Nobody got too excited by Finance Minister Malusi Gigaba’s 14-point action plan to address, or create, "inclusive economic growth" the other day. Partly that’s because unlike its simpleton cousin, Radical Economic Transformation, Inclusive Economic Growth is actually, like most valuable ideals, quite a complicated thing to undertake.
I’ve read the Gigaba proposals and I can’t find any growth in them. I can’t find any inclusivity in them either. Perhaps I’m just dumb. Growth is growth, surely. You need investment in the right policies and strategies and projects. Inclusivity implies doing hard things together. You create a new culture by doing something together. Normally it would take being invaded to unite a nation. We have to find another way.
We all spotted the opening for private-sector participation in some state-owned enterprises (SOEs) in Gigaba’s plan and that’s good. But no private wealth is going to go anywhere near a government business touched by the Gupta family. That, for the moment, rules out South African Airways, Eskom, Transnet and Denel.
Who needs it? The moment you become a shareholder in a business with these guys, FBI screens in Washington light up and suddenly you’re in the queue of politically connected people supposedly in business around the world who are either laundering money for themselves or to finance terrorism. It means the Americans are officially watching you.
Obviously privatisation is unmentionable, but Gigaba talked a lot about what he called the Private Sector Participation Process with lots of deadlines of frameworks, projects and asset classes. But, in all, it was hard to follow. What on earth, for instance, might this mean: "The Minister of Finance has also committed to exploring an economic support package within existing fiscal resources," said Gigaba, in the Third Person. "The support package will be designed to enhance the [Zuma] nine-point plan structural reform programme, and will depend on the government’s ability to find resources [cash] through reprioritisation from areas of slack towards areas with higher potential for growth and employment."
Huh? Does it mean he’ll be looking to take money away from SOEs that waste it or give it away to third parties in corrupted contracts, and spend it where it might have some effect? Have some "slack" SOEs become targets for private sector participation? Only if they are clean. You can’t reform anything in the state while the Guptas have the president in their pocket.
But there was something intriguing in Gigaba’s approach; both a strength and a weakness of his. He likes process. When he was public enterprises minister he would constantly set deadlines for things to happen — the first firing of a generator at Medupi was my favourite; he missed them every time. Here, now, in his 14-point plan, he sets deadlines for five or six ministers to meet.
That’s a good thing. Not because the ministers will meet them. They won’t. President Jacob Zuma has packed his Cabinet with too many incompetents, and many of Gigaba’s targets will be missed. Fortunately, he’s written them down so we can track them. But it gives you an idea of what a specially empowered finance or economics minister could achieve if a self-confident president would allow it. Mandela didn’t, Mbeki didn’t and Zuma hasn’t.
Give this economy to someone with a clear vision of how to grow it inclusively and allow him or her to ride over the court jesters who routinely mismanage things like energy, telecoms, mining or small business, and you’d soon find the country settling if the chosen path was reasonable. In the old days we’d call this person an Economic Tzar, or Czar. They represent no threat to the leader. In fact, their success guarantees the leader’s success.
At the moment it is physically impossible for a South African finance minister to promise growth. It’s the policies of the rest of the Cabinet that make or break the country. The Treasury funds the plans of other departments. The finance minister is just their banker.
We could do it better, but only with a leader truly seized with fixing the economy. Zuma just isn’t. During his term in office, as Hilary Joffe pointed out on Wednesday, almost a full percentage point of GDP growth has gone annually to bailing out SOEs. Yet there was Zuma again on Tuesday, this time in Empangeni, making it clear for the millionth time that he is not interested in running a sophisticated industrial democracy. In the face of a huge economic crisis, he was all petty politics: complaining that he is restrained from answering his critics (for some unknown reason), he warned that "we are only left with five months to the [party] elections. After it, I won’t be restricted when responding to people. For now I must nurse everything," he said, saying that after the vote to succeed him as party leader "there are those I’ll tell in the morning where to get off".
I’d say those words could only come from a man
under pressure.
I formally retire from Tiso Blackstar at the end of November, when I turn a mere 65. I have a contract to write this and other columns for another two years after that, which is great because both the December ANC election and the 2019 general election will happen in front of me. But I am, meanwhile, due a huge amount of leave. I’ll be back here mid-October.
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