Letter: There are no government reforms to save SA - Businesslive

Mar 15, 2021
15 March 2021 - The thrust of your recent editorial is broadly right on the country’s poor economic prognosis, though you may be a bit soft in setting out the extent of downside risks at even the low number you cite ("Only real reform will bring a rebound", March 11).

The thrust of your recent editorial is broadly right on the country’s poor economic prognosis, though you may be a bit soft in setting out the extent of downside risks at even the low number you cite ("Only real reform will bring a rebound", March 11).

However, you conclude with the following line: “Unless the government pushes on with its stated reform agenda, there’ll be nothing to celebrate tomorrow.”  We are not familiar with any such agenda.

Take the example of labour, education and crime policy as a start. Our labour market absorption rate is just over half the global norm, less than one in 10 of SA's children passes maths with a grade of 50% or higher in matric, and our murder rate is a multiple of global norms. Does the department of labour have reforms in mind that will allow the labour absorption rate to double? There is nothing of the sort. And what policies have of late been adopted that have the opposite effect in pricing more people out of jobs?

What is the government’s policy to raise the proportion of kids passing maths in matric? There is nothing going on at the department of education that could achieve this. The same is true for its law enforcement policy, where no workable ideas to turn the tide of mayhem and murder are even on the table.

Move on to questions of energy policy and, despite modest moves towards private provision, there are none of sufficient ambition to support an economic growth rate that might aspire to emerging market norms. At odds with that objective, the cabinet will likely remain in resolute opposition to energy reforms that could see private providers challenge the quantum of electricity put out by Eskom, given that it reads such a level of competition as a national security threat.

On investor certainty, the chief flag the government has put up is that of expropriation without compensation, which is not a land reform policy but an effort to open the way to seizing any fixed or movable asset without paying for it across any sector of the economy (a bank recently expressed the view that it was confident the government would use these powers responsibly, revealing a political understanding that, on the back of the example of SA’s "lived experience" of the past decade, might best be described as delightfully quaint).

On health, the example of the government’s vaccination effort, which it saw as the flagship effort to demonstrate how well the National Health Insurance scheme would work, has stuttered to a point where SA now lags tenfold behind the global rate of vaccination and almost hundredfold behind that of many successful economies. So serious are the ensuing risks to the country’s economic recovery that health minister Zweli Mkhize, who was at one point regarded as a serious contender to lead SA, has seen his currency dive among serious global observers of our national condition.

There are a few reformist ideas here and there … on bandwidth auctions and this and that. But there is no coherent reform plan, and in many of the most critical areas there is really no plan at all – if a “plan” means a strategy that gives SA a serious shot at emulating emerging market growth averages over the next decade. It is a harsh assessment but one corroborated by the highest authority in the person of the finance minister himself.

In his three-year view, Tito Mboweni projects that SA’s economy will be growing at roughly a third of emerging market norms. Why would the minister project such a low number if he knew reforms were on the way, the energy crisis was soon to abate, and state capture suspects would be tried and jailed? I would speculate — but don’t doubt that he would deny it with a straight face — the reason is he knows that nothing of a bold reformist strategy is coming.

The layers and layers of advisory committees, councils, panels, commissions, agencies, groups and boards created supposedly to enable reform have been formed not because there is any plan to speak of, but merely because something must nonetheless be done to fill the hours of the day and to feed the media.

We would go one step further than even that damning assessment to say that, beyond ineptitude, the dearth of reforms must be explained by ideological malice that fosters the government’s resenting surrendering state authority to the private sector.

Frans Cronje
Institute of Race Relations


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