Trust me: Public protector Busisiwe Mkhwebane’s briefing of media on her first 100 days in office raised more questions. Photo Delwyn Verasamy
The proposal of the public protector, advocate Busisiwe Mkhwebane, that the Constitution should be amended to change the role of the South African Reserve Bank, is antidemocratic, anti-poor, beyond her mandate and betrays a poor understanding of the bank’s role within the state.
It is antidemocratic because, before we even get to the economic merits of the proposal, the proposal represents an attempt to shift legitimate executive authority to a bunch of independent, unelected bankers.
It is rightfully the unique responsibility of government, based on its political mandate, to decide what economic growth policies it wishes to adopt and how it wants to go about achieving these.
That is the heart of democratic governance. The public protector wants to rob a democratically-elected government of a central function. Only someone with an ill-informed understanding of democratic theory could agree with her.
She is right that it is horrible that our economy is undemocratic. She is also right to show deep concern — at least rhetorically — for the lack of socio-economic justice for millions of South Africans.
She is wrong about what the biggest reasons are for why our society is still grossly unjust. Missed opportunities, theft, a state that is not fit for purpose and state capture more importantly, and neoliberal economic policies, are the central drivers behind our persisting socioeconomic ills.
The Reserve Bank debate is a red herring. It is, in fact, a dangerous red herring. Focusing on the Reserve Bank, chiefly, simply shifts the blame from where it should be focused which is on the executive. President Jacob Zuma and the Guptas, and their various lieutenants are the biggest enemies of a just society.
The Reserve Bank isn’t the government. It isn’t the economic cluster. It isn’t the elected political party responsible for crafting and implementing economic policy.
So the proposal from the public protector is both anti-democratic and wrong-headed. She recognises a serious problem. She misdiagnosed why that serious problem exists. The Saxonwold shebeen and not the Reserve Bank should be her target if she is serious in her rhetoric about the needs of the poor majority.
Her proposal is also not based on sound law. I repeatedly asked her a predictable question on my radio show in an interview on Tuesday: What is the source of law that allows you to even enter this debate and propose a constitutional amendment to change the mandate of the Reserve Bank?
I am still awaiting an answer. She is nonplussed. She could not point to any clause in the statute that governs her institution, nor any clause in chapter nine of the Constitution, that justifies her recommendation as a lawful exercise of her mandate.
She is simply here overstepping her authority. At one point in our interview she claimed that the range of remedial action that she is allowed to recommend in order to remedy problems brought to her is the basis of her recommendation that the Reserve Bank change its mandate.
That makes no jurisprudential sense. The Constitution could not reasonably be interpreted to mean by “remedial action” that her first-aid kit of remedies include dictating to the legislature and the executive what constitutional changes to make, how to reform the Reserve Bank, and mandate it to reword the constitution according to her whim.
Not even an average first year law student would venture this legal opinion about the scope of remedial action open to the public protector. It is legal nonsense. She has to work within the constitution. Not seek to change it. That is not just poor legal interpretation. It is, furthermore, an aspect of the an antidemocratic nature of the entire proposal.
Beyond these weaknesses, the proposal is also anti-poor. The core existing function of the Reserve Bank is to protect Gogo Dlamini against rampant inflation. If the public protector cared about the poor, she would care about inflation-targeting. She would also care then about the bank maintaining the value of the currency and the stability of the financial system.
Obviously inflation-targeting alone doesn’t break the back of poverty. You need sustained economic growth, higher levels of employment and reduced levels of inequality. You need redistributive economic policies that break the structural impact of justice-blind neoliberal economic policies loved and enacted for so long by successive ANC governments.
No-one thinks that the Reserve Bank targeting inflation constitutes a silver bullet for all our economic woes. This brings us back, simply, to the overarching role of government.
It is the package of government policies that ultimately determine the fate of Gogo Dlamini. And it is not the place of the public protector to direct the government how to get that package right.
If we as citizens are unhappy with the ANC government disregarding the impact of state capture, unreformed capital and economic policies that are anti-poor, then we must express disapproval at the ballot box.
What will not help the poor, however, is to reduce political accountability by expanding the role of bankers.
Lastly, the public protector should actually ask the bank how it works. They have autonomy over the instruments they use for their goals. They do not choose their goals. The state does.
The Reserve Bank answers to Parliament and has to consult with the relevant ministry within the economic cluster. It also explicitly already aims at sustainable growth.
I am not defending the bank as achieving these aims. My present point simply is that a further weakness of the proposal of the public protector is that it is based on a poor understanding of the current design of the Reserve Bank and its relationship with the executive.
Ironically, her proposal will give the bank greater independence and less responsiveness to the executive’s mandate obtained from the electorate. That makes the proposal, in the end, a lurch to the right rather than to the left regardless of the intent.
Bankers should not be unduly empowered politically. They should not be responsible for transformation. That’s politics. Bankers’ core competency is maintaining a stable financial system. That is how you divvy up the burdens between politicians and bankers.
The public protector should stay in her lane. Get on with investigating the Guptas. The Guptas are a bigger threat to Gogo Dlamini than the Reserve Bank. Leave the government to decide economic policy. Don’t expand the bankers’ mandate. Do not act outside the law, advocate Mkhwebane. Else we will need protection from you too.