Economic consultation is good, but it’s time now for action
The past few months have been good ones for economists who want to influence government policy and not just analyse or criticise it. In November, President Cyril Ramaphosa called in a select group of about 20 economists to seek their views on what should be done to lift the economy out of its growth slump. In December, finance minister Tito Mboweni followed up with an Economic Colloquium of almost 60 economists, sector experts and officials, which also included economic development minister Ebrahim Patel, trade & industry minister Rob Davies and Reserve Bank governor Lesetja Kganyago. A third round is planned for next weekend, just before “Team SA” sets off for the World Economic Forum at Davos, and just ahead of the cabinet lekgotla which will help to shape Ramaphosa’s February 7 state of the nation address, as well as of Mboweni’s budget speech later in the month.
The urgency, it seems, is because the president needs a few compelling things to say about what government is going to do to repair the economy and create jobs when he opens parliament.
Round three will come up with a document and proposals that can be discussed at the lekgotla and can feed into the Sona, and the budget speech.
It’s clearly not just about coming up with a couple of key announcements in the short term, though, but about getting to growth in the longer term. While the presidency may have kicked off the process, the genesis of rounds two and three of the economist roundtables apparently went back to an earlier invite which Mboweni extended to Harvard University professor Ricardo Hausmann, who led the 2006-2008 panel of international and local economists who advised the Thabo Mbeki government on economic policy which fed into Asgisa (the Accelerated and Shared Growth Initiative for SA) — the signature economic policy intervention of the Mbeki era.
That 2006-2008 process was the last time government called in the economist community to advise it on growth policy. And while
Hausman and his Harvard colleague Professor Robert Lawrence have again been called on for expert international advice, this latest round of consultations was far more locally focused, and more diverse. There were private- and public-sector and academic economists at
December’s roundtable, as well as agricultural and other experts (one of the most interesting of which was Mboweni’s Limpopo neighbour Tommy van Zyl, whose family farming empire produces half of SA’s tomatoes and has forged BEE partnerships with local communities).
The discussion — most of which was behind closed doors — was robust and open even if there wasn’t much that was new. SA’s economic ills have been so extensively diagnosed, and the same remedies proposed and even agreed on so many times, that there surely isn’t that much new to say by now. Yet economists have been quite buoyed by the process itself, and by the fact that the president and the finance minister are listening — and pushing the experts in the economics community and in business more generally to come up with concrete proposals and solutions. Chances are that the buoyant mood could dissolve quite quickly, though, if the Sona doesn’t include some strong signals of intent to implement measures to get the economy going, rather than just consulting about it.
State-owned enterprises are one key issue on which something compelling and courageous needs to be said. The state of the state is another. The economists know quite well that any number of compelling economic policy announcements won’t amount to anything as long as there remain deep divides within government (and the governing party) over policy, and as long as the state itself lacks the leadership or efficiency to turn policy into reality.
Government must show real intent to address binding constraints to growth