If it ain't broke, don't fix it

Mamphela Ramphele, a key member of the Dinokeng team, spoke to Lynley Donnelly about the importance of getting the diagnosis right.

Given the economic crisis, countries across the globe are increasing state intervention in their economies and South Africa is no exception. Yet the scenarios, particularly “Walk apart”, take a negative view of increased state intervention.
The point is not to devalue the role of the state.
Across the globe states need to evaluate the best interventions for their circumstances and different environments trigger different responses. But in South Africa we had an interventionist state under the apartheid government. Given that since 1994 the government has struggled to deliver on public goods, and by that I mean adequate health, education and citizen safety — how do you logically jump to saying that the government must do more? It’s like saying this car has a weak engine, it stalls at every stop street, but then loading it with more.

But that does not mean that government has no role to play — there needs to be a conversation about how economic policy can play a role in addressing inequality, but this does not mean [for example] that we need more state-owned enterprises. I see the role of the government as an enabler, a catalyst that engages with the private sector and doing more in the way of public private partnerships.

The report points to the successes of our current macro economic policy, but also to deepening inequality. Organisations like Cosatu and the SACP are calling for a complete overhaul of economic policy, which they blame for widening the plight of the poor.
By making the wrong diagnosis you compound the problem. No one would doubt that the current levels of inequality in the country are unsustainable. The question to ask is, what have we done since 1994 to increase inequality — and to deduce that our economic policy is wrong is the wrong diagnosis to make — Yes, we can quibble about things like monetary policy and whether inflation targeting is the right thing to do, but we must not jump to conclusions that are not born out by fact — the chief generator of inequality is not macroeconomic policy — it is the failure of an effective education system. If students left [high school] with a decent matric they would find jobs, yet we have rising unemployment along with an increasing skills shortage — to rush out and alter the economic framework is not the answer, we need to address the fundamentals.

Given the growing influence of labour in the ANC and government, how much engagement have you had with labour on the scenarios?
We have briefed the likes of Gwede Mantashe, national chairperson of the SACP, we have briefed Nactu (National Council of Trade Unions), Solidarity and many others and in the next few months we are going to go back to them for further proposals and discussion — but all proposals must be subjected to debate among all South Africans, across all sectors.

Labour cannot impose their views, in the same way that the private sector cannot impose theirs — We need to be very careful about protecting what works. You can argue that there is a lot wrong with our market economy, lack of regulation in terms of our competition laws, for instance, which the private sector has taken advantage of. We also have the most expensive banking system in the world, but we cannot abandon what works in the drive to innovate.

Given the support you will require from the state, how much engagement and support have you had from government?
We presented the scenarios to President Motlanthe twice, both an early draft and the version that was made public. Each time we were very encouraged by the response, including suggestions around where there were some holes in the scenarios that needed addressing. But overall people agreed with the diagnosis. Now we will go back to government and begin questioning how to respond to the challenges.

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