Pravin Gordhan’s Medium Term Budget Policy Statement on Wednesday underscores the central role that politics plays in the economy. For all his honourable intentions and fine words, Gordhan did not have a good story to tell about the state of our economy. For all his brave talk, there is not much in our economic outlook for South Africans to be optimistic about. Because Gordhan’s economics are being derailed by Zuma’s politics.
Mr Gordhan promised things he cannot deliver on. His objective of inclusive growth and social transformation is no longer the ANC‘s objective. We applaud his efforts to grow confidence in our economy, but they are being severely undermined by the political machinations of his own party, which is more intent on diverting public funds to private ends.
Mr Gordhan quoted Amilcar Cabril. I will do the same: “Always bear in mind that the people are not fighting for ideas, for the things in anyone’s head. They are fighting to win material benefits, to live better and in peace, to see their lives go forward, to guarantee the future of their children.”
Mr Gordhan delivered a statesmanlike speech. But in its fineprint, we learn that our economy is not going to deliver the material benefits, the better lives and the brighter future for their children that people want. Our economy is stuck in a debt trap: debt servicing is our fastest growing line item. We are incapacitated by slow growth, forecast at only 0.5% this year, giving little hope of respite to the 8.9 million jobless South Africans.
We learn that next year, the government will have to raise taxes very significantly, due to revenue collection falling short of target (another indicator of the real state of the economy), coupled with a need to increase spending on higher education, national health insurance and social grants. Unfortunately, higher taxes will do nothing to help our economic growth prospects.
What is holding our economy back? Our politics, plain and simple. Mr Gordhan suggests as much in his speech, if you read between the lines.
“Those who are called upon to serve in public institutions have an added responsibility to work with integrity, honesty and accountability and to ensure that their efforts are directed towards the shared interests of all South Africans.”
The problem is, they aren’t. Rather, the efforts of President Zuma and his ruling clique are directed towards shoring up power so that they can raid the public purse with impunity. The economy could not be further from their minds. They are more interested in devising ways to rid themselves of pesky finance ministers who want to spend public money on the public.
“Put simply….. public funds must not be diverted to private ends.”
Indeed not. And yet why else would Mr Zuma and his clique be so intent on capturing our National Treasury? Why else would the NPA, aided and abetted by the Hawks and SARS commissioner Tom Moyane, announce their intention to charge Mr Gordhan with fraud and theft, just two weeks before this important MTBPS speech?
“Our social contract is under pressure. It is as if we have put unnecessary hurdles in the way of realising our potential and implementing our development plans.”
The fact is, the unnecessary hurdles of which Mr Gordhan speaks are our President, and many of his cabinet ministers, who have turned the state on itself – and turned the ANC on itself.
“It is not just the unsettling effect of legal matters and court challenges.”
No, it is also the ANC government’s inability to remove the structural and policy constraints that hold back economic growth. It is their inability to create a predictable and stable policy and political environment. Above all, it is their inability to put the national interest first.
“Vested interests and political contestation interfere with decision-making.”
Precisely. So while Mr Gordhan and his National Treasury have good intentions, they will not come to pass while Zuma’s ruling faction is at the helm. The fact is, our National Treasury is on South Africa’s side, but our government is not. And people know it. Our social contract is under pressure because South Africans no longer trust their leaders. What is to be done?
“We must intensify the national dialogue to seek common solutions and concrete actions to slow growth and poverty.”
Mr Gordhan may want to intensify the national dialogue, but the ANC certainly doesn’t. The national dialogue plays out first and foremost in Parliament. And yet after the NPA announcement on 11 October 2016 of its intention to charge Mr Gordhan, my request for a debate of national importance on the Politicization of the NPA was refused by the speaker on the grounds that it “does not relate to a specific matter of recent occurrence”.
In truth, the most powerful forum for national dialogue is the next national elections in 2019. And the most concrete action we can take to boost our economy is to overhaul our politics by voting the ANC out of power.