If we don’t fix it, IMF may

Mail & Guardian - - Comment & Analysis -

We have a plan, the lat­est in­car­na­tion of which was the medium-term bud­get pol­icy state­ment the new fi­nance min­is­ter tabled in Par­lia­ment two weeks ago. Tito Mboweni made it clear that, if this plan does not work, we may well have to im­ple­ment a dif­fer­ent kind of plan — one that in­volves knock­ing on the door of the In­ter­na­tional Mon­e­tary Fund (IMF), and abid­ing by its con­di­tions.

This would be a dif­fer­ent crea­ture to the no­to­ri­ous struc­tural ad­just­ment pro­grammes the IMF pre­vi­ously rolled out across the con­ti­nent with dele­te­ri­ous ef­fects. We could, for in­stance, ex­pect the IMF to in­sist that the coun­try’s wel­fare se­cu­rity net, so­cial grants, re­main in place.

But we should fully ex­pect that the IMF’s main fo­cus would be our costly civil ser­vice and bloated, in­debted and dys­func­tional state-owned en­ter­prises.

Rail util­ity Prasa is so in­ept that, to keep it run­ning, it now has to re­port to a court about its mea­sures to main­tain safety.

The civil ser­vice is al­ready in the spot­light: gov­ern­ment, in the form of the depart­ment of pub­lic ser­vice and ad­min­is­tra­tion, ne­go­ti­ated an in­fla­tion­bust­ing agree­ment with the pub­lic sec­tor unions that will cost an ad­di­tional R30-bil­lion over three years. Gov­ern­ment, in the form of the trea­sury, said it can­not af­ford this and will not make the R30-bil­lion avail­able.

One state en­tity, the SABC, ap­pears to have got the memo and an­nounced strin­gent retrenchments to cut back on its R3-bil­lion-plus salary bill.

The medium-term bud­get in­cluded bailouts for SAA (R5-bil­lion), San­ral (R5.8-bil­lion), SA Ex­press (R1.2-bil­lion) and the Post Of­fice (R2.9-bil­lion). In the case of SAA, Mboweni asked whether the coun­try can af­ford such an en­ter­prise given that it largely ben­e­fits the wealthy. Re­ports sug­gest that the air­line is too costly to close and the chances of find­ing pri­vate money to in­vest in a fly­ing fi­nan­cial calamity ap­pear slim.

Gov­ern­ment ap­pears pre­pared to have a wider con­ver­sa­tion about pri­vati­sa­tion, but the con­di­tion of some of these en­ter­prises is so dire that it is hard to see pri­vate money com­ing in.

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