SA needs a TK Whitaker to deal with economic policies
AS THE world’s elite prepare to descend on Davos this week at somewhere around R900 000 per head, I wonder how many have ever heard of TK Whitaker, who died in Ireland on January 9 shortly after his 100th birthday?
Whitaker joined the Irish civil service, and in 1958 published, with the approval of the Irish Taoiseach, Seán Lemass, his First Programme for Economic Expansion.
In the 1950s, the Irish Republic, or “Eire”, was a despondent place. The previous Taoiseach, Éamon de Valera, who had led the independence war against Britain in the 1920s, believed in protectionism and isolation. Local favoured companies were protected, becoming inefficient and incompetent.
Creating no jobs, the best and brightest youngsters emigrated. Described as a “powerless little cabbage garden”, agricultural production from small, uneconomical farms was so low that, during World War II, a second Irish famine was considered likely. It was only a threatened halt to Guinness production that persuaded the British to supply coal, food and fertiliser.
Whitaker’s programme was to make the Irish look outwards realistically, unaffected by Nationalist emotionalism. It encouraged foreign companies to move into Ireland through low taxes and by removing Irish “empowerment” requirements. It encouraged local companies to export and shifted Ireland’s economic foundation from subsistence agriculture to industry. In time, exports increased in volume by some 35%, emigration dropped, morale improved and gradually Irish society became receptive to new ideas through an invigorated media and better schooling.
South Africa urgently needs the clear vision of a TK Whitaker to cut through the conflicting mess of our current economic policies.
We have a weighty National Development Plan, but if it isn’t totally on the shelf gathering dust, it is in competition with the New Growth Path, a collectivist interventionist developmental-state strategy which encourages favoured industries, many of which don’t have good export potential. Redistribution policies increased inequality and threatened the middle class, who, after all, invest in education and supply the next generation’s quality labour.
Instead South Africa lost a generation of its young and brightest to greener pastures while our industrial base is now in the ICU. I know last year’s South African Davos delegation, the tenth largest to attend, had a “good story” to tell about South Africa as an investment destination. This year I expect it will be much the same. But the front page of Friday, January 13’s Cape Times Business Report had the following headlines: “Planned power cut will hit operations hard, says Astral”. This was about Eskom’s plan to cut supplies to municipalities who hadn’t paid their bills, catastrophically affecting Astral’s industrial operations.
“Tough year ahead for retail sector,” detailing the underwhelming Christmas season and difficult trading conditions due to low consumer confidence.
“Sit-in shuts Harmony mine” as 1 700 miners refused to surface over an alleged bonus payout which management claimed to know nothing about.
“SA manufacturing shows signs of life” made breathing easier until I read that it underperforms global norms, with the Purchasing Manager’s Index for the fourth quarter still standing at a contractionary 47.0.
If you add all of last year’s negative press on university turmoil, corruption and crime, I just don’t see how our Davosian philanthropic elite can sell South Africa as a global investment destination. Until we have a government of TK Whitakers with the courage to accept that our economic policies have failed and the positive energy and determination to change the situation, President Zuma can say what he likes about creating jobs. It simply won’t happen. James Cunningham Camps Bay