Eco­nomic con­sul­ta­tion is good, but it’s time now for ac­tion

Sunday Times - - Business Opinion & Bits - By Hi­lary Joffe

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

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