Five lessons coronavirus has taught us
As SA grapples with the painful process of reopening the economy amid rapidly rising infections, there are at least five lessons it can draw from the pandemic so far.
The first was obvious immediately: the importance of buffers, or that you “fix your roof before the rain comes”, to quote Reserve Bank governor Lesetja Kganyago.
At the start of the 2008 global financial crisis, SA was running a fiscal surplus, government debt was low, inflation was within the target band and the banks were wellcapitalised. It could deploy all three buffers — monetary and fiscal policy and financial stability buffers — at the same time.
In 2020, before the virus struck, inflation was wellThis contained and the banks had ample capital reserves. This allowed the Bank to slash interest rates and relax banking regulatory requirements at the start of the lockdown, putting R32bn back into the hands of consumers and creating additional space for banks to extend forbearance or lending worth R540bn.
The second lesson soon emerged: the benefit of having an existing social grants system, because it is enabling the government to deliver additional fiscal support directly to SA’s 18-million poorest people. Unfortunately, the lack of any fiscal buffer means the extent of support is highly constrained.
The third lesson has become apparent as the government flounders in easing SA out of lockdown: the importance of listening to technical experts and making policy that is based on evidence.
During the Zuma years, SA developed the tendency to make policy that ignored the advice of technical experts, including the business sector. In the early stages of the pandemic, it looked as if the government was really listening. But then came the smoking and booze ban, the night-time curfew and the tight exercise window, the scientific basis for which was poorly explained, if at all.
The sense that the government was indulging petty bureaucrats over technical experts became irrefutable once the tortuous five-level alert system was revealed. The government’s failure to back its position with evidence, combined with a tendency towards bureaucratic overreach, has damaged its credibility and caused support for the lockdown to shrivel.
Sensible regulations that balance civil liberties with scientific evidence would enjoy greater support and probably improve adherence to the regulations that really matter — wearing face masks, social distancing and hand washing.
The fourth lesson is the importance of state capacity. If state capture taught SA the importance of maintaining strong, healthy institutions — such as the public protector and the judiciary — the coronavirus is teaching us the importance of having the basic state machinery to deliver things such as water and timely support to small businesses.
It is common cause in SA that accountability in the public sector is pathetically weak and that the government is extremely poor at detailed planning and the execution of policy. In 2012, the National Development Plan warned that unless public officials are held accountable for their conduct, cadre deployment is abandoned and corruption tackled, service delivery will not improve.
And so it has come to pass that in 2020 there is no way to return millions of children to school because basic sanitation is still lacking, and they are crammed together — 40 to a classroom.
The fifth lesson is the value of an efficient private sector willing to partner with the government in support of public programmes. This ranges from nongovernmental organisations, which are providing food to starving communities, to the private hospitals and mining facilities that are shouldering some of the public health-care burden. Hopefully, when the crisis is over, the public and private sectors will continue to leverage this co-operation.
Covid-19 won’t be SA’s last pandemic. It is essential that the country learn the lessons of the current crisis so that we are better prepared for the next one, whether financial, health or climate-related. If the virus serves as a wake-up call that forces SA to change the way it operates, all this hardship may not be entirely in vain.