SA must confront malaise

Desmond Lachman is dead wrong. SA does not need to “ask the IMF for help” (Why SA’s best option is to ask the IMF for help, July 28).

SA’s political and civic leaders need to confront the economic malaise in which we find ourselves. They need to be honest and forthright in articulating differences and finding common ground. They need to listen to expert advice in formulating policies and programmes to take us forward. They need to build effective partnerships between the government, business and the financial sector to boost growth, investment, trade and productivity.

These are domestic political and economic imperatives. They require processes of engagement that are built on our constitutional framework and that reinforce our institutional capabilities. Lachman thinks we need help from the IMF in two areas: designing macroeconomic policy and defending the rand. Such advice as the IMF wishes to offer is already available through its annual consultations and regular publications.

In its most recent report the IMF “commended SA’s resilience, which owes to its flexible exchange rate, low reliance on foreign currency debt, large domestic investor base and broadly balanced international investment position”. There is no suggestion here that the IMF thinks SA needs an IMF foreign currency facility to defend the rand. The IMF has its role, of course, but Lachman’s view that it plays this role as a specialist physician dispensing cures to diseased patients is pompous nonsense. Our malaise is not on the diagnostic schedule of some IMF therapeutic manual.

Think through what it is that we need to rebuild confidence and give impetus to investment, growth and employment. We need urban development plans to be implemented, including transport and residential infrastructure. We need greatly stepped-up investment in housing, founded on partnerships between municipalities, property developers and banks. We need a more diversified manufacturing sector, especially in more employmentintensive activities.

We need to support firms that export, we need to strengthen regional trade and infrastructure investment. We need a more conducive environment for trade and small enterprises in cities and townships.

We need collaborative programmes to advance agricultural production and support emerging farmers.

We need to continue to attract tourists, modernise telecommunications and restructure our water and electricity sectors. We need to implement more rapidly the changes in schools and colleges that improve learning outcomes and enhance skills. We need to invest in engineering capacity, industrial design and management capabilities. We need an integrated health system that builds on the strengths of both the public and private sectors.

The IMF, the Organisation for Economic Co-operation and Development, the UN Development Programme and even the Brics bank might have useful advice on some of these challenges. But they will not do the work for us. We have to find the will, the courage, the intelligence and the integrity to do it ourselves.

Andrew Donaldson

Former deputy director-general: Treasury