Our common economic ailment

Posted on November 4, 2018


First published in City Press (November 4, 2018)

There is usually a degree of showmanship when budgets are announced in parliament. South Africa’s former finance minister, Trevor Manuel, excelled at this, from multi-lingual greetings to his populist, “Tips for Trevor” gimmick. Tito Mboweni followed suit last week, only laying one brief claim to a voter’s opinion (on removing VAT from sanitary pads) having any bearing on the budget.

However, although he had only been in the job for a couple of weeks, this was seen as Tito Mboweni’s medium term budget statement. Yet the text was drafted well before he re-entered the political arena. So, apart from perhaps the odd rhetorical flourish — including the welcome wish to see the bloated cabinet shrunk to a more sensible size —he was stuck with what is the government’s or, at least, the cabinet’s, outlook.

And that outlook, as he made clear, is one of the South African economy — and all of us trying to stay afloat in it — being well and truly up the creek. But, at the same time, there was the promise of an investment summit paddle being provided to enable SA Inc to power away from a potential vortex of debt and greater devastation.

This summit to woo foreign and domestic investors was hosted by that master of the charm offensive, President Cyril Ramaphosa. In terms of rhetoric and enthusiasm he did not disappoint, announcing that the glittering one-day gathering had provided a massive R290 billion injection toward a paddle of economic rejuvenation.

It was all very upbeat, with talk of further pledges of mega billions flowing in from sources such as Saudi Arabia, the Gulf states and China. Although such investors would cream off profits, they would also provide training for new, high tech jobs.

However, as is invariably the case, the devil lay in the detail. The largest pledged investment — $6 billion (R80 billion) from Anglo American — is, for example, nothing new: this is money needed (much of it already committed) for the maintenance and expansion of existing interests. So the paddle, for a vessel already badly wormed out by corruption, is extremely fragile.

This is inevitable because the government remains mired in the thinking of the 20th Century while trying to deal with the realties of a new century and the massive changes this has wrought. Never mind the Guptas and others staging tender and other raids on the public purse: they are mere smash and grab operatives. Much more insidious is the fact that the government was long ago captured ideologically by what has variously been dubbed the Washington consensus or neo-liberalism, a system that serves the interests of big business.

Trade unions and human rights groups have long maintained that this system has led to the obscene wage and welfare gap, to increased hunger and homelessness in a world of plenty. They have also become increasingly aware that economic growth does not necessarily translate into jobs; that the digital revolution means that there will in future be fewer and fewer jobs available at any level or at any price.

Yet, rather than face reality, most of those profiting from the current system, thinking their own financial lifeboats are assured, are content to blunder on. Significantly, in the still racialised South African context, two-thirds of the wealthiest 10% of the population is “Black”; class, not colour is the real divider.

Perhaps a leaflet circulating as part of a discussion project at a British university sums up the current situation. It asks: Feeling sad and depressed? Anxious? Worried about the future? Feeling isolated and alone?

The conclusion: You might be suffering from capitalism.