Des­per­ate times

Finweek English Edition - - FEEDBACK -

In a re­cent in­ter­view with McKin­sey, for­mer US Trea­sury Sec­re­tary Larry Sum­mers shared his thoughts on what the US gov­ern­ment should do to grow the econ­omy. His to-do list in­cluded the need to ad­dress health and ed­u­ca­tion, in­crease spend­ing on science and in­no­va­tion as well as to en­cour­age in­vest­ment. In par­tic­u­lar, the gov­ern­ment should take ad­van­tage of the cur­rent low in­ter­est rate en­vi­ron­ment to build more public sec­tor in­fra­struc­ture.

If only fi­nance min­is­ter Nh­lanhla Nene had some cash in his cof­fers to fol­low that ad­vice. Come bud­get day on 25 Fe­bru­ary, his fo­cus will be on ex­plain­ing why he is in­creas­ing our taxes and cut­ting spend­ing.

The cur­rent eco­nomic cli­mate isn’t con­ducive to pri­vate sec­tor in­vest­ment ei­ther. Even if we ig­nore the eco­nomic growth fore­casts and the dis­as­ter that is Eskom, we are fail­ing dis­mally at pro­vid­ing in­vestors – the kind who are will­ing to build mines and fac­to­ries, and stick around for longer than the next trad­ing ses­sion – with reg­u­la­tory cer­tainty.

We’re re­cruit­ing for­eign in­vestors the one mo­ment, and threat­en­ing their se­cu­rity of ten­ure the next. We con­tinue to tin­ker with key pieces of leg­is­la­tion, such as the min­eral and petroleum law.

Con­fi­dence is the cheap­est form of stim­u­lus, Sum­mers says. It’s a pity that, come Wed­nes­day, Nene won’t have even that rab­bit in his hat. Send com­ments to the Edi­tor, Jana Marais –

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