Transformation under spotlight
RADICAL economic transformation should not be “used as a smokescreen to pursue narrow agendas including the empowerment of a favourite few”, Economic Development Minister Ebrahim Patel says.
If the country wanted to ensure real transformation, the resources of the state and commitments by private capital had to be applied with integrity and be free of corruption, he said.
“Actions against economic exclusion should be pursued firmly, including measures to deal with cartels and monopolies and with corruption and attempts at state capture.”
Corruption, maladministration by public institutions and “state capture by narrow vested intere would undermine economic transformation ‘profoundly’, he said.
To be radical, economic transformation had to be “bold, extensive and implemented expeditiously”. This would require a new, bolder approach by the business community, working in partnership with the state and labour.
A programme aimed at enriching only a few people would not tackle gaping levels of inequality, provide social stability or be sustainable, he said.
In a written response to a question by DA economic development spokesman Michael Cardo, Patel set himself apart from cabinet colleagues who had played down SA’s credit ratings downgrade to junk status saying it was “bad news”.
Water and Sanitation Minister Nomvula Mokonyane was one of the ministers who welcomed the downgrade, saying it provided the ANC and its government with the opportunity to do things their way. This was despite the effects of the ratings decision on the value of the rand, economic growth and SA’s fiscal health.
Earlier this month, S&P Global Ratings downgraded SA’s foreigncurrency debt rating to subinvestment or “junk” status, saying President Jacob Zuma’s cabinet reshuffle had put SA’s fiscal and growth outcomes at risk. This was followed by a downgrade to junk by Fitch.
Patel said the downgrade was “bad news for our efforts to grow the economy at a faster and more inclusive level. We needed to take steps to ensure that we regain investment-grade status from lenders and pursue a credible, bold, inclusive growth strategy in the interest of our people”.
The minister said the downgrade meant domestic savings levels would have to be increased so that SA could finance more of its growth efforts from internal resources. — TMG