Balancing the potential benefits from further development of South Africa’s mineral and agricultural endowments with a less resource- and energy-intensive development path has been highlighted as a key future challenge for future deliberations by the nascent National Planning Commission (NPC).

In its ‘Diagnostics Overview’, released by NPC chairperson Minister Trevor Manuel and deputy chairperson Cyril Ramaphosa in Cape Town on Thursday, the NPC warns that the costs of such a transition would not “fall evenly” and export sectors could “suffer”.

Nevertheless, it describes the prevailing resource-intensive nature of the South African economy as “unsustainable”, while making it vulnerable to external forces that can induce local booms and busts. Further, it notes that the coal-heavy nature of the economy opens it to penalties as the world seeks to mitigate climate change by reducing emissions of carbon dioxide.

But the report also notes that the export earnings of the mining sector currently help to fund South Africa’s imports and create a large number of low-skilled jobs. Therefore, government and industry would need to look at innovative ways in which to support and transform the sector as it changes to a low-carbon future.

DIFFICULT TRADE-OFFS

Any additional jobs that might arise in so-called green industries would also need to be set against the potential job losses in the mining industry as more expensive energy constrains the sector’s activities.

The 30-page document even questions whether it is possible to reduce carbon emissions and environmental impacts while remaining a competitive commodity exporter and flags uncertainties about the pace at which a highly resource-intensive economy can realistically expect to shift to a more knowledge-intensive, or labour-intensive one.

“Given these challenges, there are thus already good reasons to seek to build a new development path that is more inclusive, less dependent on the exploitation of non-renewable resources and that uses renewable resources more sustainably and strategically.”

The document also highlights the fact that the country’s limited water resources will play a role in constraining a business-as-usual growth trajectory.

South Africa is the 30th driest country in the world and the intensity of South Africa’s water use, at 31% of the available resource, is high. The NPC cautions that, once water use approaches 40% of average yearly availability, South Africa will face a “binding” water constraint.

An extensive infrastructure network is needed to store and transport water between and within river basins, but that besides building new infrastructure to bolster suppliers, greater emphasis will also have to be given to improving water resource management and encouraging more efficient consumption by municipalities, farmers and the mining industry.

Overall, the report delves into eight other challenges, while highlighting poverty, inequality and unemployment, as well as the poor quality of education for most black youth as the two principal concerns facing the country.

Other issues noted include poorly located, inadequate and poorly maintained infrastructure, spatial problems that marginalise the poor, an ailing public health system, the uneven performance of the public service, the role of corruption in undermining service delivery and State legitimacy and continued societal division.

The 25-member NPC is expected to present its vision statement and final plan to Cabinet in November 2011.