Growth and jobs: these should be the twin themes that define the next decade of freedom, the barometer by which government performance has to be judged. For all the comforts of a stable macroeconomic environment, historically low interest rates, a stable currency and well-contained price rises, the lack of jobs and meaningful growth begin to make stability seem like standing still — especially if you’re jobless.
The first curious point is that having made every effort to lessen its dependence on markets by reducing its dependence on debt, the government all too often engages the markets in an appeasing, almost grovelling way. It’s time to raise a middle finger.
The world needs to be told that in the absence of sufficient foreign direct investments from its markets, South Africa will do all in its power to look for alternative sources to fund growth. This may include the last and unfortunate resort of overshooting deficit targets by using our hard-earned credit-worthiness by borrowing, as long as it to invest and not just to consume.
The government must continue to be driven by the tenet that trade can change the world. China is currently said to be building 228 skyscrapers in Shanghai. For a range of required imported materials, from steel and aluminium to freshly cut roses for executive desks, they must look to us. Our foreign affairs policy should be focusing on China and India, not deadbeat Haiti.
Our campaign for fair international trade should of course include sustained pressure for an end to Western protectionism.
South African business has also never really played the part it should or can. With some notable exceptions, it has resisted or dragged its feet on transformation.
One of business’s more dubious complaints is that the South African labour market is excessively rigid — this at a time when the International Labour Organisation says it is too flexible. Given the history of hostility and mistrust between labour and capital, black and white, in South Africa, it is unrealistic to expect society to give business carte blanche to hire and fire.
Labour too has its follies. Now, more than ever it needs to be militant. But its claim that productivity has improved is sometimes disingenuous. In many instances, productivity has improved only because after retrenchments, fewer workers are producing the same as before, thus raising the productivity quotient.
Another problem with business and investors in general is their tendency to shift the goalposts. First South Africa had to keep inflation and borrowing in check , then it must remove exchange controls and lower taxes. The demands are largely ideological — nobody has bothered to quantify what real benefits may flow to the economy. Probably very few.
Finally, in a bid to lure investment, it should not be tempted to create artificial tax and cheap labour havens that distribute wealth unevenly.