indeed, the coronavirus crash <a href="https://www.nasdaq.com/articles/global-markets-coronavirus-crash-wipes-%245-trillion-off-world-stocks-2020-02-28">wiped out no less than 5 trillion US dollars</a> in share markets value in a week’s time, and with the virus quickly spreading to other countries, investors’ fears for their stocks is logically increasing.</p>
<p>However, by analysing previous viral outbreaks’ impact on financial markets, we can notice that in most cases stocks rallied over the 12 months following the outbreak. For instance, the wealth-management firm Cresset Capital <a href="https://www.forbes.com/sites/simonconstable/2020/02/28/coronavirus-crash-will-leave-stocks-higher-12-months-from-now-history-shows/#52588aa06b55">studied</a> the last five viral outbreaks’ immediate consequences on the stock markets (S&P 500 Index) and where they stood 12 months later.</p>
<p>In all five cases, the S&P 500 was up a year later compared to where it was the day before each crisis broke out. In two instances, the market rallied more than 20%, and the lowest gain was 7.8%. In most cases, 12 months later we reach the same conclusion as Cresset Capital’s study, i.e. markets not only readjust but make further gains as well.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/319078/original/file-20200306-118904-24djwc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/319078/original/file-20200306-118904-24djwc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=373&fit=crop&dpr=1 600w, https://images.theconversation.com/files/319078/original/file-20200306-118904-24djwc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=373&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/319078/original/file-20200306-118904-24djwc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=373&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/319078/original/file-20200306-118904-24djwc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=468&fit=crop&dpr=1 754w, https://images.theconversation.com/files/319078/original/file-20200306-118904-24djwc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=468&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/319078/original/file-20200306-118904-24djwc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=468&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Table 1: Viral outbreaks impact on S&P (6–12 months, % change.</span>
<span class="attribution"><span class="source">Dow Jones Market Data</span></span>
</figcaption>
</figure>
<h2>Central bank interventions</h2>
<p>To stabilise the markets as well as the economic activity, central banks around the world decided to intervene in various ways to provide the needed fiscal support.</p>
<p>While the US Federal Reserve <a href="https://www.wsj.com/articles/federal-reserve-cuts-interest-rates-by-half-percentage-point-11583247606">slashed the interest rate by 50 basis points to a range of 1% to 1.25%</a>, the Bank of Japan and Bank of England pledged to monitor markets closely and safeguard financial stability. The Gulf countries’ Central Banks (KSA, Bahrein, UAE), also <a href="https://gulfnews.com/business/banking/uae-gulf-central-banks-cut-interest-rates-in-response-to-coronavirus-outbreak-1.70144022">cut interest rates by 0.5%</a>.</p>
<p>As for the IMF and the World Bank, they were quick to <a href="https://www.nytimes.com/2020/03/02/business/stock-market-today.html">issue a joint statement</a> declaring their readiness to help “address the human tragedy and economic challenge” posed by the virus.</p>
<p>The European Central Bank said it “stands ready” to respond to signs of a slowdown, and Chinese officials <a href="https://asia.nikkei.com/Spotlight/coronavirus/China-extends-70bn-lifeline-to-jump-start-small-businesses">approved</a> 500 billion yuan ($71 billion) in financing to provide less-expensive loans to smaller enterprises struggling to resume operations.</p>
<p>Moves to reassure investors by central banks and regulators around the world did little to calm fears, however. Financial markets bounced back on March 2 only to fall again the following day.</p>
<p>If the coronavirus is partially to blame for the market losses due to the ambiguity surrounding the economic consequences of the outbreak, according to some analysts a sizeable market correction was overdue anyway, as some stocks were overpriced and readjustment was needed to rebalance. The coronavirus outbreak was just the spark that ignited the fire.</p>
<p>For now, the outbreak is still expanding and thus spreading fear and disrupting economic activity. Will history repeat itself and will we witness a readjustment in the next 6 to 12 months? Or will it be different this time?</p>
<p>There is no definite answer, only time will tell. Unfortunately, the biggest fears are ahead, particularly concerning global economic growth. The <a href="https://www.theguardian.com/business/2020/mar/02/coronavirus-escalation-could-cut-global-economic-growth-in-half-oecd">OECD has warned</a> that an escalation of the outbreak could cut global GDP growth to 1.5%, half the current projected increase of 2.9%, and send some economies into recession.</p>
<hr>
<p><em>This article was written with Ahmad Ismail, a Paris-based research consultant specialising in political-economic analysis and geopolitics.</em></p><img src="https://counter.theconversation.com/content/133183/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hassan Obeid - European Business School - Paris / INSEEC U</span></em></p>In the week ending February 28, leading stock markets around the world faced their worst week since the financial crisis of 2008. And things could get worse.Hassan Obeid, Professor of Finance, European Business School, EBS Paris Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1222522019-11-15T13:29:43Z2019-11-15T13:29:43ZDo we actually grow from adversity?<figure><img src="https://images.theconversation.com/files/301659/original/file-20191113-77300-1ugmjb6.jpg?ixlib=rb-1.1.0&rect=81%2C8%2C5349%2C3497&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">We like to narrate our lives in terms of the challenges we've confronted and the setbacks we've overcome.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/surreal-concept-man-rising-stairs-try-1473864617">frankie's/shutterstock.com </a></span></figcaption></figure><p>In our culture, there’s this idea that enduring a tragedy <a href="https://www.nytimes.com/2012/03/25/magazine/post-traumatic-stresss-surprisingly-positive-flip-side.html">can be good for your personal growth</a>. You’ll have a newfound appreciation for life. You’ll be grateful for your friends and family. You’ll learn from the experience. You’ll become more resilient.</p>
<p><a href="https://www.forbes.com/sites/thestoryexchange/2018/12/13/a-sandy-hook-moms-powerful-lesson-in-resilience/#135d9d417a9b">This theme</a> appears in media coverage, <a href="https://philadelphia.cbslocal.com/2019/04/22/these-are-resilient-people-shock-of-sri-lanka-terrorist-attack-felt-in-philadelphia/">time</a> and <a href="https://abcnews.go.com/Health/japan-victims-show-resilience-earthquake-tsunami-sign-sense/story?id=13135355">again</a>, in the wake of natural disasters and terrorist attacks. </p>
<p>But what does the science say? </p>
<p>Is there actually value in pain and suffering? Was philosopher Frederich Nietzsche onto something when <a href="http://www.handprint.com/SC/NIE/GotDamer.html">he said</a>, “That which does not kill us, makes us stronger”?</p>
<h2>A powerful narrative</h2>
<p>As psychologists, we’ve been <a href="https://doi.org/10.1177/0963721419827017">studying this question</a> for the better part of the last decade. </p>
<p>We’re not the first to grapple with these questions. Psychologists Richard Tedeschi and Lawrence Calhoun have <a href="http://www.apa.org/monitor/2016/11/growth-trauma.aspx">written about</a> how, after experiencing loss or trauma, people reported feeling a greater appreciation for life, closer to their friends and family, stronger, more spiritual and more inspired. They dubbed this phenomenon “post-traumatic growth.”</p>
<p>The appeal of this finding is obvious. It shows there’s a silver lining to tragedy. It’s also consistent with the biblical theme of <a href="https://www.gotquestions.org/redemption.html">redemption</a>, which says that all pain and suffering will ultimately lead to freedom. </p>
<p>The findings also help us make sense of our own lives. Psychologists <a href="https://www.sesp.northwestern.edu/foley/research/redemptiveself/">have demonstrated</a> that we like to narrate our lives in terms of the challenges we’ve confronted and the setbacks we’ve overcome. We like to believe good things can emerge from a bad turn of events because it’s often a key element of the stories we tell about our own lives.</p>
<h2>How can you predict a traumatic event?</h2>
<p>The cultural narrative of “growth from adversity” might sound compelling. </p>
<p>But our own examination of the existing research on the topic identified some red flags.</p>
<p>For one, it’s difficult to collect data on people before and after they’ve experienced trauma. For example, there’s no way of knowing who’s going to lose their home in a hurricane. </p>
<p>For this reason, most research on post-traumatic growth has asked people to estimate how much they’ve changed as a result of their trauma. While this might seem like a sensible way to assess personal growth – you might ask this question of a friend or even yourself – there are <a href="https://doi.org/10.1002/per.1963">significant problems</a> with this approach. </p>
<p><a href="https://www.researchgate.net/profile/Crystal_Park/publication/26281342_Does_Self-Reported_Posttraumatic_Growth_Reflect_Genuine_Positive_Change/links/5b36e05fa6fdcc8506dfae18/Does-Self-Reported-Posttraumatic-Growth-Reflect-Genuine-Positive-Change.pdf">Studies</a> <a href="https://doi.org/10.1521/jscp.2011.30.7.699">have</a> <a href="https://doi.org/10.1177/0265407518811662">found</a> that people aren’t very good at accurately remembering what they were like before a traumatic event. <a href="https://doi.org/10.1002/per.1963">Or participants will say they’ve grown from the event</a> when, in fact, they’re still <a href="https://doi.org/10.1177/2167702614549800">struggling</a>. Their reports of growth <a href="https://doi.org/10.1521/jscp.2010.29.5.546">don’t always match</a> what their friends and family think and <a href="https://doi.org/10.1016/j.jrp.2016.04.001">may not reflect actual changes in their behaviors</a>. </p>
<p>Telling others that you’ve grown might actually be a way to cope with the pain you’re still experiencing. Western culture <a href="https://doi.org/10.2190/OM.60.3.c">permits little time to grieve</a>; eventually, the expectation is that people are supposed to “get over it and move on.”</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/301661/original/file-20191113-77342-z9rb7k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/301661/original/file-20191113-77342-z9rb7k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/301661/original/file-20191113-77342-z9rb7k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/301661/original/file-20191113-77342-z9rb7k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/301661/original/file-20191113-77342-z9rb7k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/301661/original/file-20191113-77342-z9rb7k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/301661/original/file-20191113-77342-z9rb7k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">How much people believe they’ve changed often isn’t associated with how much they’ve actually changed.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/man-defeated-by-his-shadow-boxing-629681300">frankie's/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>That pressure may even be embedded in the test itself; the questions typically used by trauma researchers tend to ask only about positive changes – whether the person has a newfound appreciation for their life, has pursued new goals or has become more religious. An expectation of recovery and self-improvement is baked into this line of questioning. In other cases, people may simply report that they’ve become stronger because they’re in denial about the actual pain that they are experiencing. </p>
<p>Yet the <a href="https://doi.org/10.1177/2167702614549800">best-designed studies</a> examining growth have found that how much people believed they had changed following a traumatic experience was not associated with how much they actually changed over time. </p>
<p>In fact, those who reported that they had experienced the most personal growth in the wake of a tragedy <a href="https://doi.org/10.1111/j.1467-9280.2009.02381.x">were more likely to be still experiencing</a> symptoms of post-traumatic stress disorder and depression. </p>
<h2>The jury’s still out</h2>
<p>In many ways, it’s problematic to embrace the idea that personal growth and resilience are typical outcomes of adversity. </p>
<p>Think about what it communicates: Suffering is good in the long run, and people who have experienced trauma are stronger than those who haven’t. </p>
<p>But moving on from a tragedy isn’t easy. Sometimes, the trauma of certain tragedies, such as the death of a child or a spouse, never fully goes away. </p>
<p>And then there are those who are open about the fact that they’re struggling after a loss months, even years later. If “what doesn’t kill you makes you stronger” were true, these people might be viewed as “weak,” or seen as having something “wrong” with them.</p>
<p>Here’s what we do know from the best science that’s been done: People can indeed grow from adversity. They can become stronger, improve the quality of their relationships and <a href="https://psycnet.apa.org/record/2018-64399-001">increase their self-esteem</a>. But it probably doesn’t happen nearly as often as most people and some researchers believe. </p>
<p>What’s more, not everyone will grow in the same way and at the same speed. People will continue to need the help and social support of their families, friends and communities in the wake of a traumatic event. The availability of these resources <a href="https://doi.org/10.1177/2167702615601001">actually play a big role</a> in determining whether people do, in fact, grow. </p>
<p>Nor should growth be thought of as a goal for everyone. For many people, just getting back to where they were before the trauma may be an ambitious enough goal. </p>
<p>While it’s certainly possible for adversity to lead to new insights and wisdom, science is still unclear about the “when” and “how.” </p>
<p>Stories of growth stemming from trauma <a href="https://www.cnn.com/2013/12/10/living/nelson-mandela-character-identity/index.html">are certainly powerful</a>. They can serve as inspiration for our own lives. But we need to do better research to know whether such stories are the norm or the exception.</p>
<p>[ <em>Insight, in your inbox each day.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=insight">You can get it with The Conversation’s email newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/122252/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Eranda Jayawickreme receives funding from the John Templeton Foundation, the Templeton World Charity Foundation and the European Association for Personality Psychology. The content is solely his responsibility and does not necessarily represent the official views of the funding agencies.</span></em></p><p class="fine-print"><em><span>Frank J. Infurna currently receives research funding from the John Templeton Foundation and National Institute on Aging. The content is solely his responsibility and does not necessarily represent the official views of the funding agencies.</span></em></p>We like to think there’s a silver lining to tragedy – and this may be influencing both how studies on post-traumatic growth are constructed and how subjects are responding.Eranda Jayawickreme, Associate Professor of Psychology, Wake Forest UniversityFrank J. Infurna, Associate Professor of Psychology, Arizona State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1146152019-07-04T08:13:01Z2019-07-04T08:13:01ZHow South Korea and Taiwan grew their economies, while Malaysia and Indonesia trailed behind<figure><img src="https://images.theconversation.com/files/282251/original/file-20190702-126400-fv0dgl.jpg?ixlib=rb-1.1.0&rect=1%2C0%2C997%2C666&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Korea has grown into a rich country with a per capita GDP of nearly US$30,000 in 2017.</span> <span class="attribution"><span class="source">www.shutterstock.com</span></span></figcaption></figure><p>South Korea, Taiwan, Malaysia and Indonesia all suffered from Japanese occupation during the second world war. But in the decades of peace that followed, South Korea and Taiwan revived, grew their economies and became rich. Their GDP per capita – what everyone in the country earns per year if income is equally distributed – are now on par with developed Western countries.</p>
<p>We are familiar with South Korean products, from cars and electronics to skincare. Taiwan exports refined oil, electronics and computers, such as Acer and Asus.</p>
<p>Malaysia, however, plateaued once it reached <a href="https://blogs.worldbank.org/opendata/new-country-classifications-income-level-2018-2019">upper-middle income</a>, a term the World Bank uses to define countries with a per capita GDP higher than US$1,045 but lower than US$12,736. In the meantime, Indonesia is still struggling in the lower-middle income level with GDP per capita below US$4,125. </p>
<p>Why do some countries grow faster than others? </p>
<p>Innovative local companies play a key role.</p>
<h2>The tale of four economies</h2>
<p>Around two decades after the second world war, in 1967, Malaysia led the four economies in <a href="https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=KR-MY-ID&view=chart">GDP per capita</a> at US$317. <a href="https://eng.stat.gov.tw/point.asp?index=1">Taiwan’s was US$281</a>, South Korea’s US$161 and Indonesia’s US$54. </p>
<p>Within two years, Taiwan overtook Malaysia. And a decade later, in 1977, it was Korea’s turn. </p>
<p>In 2003, Korea’s GDP per capita was US$14,209 – 90 times what it was in 1967. Taiwan’s GDP per capita was close, with US$14,120 in 2003. </p>
<p>Observers dubbed the growth of these four, along with Japan, Hong Kong, Thailand and Singapore in the 1980s and 1990s, as <a href="http://documents.worldbank.org/curated/en/975081468244550798/Main-report">the Asian Miracle</a>. Their GDP per capita grew twice as fast between 1965 and 1990 compared to more developed Western countries such as those Europe and North America. </p>
<iframe title="GDP per capita growth in USD" aria-label="Interactive line chart" src="https://datawrapper.dwcdn.net/IBEF0/2/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="400"></iframe>
<p>The GDP per capita increase in these countries was accompanied by poverty reduction and a narrowing of the gap between the rich and poor.</p>
<p>The 1997 Asian Financial Crisis hit these economies hard. Korea saw its <a href="https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=KR-MY-ID&view=chart">GDP per capita slump</a> by 33.4%, Taiwan by 8.5%, Malaysia by 29.6% and Indonesia by 56.4%, bringing Indonesia back to <a href="https://blogs.worldbank.org/opendata/new-country-classifications-income-level-2018-2019">low-income level</a>. </p>
<p>But by 2017, the average income in Korea had again grown, to nearly US$30,000. Taiwan’s grew to US$24,000. Malaysia and Indonesia’s were behind with US$9,952 and US$3,847 respectively.</p>
<h2>Why do some economies grow faster than others?</h2>
<p>Economists use GDP per capita as an indicator of a country’s productivity rate – the output it has produced over a certain period. The higher the per capita GDP of an economy, the higher the productivity of its citizens. South Korea and Taiwan’s high GDP reflects their high productivity rate compared to Malaysia and Indonesia.</p>
<p>Three things determine a country’s productivity: labour, capital, and something known as total factor productivity (TFP), which represents efficiency and technology. For example, better management systems to reduce red tape could signal efficiency, while the use of technology to automate tasks that would take up a lot of time if done manually, technology.</p>
<p>According to the <a href="https://www.apo-tokyo.org/publications/ebooks/apo-productivity-databook-2018/">Asian Productivity Organisation</a>, TFP contributed 14% to Korea’s economic growth between 1970 and 2016, and 24% for Taiwan. Meanwhile, TFP only contributed 5% to Malaysia’s growth, and for Indonesia, the percentage is even lower: 1%. This means there’s very little technological advancement in Indonesia. </p>
<p>The small contribution of TFP to Indonesia’s economy closely ties to the country’s low investment in research and development. In 2017, Indonesia spent <a href="https://www.thejakartapost.com/life/2019/02/18/indonesia-needs-to-get-serious-about-rd.html">less than 0.2% of its GDP on research and development</a>. Meanwhile, Korea spent 4.55% of its GDP on research and development. Taiwan, in 2016 spent 3.16% and Malaysia around 1.3% </p>
<h2>How to increase total factor productivity</h2>
<p>A <a href="https://www.imf.org/external/pubs/ft/wp/2015/wp15131.pdf">working paper</a> for the International Monetary Fund showed that Korea and Taiwan’s economic growth has relied on technological innovation by local companies. </p>
<p>In the 1960s, South Korea founded 35 state-owned companies in the energy, construction and banking sectors. By the 1970s, to improve the public enterprises’ performance, <a href="https://www.jstor.org/stable/4192322">South Korea began privatising state-owned companies</a>, providing loans and protection from market competition to family-owned business groups – called chaebol in Korean. </p>
<p>Meanwhile, economist Chen Been-lon argues the government and private enterprises have been <a href="https://taiwantoday.tw/news.php?post=13965&unit=8,8,29,32,32,45">instrumental in helping Taiwan grow into today’s economic powerhouse</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/282252/original/file-20190702-126396-10xhacu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/282252/original/file-20190702-126396-10xhacu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/282252/original/file-20190702-126396-10xhacu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/282252/original/file-20190702-126396-10xhacu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/282252/original/file-20190702-126396-10xhacu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/282252/original/file-20190702-126396-10xhacu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/282252/original/file-20190702-126396-10xhacu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Electronic boards. Taiwan exports 40% of the world’s semiconductors.</span>
<span class="attribution"><span class="source">www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>In 1964, Taiwan built <a href="https://books.google.co.id/books?id=YNzUCgAAQBAJ&pg=PA6&lpg=PA6&dq=semiconductor+lab+national+chiao+tung+university&source=bl&ots=TRjwwhz2_M&sig=ACfU3U3Liu5ymq9wmN9ALZQ8gjojrFgzMA&hl=en&sa=X&ved=2ahUKEwj6p9Xvn5jjAhXM6nMBHQD_Bgo4ChDoATAAegQICBAB#v=onepage&q=semiconductor%20lab%20national%20chiao%20tung%20university&f=false">a semiconductor lab at the National Chiao Tung University</a>. This lab was the training ground for many engineers who became the backbone of Taiwan’s semiconductor industry. </p>
<p>In 1974 <a href="https://books.google.co.id/books?id=YNzUCgAAQBAJ&pg=PA6&lpg=PA6&dq=semiconductor+lab+national+chiao+tung+university&source=bl&ots=TRjwwhz2_M&sig=ACfU3U3Liu5ymq9wmN9ALZQ8gjojrFgzMA&hl=en&sa=X&ved=2ahUKEwj6p9Xvn5jjAhXM6nMBHQD_Bgo4ChDoATAAegQICBAB#v=onepage&q=erso%20&f=false">a state-owned Electronic Research and Services Organization (ERSO) was established </a>near National Chiao Tung University. In 1980 ERSO created its first spin-off company named United Microelectronics (UMC) with 40% capital investment coming from the government. </p>
<p>UMC moved on to become Taiwan’s centre for acquiring chip technologies, training local engineers and building the foundation of Taiwan semiconductor industries. </p>
<p>Support for domestic industries by the South Korean and Taiwanese government, through cheap loans and market protections, provided room for companies to increase the budget to develop technological innovation. </p>
<p>They also improved the quality of education, providing high-quality labour for companies that would need highly skilled workers.</p>
<p>In contrast to South Korea and Taiwan’s strategy, in which the government supported the development of domestic industries, <a href="https://www.imf.org/external/pubs/ft/wp/2015/wp15131.pdf">the IMF paper noted Malaysia</a> <a href="http://www2.pahang.uitm.edu.my/upena/docs/Japan%20Technology%20Ttansfer%20(JTT).pdf">relied on transfer technology from multinational companies</a>. </p>
<p><a href="https://www.imf.org/external/pubs/ft/wp/2015/wp15131.pdf">Multinational companies are reluctant to transfer their technologies </a>to local companies, leaving host countries stuck supplying raw materials. Multinational companies protect their intellectual property rights and product development. They are also reluctant to train local hires lest they move to other companies.</p>
<p>This is the challenge Indonesia and Malaysia are facing. As domestic industries are underdeveloped in both countries, local companies have little to spare to fund research and development. </p>
<p>While South Korea and Taiwan have 15 and nine companies respectively listed in the <a href="http://fortune.com/global500/list/filtered?non-us-cos-y-n=true">Fortune 500 list</a>, a ranking of the biggest companies in the world by revenue, both Indonesia and Malaysia each have only one company in the list, and they are the countries’ state oil and gas companies.</p>
<h2>Catching up</h2>
<p>Strong evidence, both from Korea and Taiwan, shows that to increase a country’s productivity, domestic industries must invest in research and development.</p>
<p>The Indonesian government is <a href="https://www.cnbcindonesia.com/news/20190216134046-4-55888/jokowi-sebut-akan-ada-pengurangan-pajak-100-ke-bukalapak-cs">reportedly planning to introduce tax deductions</a> for companies that support vocational training, research and development. </p>
<p>Along with incentives for companies, both Malaysia and Indonesia must improve their higher education sectors to support research and development – as well as increase investment in these areas. They must also develop reliable domestic companies.</p>
<p>Malaysia already allows foreign academics to teach and do research. Indonesia should follow this path as it needs to have world-class universities. The higher education sector should be given more autonomy to manage recruitment of lecturers and researchers, and to attract the best students from all over the world.</p>
<p>South Korea and Taiwan’s experience in supporting domestic industries and improving their research sector can be models for Malaysia and Indonesia. </p>
<hr>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/282247/original/file-20190702-126345-l490t6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/282247/original/file-20190702-126345-l490t6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=252&fit=crop&dpr=1 600w, https://images.theconversation.com/files/282247/original/file-20190702-126345-l490t6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=252&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/282247/original/file-20190702-126345-l490t6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=252&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/282247/original/file-20190702-126345-l490t6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=317&fit=crop&dpr=1 754w, https://images.theconversation.com/files/282247/original/file-20190702-126345-l490t6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=317&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/282247/original/file-20190702-126345-l490t6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=317&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><em>The Indonesian Academy of Sciences supports The Conversation Indonesia as host partner.</em></p>
<hr><img src="https://counter.theconversation.com/content/114615/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Chairil Abdini is the Secretary General of the Indonesian Academy of Science (AIPI). </span></em></p>Why do some countries grow faster than others? Innovative local companies play a key role.Chairil Abdini, Lecturer in Public Policy and Decision Analysis, Universitas IndonesiaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1130552019-05-24T13:09:29Z2019-05-24T13:09:29ZClimate change: ‘We’ve created a civilisation hell bent on destroying itself – I’m terrified’, writes Earth scientist<figure><img src="https://images.theconversation.com/files/273091/original/file-20190507-103049-95aua2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">shutterstock</span> </figcaption></figure><p>The coffee tasted bad. Acrid and with a sweet, sickly smell. The sort of coffee that results from overfilling the filter machine and then leaving the brew to stew on the hot plate for several hours. The sort of coffee I would drink continually during the day to keep whatever gears left in my head turning.</p>
<p>Odours are powerfully connected to memories. And so it’s the smell of that bad coffee which has become entwined with the memory of my sudden realisation that we are facing utter ruin.</p>
<p>It was the spring of 2011, and I had managed to corner a very senior member of the <a href="https://www.ipcc.ch">Intergovernmental Panel on Climate Change</a> (IPCC) during a coffee break at a workshop. The IPCC was established in 1988 as a response to increasing concern that the observed changes in the Earth’s climate are being largely caused by humans.</p>
<p>The IPCC reviews the vast amounts of science being generated around climate change and produces <a href="https://www.ipcc.ch/reports">assessment reports</a> every four years. Given the impact the IPPC’s findings can have on policy and industry, great care is made to carefully present and communicate its scientific findings. So I wasn’t expecting much when I straight out asked him how much warming he thought we were going to achieve before we manage to make the required cuts to greenhouse gas emissions. </p>
<p>“Oh, I think we’re heading towards 3°C at least,” he said.</p>
<p>“Ah, yes, but <em>heading towards</em>,” I countered: “We won’t get to 3°C, will we?” (Because whatever you think of the <a href="https://theconversation.com/why-is-climate-changes-2-degrees-celsius-of-warming-limit-so-important-82058">2°C threshold</a> that separates “safe” from “dangerous” climate change, 3°C is well beyond what much of the world could bear.)</p>
<p>“Not so,” he replied.</p>
<p>That wasn’t his hedge, but his best assessment of where, after all the political, economic, and social wrangling we will end up.</p>
<p>“But what about the many millions of people directly threatened,” I went on. “Those living in low-lying nations, the farmers affected by abrupt changes in weather, kids exposed to new diseases?”</p>
<p>He gave a sigh, paused for a few seconds, and a sad, resigned smile crept over his face. He then simply said: “They will die.”</p>
<hr>
<p><em><strong>This article is part of Conversation Insights</strong></em></p>
<p><em>The Conversation’s <a href="https://theconversation.com/introducing-conversation-insights-a-new-team-that-seeks-scoops-from-interdisciplinary-research-107119">Insights team</a> generates long-form journalism derived from interdisciplinary research. The team is working with academics from different backgrounds who have been engaged in projects aimed at tackling societal and scientific challenges. In generating these narratives we hope to bring areas of interdisciplinary research to a wider audience.</em></p>
<p><em>You can read more Insights stories <a href="https://theconversation.com/uk/topics/insights-series-71218">here</a>.</em></p>
<hr>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273122/original/file-20190507-103085-roidcb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273122/original/file-20190507-103085-roidcb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273122/original/file-20190507-103085-roidcb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273122/original/file-20190507-103085-roidcb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273122/original/file-20190507-103085-roidcb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273122/original/file-20190507-103085-roidcb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273122/original/file-20190507-103085-roidcb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Untold devastation awaits us if radical action is not taken.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/banda-aceh-indonesia-december-31-2004-1024465444?src=orKRP2r9KkbKqK717-o7MQ-1-21">Frans Delian/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>That episode marked a clear boundary between two stages of my academic career. At the time, I was a new lecturer in the area of complex systems and Earth system science. Previously, I had worked as a research scientist on an <a href="https://theconversation.com/why-looking-for-aliens-is-good-for-society-even-if-there-arent-any-80700">international astrobiology</a> project based in Germany.</p>
<p>In many ways, that had been my dream job. As a young boy, I had lain on the grass on clear summer evenings and looked up at one of the dots in the night sky and wondered if around that star a planet orbited with beings that could look up from the surface of their world and similarly wonder about the chances of life being found within the unremarkable solar system we call home in the universe. Years later, my research involves thinking about how surface life can affect the atmosphere, oceans and <a href="https://www.earth-syst-dynam.net/2/139/2011">even rocks</a> of the planet it lives on.</p>
<p>That’s certainly the case with life on Earth. At a global scale, the air we all breathe contains oxygen largely as a result of photosynthetic life, while an important part of the UK’s national identity for some – the white cliffs of Dover – are comprised of countless numbers of <a href="https://www.washingtonpost.com/news/morning-mix/wp/2016/09/20/behind-the-stunning-white-cliffs-of-dover-scientists-unlock-a-mystery-of-algae/?utm_term=.d073521467c7">tiny marine organisms</a> that lived more than 70m years ago.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273125/original/file-20190507-103045-128lqx4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273125/original/file-20190507-103045-128lqx4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273125/original/file-20190507-103045-128lqx4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273125/original/file-20190507-103045-128lqx4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273125/original/file-20190507-103045-128lqx4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273125/original/file-20190507-103045-128lqx4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273125/original/file-20190507-103045-128lqx4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The chalk is made up of ancient pulverised shells of tiny organisms called coccolithophore.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/white-cliffs-dover-10809583?src=k_N56tCyDT8V8GCYR590hA-1-23">John Hemmings/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>So it wasn’t a very large step from thinking about how life has radically altered the Earth over billions of years to my new research that considers how a particular species has <a href="https://journals.sagepub.com/doi/abs/10.1177/2053019617725537">wrought major changes within the most recent few centuries</a>. Whatever other attributes <em>Homo sapiens</em> may have – and much is made of our opposable thumbs, upright walking and big brains – our capacity to impact the environment far and wide is perhaps unprecedented in all of life’s history. If nothing else, we humans can make an almighty mess.</p>
<h2>Change within a lifetime</h2>
<p>I was born in the early 1970s. This means in my lifetime the number of people on Earth has doubled, while the size of wild animal populations has been <a href="https://www.bbc.co.uk/news/science-environment-37775622">reduced by 60%</a>. Humanity has swung a wrecking ball through the biosphere. We have chopped down <a href="https://theconversation.com/three-trillion-trees-live-on-earth-but-there-would-be-twice-as-many-without-humans-46914">over half</a> of the world’s rainforests and by the middle of this century there may not be much more than a quarter left. This has been accompanied by a <a href="https://www.ipbes.net/news/Media-Release-Global-Assessment">massive loss in biodiversity</a>, such that the biosphere may be entering one of the great <a href="https://theconversation.com/earths-sixth-mass-extinction-has-begun-new-study-confirms-43432">mass extinction events</a> in the history of life on Earth. </p>
<p>What makes this even more disturbing, is that these impacts are as yet largely unaffected by climate change. Climate change is the ghosts of impacts future. It has the potential to ratchet up whatever humans have done to even higher levels. Credible assessments conclude that <a href="https://theconversation.com/one-in-six-species-faces-extinction-as-a-result-of-climate-change-41018">one in six</a> species are threatened with extinction if climate change continues. </p>
<p>The scientific community has been sounding the alarm over climate change for decades. The political and economic response has been at best sluggish. We know that in order to avoid the worst impacts of climate change, we need to rapidly reduce emissions now.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/270852/original/file-20190424-121254-1j7sq0.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/270852/original/file-20190424-121254-1j7sq0.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/270852/original/file-20190424-121254-1j7sq0.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/270852/original/file-20190424-121254-1j7sq0.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/270852/original/file-20190424-121254-1j7sq0.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/270852/original/file-20190424-121254-1j7sq0.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/270852/original/file-20190424-121254-1j7sq0.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/270852/original/file-20190424-121254-1j7sq0.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Required emissions reductions to limit warming to 2°C.</span>
<span class="attribution"><span class="source">Robbie Andrew</span></span>
</figcaption>
</figure>
<p>The sudden increase in media coverage of climate change as a result of the actions of <a href="https://rebellion.earth">Extinction Rebellion</a> and school strike for climate pioneer <a href="https://twitter.com/GretaThunberg?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor">Greta Thunburg</a>, demonstrates that wider society is waking up to the need for urgent action. Why has it taken the occupation of Parliament Square in London or children across the world walking out of school to get this message heard?</p>
<p>There is another way of looking at how we have been responding to climate change and other environmental challenges. It’s both exhilarating and terrifying. Exhilarating because it offers a new perspective that could cut through inaction. Terrifying as it could, if we are not careful, <a href="https://theconversation.com/climate-change-seeing-the-planet-break-down-is-depressing-heres-how-to-turn-your-pain-into-action-114407">lead to resignation and paralysis</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/climate-change-seeing-the-planet-break-down-is-depressing-heres-how-to-turn-your-pain-into-action-114407">Climate change: seeing the planet break down is depressing – here's how to turn your pain into action</a>
</strong>
</em>
</p>
<hr>
<p>Because one explanation for our collective failure on climate change is that such collective action is perhaps impossible. It’s not that we don’t want to change, but that we can’t. We are locked into a planetary-scale system that while built by humans, is largely beyond our control. This system is called the technosphere.</p>
<h2>The technosphere</h2>
<p>Coined by US geoscientist <a href="https://journals.sagepub.com/doi/10.1177/2053019614530575">Peter Haff in 2014</a>, the technosphere is the system that consists of individual humans, human societies – and stuff. In terms of stuff, humans have produced an extraordinary <a href="https://phys.org/news/2016-11-earth-technosphere-trillion-tons.html">30 trillion metric tons</a> of things. From skyscrapers to CDs, fountains to fondue sets. A good deal of this is infrastructure, such as roads and railways, which links humanity together. </p>
<p>Along with the physical transport of humans and the goods they consume is the transfer of information between humans and their machines. First through the spoken word, then parchment and paper-based documents, then radio waves converted to sound and pictures, and subsequently digital information sent via the internet. These networks facilitate human communities. From roving bands of hunter-gatherers and small farming tribes, right up to the inhabitants of a megacity that teams with over 10m inhabitants, <em>Homo sapiens</em> is a fundamentally social species. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273133/original/file-20190507-103082-j4tniw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273133/original/file-20190507-103082-j4tniw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273133/original/file-20190507-103082-j4tniw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273133/original/file-20190507-103082-j4tniw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273133/original/file-20190507-103082-j4tniw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273133/original/file-20190507-103082-j4tniw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273133/original/file-20190507-103082-j4tniw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The techno-planet.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/night-traffic-zips-through-intersection-gangnam-259954391?src=H2Ldk07DwB3hBH7DqCHZdA-1-8">Joshua Davenport/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>Just as important, but much less tangible, is society and culture. The realm of ideas and beliefs, of habits and norms. Humans do a great many different things because in important ways they see the world in different ways. These differences are often held to be the root cause of our inability to take effective global action. There is no global government, for a start.</p>
<p>But as different as we all are, the vast majority of humanity is now behaving in fundamentally similar ways. Yes, there are still some nomads who roam tropical rainforests, still some roving sea gypsies. But <a href="https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html">more than half</a> of the global population now lives in urban environments and nearly all are in some way connected to industrialised activities. Most of humanity is tightly enmeshed into a globalised, industrialised complex system – that of the technosphere. </p>
<p>Importantly, the size, scale and power of the technosphere has dramatically grown since World War II. This tremendous increase in the number of humans, their energy and material consumption, food production and environmental impact has been dubbed <a href="http://anthropocene.info/great-acceleration.php">the Great Acceleration</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/273190/original/file-20190507-103053-1yeixnq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/273190/original/file-20190507-103053-1yeixnq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273190/original/file-20190507-103053-1yeixnq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=419&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273190/original/file-20190507-103053-1yeixnq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=419&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273190/original/file-20190507-103053-1yeixnq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=419&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273190/original/file-20190507-103053-1yeixnq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=526&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273190/original/file-20190507-103053-1yeixnq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=526&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273190/original/file-20190507-103053-1yeixnq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=526&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The great acceleration of the technosphere.</span>
<span class="attribution"><span class="source">Felix Pharand-Deschenes Globaia</span></span>
</figcaption>
</figure>
<h2>The tyranny of growth</h2>
<p>It seems sensible to assume that the reason products and services are made is so that they can be bought and sold and so the makers can turn a profit. So the drive for innovation – for faster, smaller phones, for example – is driven by being able to make more money by selling more phones. In line with this, the environmental writer George Monbiot <a href="https://www.theguardian.com/commentisfree/2019/apr/25/capitalism-economic-system-survival-earth">argued</a> that the root cause of climate change and other environmental calamities is capitalism and consequently any attempt to reduce greenhouse gas emissions will ultimately fail if we allow capitalism to continue. </p>
<p>But zooming out from the toil of individual manufacturers, and even humanity, allows us to take a fundamentally different perspective, one that transcends critiques of capitalism and other forms of government. </p>
<p>Humans consume. In the first instance, we must eat and drink in order to maintain our metabolism, to stay alive. Beyond that, we need shelter and protection from physical elements.</p>
<p>There are also the things we need to perform our different jobs and activities and to travel to and from our jobs and activities. And beyond that is more discretional consumption: TVs, games consoles, jewellery, fashion.</p>
<p>The purpose of humans in this context is to consume products and services. The more we consume, the more materials will be extracted from the Earth, and the more energy resources consumed, the more factories and infrastructure built. And ultimately, the more the technosphere will grow.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273136/original/file-20190507-103060-47t1ag.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273136/original/file-20190507-103060-47t1ag.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=294&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273136/original/file-20190507-103060-47t1ag.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=294&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273136/original/file-20190507-103060-47t1ag.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=294&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273136/original/file-20190507-103060-47t1ag.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=369&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273136/original/file-20190507-103060-47t1ag.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=369&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273136/original/file-20190507-103060-47t1ag.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=369&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The growth of the economy is based on the growth of consumption.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/poor-culture-consumption-achieve-progress-modern-646823572?src=Ks1TQ2e1zpQyeAMkKM-Q3Q-1-29">Roman Mikhailiuk/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>The emergence and development of capitalism obviously lead to the growth of the technosphere: the application of markets and legal systems allows increased consumption and so growth. But other political systems may serve the same purpose, with varying degrees of success. Recall the industrial output and environmental pollution of the <a href="https://observablehq.com/@drsimevans/bar-chart-race-the-largest-cumulative-co2-emitters-since-17">former Soviet Union</a>. In the modern world, all that matters is growth.</p>
<p>The idea that growth is ultimately behind our unsustainable civilisation is not a new concept. <a href="http://www.esp.org/books/malthus/population/malthus.pdf">Thomas Malthus famously argued</a> there were limits to human population growth, while the Club of Rome’s 1972 book, <a href="https://www.clubofrome.org/report/the-limits-to-growth">Limits to Growth</a>, presented simulation results that pointed to a collapse in global civilisation.</p>
<p>Today, alternative narratives to the growth agenda are, perhaps, getting political traction with an <a href="http://limits2growth.org.uk">All Party Parliamentary Group</a> convening meetings and activities that seriously consider de-growth policies. And curbing growth within environmental limits is central to the idea of a <a href="https://neweconomics.org/campaigns/green-new-deal">Green New Deal</a>, which is now being discussed seriously in the US, UK, and other nations. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273137/original/file-20190507-103045-789536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273137/original/file-20190507-103045-789536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273137/original/file-20190507-103045-789536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273137/original/file-20190507-103045-789536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273137/original/file-20190507-103045-789536.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273137/original/file-20190507-103045-789536.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273137/original/file-20190507-103045-789536.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Alexandria Ocasio-Cortez, champion of the US Green New Deal.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/washington-dcusa-november-13-2018student-activists-1231811017?src=uogYmbEaINf00LRMa9Gx9g-1-0">Rachael Warriner/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>If growth is the problem, then we just have to work at that, right? This won’t be easy, as growth is baked into every aspect of <a href="https://www.youtube.com/watch?v=vs9NKdGrmdA">politics and economics</a>. But we can at least imagine what a de-growth economy would look like. </p>
<p>My fear, however, is that we will not be able to slow down the growth of the technosphere even if we tried – because we are not actually in control. </p>
<h2>Limits to freedom</h2>
<p>It may seem nonsense that humans are unable to make important changes to the system they have built. But just how free are we? Rather than being masters of our own destiny, we may be very constrained in how we can act. </p>
<p>Like individual blood cells coursing through capillaries, humans are part of a global-scale system that provides for all their needs and so has led them to rely on it entirely.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/QbvLCZk1xZU?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Tokyo train commuters travelling to work.</span></figcaption>
</figure>
<p>If you jump in your car to get to a particular destination, you can’t travel in a straight line “as the crow flies”. You will use roads that in some instances are older than your car, you, or <a href="https://britishheritage.com/taking-a-ride-on-watling-street">even your nation</a>. A significant fraction of human effort and endeavour is devoted to maintaining this fabric of the technosphere: fixing roads, railways, and buildings, for example. </p>
<p>In that respect, any change must be incremental because it must use what current and previous generations have built. The channelling of people via road networks seems a trivial way to demonstrate that what happened far in the past can constrain the present, but humanity’s path to decarbonisation isn’t going to be direct. It has to start from here and at least in the beginning use existing routes of development.</p>
<p>This isn’t meant to excuse policymakers for their failure of ambition, or lack of bravery. But it indicates that there may be deeper reasons why carbon emissions are not decreasing even when there appears to be increasingly good news about alternatives to fossil fuels. </p>
<p>Think about it: at the global scale, we have witnessed a <a href="https://www.iea.org/newsroom/news/2019/february/is-exponential-growth-of-solar-pv-the-obvious-conclusion.html">phenomenal rate of deployment of solar</a>, wind, and other sources of renewable energy generation. But global greenhouse gas emissions continue to rise. This is because renewables promote growth – they simply represent another method of extracting energy, rather than replacing an existing one.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273138/original/file-20190507-103045-uh9h6y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273138/original/file-20190507-103045-uh9h6y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273138/original/file-20190507-103045-uh9h6y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273138/original/file-20190507-103045-uh9h6y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273138/original/file-20190507-103045-uh9h6y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273138/original/file-20190507-103045-uh9h6y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273138/original/file-20190507-103045-uh9h6y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Renewable energy production has not led to a reduction in fossil fuel use.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/top-view-solar-panels-cell-farm-727265002?src=tShmKoJEbOXgJJ_RKOW6Qw-1-81">Thongsuk Atiwannakul/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>The relationship between the size of the global economy and carbon emissions is so robust that US physicist Tim Garrett has proposed a very simple formula <a href="https://link.springer.com/article/10.1007%2Fs10584-009-9717-9">that links the two</a> with startling accuracy. Using this method, an atmospheric scientist can predict the size of the global economy for the past 60 years with tremendous precision. </p>
<p>But correlation does not necessarily mean causation. That there has been a tight link between economic growth and carbon emissions does not mean that has to continue indefinitely. The <a href="https://www.earth-syst-dynam.net/3/1/2012/">tantalisingly simple explanation</a> for this link is that the technosphere can be viewed like an engine: one that works to make cars, roads, clothes, and stuff – even people – using available energy.</p>
<p>The technosphere still has access to abundant supplies of high energy density fossil fuels. And so the absolute decoupling of global carbon emissions from economic growth will not happen until they either run out or the technosphere eventually transitions to alternative energy generation. That may be well beyond the <a href="https://theconversation.com/humanity-is-in-the-existential-danger-zone-study-confirms-36307">danger zone for humans</a>. </p>
<h2>A repugnant conclusion</h2>
<p>We have just come to appreciate that our impacts on the Earth system are so large that we have possibly ushered in a new geological epoch: <a href="https://www.pik-potsdam.de/news/public-events/archiv/alter-net/former-ss/2007/05-09.2007/steffen/literature/ambi-36-08-06_614_621.pdf">the Anthropocene</a>. The Earth’s rocks will bear witness to humans’ impacts long after we disappear. The technosphere can be seen as the engine of the Anthropocene. But that does not mean we are driving it. We may have created this system, but it is not built for our communal benefit. This runs completely counter to how we view our relationship with the Earth system.</p>
<p>Take the <a href="https://www.stockholmresilience.org/research/planetary-boundaries/planetary-boundaries/about-the-research/the-nine-planetary-boundaries.html">planetary boundaries concept</a>, which has generated much interest scientifically, economically, and politically. This idea frames human development as impacting on nine planetary boundaries, including climate change, biodiversity loss, and ocean acidification. If we push past these boundaries, then the Earth system will change in ways that will make human civilisation very difficult, if not impossible, to maintain. The value of, say, the biosphere here is that it provides goods and services to us. This represents what we can literally get from the system.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/271245/original/file-20190427-194633-65zi7y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/271245/original/file-20190427-194633-65zi7y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/271245/original/file-20190427-194633-65zi7y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=407&fit=crop&dpr=1 600w, https://images.theconversation.com/files/271245/original/file-20190427-194633-65zi7y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=407&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/271245/original/file-20190427-194633-65zi7y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=407&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/271245/original/file-20190427-194633-65zi7y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=512&fit=crop&dpr=1 754w, https://images.theconversation.com/files/271245/original/file-20190427-194633-65zi7y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=512&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/271245/original/file-20190427-194633-65zi7y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=512&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The planetary boundaries that are intended to help define a safe operating space for humanity.</span>
<span class="attribution"><span class="source">Steffen, W., et al, 2015. Planetary boundaries: Guiding human development on a changing planet. Science, 347(6223), p.1</span></span>
</figcaption>
</figure>
<p>This very human-centric approach should lead to more sustainable development. It should constrain growth. But the technological world system we have built is clever at getting around such constraints. It uses the ingenuity of humans to build new technologies – such as <a href="https://theconversation.com/why-you-need-to-get-involved-in-the-geoengineering-debate-now-85619">geoengineering</a> – to reduce surface temperatures. That would not halt ocean <a href="https://www.pmel.noaa.gov/co2/story/What+is+Ocean+Acidification%3F">acidification</a> and so would lead to the potential collapse of ocean ecosystems. No matter. The climate constraint would have been avoided and the technosphere could then get to work overcoming any side effects of biodiversity loss. Fish stocks collapse? Shift to farmed fish or intensively grown algae.</p>
<p>As defined so far, there appears nothing to stop the technosphere <a href="https://www.huffingtonpost.co.uk/entry/nature-destruction-climate-change-world-biodiversity_n_5c49e78ce4b06ba6d3bb2d44?ncid=other_twitter_cooo9wqtham&utm_campaign=share_twitter&guce_referrer=aHR0cHM6Ly90LmNvL2hSSkFwVW5oenc&guce_referrer_sig=AQAAAJ08mI8iHgDTh2N_WwvYxFXt5UWZdx-U3wrfrGh1kANJBcxQ1cf7kEvnMv8VLUSu88QZulhu1isW4m0NCuJPNWpDuqYYtMwAMg1P6X1-HDqZsn9n1TouhsCRt1Q1fQp3_RPQaaYLe02AQcEv5G0OkylazFKA28iseq7lctcBxqz4&_guc_consent_skip=1556547600">liquidating most of the Earth’s biosphere</a> to satisfy its growth. Just as long as goods and services are consumed, the technosphere can continue to grow.</p>
<p>And so those who fear the <a href="https://www.theguardian.com/environment/2010/apr/29/environmentalism-dark-mountain-project">collapse of civilisation</a> or those who have enduring <a href="https://www.telegraph.co.uk/business/2019/04/28/capitalism-can-save-planet/?WT.mc_id=tmg_share_tw">faith in human innovation</a> being able to solve all sustainability challenges may both be wrong. </p>
<p>After all, a much smaller and much richer population of the order of hundreds of millions could consume more than the current population of 7.6 billion or the projected population of nine billion by the middle of this century. While there would be widespread disruption, the technosphere may be able to weather climate change <a href="https://interactive.carbonbrief.org/impacts-climate-change-one-point-five-degrees-two-degrees/?utm_source=web&utm_campaign=Redirect">beyond 3°C</a>. It does not care, cannot care, that billions of people would have died. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273139/original/file-20190507-103082-rfn094.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273139/original/file-20190507-103082-rfn094.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273139/original/file-20190507-103082-rfn094.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273139/original/file-20190507-103082-rfn094.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273139/original/file-20190507-103082-rfn094.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273139/original/file-20190507-103082-rfn094.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273139/original/file-20190507-103082-rfn094.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Fewer people would not necessarily mean a smaller technosphere.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/background-hong-kong-residential-flat-building-701831104?src=1Dfl8njZJaVCuLVvkHkS8Q-1-46">Gunnerchu/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>And at some point in the future, the technosphere could even function without humans. We worry about robots taking over human’s jobs. Perhaps we should be more concerned with them taking over our role as apex consumers.</p>
<h2>Escape plan</h2>
<p>The situation, then, may all seem rather hopeless. Whether or not my argument is an accurate representation of our civilisation, there is the risk it produces a self-fulfilling prophecy. Because if we believe we can’t slow down the growth of the technosphere, then why bother? </p>
<p>This goes beyond the question of “what difference could I make?” to “what difference can anyone make?” While <a href="https://theconversation.com/climate-change-yes-your-individual-action-does-make-a-difference-115169">flying less</a>, cutting down on eating <a href="https://theconversation.com/can-eating-less-meat-really-tackle-climate-change-50884">meat and dairy</a> and <a href="https://theconversation.com/ten-reasons-why-we-should-all-love-cyclists-76755">cycling to work</a> are all commendable steps to take, they do not constitute living outside the technosphere.</p>
<p>It’s not just that we give <a href="https://plato.stanford.edu/entries/locke-political/#ConPolOblEndGov">tacit consent</a> to the technosphere by using its roads, computers, or intensively farmed food. It’s that by being a productive member of society, by earning and spending, above all by consuming, we further the technosphere’s growth.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/climate-change-yes-your-individual-action-does-make-a-difference-115169">Climate change: yes, your individual action does make a difference</a>
</strong>
</em>
</p>
<hr>
<p>Perhaps the way out from fatalism and disaster is an acceptance that humans may not actually be in control of our planet. This would be the vital first step that could lead to a broader outlook that encompasses more than humans. </p>
<p>For example, the mainstream <a href="https://theconversation.com/how-the-neoliberal-obsession-with-valuing-nature-changes-our-understanding-of-it-103366">economic attitude about trees</a>, frogs, mountains, and lakes is that these things only have value if they provide something to us. This mindset sets them up as nothing more than resources to exploit and sinks for waste. </p>
<p>What if we thought of them as components or even our companions in the complex Earth system? Questions about sustainable development then become questions about how growth in the technosphere can be accommodated with their concerns, interests, and welfare as well as ours.</p>
<p>This may produce questions that seem absurd. What are the concerns or interests of a mountain? Of a flea? But if we continue to frame the situation in terms of “us against them”, of human well-being trumping everything else in the Earth system, then we may be effectively hacking away the best form of protection against a dangerously rampant technosphere. </p>
<p>And so the most effective guard against climate breakdown may not be technological solutions, but a more fundamental reimagining of what constitutes a good life on this particular planet. We may be critically constrained in our abilities to change and rework the technosphere, but we should be free to envisage alternative futures. So far our response to the challenge of climate change exposes a fundamental failure of our collective imagination. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/273140/original/file-20190507-103045-1iwt2xn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/273140/original/file-20190507-103045-1iwt2xn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/273140/original/file-20190507-103045-1iwt2xn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/273140/original/file-20190507-103045-1iwt2xn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/273140/original/file-20190507-103045-1iwt2xn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/273140/original/file-20190507-103045-1iwt2xn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/273140/original/file-20190507-103045-1iwt2xn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">We must start to see ourselves as a small part of a planetary natural system.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/damselfish-swim-shallow-water-palaus-inner-255796441?src=Jc_xUOzRsT4kapE91sLcjQ-1-29">Ethan Daniels/Shutterstock.com</a></span>
</figcaption>
</figure>
<p>To understand you are in a prison, you must first be able to see the bars. That this prison was created by humans over many generations doesn’t change the conclusion that we are currently tightly bound up within a system that could, if we do not act, lead to the impoverishment, and even death of billions of people.</p>
<p>Eight years ago, I woke up to the real possibility that humanity is facing disaster. I can still smell that bad coffee, I can still recall the memory of scrabbling to make sense of the words I was hearing. Embracing the reality of the technosphere doesn’t mean giving up, of meekly returning to our cells. It means grabbing a vital new piece of the map and planning our escape.</p>
<hr>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=112&fit=crop&dpr=1 600w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=112&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=112&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=140&fit=crop&dpr=1 754w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=140&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/313478/original/file-20200204-41481-1n8vco4.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=140&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p><em>For you: more from our <a href="https://theconversation.com/uk/topics/insights-series-71218?utm_source=TCUK&utm_medium=linkback&utm_campaign=TCUKengagement&utm_content=InsightsUK">Insights series</a>:</em></p>
<ul>
<li><p><em><a href="https://theconversation.com/a-globalised-solar-powered-future-is-wholly-unrealistic-and-our-economy-is-the-reason-why-118927?utm_source=TCUK&utm_medium=linkback&utm_campaign=TCUKengagement&utm_content=InsightsUK">A globalised solar-powered future is wholly unrealistic – and our economy is the reason why</a></em></p></li>
<li><p><em><a href="https://theconversation.com/the-end-of-the-world-a-history-of-how-a-silent-cosmos-led-humans-to-fear-the-worst-120193?utm_source=TCUK&utm_medium=linkback&utm_campaign=TCUKengagement&utm_content=InsightsUK">The end of the world: a history of how a silent cosmos led humans to fear the worst</a></em></p></li>
<li><p><em><a href="https://theconversation.com/environmental-stress-is-already-causing-death-this-chaos-map-shows-where-123796?utm_source=TCUK&utm_medium=linkback&utm_campaign=TCUKengagement&utm_content=InsightsUK">Environmental stress is already causing death – this chaos map shows where
</a></em></p></li>
</ul>
<p><em>To hear about new Insights articles, join the hundreds of thousands of people who value The Conversation’s evidence-based news. <a href="https://theconversation.com/uk/newsletters/the-daily-newsletter-2?utm_source=TCUK&utm_medium=linkback&utm_campaign=TCUKengagement&utm_content=InsightsUK"><strong>Subscribe to our newsletter</strong></a>.</em></p>
<hr><img src="https://counter.theconversation.com/content/113055/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>James Dyke does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Why radical changes to society are needed if we are to escape environmental disaster.James Dyke, Senior Lecturer in Global Systems, University of ExeterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/949432018-05-15T13:23:28Z2018-05-15T13:23:28ZAfrica’s business schools need to be locally relevant and globally wise<figure><img src="https://images.theconversation.com/files/218468/original/file-20180510-34015-z95nos.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">African business school need to achieve a tricky balance between local realities and global demands.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>If <a href="https://www.africanmanagers.org/trainingtalent">99.6% of businesses</a> in a country like Nigeria employ fewer than 10 workers, does it make sense to teach Nigerian business students how to manage Fortune 500 companies in the US using Harvard Business School case studies? This question, raised by the <a href="https://www.africanmanagers.org/trainingtalent">African Management Initiative</a> in a recent report, sums up the complex nature of the challenge facing African business schools when picking a path between global recognition and local relevance.</p>
<p>There is no doubt that business schools need to demonstrate international relevance, whether through the programmes they offer, or the content they teach. This allows them to attract international students and faculty. And, perhaps more importantly, it offers students a chance to experience international contexts. International mobility in today’s global business world is a key requirement. </p>
<p>At the same time, schools need to cater to the <a href="https://www.aabschools.com/news_items/detail/419.html">day-to-day realities</a> in their own context. African business schools operate in environments characterised by high degrees of inequality and uncertainty, a lack of skills and high rates of unemployment. </p>
<p>Ideally, they need to do both these things if they want to deliver the best possible training for the continent’s requirements. </p>
<h2>An assessment of quality</h2>
<p>One important way that business schools seek to demonstrate international relevance is through rankings and accreditations. These offer an <a href="https://www.businessbecause.com/news/mba-application/5136/mba-accreditation">important marketing and reputational window</a> to the world. And they are widely used by global schools as stamps of quality. They are also one of the major <a href="https://www.businessbecause.com/news/mba-rankings/5148/mba-rankings-economist-financial-times-qs-explained">tools</a> employed by students in choosing where to study.</p>
<p>But only a handful of schools in Africa are recognised and ranked globally. The University of Cape Town Graduate School of Business, University of Stellenbosch Business School and the American University in Cairo are the only African business schools out of 86 globally that are <a href="http://www.mba.today/guide/triple-accreditation-business-schools">triple-crown accredited</a>. This means they have recognition from the top three global accreditation bodies, the Association to <a href="http://www.aacsb.edu/about">Advance Collegiate Schools of Business</a>, <a href="https://www.mbaworld.com">the Association of MBAs</a>, and the <a href="https://www.efmd.org">European Foundation for Management Development’s Quality Improvement System</a>. </p>
<p>When it comes to rankings, only the University of Cape Town Graduate School of Business, University of Stellenbosch Business School and the Gordon Institute of Business Science University of Pretoria are recognised in the various <a href="http://rankings.ft.com/businessschoolrankings/rankings">Financial Times rankings</a> for their offerings.</p>
<h2>Useful benchmark or distraction from purpose?</h2>
<p>The process of business school accreditation is rigorous and time consuming. Schools must articulate their vision and mission and relevance and impact.</p>
<p>Schools have to submit a lot of information and an accreditation panel will spend time at a school to inspect and ensure that it is delivering what it claims to be delivering. This process can be useful because it helps schools identify and improve on weaknesses identified.</p>
<p>Accreditation bodies offer a rounded assessment of schools. The three main global assessment bodies assess performance in a holistic way. Their assessment goes beyond just individual increases in salary. They take into account graduates’ contribution to society, value creation and entrepreneurship. </p>
<p>There is a new kid on the block worth watching: the <a href="https://www.aabschools.com">Association of African Business Schools</a> which hopes to delve deeper into what African business schools are doing to develop the continent.</p>
<p>Undergoing accreditation can therefore be a highly developmental process. It can be useful as a consultancy exercise as much as – if not more than – an audit of quality standards. But the reality is that many African business schools operate with minimal resources making it challenging for them to achieve accreditation. </p>
<p>Rankings, by comparison, are easier to participate in but have received a lot of <a href="http://www.aacsb.edu/blog/2017/may/criticism-of-business-school-rankings-thrust-into-spotlight">criticism</a> including charges that they come with flawed methodologies, misleading information and a lack of transparency. They are also accused of <a href="http://www.aacsb.edu/blog/2017/may/criticism-of-business-school-rankings-thrust-into-spotlight">detracting from the social obligations</a> of schools. That’s because they tend to place little emphasis on students’ learning or societal benefits and focus almost exclusively on the short-term economic returns of their education for graduates. The rankings however, are a <a href="https://www.mastersportal.com/articles/361/top-3-mba-rankings-help-you-choose-the-best-business-school-abroad.html">criterion</a> used by potential international students when choosing which schools to apply to. They cannot be discounted. </p>
<p>Together, accreditation’s and rankings offer African business schools a valuable way to benchmark themselves against their global peers. As Professor Jonathan Jansen, former vice-chancellor at the University of the Free State, <a href="https://www.pressreader.com/south-africa/the-herald-south-africa/20180215/281913068579850">wrote</a> in a recent article, they can reveal areas in which a university can grow and improve on its scholarly work: </p>
<blockquote>
<p>You never really know how good you are until you are ranked against the best.</p>
</blockquote>
<p>Rankings and accreditation may be onerous and expensive, but if used wisely they can strengthen global credentials. At the same time they can also help business schools to hone their offerings to develop the right calibre of leadership and management to drive the development that is needed on the continent.</p><img src="https://counter.theconversation.com/content/94943/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kutlwano Ramaboa does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>African business schools can benefit from the rigourous process offered by global rankings and accreditations.Kutlwano Ramaboa, Senior Lecturer in Research Methodology, Director of International Relations, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/943522018-04-05T13:05:29Z2018-04-05T13:05:29ZRamaphosa’s to do list: seven economic policy areas that will shift the dial<figure><img src="https://images.theconversation.com/files/213394/original/file-20180405-189816-1rxfzr1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa faces many economic challenges.</span> <span class="attribution"><span class="source">GCIS</span></span></figcaption></figure><p>South Africa’s new President, Cyril Ramaphosa, seems to have a lot going for him. His early new broom sweeps clean gestures have been incisive and the market indicators are responding well. A plethora of good news has come his way in the weeks since he was sworn in. </p>
<p>The rand has remained strong, and with it the steadying of the inflation rate – at 4% the <a href="https://www.businessinsider.co.za/inflation-slowed-down-to-a-mere-41-for-february-as-the-sa-economy-claws-out-of-political-paralysis-2018-3">lowest it’s been in three years</a>. This in turn allowed the South African Reserve Bank to cut interest rates by 25 basis points. Few things benefit a feel good effect better than downward movement in interest rates.</p>
<p>And <a href="https://www.iol.co.za/business-report/economy/sas-business-confidence-retreats-from-2-12-year-high-13638534">business confidence</a> is looking up. This could mean that companies use their high cash balances to invest.</p>
<p>Most critically, global credit rating agency <a href="https://www.thesouthafrican.com/moodys-credit-sa-avoids-junk-status/">Moody’s</a> maintained South Africa’s investment grade rating and upgraded the outlook of the country’s sovereign debt to stable. And while one of the other top three rating agencies, S&P, didn’t upgrade its sub-investment grading, it doubled its growth <a href="https://www.cnbcafrica.com/insights/sa-downgrade/2018/03/27/sp-raises-growth-outlook-south-africa/">forecast</a> for 2018 from 1% to 2%.</p>
<p>Also auspicious is the trajectory of the global economy, if <a href="https://www.fin24.com/Markets/Currencies/trumps-trade-war-could-hit-rand-through-oil-price-20180405">Trump’s trade war </a> can be contained. The <a href="http://www.worldbank.org/en/region/afr/brief/global-economic-prospects-sub-saharan-africa-2018">prospect</a> of continued economic growth across Africa and the huge improvement in the southern African environment with new leaders in Zimbabwe, Angola, Mozambique and South Africa, are also positive.</p>
<p>But Ramaphosa will have to do much more to rekindle growth, address deep inequalities and tackle corruption in the private and public sectors. Above all he must address policy uncertainty. This is affecting a range of key sectors from energy to telecoms, water mining and land.</p>
<p>The Ramaphosa government can’t do everything at once. There are seven key areas that South African’s new president should focus on to make some headway.</p>
<h2>The to do list</h2>
<p><strong>Fiscal stability:</strong></p>
<p>One critical challenge is maintaining macroeconomic stability – that means keeping the budget deficit within reasonable bounds and yet supporting economic expansion. So, he needs to be sure that any increases in government expenditure support growth and development.</p>
<p>But this won’t be easy given that the government has landed itself with a massive <a href="https://www.moneyweb.co.za/news/south-africa/sas-whale-sized-public-sector-wage-bill-approaches-a-cliff/">public sector wage bill</a>. Costs have gone up dramatically as a result of higher wage settlements as well as employment going up from 2.5 million go 3.2 million under Jacob Zuma.</p>
<p>It will be hard for Ramaphosa to bring this back under control given that he also needs to win over the labour movement in his mission to build a new social contract between government, labour and business.</p>
<p>At the same time, government has to attract capable professionals to deliver on its promises to replace talent lost during the frustrating Zuma years. Ramaphosa and his team will need to work hard to make public service an admired career proposition.</p>
<p><strong>Re-industrialisation:</strong></p>
<p>Ramaphosa has promised to getting industry going in South Africa again. This requires three key conditions: </p>
<ul>
<li><p>A relatively competitive currency (the rand should not get so strong that imports are favoured against domestic products). </p></li>
<li><p>interest rates must be low enough to encourage investment, especially by small firms.</p></li>
<li><p>Real wage rates must be linked to productivity increases – if wage increases run ahead of productivity growth, domestic producers will lose out to international competition.</p></li>
</ul>
<p>Ramaphosa might run into some difficulty here too given that he’s promised to forge a “social pact” with labour and industry. Striking deals between competing interests might get in the way of delivering these three key drivers.</p>
<p>But if he does, South Africa would have taken a real step towards a democratic developmental state, as <a href="http://www.jforcs.com/research-development-emerging-countries-case-study-mauritius-singapore/">Mauritius</a> did in the early 1970s and <a href="https://www.emeraldinsight.com/doi/full/10.1108/03068290610689714">Ireland</a> in the late 1980s. Both countries made social pacts in which government supported investment, business committed to investment, and labour agreed to limit wage demands to increases no greater than productivity increases. The result was sustained growth over several decades.</p>
<p><strong>State owned enterprises:</strong>
Ramaphosa has already made some bold moves by firing executives from key entities such as the state power utility Eskom and South African Airways. But tougher decisions will have to be taken. Operations will have to be rationalised and policies overhauled in key sectors such as energy, information and communication technologies, water and transport.</p>
<p><strong>Urban land:</strong>
Reallocating land in urban areas could reduce inequality and erode the spatial legacy of apartheid. Poor workers and their families continue to live great distances from places of work. Better located, safe and secure homes for workers and their families, and better public transport will improve livelihoods and lower employment costs. Access to suitable and secure urban homes would be a massive step forward for many, and a huge contribution to the reduction of inequality. </p>
<p><strong>Small business:</strong>
Government needs to act in a far more consistent, committed and coordinated way to support the small business sector. Currently responsibilities are split over several ministries. It also needs to ensure that the dead hand
of state monopolies and private oligopolies are lifted. Underpinning this should be a stronger commitment to supporting investment in new research and development.</p>
<p><strong>Skills:</strong>
Education – and skills – should be a central focus. </p>
<p>The greatest intervention to support skills development and reduce inequality in the longer term would be to take early childhood development funding seriously.</p>
<p>Secondly, the general quality of basic education is failing the country. This needs to be addressed. And the World Economic Forum has <a href="https://mybroadband.co.za/news/technology/171141-south-africa-finishes-last-in-wefs-2016-mathematics-and-science-education-ranking.html">downgraded</a> South Africa’s competitiveness ranking for the relatively low number of university graduates it produces. This needs to be reversed. </p>
<p>The commitment to free higher education for capable students from poor backgrounds is a bold step forward, but the universities need more and smarter investment in their capacity. </p>
<p>The skills training environment remains deficient, and needs a better relationship between the demand and supply (employers and training institutions) to get it to work efficiently. And a wiser policy on the skilled immigrants would help a great deal in the interim. </p>
<p><strong>Policy certainty:</strong>
More certainty is needed about policies on mining, land and black economic empowerment to encourage new investment. </p>
<h2>Tough road</h2>
<p>Ramaphosa has started brilliantly, in spite of the terrible state of the African National Congress (ANC) and the weakness of too many government institutions. Getting to serious, inclusive growth is going to demand a great deal of work by skilled policy makers working within effective social partnership agreements. </p>
<p>In view of the limited resources available to the government and considering the fragility of the ANC, he will need to prioritise and move systematically through the issues, all the while ensuring that his government maintains sufficient support.</p><img src="https://counter.theconversation.com/content/94352/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alan Hirsch does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>South Africa’s President, Cyril Ramaphosa, needs to quickly address key challenges to restart the economy.Alan Hirsch, Professor and Director of the Graduate School of Development Policy, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/922452018-02-22T11:25:10Z2018-02-22T11:25:10ZEfforts to get South Africa’s economy moving are no more than a patch up job<figure><img src="https://images.theconversation.com/files/207463/original/file-20180222-152372-x8679p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South African finance minister Malusi Gigaba could have done better in his 2018 budget speech.</span> <span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span></figcaption></figure><p>Its obvious that the South African government approached the <a href="http://www.treasury.gov.za/">2018 budget</a> from an extremely tight spot and with limited options. The country has been staring at the perfect storm of low economic growth and widening fiscal deficits set against huge expectations and needs. These include <a href="https://www.ujuh.co.za/south-africa-relies-on-new-taxes-to-fund-fee-free-higher-education/">fee-free higher education</a> for poor students, troubled state-owned enterprises and a growing base of the unemployed.</p>
<p>The saving grace may have been the recent <a href="https://theconversation.com/why-ramaphosas-moment-of-hope-is-built-on-a-fragile-foundation-92043">change in presidency</a> from the disastrous Jacob Zuma to the promising Cyril Ramaphosa. The new president has triggered a wave of optimism and there are signs that the economy is <a href="https://citizen.co.za/business/business-news/1829217/sas-economic-growth-forecast-revised-upward/">picking up</a>. This will be needed if Treasury is to find a way of closing a revenue gap of R48.2bn.</p>
<p>The focus by Malusi Gigaba, the minister of finance, on free education, developing industrialists and small to medium sized enterprises are to be welcomed. But one gets the sense that without the right policies in place, this is just more of the same. </p>
<p>Assuming that government is able to achieve the expenditure reduction of R85 billion, fund the R57 billion earmarked for higher education via increased <a href="https://theconversation.com/south-africas-finance-minister-played-the-tax-cards-he-had-left-wealth-and-vat-92230">Value Added Tax</a> (VAT) and marginal adjustments to personal income tax, the question remains; has it addressed the real reasons why the country has been limping along. It all sounds like a patch up job to me.</p>
<p>The increase in VAT from 14% to 15% is bad news, despite the promised offsets through social grants. VAT is generally known to be <a href="https://www.ujuh.co.za/south-africas-tax-system-and-the-reform-agenda-for-2015-and-beyond/">a regressive tax</a> which means it tends to hit the poor people the hardest.</p>
<p>On top of this, the budget just didn’t go far enough. Perhaps the finance minister was caught up in the euphoria of Ramaphosa’s widely welcomed <a href="https://theconversation.com/why-ramaphosas-moment-of-hope-is-built-on-a-fragile-foundation-92043">state of the nation address</a>. Gigaba’s speech didn’t do enough to highlight the consequences of not doing what needs to be done. He had a great opportunity to set the path, but there wasn’t an integrated outline as to what is needed, and how the changes proposed will be implemented in a way that makes sure they complement each other. </p>
<p>He had the chance to set the vision, but didn’t.</p>
<h2>Thin on detail</h2>
<p>The budget is very thin on detail. The power utility Eskom is clearly a great concern as reference to this was highlighted quite early on in the budget speech. The minister said:</p>
<blockquote>
<p>we have demonstrated our resolve by strengthening Eskom’s board and management with highly capable, ethical and credible leadership. </p>
</blockquote>
<p>Other than a brief mention of South African Airways (SAA), Gigaba made no reference to other stressed state owned enterprises such Passenger Rail Agency of South Africa and Denel. I was expecting more detail on how government plans to sort out the state owned enterprises mess.</p>
<p>The debt situation is frightening. The debt-service cost projections have gone up from R163.155 million in 2017/18 to R213.859 million in 2020/21. Even though he acknowledged that government debt is on an unsustainable path, he didn’t provide a clear outline about how the stabilisation of gross debt-to-GDP at 56.2% of GDP in 2022/23 will be achieved. This is just a case of kicking the can down the road.</p>
<h2>The fate of state owned enterprises</h2>
<p>Gigaba made a bold statement when he said:</p>
<blockquote>
<p>State-owned enterprises are expected to fund their own operations. </p>
</blockquote>
<p>The only clue as to how this will be achieved is that government would help them develop robust turnaround plans. </p>
<p>Gigaba also mentioned that non-core assets could be sold, strategic equity partners brought in or possible injections of direct capital. </p>
<p>This is all well and good. But the minster wasn’t clear about the time frame, who will drive the process or how it will be done. The lack of detail doesn’t inspire confidence that there is real political will to address the dire situation of state owned enterprises. </p>
<p>Gigaba did touch on the systemic issues like the unacceptably high levels of corruption. But he did not do so credibly enough. He didn’t demonstrate loudly and clearly that the government wouldn’t tolerate any more <a href="https://www.ujuh.co.za/state-of-capture-public-protectors-report/">transgressions</a> in the running of public funds. </p>
<p>The fact that he has a <a href="https://citizen.co.za/news/south-africa/1789778/gigaba-the-catalyst-behind-a-multibillion-rand-civil-claim-against-eskom-zuma-guptas/">cloud hanging over</a> his head does not help the situation. One can’t help but wonder if his proposals can be taken seriously. </p>
<p>What people want to see is the minster drawing a line in the sand and making it abundantly clear that it can no longer be crossed. As the person who controls the public purse, this message should have been loud and clear.</p>
<h2>Next steps</h2>
<p>Ramaphosa has the opportunity to assemble the most respected cabinet this country has ever known. The various summits that he is calling for – such as the one on jobs – and the social compact he’s intent on securing are absolutely essential to kick start South Africa on a growth path that is able to realise inclusive economy and socioeconomic transformation.</p><img src="https://counter.theconversation.com/content/92245/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Owen Skae does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>South Africa’s 2018 budget does not go far enough. Perhaps finance minister, Malusi Gigaba was caught up in the euphoria of the widely welcomed state of the nation address by Cyril Ramaphosa.Owen Skae, Associate Professor and Director of Rhodes Business School, Rhodes UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/920432018-02-19T12:13:17Z2018-02-19T12:13:17ZWhy Ramaphosa’s moment of hope is built on a fragile foundation<figure><img src="https://images.theconversation.com/files/206958/original/file-20180219-75967-1jt4sj5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa's new president, Cyril Ramaphosa has in his state of the nation speech inspired hope.</span> <span class="attribution"><span class="source">Reuters/Ruvan Boshoff</span></span></figcaption></figure><p>Coming after the extended period of uncertainty in South Africa resulting from Jacob Zuma’s <a href="https://www.iol.co.za/news/politics/zuma-refuses-to-resign-13255893">reluctance</a> to resign, Cyril Ramaphosa’s first state of the nation <a href="http://www.thepresidency.gov.za/speeches/state-nation-address-president-republic-south-africa%2C-mr-cyril-ramaphosa">speech</a> restored dignity and decorum to parliament, and pressed all the right buttons. </p>
<p>He was gracious to all (even giving thanks to Zuma for facilitating what the African National Congress (ANC) has termed “the transition”), before launching into the delivery of a peroration which proclaimed the breaking of a new dawn. South Africa’s <a href="https://www.newstatesman.com/world/africa/2018/01/do-south-africa-and-zimbabwe-s-new-leaders-represent-moment-hope">“moment of hope”</a>, which was to be founded on the legacy of Nelson Mandela, had returned. </p>
<p>Ramaphosa combined extensive tribute to the heroes of the ANC’s liberation struggle with the gospel of social inclusion according to the Holy Writ of the <a href="https://www.ujuh.co.za/remember-the-freedom-charter-what-it-actually-says/">Freedom Charter</a>. This was time to move beyond the recent period of discord, disunity and disillusionment. </p>
<p>The speech was delivered with panache and confidence. It had style, declaring to the nation and the world that he, Cyril Ramaphosa, was in charge. </p>
<p>But along with the style, there was the solid substance. The overall impression was that Ramaphosa intends to impose a new coherence and efficiency on government. Although acknowledging the calamity of the dismally low rate of economic growth, he was upbeat about the future, about the reviving fortunes of the commodities market, and the upturn in the markets.</p>
<p>Deservedly, Ramaphosa was to be allowed to enjoy the applause, as opposition members rose to their feet alongside the ANC MPs to give him a standing ovation which went far beyond ceremonial ritual. After the disaster of Zuma, it would seem to have given a massive fillip to South African pride and confidence. </p>
<p>It also gave the opposition parties a problem. With Zuma gone and a credible ANC president in place, they are facing an uphill electoral battle.</p>
<h2>The substance</h2>
<p>The new President committed to ensuring ethical behaviour and leadership, and to a refusal to tolerate the plunder of resources by public employees or theft and exploitation by private businesses. Critically, this would entail a transformation in the way that state-owned enterprises such as the power utility Eskom would be run. </p>
<p>There would be a new beginning at state-owned enterprises. They would no longer be allowed to borrow their way out of their financial difficulties. Competent people would be appointed to their boards, and there would be an appropriate distancing of their strategic role from operational management. And board members would be barred from any involvement in procurement. </p>
<p>This would be all part and parcel of a much wider reconfiguration of government, presumably a code for the reduction in the number of departments and a reduction in the size of ministerial ranks. </p>
<p>Ramaphosa also committed to hands-on government, promising that he would be visiting each department over the forthcoming year.</p>
<p>The forging of a social compact between government, business and labour would define the new era. A part of it would come from a new presidential economic advisory council. There would be summits for jobs and investment; convening of a youth working group to promote youth enterprise and employment and a summit for the social sector to forge a new consensus with NGOs and civil society. </p>
<p>This would add up to the construction of a “capable state” to foster much needed economic recovery. There would be concerted efforts to promote and aid small and medium business and revive manufacturing. Stress was laid on the importance of arriving at <a href="http://ewn.co.za/2018/02/19/ramaphosa-says-committed-to-holding-talks-on-mining-charter">consensus around a mining charter</a>, a document designed to guide transformation in this industry. </p>
<p>Due reference was made to preparing South Africa to embrace the fourth and fifth industrial revolutions and the encouragement of scientific innovation and new technology. And there was an explicit undertaking from Ramaphosa that he would take personal responsibility to ensure that social grants would get paid. And “no individual person in government” would be allowed to obstruct social grants delivery, a brutal albeit indirect put down of the minister concerned. </p>
<p>The one aspect of the speech which would have raised eyebrows among the Davos crowd was Ramaphosa’s re-iteration of the ANC government’s commitment to the expropriation of land without compensation as part of <a href="https://theconversation.com/is-south-africas-anc-bent-on-radical-policies-heres-why-the-answer-is-no-89801">radical economic transformation</a>. This highlighted the ANC’s proposed change to the constitution adopted at its recent national conference. </p>
<p>But that commitment was also <a href="https://theconversation.com/is-south-africas-anc-bent-on-radical-policies-heres-why-the-answer-is-no-89801">fudged</a> by linking any expropriation to ensuring agricultural production and food security. Cynics may argue that this was simply a form of words. In the context of Ramaphosa’s general investment seeking demeanour, agricultural capital and international business are unlikely to be unduly alarmed. But if they are wise, they will take it as a warning to come to the party of “social transformation”.</p>
<h2>A long game</h2>
<p>Ramaphosa has played a long game since he was <a href="https://www.news24.com/Books/book-extract-ramaphosa-and-the-massacre-at-marikana-20171126-2">passed over for president</a> in the mid-90s in favour of Thabo Mbeki. After playing a key role in crafting the constitution, he left politics, made a lot of money by spearheading the first round of black economic empowerment, and then returned to politics to play what must at times have been a mortifying role as deputy president under Zuma. He suffered a great deal of criticism for being complicit in the Zuma-era corruption because of his silence – silence he would have reckoned was necessary to secure his rise to the top.</p>
<p>Clearly, Ramaphosa is not above criticism. He is no saint. He lives in the shadow of the massacre of miners at <a href="https://www.news24.com/Books/book-extract-ramaphosa-and-the-massacre-at-marikana-20171126-2">Marikana</a>. Only towards the end of the ANC leadership race did he let fly against corruption and state capture. </p>
<p>Yet it could so easily have been so different. What would the mood have been now if Nkosazana Dlamini-Zuma had won the ANC leadership? Few would have been convinced that she would have been able or willing to leave the legacy of the corruption of the Zuma years behind. In contrast, although there is extensive acknowledgement that Ramaphosa will meet considerable opposition from within the ANC patronage machine if he is to realise his ambitions, he has indeed provided hope.</p>
<p>Yet the irony is that we need to pay due deference to David Mabuza, Premier of the province of Mpumalanga. If it had not been for his last moment tactic of throwing his provincial delegates’ votes behind Ramaphosa at the ANC conference to thwart a Dlamini-Zuma victory at the ANC national conference, South Africa would be having to face a very different future. </p>
<p>In true ANC style, the irony is that the moment of hope was facilitated by someone who has been portrayed, even from within the party, as <a href="https://www.dailymaverick.co.za/opinionista/2017-12-28-mpumalanga-a-thin-line-between-democracy-and-fascism/">a political hoodlum</a>.</p><img src="https://counter.theconversation.com/content/92043/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Roger Southall receives funding from the National Research Foundation</span></em></p>The speech was delivered with panache and confidence. It had style, declaring to the nation and the world that he, Cyril Ramaphosa, was in charge.Roger Southall, Professor of Sociology, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/893842018-01-07T10:32:04Z2018-01-07T10:32:04ZSettling the land compensation issue is vital for Zimbabwe’s economy<figure><img src="https://images.theconversation.com/files/200156/original/file-20171220-5004-18s09y5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">REUTERS/Siphiwe Sibeko</span></span></figcaption></figure><p>In his <a href="http://allafrica.com/stories/201711250043.html">inaugural address</a> the new President of Zimbabwe, Emmerson Mnangagwa, confirmed that land reform was both historically necessary and irreversible. He also made a commitment to compensate farmers who were forced off their land during the fast track land reform programme of the <a href="https://www.hrw.org/reports/2002/zimbabwe/ZimLand0302-02.htm">2000s</a>.</p>
<p>Many <a href="http://www.telegraph.co.uk/news/2017/11/24/emmerson-mnangagwa-set-sworn-new-zimbabwe-president/">international commentators</a> read this as a sign of a more inclusive stance that could benefit economic recovery. Indeed, the recent <a href="https://www.iol.co.za/saturday-star/news/white-farmers-get-land-back-in-zimbabwe-12320865">reinstatement</a> of an evicted white farmer is perhaps an indication that things are changing.</p>
<p>Mnangagwa has no option but to tackle land reform if he’s serious about getting Zimbabwe’s economy back on track. This is because agriculture continues to play a significant role.</p>
<p>Zimbabwe’s major <a href="http://www.tandfonline.com/doi/full/10.1080/03066150.2011.583642">land reform</a>, starting in the year 2000, resulted in around 6,000 farms owned by about 4,500 farmers and companies being taken over. Former owners, most of them white commercial farmers, were evicted, sometimes violently. </p>
<p>Today around 145,000 households occupy 4.1 million hectares under smallholder resettlement schemes. Another 3.5 million hectares are used by about 23,000 medium-scale farmers.</p>
<p>One of the new government’s major policy priorities has to be to get agriculture moving as a motor of growth. The long-running issue of <a href="https://zimbabweland.wordpress.com/2017/06/12/compensation-following-land-reform-four-big-challenges/">outstanding compensation payments</a> has meant that international donors and financiers have not engaged with land reform areas, missing out on supporting major development opportunities.</p>
<p>Agriculture remains a <a href="http://www.zimfa.gov.zw/index.php/zimbabwe-in-brief/agriculture">mainstay</a> of Zimbabwe’s economy. People on the resettlement farms are producing significant quantities of food and other agricultural products. For example, in <a href="https://theconversation.com/land-reform-is-a-zimbabwe-success-story-it-will-be-the-basis-for-economic-recovery-under-mnangagwa-88205">the last season</a> over half of the 2.2 million tonnes of maize produced in the country, as well as 60% of total <a href="https://www.timb.co.zw/">tobacco</a> output worth nearly USD$350 million, came from land reform areas. These numbers make it clear how vital they are to Zimbabwe’s struggling economy.</p>
<h2>Fixing the system</h2>
<p>Former commercial farmers held land under freehold title. In some cases <a href="http://www.zimbabwesituation.com/news/zimsit_govt-speaks-on-bippa-farms-the-herald/">bilateral investment agreements</a>, mostly with European countries, also governed ownership. Yet, as part of the reform, land was expropriated by the state and allocated to new users. Initially this was done without regard to these rights.</p>
<p>The lack of redress, and the ongoing contestation over ownership of land, has caused uncertainty. This in turn has affected growth and investment. Many western countries have refused to undertake work in these areas, linked to a wider sanctions regime. </p>
<p>Resolving the compensation question is vital for seeking a way forward for Zimbabwe’s agricultural sector.</p>
<p>Of course offering compensation is not a new policy. <a href="https://zimbabweland.wordpress.com/2017/06/12/compensation-following-land-reform-four-big-challenges/">Compensation for “improvements”</a> on the land has been on offer for years. It was reconfirmed by the <a href="https://zimbabweland.wordpress.com/2013/03/25/zimbabwe-has-a-new-constitution-but-disputes-over-the-land-provisions-continue/">2013 Constitution</a>, negotiated by all political parties.</p>
<p>To date around half of all farms acquired during land reform have been valued by the government. In parallel, others have been valued by private surveyors and <a href="http://www.valconzim.com/about-us">ValCon</a>, an organisation backed by former large-scale farmers.</p>
<p>So far around 250 compensation settlements have been reached, amounting to a payment of around USD$100 million.</p>
<p>For farms where land was acquired under <a href="http://bulawayo24.com/index-id-news-sc-national-byo-119043.html">bilateral investment treaties</a>, compensation for both land and improvements must be paid, adding to the costs.</p>
<p>What’s been missing has been the capacity to undertake valuations of the remaining farms; the funds to pay compensation; as well as the political will to see it through. </p>
<p>This may now have changed under Mnangagwa. A commitment has been made to a process of auditing, valuing and paying compensation, linked in turn to the issuing of <a href="http://www.financialgazette.co.zw/zimbabwe-law-offers-farmers-99-year-leases-with-access-to-loans/">99-year leases</a> and permits to use the land.</p>
<h2>Who will pay and how?</h2>
<p>The total compensation bill is likely to run into several billion dollars. Who will pay – and how – are the big questions. </p>
<p>A mix of payments across different liabilities will be required. </p>
<p>There will be private components, such as equipment that a new farmer is using, that will have to be paid off by larger-scale farmers. This payment can be done over many years through mortgaging arrangements, with upfront payments by the state to former owners.</p>
<p>For smallholder farmers, the “improvements” designed for large-scale farming have been less useful. And their ability to pay is much less. Here state or aid funding of compensation will be required.</p>
<p>Other public assets – such as a dam, a road, a building now being used as school or as an extension workers’ house – are more appropriately paid off by the state, or as part of a donor-financed or debt-rescheduling scheme.</p>
<h2>Quick resolution is essential</h2>
<p>Nearly 18 years after the land reform most evicted farmers want a quick, pragmatic solution. This has dragged on for too long. Former white farmers are ageing and are in urgent need of pension support. Others have moved on to different businesses or left the country. This is about acknowledgement, reconciliation and justice.</p>
<p>In a period when there have been currency changes, hyperinflation and dramatic shifts in the economy, valuation will always be an approximate science. While some will continue to contest the land reform in whatever court or tribunal that will hear them, most want resolution – and soon.</p>
<p>Resolving the compensation issue is essential not only to provide redress for those who lost their farms, but also to reduce uncertainty, encourage investment and unlock potential for growth and development.</p>
<p>Mnangagwa’s commitment is a good sign. But it now needs to be seen through, and urgently.</p><img src="https://counter.theconversation.com/content/89384/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ian Scoones receives funding from the UK Economic and Social Research Council through the ESRC STEPS Centre at Sussex. </span></em></p>The unresolved compensation of Zimbabwe’s evicted white farmers needs to be settled quickly, as it stands in the way of economic recovery.Ian Scoones, Professorial Fellow, Institute of Development Studies, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/889782018-01-04T13:16:55Z2018-01-04T13:16:55ZWhat needs to be done to make Africa politically stable<figure><img src="https://images.theconversation.com/files/199885/original/file-20171219-27557-1b7zdsq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Africa needs average economic growth of over 7% for several decades if it's to reduce poverty and increase income levels.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Levels of armed conflict flux and wane. In 2017, <a href="https://issafrica.org/research/books-and-other-publications/african-futures-key-trends">levels of high fatality violence</a> in Africa were significantly lower than during the immediate post-Cold War period. This trend has occurred in spite of the recent increases in terrorist associated fatalities in key countries such as Nigeria and Somalia. Even terrorist fatalities have declined since 2015.</p>
<p>But the continent is still witnessing an increase in social turbulence, unrest and protest. This is being driven by development, urbanisation and modernisation, all of which are inevitably disruptive. Development has been driven by the fact that, since 1994, Africa has experienced the longest sustained period of growth since decolonialisation in the sixties.</p>
<p>The other major factor driving unrest is the fact that <a href="https://issafrica.org/events/the-future-of-democracy-in-africa">democracy is expanding on the continent</a>. Pressure is mounting on autocracies. We therefore shouldn’t be surprised by widespread violence in countries ranging from the Democratic Republic of the Congo (DRC) to Burundi and Uganda. And in countries run by small elites or a family – such as Gabon, Cameroon and Equatorial Guinea. </p>
<p>In the long term only rapid, inclusive economic growth combined with good governance can make Africa less volatile. </p>
<p>But how can it achieve this? What’s needed is a combination of sound economic policies, an attack on corruption and theft by ruling elites, a deepening of democracy and a rethink of the approach taken to the threat of terrorism.</p>
<h2>The economics</h2>
<p>At current population growth Africa needs average economic growth rates in excess of 7% per year for several decades if it’s to reduce poverty and increase average levels of income. This is unlikely. <a href="http://pardee.du.edu/understand-interconnected-world">Current forecasts</a> estimate average rates of growth of around half of that. </p>
<p>Perhaps more importantly, Africa needs to find ways of reaping its demographic dividend – that is decreasing the number of dependants, mostly children, compared to persons of working age (15 to 65 years of age). Traditionally this is best achieved through improvements in female education, but the provision of water, sanitation and access to contraceptives can play a huge role. This is reflected in a recent study we did on <a href="https://issafrica.org/research/books-and-other-publications/ethiopia-development-trends-assessment">the future of Ethiopia</a> that has seen more rapid reductions in fertility rates than other countries at similar levels of development. </p>
<p>Africa also needs to place employment in formal sector at the centre of government policy. This, in turn, requires diversification of African economies as well as much higher levels of foreign investment and engagement. </p>
<p>When it comes to investment and development aid the Institute for Security Studies <a href="https://issafrica.org/research/africa-in-the-world-report/fertility-growth-and-the-future-of-aid-in-sub-saharan-africa">found that</a> middle income countries are making progress in attracting foreign direct investment, but poor countries remain aid dependent. </p>
<p>Although aid is going out of fashion in favour of measures to involve the private sector, it will remain important for low income countries. It allows governments to deliver services such as water, sanitation and education more than they would otherwise be able to do. These investments in human capital development will deliver large benefits and will have long term positive effects.</p>
<p>Another area of focus should be on supporting the rule of law and the delivery of effective taxation systems. Basics such as national identity systems, effective border control and a functioning criminal justice systems are often absent. </p>
<h2>Democracy, extremism and security responses</h2>
<p>Many people across a wide range of countries on the continent are stepping up their <a href="http://afrobarometer.org/publications/pp36-do-africans-still-want-democracy">demands for more democracy</a>. Despite many setbacks, democratisation continues to advance year on year. </p>
<p>Doing these two things simultaneously – building government capacity and responding to demands for democracy – is difficult. Marginalisation, a lack of voice, a lack of accountability often lies at the heart of instability in a continent that has experienced autocracy and bad governance for decades. </p>
<p>Regional organisations (such as the Southern African Development Community and the Central African Economic Monetary Community need to take accountable governance seriously.</p>
<p>Unless this happens, there’s a real danger that the draw of extremist groups will escalate. </p>
<p>Accountable governance should also extend to the security sector where reform is perhaps the single most important component in countering violent extremism. the continent’s military, policy, gendarme and intelligence systems are generally not held to account, they act with impunity and are often the source of many problems. Instead of protecting and serving they kill, loot and rape.</p>
<p>Both the <a href="https://issafrica.org/about-us/press-releases/lessons-from-africa-on-terrorism">ISS</a> and the <a href="http://journey-to-extremism.undp.org/en/reports">UNDP</a> have concluded that action by security forces – such as the killing or arrest of a family member – often serves as the tipping point that triggers the final decision to join an extremist group. </p>
<p>In addition, Africa seems to have bought into the US war on terror approach which is to rely on the military. In fact, terrorism requires an intelligence, prosecution, and rule of law approach. African countries would be well advised to revert to an intelligence and policing response rather than a military response to terrorism.</p>
<p>Radicalisation is also fuelled by corruption, theft by ruling elites and tax havens. Africa needs to work with the rest of the world to end tax havens, tax avoidance and money laundering. </p>
<h2>Fight for a rules-based world</h2>
<p>African countries need to intensify their efforts towards a rules based world, including reform of the UN Security Council, which sits at the apex of global security governance. </p>
<p>But the continent needs to stop hiding behind the <a href="http://www.un.org/en/africa/osaa/pdf/au/cap_screform_2005.pdf">Ezulwini consensus</a> – this is the common position taken by African countries on UN reform that advocates for two permanent seats with veto rights and five non-permanent seats for Africa - and start thinking <a href="http://www.electthecouncil.org">outside the box</a>. </p>
<p>Real reform is possible, but it would require a different approach, including ending the system of veto and permanent seats.</p><img src="https://counter.theconversation.com/content/88978/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jakkie Cilliers does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Africa is still witnessing an increase in social turbulence, unrest and protest. Only rapid, inclusive economic growth combined with good governance can make the continent less volatile.Jakkie Cilliers, Chair of the Board of Trustees and Head of African Futures & Innovation at the Institute for Security Studies. Extraordinary Professor in the Centre of Human Rights, University of PretoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/894202017-12-20T13:19:19Z2017-12-20T13:19:19ZWhat does Ramaphosa’s victory mean for South Africa’s economy?<figure><img src="https://images.theconversation.com/files/200169/original/file-20171220-4965-jar8k2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">New ANC President Cyril Ramaphosa shortly after hearing he'd been elected to the top job.</span> <span class="attribution"><span class="source">EPA/Kim Ludbrook</span></span></figcaption></figure><p><em>A great deal is expected from Cyril Ramaphosa who was elected as the president of South Africa’s governing party, the African National Congress (ANC). This positions him to become the country’s president in 2019. Sibonelo Radebe asked Owen Skae to consider the implications of Ramaphosa’s victory.</em></p>
<p><strong>What does Ramaphosa’s victory represent in political economy terms?</strong></p>
<p>Judging by his track record and statements he made during the height of his campaign, Ramaphosa promises to ring in changes that will jump start the struggling South African economy. Brought to its knees by the recklessness of the Jacob Zuma presidency, the South African economy needs a new deal. Ramaphosa has <a href="https://www.iol.co.za/business-report/economy/ramaphosas-plans-for-saving-the-sa-economy-12473140">promised</a> exactly that.</p>
<p>Ramaphosa has the advantage of bringing a deep understanding and strong networks of business and organised labour to the position. So he has a better chance of getting business and labour to commit to a compact that can deliver economic growth and job creation.</p>
<p>Clearly <a href="http://ewn.co.za/2017/12/18/rand-firms-after-ramaphosa-victory">the market</a> likes him. His election saw the country’s currency <a href="https://www.businesslive.co.za/bd/markets/2017-12-19-jse-rallies-to-two-week-high-as-investors-cheer-ramaphosa-victory/">strengthen</a> and the stock market has shown <a href="https://www.businesslive.co.za/bd/markets/2017-12-19-jse-firms-as-banks-and-retailers-rocket-amid-ramaphosa-rand-rally/">above average activity</a> for this time of the year. Even <a href="https://businesstech.co.za/news/business/217135/ramaphosas-win-a-good-start-to-fight-junk-status-moodys/">credit rating agencies</a> are getting a little excited.</p>
<p>But it’s not going to be a walk in the park for Ramaphosa as his ANC presidency comes with a divided <a href="https://www.news24.com/Analysis/analysis-ramaphosa-wins-but-zumas-faction-remains-in-power-20171218">top leadership team</a>. Three of the party’s elected top six leaders come from the camp that backed Nkosazana Dlamini-Zuma as president. This is likely to make it difficult to take certain critical decisions. For example, many people were hoping that Ramaphosa would immediately recall Zuma as the first step, restoring the office of the presidency and undoing the economic damage he has caused. This is now unlikely to happen given the balance of power in the top six.</p>
<p><strong>What does he need to do to make his mark?</strong></p>
<p>The biggest challenge he faces is managing the two centres of power: he holds sway in the party as president while Zuma holds sway over the executive as president of the country until elections in 2019. This could cause infighting. Given Zuma’s reaction to Ramaphosa’s <a href="https://citizen.co.za/news/south-africa/1763208/video-zumas-stony-faced-reaction-to-ramaphosas-election-victory/">victory</a>, it is clear that cabinet meetings are likely to be a frosty affair. This 18-month period leaves time for Zuma and his supporters to continue their destructive path of self-interest in government – that is, unless the ANC recalls him.</p>
<p>I’m of the view that Ramaphosa needs to push for Zuma to be recalled by the ANC as soon as possible and then fire all conflicted ministers and bring back those with the best credentials to manage the economy. He has the opportunity as deputy president to appoint a respected director of the <a href="https://www.news24.com/SouthAfrica/News/ramaphosa-must-appoint-new-npa-head-as-court-rules-abrahams-must-vacate-office-20171208">National Prosecuting Authority</a>.</p>
<p>Leaving Zuma to act as if it is business as usual might have dire consequences for Ramaphosa. The prevailing battles surrounding the National Treasury and the budgetary process are case in point. </p>
<p>The most recent of these is Zuma’s stunning announcement that the government will deliver free higher education for about 90% of South African students from next year. He announced this populist move against advice that it will place enormous pressure on the fiscus. It has placed the National Treasury in an unenviable position of having to accommodate <a href="https://www.dailymaverick.co.za/article/2017-12-18-analysis-what-cost-the-presidents-free-tertiary-education-plan/#.WjpSW1WWbIU">an unrealistic demand</a> in the next budget which is due in February.</p>
<p>If it’s allowed to go through, the negative consequences will be felt for years to come. Ramaphosa must find a way to stop this financially reckless decision, but also address the legitimate demands students have made of the state.</p>
<p>Another financially senseless decision he needs to find a way to tamper with is Zuma’s plan to commit the country to a <a href="https://www.news24.com/SouthAfrica/News/president-zuma-remains-committed-to-nuclear-project-and-russia-20171105">plan for nuclear power</a>.</p>
<p>Whatever he does, Ramaphosa will have to show his hand soon enough; otherwise those within the ANC who wish to oust him will make his task as difficult as possible. </p>
<p><strong>What could undermine Ramaphosa’s term?</strong></p>
<p>He still hasn’t dealt with the <a href="http://www.sahistory.org.za/article/marikana-massacre-16-august-2012">Marikana tragedy</a> when striking mineworkers were shot dead by the police. The workers came from Lonmin, a platinum mining group in which Ramaphosa had a shareholding and served as a director. He can be sure that he will be reminded of this event many times during his presidency. </p>
<p>He did issue an <a href="https://www.news24.com/SouthAfrica/News/ramaphosa-apologises-for-role-in-marikana-massacre-20170507">apology</a> but I think it was not impassioned enough. This speaks to a question of trust. His detractors will always question his bona fides given that he started life as a trade unionist before becoming a billionaire businessman. </p>
<p>He will also be challenged on why he didn’t do more to address <a href="https://za.investing.com/news/stock-market-news/newsmakernearly-man-ramaphosa-edges-closer-to-south-africas-top-job-922913">corruption</a> while serving as deputy president.</p>
<p>Of course the easiest way to silence critics is to move decisively to deliver solutions to the country’s problems.</p><img src="https://counter.theconversation.com/content/89420/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Owen Skae does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Brought to its knees by the recklessness of the Zuma presidency, the South African economy needs a new deal. The ANC’s new leader Cyril Ramaphosa needs to act quickly if he’s going to make his mark.Owen Skae, Associate Professor and Director of Rhodes Business School, Rhodes UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/877772017-11-30T17:02:23Z2017-11-30T17:02:23ZSouth Africa should prepare for the worst case scenario: seeking help from the IMF<figure><img src="https://images.theconversation.com/files/196902/original/file-20171129-29143-lhq89b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">IMF Managing Director Christine Lagarde at the "G20: Compact With Africa".</span> <span class="attribution"><span class="source">Reuters/Mike Theiler</span></span></figcaption></figure><p>Prudence teaches that societies experiencing difficult and uncertain times should hope for the best but prepare for the worst.</p>
<p>South Africa should take this lesson seriously. It is facing a serious crisis. South Africa’s economy is <a href="https://theconversation.com/whats-at-stake-in-south-africas-new-finance-ministers-first-budget-85643">growing too slowly</a> to address its profound <a href="https://theconversation.com/a-shift-in-thinking-is-needed-to-counter-south-africas-startling-rise-in-poverty-83462">challenges</a> of poverty, inequality and unemployment. Social tensions are rising. Business is not transforming quickly enough. The <a href="https://theconversation.com/how-corruption-is-fraying-south-africas-social-and-economic-fabric-80690">governance and solvency</a> of key state-owned enterprises (SOEs) are collapsing. Government finances are deteriorating. <a href="https://www.iol.co.za/business-report/slip-in-south-african-credit-ratings-calls-for-reform-12168661">Credit downgrades</a> may limit government access to finance. The <a href="https://theconversation.com/eskom-ceo-saga-highlights-massive-systems-failure-in-south-africa-78432">institutions of governance</a> are decaying. The complex political situation is paralysing policymaking. </p>
<p>Countries facing analogous crises of confidence like Nigeria, Poland and Turkey have had to seek IMF support.</p>
<p>South Africa can hope that the situation will improve. But it should also plan for the possibility that it will not and that confidence in the government’s ability to manage its deteriorating financial situation will evaporate. This will lead to both higher borrowing costs and reduced access to financing for the government and state owned enterprises. It could also lead to state owned enterprises defaulting on their debts and their creditors calling in their government guarantees. As government loses the ability to fund its operations, it will be forced to turn to the IMF. It is the one organisation that can help it regain access to financing – on condition that South Africa agrees to implement an IMF approved set of reforms. </p>
<p>No-one wants an IMF programme for South Africa. First, it means the government accepting an outsider, dominated by rich countries, overseeing its economic policies. Second, IMF support will be conditioned on the country agreeing to painful reforms such as:</p>
<ul>
<li><p>Reducing the government’s budget deficit and the current account deficit so that it can meet its financial obligations</p></li>
<li><p>Deregulation and labour market reforms designed to encourage investment. </p></li>
</ul>
<p>But if South Africa begins preparing for this possibility it may be able to mitigate its worst effects and be ready to exploit whatever opportunities it creates. </p>
<h2>Negotiating with the IMF</h2>
<p>The South African government has considerable experience dealing with the IMF, which regularly visits each of its member states to consult about the state of its economy— the most recent <a href="http://www.imf.org/en/News/Articles/2017/11/08/pr17428-southafrica-imf-staff-concludes-visit">IMF mission visited South Africa</a> in early November. However, it is over <a href="https://theconversation.com/why-south-africa-shouldnt-turn-to-the-imf-for-help-82027">20 years</a> since South Africa negotiated a financing arrangement with the IMF. </p>
<p>Unless challenged, the IMF is likely to condition its financial support on a standard recipe of reforms. However, over time the IMF has become more amenable to supporting the programmes proposed by its member states. It has learned that, while there are similarities between macro-economic crises in different countries, there is more than one strategy for resolving such crises. In fact, the optimal solution depends on each country’s institutional arrangements, history, and particular economic, social, environmental and political characteristics. It also depends on the impact of macro-economic policies on such social factors as gender, equity and environmental and social sustainability. </p>
<p>Yanis Varoufakis, former Greek finance minister, reports in his <a href="https://www.ft.com/content/3d1a3470-f720-11e5-803c-d27c7117d132">book</a> on his experiences negotiating with Greece’s creditors that countries like Poland, through careful planning and shrewd negotiations, were able to convince the IMF to follow their plan rather than the IMF’s standard approach. His book also shows that the cost of failing to prepare adequately for negotiations like these can be very high indeed. </p>
<p>So what should South Africa do to ensure that it gets the best possible deal?</p>
<p>First, South Africa must establish clear and realistic objectives for the plan that it wants the IMF to support. Second, it must get its diplomatic ducks in a row so that it can strike the best possible deal.</p>
<h2>Fixing the budget</h2>
<p>As a priority South Africa should focus on restoring a sustainable budget situation. This will require government to make some painful policy choices about levels of expenditures as well as the purposes for which funds are allocated. </p>
<p>The government can build confidence in these choices if it can show that:</p>
<ul>
<li><p>the benefits exceed the costs and that the costs are being equitably shared. </p></li>
<li><p>Policy choices are based on both the human rights imperatives stipulated in the South African Constitution and on promoting growth.</p></li>
<li><p>it’s serious about addressing the governance problems in state owned enterprises and government departments. </p></li>
<li><p>it is complying with the legal procedures applicable to government finances and the open budgeting processes that it used in the past. </p></li>
</ul>
<p>Finally, government must encourage other social actors – such as business and labour who have contributed to the crisis – to help mitigate the pain. A demonstration of broad support would help convince the IMF to support the government’s strategy. </p>
<h2>Diplomacy</h2>
<p>As Varoufakis’ experience shows, the cost of under-estimating the impact of international economic diplomacy on the outcomes of complex international financial negotiations can be unacceptably high. </p>
<p>The South African government must therefore prepare to sell its programme to the IMF. This requires it to appoint negotiators who have a good understanding of both the IMF as an institution and global financial diplomacy. They can make the South African case in the way that is most likely to convince the IMF staff and Board of Executive Directors to support the South African programme. </p>
<p>These negotiators should also seek to exploit all the benefits that South Africa can harvest from its membership in the institutions of global economic governance. For example, they can tap the experience and expertise of groups like the G24, a lobby group for the interests of IMF developing member states in which South Africa participates, to help it prepare for these negotiations. </p>
<p>They can also draw on the stores of information in international organisations like the IMF, the World Bank and the African Development Bank that have had extensive experience dealing with developing countries facing macro-economic crises. Access to this information should be a benefit of membership. The executive directors that represent South Africa at these institutions can help the government gain access to this information and, if appropriate, identify the relevant experts to consult.</p><img src="https://counter.theconversation.com/content/87777/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Danny Bradlow's SARCHI Chair is supported by the National Research Foundation. </span></em></p>South Africa will be well advised to start preparing itself for an International Monetary Fund programme as the country faces a deepening economic crisis.Danny Bradlow, SARCHI Professor of International Development Law and African Economic Relations, University of PretoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/880422017-11-24T11:40:41Z2017-11-24T11:40:41ZDebunking the UK’s productivity problem<figure><img src="https://images.theconversation.com/files/196194/original/file-20171123-18006-14ohrd8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hyper-efficient.</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>Productivity – or the UK’s lack of it – is the cause of the country’s economic woes. We have been told this by countless politicians and commentators. And the focus on Britain’s “productivity puzzle” is back in the headlines thanks to the latest budget. The UK’s latest productivity and growth forecasts have been <a href="http://www.independent.co.uk/news/business/news/budget-2017-latest-uk-productivity-growth-economic-forecast-gdp-philip-hammond-statement-a8069321.html">slashed</a>, such that the leading IFS think tank now predicts two decades of <a href="https://www.theguardian.com/business/2017/nov/23/uk-no-earnings-growth-budget-brexit-productivity-ifs">no earnings growth</a>. </p>
<p>A similar story tends to be recycled every time growth forecasts change or data comparing the G7 countries or regions within the UK is released. Phrases <a href="https://www.gov.uk/government/speeches/autumn-statement-2016-philip-hammonds-speech">like</a>: “It takes a German worker four days to produce what a British one does in five.”</p>
<p>But how is productivity the cause of the UK’s problems and what does this statement actually mean? Unfortunately very little, because the term is used inconsistently. There are different measures of productivity and the nature of the UK’s problem depends on which one we are looking at and how it is being used.</p>
<h2>Different definitions</h2>
<p>At its base, productivity is a measure of output over input. The most commonly used measure of output is value-added. Literally the value added to goods and services produced in the UK, calculated as the monetary difference between what is sold and the intermediate goods used in its production. </p>
<p>The most commonly reported input is the number of workers or worker-hours. When combined this gives us a measure of labour productivity, calculated for each industry and aggregated for a region or the whole economy. So far, so good. However, there are some more crucial distinctions, depending upon how labour productivity is used.</p>
<p>If we compare the performance of the UK with other countries or that of London with other parts of the UK, this requires making the comparison at the same point in time. In this case national statistical offices use current price measures of value-added. They use prices in each country at the point of comparison, converted into a common currency (usually US dollars) and adjusted for what these can buy in each place. This is called purchasing power parity or PPP. </p>
<iframe src="https://datawrapper.dwcdn.net/ZgnFx/1/" scrolling="no" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="435"></iframe>
<p>Hence, what we are saying when we say that London is more productive than Carlisle in the north of England or that the UK is less productive than Germany, is that the value-added at current prices produced per hour worked in those places (what economists would call nominal productivity) is different. This is likely to depend largely upon the activities that are being performed in each place. </p>
<p>If some highly lucrative activities are concentrated in one part of the country – say financial and professional services in London – or within a country – think of complex manufacturing across Germany – then this will strongly influence the current price productivity data. The fact that the UK lags behind other countries on this measure reflects what goods and services it produces and the prices it can command for them versus what it has to pay for intermediate inputs. </p>
<p>So some of what the UK produces may be attributable to the skills of workers – but clearly the UK has wider historical issues regarding the types of industry it has and the geographical diversity of its economy. It is misleading to label this a productivity problem.</p>
<h2>Skills and efficiency</h2>
<p>A second way that labour productivity is used is to chart its change or growth over time. This calculation involves fixing prices at some point in time and calculating the change in the quantity of output produced to give a real measure of value-added. Hence if real labour productivity is increasing at 3% per year, a country is producing 3% more actual goods and services per hour worked than it was before, independent of price changes. </p>
<p>It is this calculation that is reflected in the growth of the economy and increases living standards. It is often interpreted as a measure of the increasing efficiency of workers but we must bear in mind that how work is organised, what equipment workers have, how skilled and well-trained they are and how close to capacity the economy is operating will all affect this measure. Also, certain industries have greater propensity for automation, which is <a href="https://hbr.org/2015/06/robots-seem-to-be-improving-productivity-not-costing-jobs">central to increasing productivity</a>.</p>
<p>Unfortunately, since the financial crisis productivity growth across the G7 has been much lower than it was prior to it – which has raised questions regarding how realistic prior measurement was, particularly in financial services, and whether the world has entered an era of slower technological progress. The UK’s productivity fall was steeper and its rebound weaker than in <a href="https://www.ons.gov.uk/economy/economicoutputandproductivity/productivitymeasures/bulletins/internationalcomparisonsofproductivityfinalestimates/2015">comparison countries</a>. </p>
<p>This might be due to a number of reasons: low capital investment, poor skills, the high employment rate and low interest rates keeping inefficient companies afloat. No single explanation is currently winning the day. I would, however, urge readers to think about which measure of productivity is being used and what it means the next time we are told that the UK’s economic woes are due to poor productivity.</p><img src="https://counter.theconversation.com/content/88042/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul Lewis does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>There are different measures of productivity and the nature of the UK’s problem depends on which one we are looking at.Paul Lewis, Senior Lecturer in Political Economy, Birmingham Business School, University of BirminghamLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/841462017-09-28T18:46:22Z2017-09-28T18:46:22ZHow land reform and rural development can help reduce poverty in South Africa<figure><img src="https://images.theconversation.com/files/187171/original/file-20170922-13425-70orxn.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Rural poverty affects a growing number of people in South Africa.</span> <span class="attribution"><span class="source">REUTERS/Mike Hutchings</span></span></figcaption></figure><p>South Africa will need to review its land reform policy, with an eye to boosting productive land use among the rural poor, if it is to push back rising poverty levels.</p>
<p>The country’s <a href="https://theconversation.com/a-shift-in-thinking-is-needed-to-counter-south-africas-startling-rise-in-poverty-83462">poverty levels</a> have increased sharply over the past five years with an additional 3 million people now classified as living in absolute poverty. This means about 34 million people from a population of 55 million <a href="http://www.statssa.gov.za/?p=10334">lack basic necessities</a> like housing, transport, food, heating and proper clothing.</p>
<p>Much of the commentary on these sad statistics has emphasised the poor performance of urban job creation efforts and the country’s education system. Little has been said about the role of rural development or land reform.</p>
<p>This is a major omission given that about <a href="https://data.worldbank.org/indicator/SP.RUR.TOTL.ZS">35%</a> of South Africa’s population live in rural areas. They are among the worst affected by the rising poverty levels. </p>
<p>Large tracts of land lie fallow in the country’s rural areas, particularly in former homelands (surrogate states created by the apartheid government). They were fully integrated into South Africa in 1994 bringing with them large amounts of land under traditional authorities.</p>
<p>Research by the Human Sciences Research Council suggests that poverty levels can be pushed back significantly if policies are put in place that focus on food security and creating viable pathways to prosperity for the rural poor. This would be particularly true if land reform helped people develop the means of producing food, generating value and employing people. </p>
<h2>The problem</h2>
<p>Researchers <a href="http://www.hsrc.ac.za/uploads/pageContent/624/Poverty.pdf">investigating</a> the land needs of marginal communities, such as farm workers and rural households in the former homelands, have uncovered a considerable desire for opportunities on the land.</p>
<p>But they found that municipalities, government departments and banks were offering relatively little assistance to poorer would-be farmers seeking to improve their land and its value. </p>
<p>In the former homelands in particular, many families reportedly felt opportunities existed literally on their doorsteps but they lacked the means and support to grasp them. A common response among young people to the absence of such opportunities is to pick up and leave for the cities.</p>
<p>The need to rekindle rural development in South Africa is widely recognised even within the government. The country has lots of policies that speak to the ideal of lifting the rural poor out of poverty. Some policies are just not followed while others have proven to be inappropriate.</p>
<p>A fundamental problem underpinning successive rural development initiatives has been the split between the two main strands of government land reform policy: <a href="http://www.sahistory.org.za/article/land-restitution-south-africa-1994">land restitution</a> and <a href="http://www.plaas.org.za/plaas-publication/FC01">land redistribution</a>. </p>
<p>Land restitution was largely conceived as a means of addressing the colonial legacy of land dispossession. For its part, land redistribution was mainly designed to create a new class of black commercial farmers who would inherit existing white commercial farms. </p>
<p>Neither has been successfully implemented. Land restitution has been painfully slow, while land redistribution has been criticised for becoming increasingly <a href="http://www.fin24.com/Economy/South-Africa/land-reform-is-captured-20170224">elitist</a>. </p>
<p>To advance land redistribution the government put in place a land acquisition <a href="http://www.plaas.org.za/sites/default/files/publications-pdf/PP%2006.pdf">strategy</a> that acted as an enabler for entrepreneurs who wanted to get into large-scale, commercial agriculture. Once again the poor were left at the margins. </p>
<p>In the early years of democracy, the African National Congress adopted a <a href="http://www.cls.uct.ac.za/usr/lrg/downloads/Factsheet_CommunalTenure_IPILRA_Final_Feb2015.pdf">“do no harm”</a> approach in relation to land tenure in the former homelands. The reasoning was that this land served as a bulwark against poverty. </p>
<p>But that policy appears to have shifted to focus on bolstering the power of local chiefs to oversee land use. The ruling party is leveraging the clout of the chiefs to secure rural constituency <a href="https://www.nytimes.com/2016/04/07/world/africa/jacob-zuma-under-siege-finds-political-refuge-in-rural-south-africa.html">support</a> during elections.</p>
<p>A sharp historical irony is that the present government is arguably reproducing patterns of land ownership that were originally justified by the <a href="https://www.africaresearchinstitute.org/newsite/publications/briefing-notes/land-law-and-traditional-leadership-in-south-africa/">colonial ideology</a>.</p>
<h2>What must be done</h2>
<p>A range of different models could be adopted in different localities. Recently there’s been a significant rise in the establishment of informal land markets. </p>
<p>This indicates that disregarded rural land has substantial value. But this value is being undermined by a lack of appropriate titling opportunities and land management systems.</p>
<p>What is required is a single and inclusive land reform programme. It must view all land as economically valuable and aim to maximise its potential without undermining people’s social and cultural rights and expressions of identity and belonging. Such a programme should recognise that unused land can be used to address poverty and stimulate growth if it is incorporated into rural value chains.</p>
<p>And to make farming easier and more worthwhile new mechanisms and arrangements must be designed to release productive land currently locked up in customary practices. Although individualist freeholding is an inadequate and often wildly inappropriate alternative to present tenure practices, chiefs and communities should be held accountable if they appear unable to improve their land.</p><img src="https://counter.theconversation.com/content/84146/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tim GB Hart does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article. He has previously received funding from the Department of Science and Technology, the Department of Rural Development and the Belgian Technical Cooperation.
</span></em></p><p class="fine-print"><em><span>Leslie J. Bank does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>South Africa should review its rural development strategy and land reform policy to win the fight against rising poverty.Leslie J. Bank, Deputy Director in Economic Development and Professor of Social Anthropology, Human Sciences Research CouncilTim GB Hart, Senior Research Project Manager and Rural Sociologist, Economic Performance and Development, Human Sciences Research CouncilLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/828602017-09-05T14:44:17Z2017-09-05T14:44:17ZObsession with growth won’t help South Africa’s economic recovery<figure><img src="https://images.theconversation.com/files/184552/original/file-20170904-17292-rj9c0l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Unemployed South African workers wait for scarce jobs as the economy struggles to create employment. </span> <span class="attribution"><span class="source">EPA/NIC BOTHMA</span></span></figcaption></figure><p><em>Faced with a growing economic crisis, South Africa’s new Finance Minister, Malusi Gigaba, has come up with a <a href="http://www.treasury.gov.za/comm_media/press/2017/2017071301%20Government%E2%80%99s%20inclusive%20growth%20action%20plan.pdf">14 point plan</a> to turn the country’s economic fortunes around. Sibonelo Radebe asked Mohammad Amir Anwar to assess the plan.</em></p>
<p><strong>How do you rate the recovery plan?</strong></p>
<p>It’s still early days but one thing is clear. The plan was put in place as a response to the <a href="https://theconversation.com/what-a-downgrade-means-for-south-africa-and-what-it-can-do-about-it-75704">credit rating downgrades</a> experienced in the second quarter of 2017. It comes with a greater focus on monetary and fiscal frameworks, a slippery area which has served <a href="https://theconversation.com/why-south-africa-should-undo-mandelas-economic-deals-52767">neo-liberal agendas</a> in the post-1994 South Africa.</p>
<p>Instead of focusing on policies that allow redistribution of wealth and creating sociopolitical and economic opportunities for those who were left out of the system, successive ANC governments have been obsessed with neo-liberal dictates which have served to <a href="http://www.sahistory.org.za/sites/default/files/file%20uploads%20/professor_jeremy_seekings_nicoli_nattrass_classbookos.org_.pdf">maintain</a> apartheid inspired economic structures.</p>
<p>It’s unfortunate that Gigaba is still toeing the neo-liberal line despite all his political <a href="http://ewn.co.za/2017/06/30/gigaba-says-drastic-measures-needed-to-growth-sa-s-economy">rhetoric</a>, including a call for <a href="https://mg.co.za/article/2017-05-09-mps-grill-gigaba-on-radical-economic-transformation">radical economic transformation</a>. </p>
<p>This neo-liberal approach assumes that economic growth is the sole criterion to put the country back on the right track. This <a href="https://theconversation.com/growth-is-dying-as-the-silver-bullet-for-success-why-this-may-be-good-thing-78427">obsession with growth</a> means that the focus is on short-term fiscal and monetary issues to gain the confidence of investors in the economy. Testament to this are the short deadlines of the plan and the accompanying narratives. These include <a href="http://www.huffingtonpost.co.za/2017/07/13/governments-economic-growth-action-plan-gigabas-speech-in-f_a_23027748/">references</a> to reforms that “would support both businesses and consumer confidence, thereby laying the foundation for an economic recovery”.</p>
<p>It would seem that not much thinking has gone into changing the underlying structures of the economy for the long-term. </p>
<p><strong>What are the most positive elements of the plan?</strong></p>
<p>The minister has spoken about including different stakeholders in the recovery plan, which seems to be a good approach. South Africa’s history of segregation needs to be met with inclusive policies. Public consultations with key stakeholders and consensus must be key to any recovery plan.</p>
<p>The plan to tackle non-performing <a href="https://www.businesslive.co.za/rdm/business/2017-03-24-sinking-fast-the-perilous-state-of-sas-six-big-state-owned-companies/">state-owned enterprises</a> is very encouraging. But reckless recapitalisation by injecting public money into non-performing entities will only divert government resources, which could otherwise be used to help poor and marginalised people. </p>
<p>Government should realise that fixing troubled state-owned enterprises requires deep restructuring of the way they are operated and led. Boards that are part of the problem in terms of incompetency and corruption must be dissolved and reconstituted. Corrupt officials must be held accountable. Enhancing public-private partnership in some enterprises can also eliminate inefficiencies. </p>
<p>Another positive is that each of the 14 points and sub-points came with a deadline. This can focus the mind and ensure that work gets done. South Africa has seen many plans in the past come and go with no results.</p>
<p>But some of the dates are far too ambitious. For example, Gigaba speaks of finalising the Minerals and Petroleum Development Act amendment process by December 2017. This deadline is too tight and could result in low levels of participation. This will defeat the objective of getting stakeholder buy-in.</p>
<p><strong>What are the most critical things that are missing from it?</strong></p>
<p>Not enough attention has been given to job creation. The South African economy has for a very long time experienced <a href="http://www.economist.com/node/16248641">jobless economic growth</a>. This meant that the country’s jobless rate remained stubbornly high for many years. Recent figures of unemployment touching <a href="https://www.bloomberg.com/news/articles/2017-06-01/south-africa-jobless-rate-rises-to-14-year-high-in-first-quarter">27.7%</a> are indeed worrying. Youth unemployment is said to be <a href="http://data.worldbank.org/indicator/SL.UEM.1524.ZS">52%</a>. Any plan that addresses only economic growth without the creation of job opportunities will be found wanting.</p>
<p>The South African government’s priority should be to boost employment, by focusing on sectors that can easily generate jobs. I welcome the suggestion to boost the small, medium and micro-enterprises sector by giving them a share in public procurement. Small enterprises have been recognised for their potential to <a href="http://www.tandfonline.com/doi/full/10.1080/0376835042000325697?needAccess=true&instName=University+of+Oxford">aid</a> sustainable economic development and to create jobs.</p>
<p>The plan does not give details of overhauling the most important sectors of the economy: mining and agriculture. These sectors are key to generating growth and employment and can be used to drive economic transformation and empower communities that are at the margins of the economy.</p>
<p>For this to happen, the South African government needs to adopt radical approaches that include new and sustainable ways of doing business and redistribution of land.</p>
<p>There is a strong case for government to ensure that mining companies reinvest in workers and local economies. This can be done through investment in education of workers and forming business linkages with local companies that enable technology and knowledge transfer for a <a href="http://www.tandfonline.com/doi/full/10.1080/03056244.2017.1333412?needAccess=true&instName=University+of+Oxford">viable industrial transformation</a>. Unemployed mine workers (and farm workers too) should be given new kinds of vocational training and education to help them find work elsewhere.</p>
<p><strong>How do the ANC’s internal power struggles affect the plan?</strong></p>
<p>The ANC’s leadership is in disarray. Intra-party fighting has led to opposing factions being formed, with each propagating its own <a href="http://www.huffingtonpost.co.za/2017/04/27/ndz-vs-cr17-battle-for-the-anc-underway_a_22058354/">economic vision</a>. This increases the likelihood that a new crop of ANC leaders will change policy. Constant reshuffling and changes in key government positions can seriously affect policy plans and lead to uncertainty about the future. </p>
<p>A new leader will have to bring cohesion into an already fractured party, encourage all members to unite and work for a better South Africa and, most importantly, tackle corruption both in and outside party circles.</p><img src="https://counter.theconversation.com/content/82860/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mohammad Amir Anwar does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>South Africa’s recently announced economic recovery plan failed to break away from the cumbersome neo-liberal line.Mohammad Amir Anwar, Post-doctoral Research Fellow, University of OxfordLicensed as Creative Commons – attribution, no derivatives.