Broke and sick, we are at least well-led
he grown-ups, thank goodness, are in charge. News that the SA Reserve Bank is stepping in to provide liquidity to the economy, despite our strained circumstances, seemed to cheer everyone up. The markets screen on my phone turned green.
The JSE was up, the rand was up and yields on our longterm sovereign debt (the yield being the interest we have to pay to get people to buy our bonds) fell sharply, though they are still insanely high.
Coming hard on the heels of a 100-point cut in the Bank’s base rate last week, and further mechanisms to keep the local markets liquid, you have to appreciate the stoicism and quiet dignity of Reserve Bank governor Lesetja Kganyago in the face of taunts and attack over the years from the Left.
The fact is that it is only because of our strong institutions — the National Treasury and the Reserve Bank right at the top, and the commercial banks themselves
T— that President Cyril Ramaphosa could even begin to contemplate the national lockdown, planned from midnight Thursday, to try to slow the advance of the coronavirus epidemic in the country.
Ramaphosa has found new fans in the oddest of places recently, some of which, for obvious reasons, has amused me no end. But he couldn’t do anything without the political and business establishment rallying behind him. It has been remarkable and we go into this three-week lockdown with the Reserve Bank basically channelling the quantitative easing measures US and European central banks did after the 2008 financial crisis. It long is quite’remarkable. he ll buy government
Of course, Kganyago has been careful not to say how bonds for, nor what money he ’ ll be using (does he print it, given that most of our debt is in rand, or does he use his reserves?). We cannot, as the US, UK and Germany plan to, throw real money at the economy. We are broke and, now, sick. But we are reasonably well-led.
In Washington, US President Donald Trump wants the churches full at Easter, in just more than two weeks. He is campaigning through the Covid-19 crisis, and the worst of it is that it seems to be working. His likely Democratic rival, former vice-president Joe Biden, is nowhere to be seen.
Trump is everywhere, saying whatever he likes about the virus. Here, while Ramaphosa rides a wave of admiration and even gratitude for having acted as early and as forcefully as he has, the coming three weeks will be his sternest test and, arguably his one and only chance to save the country.
On Friday, reality will begin to hit home. South Africans will be hard to confine. I drove past the hundreds of tiny corrugated iron shacks alongside the N2 outside Grabouw in the Western Cape this week, and there is just no way anyone is going to sit in one of those for three weeks.
So it is going to be important to manage the lockdown with what batsmen in cricket call “soft hands ”— the more loosely you hold the bat in the face of viciously fast bowling, the less likely you are to sky the ball and get caught. You don’t score runs but you’re still there after the bowlers have exhausted themselves.
Ramaphosa needs to be still standing after 21 days. He needs to message constantly that the object is to avoid contact with other people. The virus doesn’t spread itself. People spread the virus. Poor Prince Charles, who has been shaking hands since he was a baby, finally shook one too many and has tested positive for the virus.
Still, these 21 days people are going to move around. The regulations are way too vague, but that no-one is sure what can and cannot be done is probably a good thing. At least for the first week. But by the end of week three, the country will have only just found its lockdown rhythm. In all likelihood, the president will have to extend it another few weeks.
It’s going to hurt, but there is simply no rational trade-off between saving the economy and saving the population. The virus comes first, every time. We will have to pick up the pieces only after we’ve beaten it. Even in richer countries such as the UK, they are going to pay a terrible human price for the prevarications of Prime Minister Boris Johnson. He has done too little too late. The fact that he runs a rich economy will soon catch up with him.
Here, we still have time. Thus far no-one has died in SA. But there’s a problem coming with the lockdown that Ramaphosa needs to correct quickly. In his first announcement he declared gatherings of more than 100 people illegal. But if he wants the lockdown to work he needs to declare all gatherings illegal. Any two people standing or moving together outside their home(s) should constitute a gathering and it should be broken up.
It is easy to police and allows rich and poor citizens to get through the next three or possibly six weeks without going stark raving mad and, at the same time, taking a real fight to the virus in our midst.
IT’S GOING TO HURT, BUT THERE IS SIMPLY NO RATIONAL TRADEOFF BETWEEN SAVING THE ECONOMY AND SAVING THE POPULATION. THE VIRUS COMES FIRST