Assessing government's role in the promotion of co-operatives as strategic intervention to accelerate socio-economic transformation.

Abstract

The new democratic government inherited huge socio-economic backlogs caused by the racially-based apartheid system which denied the black majority access to educational and economic opportunities that would have enhanced their quality of life as was the case with their fellow white compatriots. Since 1994 the new government has introduced numerous legislative measures to address these imbalances. This included the establishment of frameworks to promote black economic empowerment through a combination of programmes that were believed to be appropriate to draw more historically disenfranchised communities into the mainstream of the economy. The Redistribution and Development Programme (RDP) was initially introduced and later replaced with a macro-economic policy in 1996, the Growth, Employment and Redistribution (GEAR) that favoured free market and limited state intervention in private business. The RDP was believed, mainly by civil organizations and trade unions, to be the practical blue print to level the socio-economic playing fields for a post-apartheid society (Knight 2006). However, GEAR with a target of 400 000 jobs created each year only amassed criticism from the governing party’s alliance partners that felt it led to job losses whilst its proponents believed it was growing the economy and reducing the budget deficit and inflation. Trade unions further blamed GEAR for `breeding jobless growth’ that benefited capitalist markets at the expense of the poor and workers. The introduction of Accelerated and Shared Growth Initiative of South Africa (ASGISA) directed at reducing unemployment and poverty by half in 2014 coincided with the promotion of co-operatives as an alternative sector that could be pursued with gusto to fast-track societal transformation that had partly stagnated as claims of growing poverty and joblessness were loudly expressed. While not entirely replacing GEAR, the ASGISA strategy was to reinvigorate the economy through accelerated and shared growth and development, as stated by former President, Thabo Mbeki in his State of the Nation Address in 2006. Further, government at national level re-activated the concept of co-operatives and KwaZulu-Natal embraced this approach with enthusiasm as it was seen as a solution to the ineffective SMME programme. Held in 2003 the Presidential Growth and Development Summit acknowledged the need to mobilize co-operatives to fast-track job creation to scale down poverty levels. This resulted in the transfer of co-operatives function from the national Department of Agriculture to the Department of Trade and Industry – with the latter given the mandate of widening the co-operatives scope to include various sectors of the economy through various forms of co-operatives (Philip 2003 and Satgar 2007) as opposed to the historical focus on agricultural-based enterprises. This dissertation attempts to reveal whether the mobilization of communities to consider entering the business world through co-operatives has been a success or not. It will seek to unravel and confirm several factors believed to be influential in the collapse or success of co-operatives, especially in KwaZulu-Natal following the promulgation of the National Co-operative Development Act of 2005. The study is therefore structured into five chapters – with chapter one setting the tone for the project by drawing on the history of the co-operatives sector generally and in South Africa specifically. Chapter two locates co-operatives in the general and economic literature which is essential in enhancing and broadening the theoretical public understanding and appreciation of the role of co-operatives in the province’s and the country’s economy. Chapter three is a demonstration of the methods or approaches employed in undertaking this investigative project while chapter four and five respectively provide the analytical overview of various pieces of information gathered from three sets of questionnaires designed for co-operatives, government officials and co-operatives experts – and the conclusive discussion of the findings and recommended approaches to the development and promotion of co-operatives in KwaZulu-Natal and the country as a whole.