Dr Iraj Abedian's Intergenerational Equity Keynote Speech

Feb 20, 2014 - Hotelling, Harold (1931) “The economics of exhaustible resources,” Journal of. Political Economy 39(2), ... New York: Palgrave Macmillan.
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Keynote Speech at the Launch of Transformation Audit 2013 February 20th, 2014

Intergenerational Equity and the Political Economy of South Africa1 Dr Iraj Abedian 1- Introduction Distinguished guests, Ladies and gentlemen, I am grateful to the Institute for Justice and Reconciliation for giving me this opportunity to share some thoughts on the concept of intergenerational equity. I hope I will be able to persuade you that a full understanding of intergenerational equity issues is one of our critical and over-arching challenges in South Africa today. Whilst congratulating the IJR for the publication of its Transformation Audit (TA) 2013, I should also underline the point that the timing of the launch of IJR’s Transformation Audit could hardly be any more apt as we move from our customary State of the Nation Address of the President on February 13th, 2014 to the forthcoming Budget Speech of the Minister of Finance, on February 26th, 2014. This is a period filled with debates on key strategic issues facing the nation, the country and its economy. To deal with the critical subject of economic ‘exclusion’, which is the subject matter of TA2013, we need to effectively address the underlying drivers of the phenomenon. The symptoms of the systemic economic exclusion are evident in the widely acknowledged triple evils of poverty, unemployment and inequality. In my view, the neglect of intergenerational equity issues over the past twenty years of democracy in South Africa has been one of the major contributors to the emergence of a systemic and structural socio-economic exclusion within our society. It is high time, that we, as a society, honestly reflect on the lessons we have learned from our own twenty years of democratic policy experimentation.

So let us begin with a short discussion of the concept of intergenerational equity itself.

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This speech draws heavily on the paper prepared for the Transformation Audit 2014 of Institute for Justice and Reconciliation, SA. 1|Page Intergenerational Equity in SA-Keynote Speech Feb 20th, 2014

Intergenerational equity is a complex issue in public policy, especially when it is seen through the lenses of political economy, philosophy, applied ethics as well as in public policy. More often than not, the notion is invoked in discourses around environmental sustainability and or in politics of public debt. The concept, however, is much deeper and wider in scope.

Intergenerational equity encompasses a variety of important issues. This is so because society is the intermediary among past, present and future generations. All social processes, be they political, economic, technological, ethical, or environmental have a systemic and dynamic impact upon the overlapping generations’ welfare. At the same time, human beings are predominantly “present-oriented”. In effect, they discount the future heavily the more distant it is or is perceived to be. This means, generally for human beings the present is more important than the near future and the near future is more important than the distant future. Furthermore, human activities and enterprises are, more often than not, subject to uncertainty and imperfect information.

These simple but factual realities do have profound and far-reaching consequences for the success and failure of nations. Moreover, our use of the natural resources, our approaches to the ecosystem, and commitment to the refinement of the political economy institutions, the social and ethical framework we promote and the ease with which we commit resources to social and human integrity are all affected by our implicit or explicit regard for the principle of intergenerational equity.

For South Africa, at this juncture in its social democratic evolution, intergenerational equity has an added significance. Two decades into the foundational years of its new democratic dispensation, compelling evidence and complicated syndromes of disregard for intergenerational equity are emerging in South A