A DANGEROUS

The thing that has been missing in the backlash over the public protector’s instruction to parliament that it alter the Reserve Bank’s constitutional mandate, has been any recognition that the constitution is not just a technical document — it is fundamentally political.

It exists as a compact between the apartheid past and the present. For this reason, its drafters set the bar that prevents changes to the constitution relatively high. This is why constitutional amendments require the support of a two-thirds majority in parliament.

Public protector Busisiwe Mkhwebane has also shown scant regard for the process that should be followed when an amendment is proposed — which suggests that she fails to understand the limitation of her responsibilities.

After the adoption of the constitution on May 8, 1996, each subsequent amendment was introduced by a member of the executive, usually the minister of justice, who would then convene a constitutional committee of parliament. There was an acceptance that all political parties needed to be involved, that they had to recognise the need for the amendment and be persuaded across the aisles about the way it was being crafted.

Now, for Mkhwebane to draft the wording of a constitutional amendment unilaterally, and then direct parliament to enact it extends so far beyond the remit of her office that it does more than just expose her ignorance — it portends significant danger.

What is implicit in Mkhwebane’s order that the Bank’s mandate be changed from one that primarily targets inflation, to one that is concerned primarily with growth, welfare and transformation, is that there is something wrong with the Bank’s current conduct. She implies the reason SA is in recession, and that unemployment has climbed to its highest level ever (27,7%), is because interest rates are too high.

Let there be no mistake: SA’S problem is not with the inflation targeting regime. In fact, it has succeeded in anchoring inflation expectations between 5% and 6% because of the credibility the Bank enjoys.

Rather, SA’S problem is all to do with the state’s profligacy, waste, mismanagement of resources, and its inability to execute policy, not to mention omnipresent corruption.

When national treasury provided the inflation targeting band in 2000, we included an “escape hatch”. It allowed the Bank to let inflation deviate temporarily from the target band if the economy was buffeted by exogenous factors, like a spike in oil prices.

In February 2010, then finance

SA’S problems come down to the state’s profligacy, waste, and inability to execute policy