INTRODUCTION

Is there some action a government of [South Africa] could take that would lead the . economy to grow like [India's] or Indonesia's? If so, what, exactly? . The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else.

Adapted from Robert Lucas, 'On the Mechanics of Economic Development' (1988)

Why are some countries so much more successful than others? How can we get South Africa to be one of the successful ones? These two simple questions led to this book.

Some people live in countries that are successful. Here average income is relatively high and distributed more or less equally. Few live in poverty. Health care is available. Education is of good quality. There is a plan for climate change.

Others live in countries that don't work. Perhaps their incomes aren't as high, or perhaps some people are very rich while others are very poor. Health care is weak. Education is expensive. They are at the mercy of climate change - they have neither a plan to slow it down nor a plan to deal with its effects.

And others live in failed states, where almost nothing works.

None of this is destiny. Countries that were once successful, like Argentina, are no longer. North Korea, with abundant natural resources, is poor. South Korea, which has no minerals and a relatively small population, is now among the richest places in the world. We South Africans know the type of country we want - the successful type. This book is about getting us there.

Take post-war Japan. World War II devastated the country.1 But between 1945 and today, the average Japanese person has become ten times richer and now earns US$45,600 per year, or R830,000. Two generations ago, Japan was a poor country. Today, Japan faces new challenges, but being poor is not one of them.

Some countries have seen their fortunes improve in a much shorter space of time. We only have to look around the world to see examples of countries that have got their policies right and those that have got their policies wrong.

Three countries lie on the south-eastern border of China - Bangladesh, Laos and Myanmar (formerly known as Burma) - and a fourth, Thailand, is close by. On paper, these four are reasonably similar. They are densely populated. As neighbours of China, they are as close to the engine of the world economy as can be. They all have coastlines and relatively young populations. But they are vastly different. In 2022,2 the average annual income per person in Thailand was $21,000, and in Vietnam $13,500. But in Laos, it was $9,400; and in Myanmar, just over $5,000. Malaysia, also nearby, has a gross domestic product (GDP) per capita of $33,500. What is it about these countries - all very close to one another, with similar geography and people - that makes one seven times richer than another?

GDP per capita for the whole world is about $21,000, whereas for South Africa it is only $16,000. So if we South Africans could only attain the average world GDP per capita, our economy would become one third bigger. We have an economy about the same size as that of Malaysia and Singapore. But Malaysia has just more than half the number of people we do (33 million). Singapore has only five million people. They are much richer per person than we are.

How is this possible? Well, there are many things that matter: history, culture, institutions, religion - all of these play pivotal roles in determining the trajectories of countries. Yet it is also undeniable that the countries I have mentioned adopted certain policies that made them successful. This book is about those policies. Without them the countries could not have hoped to be as rich today as they are.

Our tour of the world in the 'Examples of Success' chapter will show how the basics matter: technology, skilled people, investment, and the appropriate 'rules of the game'. We will see in the case of China how growth transformed the country. Under the leadership of Deng Xiaoping, the country opened up to the world, found its niche and exploited it. We will see from Vietnam and Kenya how education has re-engineered their economies and empowered their people. Travelling to South Korea - once a basket case kept alive by American grants - we'll admire the lasting boom created by investment in infrastructure and a focus on exports. Africa is the future. We look at Kenya and Rwanda, two African countries that, while not perfect, show us a path forward.

To get us there, I drill into a list of things we can do practically. This book has six E's: Eskom, Education, Environment, Exports, Equality, and An Ethical and Effective State. Easy enough. This is not an exclusive list; it is a priority list.

Let's start with Eskom and its fellow state-owned companies. For the sake of your blood pressure, I will not repeat many of the facts that we know so well about it. The year 2023 was easily the worst ever for load-shedding, with uninterrupted electricity on only thirty days.3 All South Africans - rich, poor, black, white, and all the shades and income levels in-between - have increasingly sat in the dark for hours on end in the last few years.

Those fortunate to be employed have worried about how safe their jobs are (can my place of work survive without electricity?). It is no longer just a mild annoyance about missing your favourite soap opera on TV because there is load-shedding between 5 pm and 7 pm - it is now about your food rotting in the fridge, municipal water systems being unable to work, your kids not being able to study for their exams, and whole neighbourhoods being in the dark with criminals lurking in the shadows.

Of course, the matter is not really complicated; it is just basic maths. South Africa needs around 30 GW (gigawatts) of electricity to get through a normal summer, and around 35 GW to get through a normal winter. Stage 6 load-shedding means the system is short of around 6 GW. And so, to get rid of loadshedding, we need to quickly build at least 6 GW of new power generation, with some extra for a reserve margin. (Trying to fix the existing ageing power stations is just throwing good money after bad.) And how do we do that? Well, make it easy for everyone (Eskom, the private sector, companies) to build new power stations and sources of renewable energy. How?

Again, we turn to the world. 'Load-shedding', 'blackouts', 'brownouts' - power cuts are not unique to South Africa. Many countries have experienced a version of load-shedding from time to time. Most countries responded quickly. We look at the experiences of China, Greece and Colombia. Each of these countries has faced power problems, for a variety of reasons. China experienced rolling blackouts between 2003 and 2006 because it grew too fast. In 2015 Greece was in the middle of a financial crisis and its people could not afford the electricity supplied, some of which came through a complex deal with Russia. And in Colombia a drought in 1992 caused the main source of electricity supply - a hydroelectric plant - literally to dry up.

All three countries followed a similar route. They untangled their single electricity companies, focusing on keeping parts of these under state control and opening up the remainder to a mix of state and private companies.4 Private sector generation quickly jumped in to fill the gap and the power crisis disappeared. We can do the same.

The second E is for Education. That said, it is not only education that matters, but how a person uses that education - their skills and know-how. Nelson Mandela famously said: 'Education is the most powerful weapon which you can use to change the world.'5 An educated person can steer his or her own future. On reading and maths tests, our children score very poorly compared with other middle-income countries. We will see how other nations have used education as a springboard to economic success: here Brazil and Kenya stand out.

The place where one is born, or the colour of one's skin, or the income of one's parents - none of these should determine the life chances of a child. For us to become a successful country, all children need a solid education, and the brightest and the best should be able to get the best education the nation can offer. There needs to be a relentless focus on the basics: reading, reading and reading. Too few of our children can read for meaning. By giving learners the right textbooks, and teachers who know what they are doing and who monitor and test learners regularly, we can vastly improve this core skill.

Some of our government schools deliver an exceptional education. From one of these government schools come the richest man in the world, a Booker Prize-winning author, the chief executive of this book's publishing house, top international and local lawyers, judges of the Constitutional Court and the High Court, Springbok rugby captains and, indeed, the author of this book. And that is just from one of South Africa's many excellent government schools.

To improve the life chances of children, a simple fix would be to expand functional public schools as well as learner transport to allow for bright hard-working children from poor areas to travel to well-resourced schools, and for the state to pay for their education when they get there. Many of...