MICHAEL MORRIS: Crisis is about entrenched woes, not budget - Business Day

Michael Morris
Anticipating Wednesday’s budget 2.0, it seems telling in hindsight how often the word “crisis” appeared in assessments of finance minister Enoch Godongwana’s embarrassing miscalculation the first time round, on February 19. 

“Crisis” was almost certainly not the right word to use in the first place, especially if one thinks about crises in the past. The best example is probably the financial crisis of 1985, which was, of course, a symptom of the larger chronic condition of implacable history meeting immovable politics. 

Just 13 days after the disaster of PW Botha’s ironically named “Rubicon speech” of August 15 1985 — high, but false, expectations of reform meant he was watched by a worldwide audience of about 200-million — beleaguered National Party finance minister Barend du Plessis was compelled, as the New York Times put it, to “(suspend) trading on the country’s stock and currency markets as the ... currency plunged to its lowest level ever”. 

I remember it well: I flew out of SA that weekend to begin a three-year stint at the Argus Group’s London office. It was not an encouraging time. In the run-up to the Rubicon speech historian Hermann Giliomee recalled in 2012: “SA appeared to be hurtling towards cataclysm. The toll of ‘political deaths’ rose ominously. The uprising put the government under far greater pressure than ever before. In the eyes of many, Botha was a hated tyrant who had to be toppled at all costs.” 

Then came American bank Chase Manhattan’s July 1985 decision to “call in all maturing loans and terminate borrowing facilities”. Giliomee wrote: “Although the bank would announce its decision only on August 15, just after the Rubicon speech, rumours of Chase’s withdrawal reached Pretoria almost immediately. [Foreign minister] Pik Botha recalls: ‘I will never forget the night of July 31 when [finance minister] Barend du Plessis phoned me ... [He said] Pik, I must tell you that the country is facing inevitable bankruptcy ... The process has started.’” 

Within less than a year, prisoner Nelson Mandela and justice minister Kobie Coetsee would begin secret talks that would ultimately forestall the complete economic collapse that might otherwise have been inevitable. But resolving the crisis of the late 1980s would take a long time yet, and exact a great cost.

All of this seems to make it plain, then, that our budget “crisis” of February 19 wasn’t really a crisis at all. Yet if we can be truly grateful that we don’t face anything like the critical existential choice of four decades ago, our contemporary crisis surely lies in the humdrum familiarity of our lives in 2025.

It is a crisis defined by our seeming complacency at being a country with the world’s highest youth unemployment, a paltry growth rate, woefully insufficient investment or productivity, and a socioeconomic profile after 30 years of democracy in which — as my Centre for Risk Analysis (CRA) colleague Gerbrandt van Heerden wrote at the weekend — “the vast majority of black South Africans continue to languish in poverty at much higher rates than other racial groups”.

The CRA’s latest quality of life index (based on a basket of 10 indicators, with 0 indicating the worst, and 10 the best, performance), finds black South Africans have a score of 4.6, trailing coloured (5.7), Indian/Asian (6.7) and white (7.4) South Africans. It shows half (47%) of black South Africans are now unemployed, four times higher than the rate of 9.8% for white South Africans.

It is impossible to exaggerate how chronic our condition really is.

Morris is head of media at the SA Institute of Race Relations

https://www.businesslive.co.za/bd/opinion/columnists/2025-03-10-michael-morris-crisis-is-about-entrenched-woes-not-budget/