Deputy Minister of Finance Jabu Moleketi played a central role in drafting discussion documents that argue that the African National Congress should consider an economic strategy premised not just on state intervention and increased investment, but on changes to laws that push up the cost of employment even as they protect worker rights. He spoke to the Mail & Guardian about the job-creating potential of two-tier labour markets, the role of the private sector and the importance of consensus.
What is this document trying to achieve?
The document puts growth on the agenda. Not just any kind of growth, but the kind of growth that addresses our social challenges; the type of growth that will increase labour absorption; the type of growth that will ensure levels of distribution. It basically says that to create wealth you need a creative and productive interaction between labour and capital. It’s a discussion of what kind of developmental model will achieve consensus among all key stakeholders.
Contrary to what everyone has said –that in the ANC there are certain things that are not discussed — it is basically a festival of ideas that ultimately comes up with a programme. You can’t have a situation where you censor yourself before you even engage in a discussion.
You stress the importance of consensus in the development models of Europe and Asia, but it looks like some major stake-holders disagree strongly with these proposals.
Consensus does not mean 100% agreement on everything. To get there you have to know that you aren’t going to come with an individual agenda and win all of it. We all have our own interests as different groupings, but we must come up with a vision that says we need to develop at a level that ensures increased incomes to all people, that deals with unemployment and that improves the well-being of South Africans. In that case, how do you think the objections of your trade union allies and party colleagues can be dealt with? At the end of the day, leadership must lead. You can’t subject the development of consensus to a sort of bargaining arrangement. All of us must be able to tell our constituency: this is where we are going, these are the trade-offs and this is what we are ought to sacrifice in the short term for long-term benefit. In some sectors that has not been done. How do you link the material well-being of those who are inside [formal sector employment], with those who are outside? That is a key challenge of the political process,I must not be misunderstood. One is not saying we should accept slave wages. People can become quite ridiculous in debates. The paper is not saying we must roll back the achievements of organised labour. But how do we build on them? It could be training, it could be other measures, but you can’t just deal with the niceties [laughs], you must also deal with the difficult issues. If those models [of the labour market] are rejected in debate, well and good, but they must be tested.
What about the capital side of the equation?
In South Africa we have relatively high levels of liquidity, but how efficiently do we use that to advance policy and development goals? Sometimes we might tie up that costly instrument of development in inefficient financing models. We need to examine the availability of capital in terms of a developmental model.
For example, how do we advance the policy of black economic empowerment so that it sits comfortably with bridging income gaps and increasing ownership by the previously disadvantaged, but also increases the productive capacity of South Africa? How do you ensure that it’s not just paper chasing paper?
What do you want the private sector to do?
We are not saying returns are unimportant. But we can’t advance the short-termism of the annual financial statement. How do we take a medium to long-term view? It’s going to be a bit of a challenge. The state needs to have a role –hence we talk of public enterprises — but we need risk-sharing so that the whole burden is not landed on the state, who then manage it on behalf of taxpayers. The risk averseness of private capital in South Africa is something that needs to be spoken about. We are not advocating recklessness, but we need to temper our risk appetite in terms of the developmental goals of the country.
Does frustration with impediments to delivery mean you would consider changes to the Constitution? Perhaps limiting the powers and functions of provinces?
A constitution is not a pair of handcuffs. It creates an environment where all citizens are equal in all respects. The structure of government came into being to achieve that. If the structure of government is an impediment, then we have to look at that.
There seems to a convergence of forces both in the government and the ANC, supporting quite bold moves, things that previously might have been taboo. What, and who, is driving it?
That is true. We have achieved a lot, but you have to be aware that your successes can create contradictions of their own. We have an opportunity now really to generate progress and movement. Both within the ANC and the government, leadership comes from the Presidency, and the president is prepared to challenge everyone on eliminating obstacles to achieving what we have all agreed on — a better life for all. This is a chance to do the right thing, even if it is difficult at first.