Madeleine Wackernagel : Taking Stock
The international financial magazine Euromoney this week voted Trevor Manuel best African finance minister, citing Gear as an example of Manuels innovative style and his ability to push his plans through government. But as the delegates at last weeks Cosatu congress made only too clear, not everybody is as enamoured of either Manuel or his growth, employment and redistribution strategy.
For good reason; it aint working. And neither is South Africa.
But the trade union movement failed to put forward a viable alternative. Any suggestion that economic policy might be constructively debated was quickly sidestepped in what looked like a sop to political sensitivities. Ignoring the issue will not make it disappear.
It is hard to argue with the contents of Gear overall; the world has moved on from the import-substitution industrialisation programmes that were once popular in Latin America and Southeast Asia. One could argue that the government is toeing the neo- liberal line too eagerly and doing too much, too soon, in terms of tariff reduction and deficit cutting. But these are mere ideological details.
What Gear lacks and what the Cosatu leadership failed to address is a social programme. Governments attitude is that eventually we will create jobs; hopefully the 400 000 by the year 2000 envisaged in the Gear strategy. But it is not enough to expect economic growth alone to create the millions of jobs we so desperately need certainly not at annual growth rates of between 2% and 3%.
South Africa is no South Korea, with a well-educated, highly skilled homogeneous work-force and a strong tradition of co- operation at all levels of industry, government and labour. As the recent fiascos at the National Economic Development and Labour Council illustrated only too clearly, the social partners are mostly at logger-heads, protecting their own turf at a cost to the national interest.
And while Manuel concentrates on hitting the broad macro-economic targets, at a micro level very little is being achieved. There is no coherent social programme in place or in the making, while government expenditure is still way too high.
The Budget deficit is expected to fall to 4% of gross domestic product (GDP) this year, against 5,4% last time, but there are some doubts about that goal being realised. Figures for the second quarter point to a 9% level, although there is no need to panic just yet. Spending traditionally tails off in the second half of the year. Of concern though is the nature of that outlay. The civil service is still extremely bloated and inefficient. With so few resources at its disposal, the government cannot afford to spend unwisely. Manuel is right, therefore, to keep spending down; but it needs to be redirected.
A governments role is to provide the public goods that the private sector wont, such as defence, infrastructure, health and education. But most government spending at present is going into consumption, which is not only unproductive, but inflationary to boot, while delivery is sadly lacking.
Cosatus contribution to the debate so far has been to advocate more, not less, spending. But public debt is already the second-largest item in the national Budget, and a debt trap is looming ever closer.
Instead of reciting anti-Gear rhetoric at every opportunity, Cosatu should be criticising the quality of government spending and steering the debate towards creating an effective jobs programme and getting better value for public money.
Otherwise it risks being passed over in next years award for best African trade union.