This week marked one of the finest hours in the tenure of Minister of Finance Trevor Manuel — but not because he had a national Budget to unveil.
It was because a range of esteemed contributors have collaborated to appraise Manuel’s eventful term of office in a new book called Manuel, Markets and Money: Essays in Appraisal, launched on Tuesday this week. Edited by economist Raymond Parsons, the book is a collection of articles by an impressive range of observers.
They are Manuel’s former colleague André Roux, now at Investec Asset Management; tax guru Pierre du Toit; the adroit policy analyst Steven Friedman; economists Iraj Abedian, Dennis Dykes and Brian Kantor; and journalists Lukanyo Mnyanda and Greta Steyn. Cartoonists Dov Fedler and Zapiro contribute pictorial essays.
The title, of course, links the idea of Manuel and markets, two entities, which, at the start of the minister’s tenure, never mixed. His famous words, ”I insist on the right to govern … I insist on the right not to be stampeded into a panic decision by some amorphous entity called the market,” wreaked havoc with the rand.
In the period since, he has charmed and tamed the shrewd markets, brought them to his view of the world and has grown to be at ease with them through sterling work. I recall at the time of Manuel’s appointment a Wits University corporate finance lecturer describing him as a ”reasonable civil engineer” because of his national diploma in civil and structural engineering, ”but not a good finance minister”. I wonder what he would make of him now?
One is struck by the fact that none of the contributors is a rabid, vocal and unwavering critic of government economic policy, making one sceptical about the frankness of the criticisms. Congress of South African Trade Unions economist Neva Makgetla, as a contributor, would have been in order. Yet, as Manuel acknowledged at the launch on Tuesday, the panel is unsparing in its critique in areas where it deems him to have fallen short.
Their overall support is merely a reflection of the fact that the Growth, Employment and Redistribution policy was the only way out of the economic wilderness of the mid-1990s.
The improvement of tax-collection efficiency has been one of the pillars of success of the ”Trevor years”. It has not only delivered a total of R73-billion in tax breaks over the past 10 years, it has greatly aided the Budget process reforms that are today so widely celebrated.
One of Manuel’s greatest failures has been an inability to raise the country’s savings, which remain static at a stubbornly low 15% of gross domestic product.
Kantor maintains his long-held conviction that exchange controls should be removed in a ”big bang” approach, a position Manuel recalls being badgered to agree with over drinks. Kantor also describes the Treasury’s management of the turbulent currency as ”coping badly”.
Steyn assesses the market irrationality that greeted Manuel’s appointment, but Friedman gives it a human touch when he poignantly reminds us that Manuel has had to overcome the burden of race and ”persuade white business that he is a plausible steward of economic policy”. That was before losing friends on the left for being the darling of business.
I recall Manuel’s unveiling of the Budget in Cape Town two months ago, when he spoke proudly of how, over the next three years, the government will spend R1-trillion, mainly on the poor.
The minister has now attained an aura of believability when he says he has no idea whether he will serve another term. His most impressive feature, for me, is his ability to address the needs of the poor with genuine compassion, without raising false hopes and to provide technocratic but plausible solutions. Many people now talk of him serving at the Bretton Woods institutions.
This week he told me he is not looking for a job as an international civil servant, and would prefer to serve locally. We are richer for it.
Manuel, Markets and Money: Essays in Appraisal (Double Storey), R170