Economy

Talking about the economy

Mingling in the open-air foyer outside the auditorium at the Gordon Institute of Business Science in Illovo last week, Professor Adam Habib and economist Dr Iraj Abedian were chatting. Their subjects were light fare: how to solve inflation in Zimbabwe and how to save the US economy.

“We thought we would sort out the easy stuff first,” said the gracefully greying Abedian, who led projects such as Gear and the 1995 RDP White Paper before entering the private sector as chief economist at Standard Bank and later started the financial firm Pan-African Capital Holdings.

Indeed.
Our own economy, while not yet completely swallowed by the global economic tsunami, has its own unique, yet no less colossal, problems. Pondering issues of others is much easier than our own.

Alas, it could not be avoided. Habib and Abedian were about to enter the Gibs auditorium for the recent Mail & Guardian and Absa’s Critical Thinking Forum dealing squarely with the South African economy.

Habib, the event moderator, kicked off by saying the panel would attempt to “decode” what the political parties’ economic policies were all about.

Turns out it wasn’t too difficult to decode what the ANC was saying; its representative was a no-show. (An ANC spokesperson later told the event organiser that there was “confusion” on who was supposed to be there, though Enoch Godongwana was in the official line-up.)

So, having a discussion about economic policy without the guys who will very likely be calling the shots was disheartening. But with Abedian on the panel at least we knew where we stood.

Our problems, he said, are of structural poverty, human resource development and unemployability. Abedian noted that the latter was not about unemployment.

After all, while we have four to five million unemployed people, there are half a million vacancies throughout the public sector with no single department able to fill all vacant positions.

Abedian also noted that macroeconomic policy, while it had succeeded in bringing stability, was inherently flawed with problems in balance of payments due to skills, lack of credibility and effectiveness due to poor services, and continues to support a society divided between the haves and the have-nots.

In short Abedian was talking straight sense. There was no gobbledegook politico speak full of policy, plans and promises. But then he wasn’t there for any of the political parties. Abedian was there to make sure everybody else made sense.

“It’s like manna from heaven,” the IFP’s Narend Singh said. “I can only agree.” Singh went on to hammer the status of grade three and four learners’ numeracy and literacy problems, university graduates who can’t get jobs and the dysfunctional state of our Setas.

The DA’s Ian Davidson took the ruling party to task for wrapping small businesses in red tape, “pathetic” matric pass rates, cronyism and “jobs for pals” that put the “wrong people in the wrong jobs”. Davidson offered some suggestions: bring training back into the private sector and offer wage subsides to assist in getting people employed.

Wiseman Nkulu, who represented Cope and is co-founder with Abedian of Pan-African Capital Holdings, said the country’s constraints in policy were the problem. In addition, the lack of accountability meant follow-through on policy is poor.

“When the government is under the control of an alliance, you get sub-optimal solutions — you end up selecting people who aren’t right for the job,” said Nkulu.

But while the political panellists had their say with sporadic agreement from the crowd, it was Abedian who really wowed them.

“There has to be agreement in what we say and what we do,” he said. “The corporates continually turn out glossy annual reports with good codes of practice. But back in the planning room, they are colluding and price-fixing.

“The media is in search of the truth but truth doesn’t sell papers, so they don’t tell us the truth. Companies preach best practice, but you phone them and they don’t answer.”

But then, we’re getting exactly what we are putting out there.

“The society we have,” he said, “is because of the value system we have.” If the audience cast their votes that day, they would have voted Abedian. Too bad he’s not running.

In closing the microphone was passed around the room. The thinkers asked about rural economic policies and how parties intended to assist skilled foreigners in getting into the country more easily. They spoke about citizenship courses in schools. One man suggested that the country be run more like a business.

“Well, I hope you don’t mean like the American banks,” jibed Habib.

Ah, well, back to the easy stuff.


Survey says . . .
The Institute for Democracy in South Africa’s most recent public opinion survey asked 2 400 South Africans over the age of 18 how they felt about a number of things, including the economy and how proudly South African they are.

Turns out when the economy turns sour, so do we.

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