Are There Too Many Prescriptions to heal ZA’s Economic Ills?

Government has its NDP strategy for boosting the economy, but this week the ANC appeared to be offering a rival approach. Are there too many players with too many ideas knocking about, as the economy limps along at 2% GDP growth a year? We asked some of our experts whether there are too many voices…..

Frans Cronje from the SAIRR:

There are too few. Many of them have the same ideas. More transformation, more employment equity, more black empowerment, and more land reform. There is actually no battle of ideas. From the DA to the ANC there is one overall dominant idea and that is how to use the State to redistribute resources in the society. We call this the DANC consensus. It is very dangerous and explains to a T why we are not growing. A particularly stupid thing was reportedly said (by business representatives) at a conference on the NDP yesterday that "while the plan is far from perfect it needs to be implemented as it is better than no plan". None of them would run their businesses according to a half-baked set of contradictory ideas devoid of serious budget forecasts – so why do they believe a country can be run along such lines? This anecdote sums up very well the defeatist attitude that has become so prevalent within the private sector. What is necessary is fundamental reform to free the economy to draw in entrepreneurs and investors to boost growth which will in turn boost jobs growth. This requires deregulating labour markets and scrapping racial policy. That neither the government, nor business, nor the opposition are prepared to consider this means that we must expect a few more low growth years. Whoever breaks from the DANC consensus and seeks to drive reform has a shot at successfully governing a future South Africa.

Christo Luus from Ecoquant:

Yes, probably. And a major problem is that some government ministries and departments are headed up and staffed by people with some serious ideological baggage slanted towards a socialist /communist state-controlled model – a model which has never and nowhere returned the hoped-for results. On the one hand the basics are neglected: The education system is not delivering; infrastructure maintenance and expansion are neglected; national savings are not treasured or well promoted; crime is not kept in check sufficiently; corruption is not rooted out aggressively enough; our natural resources are not well protected; food self-sufficiency is not a priority; and border control is virtually non-existent owing to crumbling police and defence forces. Persons responsible for these issues (specifically the ministers) are well rewarded for their lack of success. On the other hand, too much is being done and too many resources directed to achieve perverse targets. Neo-apartheid thrives with draconic BEE codes; enormously elaborate documents need to be filled out regularly by businesses if they simply want to buy/sell/contract with clients or suppliers, and they are burdened with numerous regulations, taxes, fees, levies, payments, licences, certificates, fines and prescriptions. Persons coming up with these flamboyant red tape measures are also well-rewarded. Ordinary citizens succumb also on a daily basis to maltreatment by unhelpful and often ill-informed public servants at all levels of government. They and their bosses are also well rewarded and probably never evaluated for service delivery. Finally, every now and then a very clever political leader of some sort tells us that private property need to be re-distributed (read confiscated?). This is enough to depress the national mood and entrepreneurial spirit – just look at what has transpired in Mugabe’s Zimbabwe (yes – it is HIS country) as a result of such policies.

Conclusion:

We have had lots and lots of debate. It would be nice to see some delivery. The continued grass-roots support for Julius Malema points to the way in which expectations remain high. If we cannot meet those expectations and deliver some hope, it is difficult to see how social unrest can be held in check…..

Tweet of the Day:

FreeMarketFoundation (@FMFSouthAfrica): “Bureaucracy defends the status quo long past the time when the quo has lost its status.” Lawrence J Peter


One response to “Are There Too Many Prescriptions to heal ZA’s Economic Ills?

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