Let’s talk about saving SA from disaster
So, Alan Pullinger, CEO of FirstRand, the big banking group that owns FNB, says the SA economy is “on its knees”, that our growth prospects “are over the cliff” and that it could take the country five years to recover.
Pullinger, normally a man of few words, was speaking at the release of the FirstRand results on Tuesday, which pretty much reflected his dismal views on the economy and our future.
So I thought it would be useful, rather than to look for some ray of hope or to seek some rock behind which to find a reason not to believe him, that it might be interesting to simply agree that we are, as an economy, down and out, on the floor, stuffed by corruption, incompetence and cowardice.
What happens to economies in our situation. Do they recover? And if they do, how? I guess one way would be leadership. But that is not on the table. In President Cyril Ramaphosa we have the least worst leading the only party positioned to run this country for at least another decade, if not more. He is indecisive in the extreme, but easy to underestimate politically. And his victory against the public protector this week will have cheered him up no end.
The DA doesn’t have, and may no longer be actually looking for, a wide mandate based on economic policy. The EFF is simply a destructive and ludicrous force in every respect.
A second way is through economic stimulus, and the cries from the Left for Ramaphosa to begin spending money are louder now than ever. Journalist and analyst Duma Gqubule, who writes on these pages regularly, asked plaintively the other day “what are we going to do with our president? His economic record is abysmal. We have had two recessions in two years.” All of which is correct.
But then comes his solution. Just in the wake of the outbreak of the coronavirus, Australia, Canada, Indonesia, Malaysia, South Korea and Thailand have announced various combinations of monetary and fiscal stimulus (interest rate cuts and state spending or tax cuts) to reverse the spiral down the economic corkscrew, while “we are heading towards a depression. So, what is our government doing in response to this crisis? Dololo.”
The obvious value of stimulus lies in the success of the Marshall Plan, which pumped the 2020 equivalent of $128bn into war-torn Europe after 1945. It’s a strong point, but that was a long time ago and there’s always the other route — IMF and World Bank rescue, which some argue we should ask for sooner rather than later. It has worked in Egypt and Greece. Technically, at least.
After institutional intervention, both economies have begun to grow strongly. GDP growth in Egypt in 2011 was 1.7%. After intervention, it was 5.3% in 2018.
The Greeks fell apart around 2010 when they warned they might not be able to service their debt. Today, after stiff IMF reforms, Greek debt is highly prized and yields on its sovereign bonds fell into negative territory a few days ago as coronavirus fever gripped the markets.
The trouble is that neither the Egyptian nor the Greek “recovery” has been that joyful. Unemployment and hardship in both economies remain high.
So what do we do here? We need to remind ourselves what is unique about us. We are diverse, clever, hard-working and proud of where we come from. There must be some way, perhaps outside a political arena that has become so toxic its inhabitants cannot be trusted, to nudge our future in the right direction. Can we, as citizens, make a difference? I believe we can, but only if we can talk while agreeing to disagree.
The Left, people like Gqubule, and the liberals, people like me, potentially form a sizeable majority.
We need to learn to talk to each other without rancour and in the sure knowledge we will never reach any agreement on a way forward without Left and liberal each giving something precious away. We need to understand that the very essence of our survival as a viable nation is compromise. It is something no current political party can contemplate. We have trembling, weak political leaders in SA and there’s nothing to be done about it. But in business, in civil society, in the trade unions and on our university campuses, there is just a glimmer (not blinding, I’ll concede) of something to settle this country.
I’ve written before about the need to create a stakeholder market economy. It is the only way forward. Even the political parties spout inclusion because they understand its power. But they don’t know how to practise it. We, as civil society, could tell them. Inclusion means exactly that. Include. More. People. In. Everything. We. Decide. And. Do.
Otherwise, if Pullinger is right and we’re screwed, that means revolution (never going to happen) or an austere IMF structural adjustment plan (more likely but really unpleasant).
IN PRESIDENT CYRIL RAMAPHOSA WE HAVE THE LEAST WORST LEADING THE ONLY PARTY POSITIONED TO RUN THIS COUNTRY
WE NEED TO UNDERSTAND THAT THE VERY ESSENCE OF OUR SURVIVAL AS A VIABLE NATION IS COMPROMISE