Time to overhaul SA’s parastatals

BRITAIN’S decision to leave the EU is likely to have repercussions far beyond the con- tinent and deep into the future, some of which will inevitably affect this country. The market turmoil of yesterday may blow over in the coming days, but the damage to the EU and UK economies could be lasting, especially if the political mood that seized Britain – the politics of fear and hate, as it has been labelled – now sweeps the rest of the Continent. Economic stagnation and divisions over the human tide of immigrants out of Africa and the Middle East renders Europe ripe for such a result. These developments could not have come at a worse time for South Africa as it seeks a way out of the economic doldrums. Already weak growth is at risk of declining further in the wake of Brexit, while social instability threatens as a result. There is little the government can do to mitigate the impact through the traditional levers of fiscal and monetary policy, which have already been all but exhausted. But there is quite a lot the government – and the rest of society – can do to change the picture in other ways. The good news is the foundations for this effort have already been laid in the form of newfound levels of co-operation between the government, business and labour as they worked together to avert a credit ratings downgrade. That the country – if only temporarily – dodged the ratings downgrade bullet is a sign of what can be achieved. But so far there has been more gesture than substance and this will have to change. Finance Minister Pravin Gordhan has been working himself to a standstill to forge the partner- ships required, with sporadic support from Presi- dent Jacob Zuma and his cabinet colleagues. The steps needed – an overhaul of state-owned enterprises, particularly their governance, and a laser focus on growth-enhancing measures – are well understood. Now would be a good time to implement them.