Promises galore but no easy walk to economic freedom
What accounts for the diversity of ideas on economic issues in the manifestos of political parties contesting the May 29 elections?
On one hand you have the creative and incredible Action SA’s manifesto, which claims if we vote it into power the party will create 4.8-million jobs (a figure its leader has a habit of rounding off to 5-million) by 2029.
The equally imaginative figure is that of Rise Mzansi’s “people’s manifesto” to achieve an annual minimum GDP growth rate of 6%.
In the same innovative camp is the EFF’s promise to create at least 5.2-million jobs in the “short to medium term”. Similarly fantastical is the MK party’s manifesto, which aims to create 5-million jobs in five years.
A mistake these parties are making is the failure to appreciate how deep the problems of poverty and unemployment are, and hence the challenges to be surmounted.
Standard Bank’s Elna Moolman has argued that the economic weakness we are seeing “stems from several headwinds, ranging from soft commodity prices to slow and fragile global economic growth, to high interest rates and severe infrastructure constraints”.
To paraphrase the father of our nation, Nelson Mandela, there is no easy walk to economic freedom.
The DA lies at the other end of the imaginative spectrum. As one of its “apex priorities” for the 2024-29 term it promises to create 2-million new jobs, with most of its policies indicating that we should turn a blind eye to the racial nature of the poverty, unemployment and inequality in SA.
As the late US president Lyndon B Johnson said when arguing for affirmative action policies: “You do not take a person who, for years, has been hobbled by chains and bring him up to the starting line of a race and then say ‘you are free to compete with all the others’ and still justly believe that you have been completely fair.”
The ANC, burdened with the mantle of incumbency, strikes a more sober, balanced tone, committing in its manifesto to creating and sustaining 2.5-million work opportunities. While working with the corporate sector in improving the business environment President Cyril Ramaphosa’s government has had to ensure the sheer survival, through an ever-widening social net, of South Africans as they slip into more and more desperate situations.
This was underlined by Liberty economist Zandile Makhoba, writing after the February budget speech, that “in an election year where appeasing the majority may have been the preferred course of action, finance minister Enoch Godongwana chose SA over politics”.
There is little a small, open economy such as SA can do about the global economy, but we are seeing the measures that the government and the private sector implemented through their joint working groups beginning to bear fruit.
Year-to-date load-shedding is about half as bad as the comparable period last year, “a trend we expect to continue this year”, Moolman wrote. Increases in private sector generation capacity and higher electricity output from Eskom contributes towards that.
Also, Stats SA’s reports confirm a slight increase in rail freight volumes in the past few months, while there are growing reports of operational improvements at ports.
The government’s continued commitment to increasing infrastructure spend has, according to Moolman, been “encouragingly shielded from the fiscal consolidation initiatives, while the underspending that has prevailed for many years seems to have reversed more recently”.
The Treasury has tabled the public-private partnership framework, meant to guide the expenditure of the R946bn infrastructure budget and reignite the construction sector, one of SA’s more labourintensive industries.
Makhoba noted that this was put forward just before the delivery of the budget, showing a sense of urgency on the part of the Treasury.
The private sector should acknowledge its role in ensuring the future wellbeing of our country. Despite it sponsoring the magical thinking of small parties, it and this country will still have to face SA’s tough economic realities after May 29.
A stable government committed to meeting the needs of all South Africans is what will be needed.