Reader feedback is vital to any publication, and ZA Confidential has received a robust rebuttal of yesterday’s Q&A with economist and author Professor Raymond Parsons from businessman Mario Pretorius, who is CEO of Telemasters. Here is his letter:
I have never given Professor Raymond Parsons much credence, but he has destroyed the little bit of sanity I credit him with. What a suck-up job to the ANC! So ‘Business’ buys into the hogwash shopping-list of ideas to get out of low growth? Absolute rubbish. This tome of an idea is as useless as it is weighty for almost every reason in the economic book that Professor Raymond Parsons hopefully has on its shelf.
For starters, we are exactly where Britain was in 1963 on the eve of their Labour blowout. We are in the same currency trap as India. There is no political will to back business. Entrepreneurship is a graveyard. SARS is bullying for every cent it can. 94% of the enormous government debt that is increasing daily is sourced out of the local banking system and away from business and consumers.
It would take a good 400 pages to illustrate the absence of the most rudimentary understanding of this government regarding economic growth, and the majority of that would be to out the no-clothes emperors of (Ministers) Manuel and Gordhan. I know of no single successful prosecution under the Prevention and Combating of Corrupt Activities Act – although we are drowning in corruption from the bottom to the top, the list of books detailing this from ‘’Zuma Exposed’’ to ‘’Tincture’’.
Not a single basic premise that underpins their PLAN is correct – from the SARB having made its 3rd consecutive loss (4th since inception) to the hare-brained ideas of ‘offsets’ and now nuclear power, there is a single and thick murky thread of real Kakistocracy running through those purporting to be our servants. A crushing future awaits us.
For those who may have missed it, here is the Q&A with Professor Raymond Parsons from yesterday’s ZA Confidential:
One of our top economists, Professor Raymond Parsons, has written a new book. Entitled ‘Zumanomics Revisited’, it is a sequel to his earlier ‘Zumanomics’. Raymond looks at the economic landscape up to 2030, and analyses what needs to be done to put the ZA economy on the right track. We spoke to him.
ZAC: You say the NDP "may be South Africa’s last opportunity to arrest the drift into what would be a low growth trap for the economy." But does the NDP have the degree of support within government, and the business community to be taken forward?
PRP. While there is broad support from several stakeholders, including business, for the NDP framework, it is not yet as strong and widespread as it should be, given its importance to where SA wants to be by 2030. Yet ANC Deputy-President Cyril Ramaphosa reiterated this week that the NDP ‘was like a moving caravan and those who did not jump aboard risked being left behind’. The extent to which the NDP will be more successful than its predecessors will depend on how well both public and private sector actions are gradually aligned to its framework and the degree to which it gains traction in the community at large. That is why the NDP puts a great deal of emphasis on the role of an ‘active citizenry’ in its implementation and for that to be effective it needs to be both a ‘bottom up’ as well as a ‘top down’ process. People will support what they have helped to create, which is why the NDP needs to gain more traction at grassroots level.
ZAC: Is there time? How do you assess the danger of social strife as joblessness remains so high in ZA?
PRP: The NDP was crafted precisely because it was felt that, until SA could develop a shared vision of the future, it would not be able to gain the time needed to more successfully address the triple challenges of unemployment, poverty and inequality. It has rightly been said that SA is not so much at a crossroad, but rather at a ‘T-junction’ where it must make the right choices to achieve its economic potential or face growing strife. Nothing is inevitable. Rising tides can be turned if in SA, with the help of the NDP, we can get both our economics and politics right. The remedies are at hand, provided there is a willingness in both the public and private sectors to take the difficult decisions needed sooner rather than later. The latest Global Competitiveness Survey by the World Economic Forum again also suggests that the areas in which SA received the lowest rankings, such education and labour market efficiency, could presage further declines in competitiveness if not addressed soon. So time is not unlimited.
ZAC: You stress the importance of implementation. Yet we are not very good at that, are we?
PRP: The issue of poor delivery has been the Achilles Heel of many previous growth and development programmes, and explains much of the social unrest around lack of delivery, especially at local level. Hence the emphasis placed in the NDP on building State capacity at different levels and to ‘professionalize’ the civil service to a far greater extent. Economic literature has suggested that it is state strength, rather than state scope, which is important for long-term growth. This also creates space to expand collaboration between the public and private sectors to improve delivery through public-private sector partnerships and similar measures. For example, we need to see greater private sector involvement in infrastructure and in energy co-generation to increase the efficiency of delivery. We should bother less about concepts such as an ‘enabling’ or ‘developmental’ state, and emphasise more the need for a ‘delivery state’ if we want to meet the challenge of implementation. ‘Does it really matter whether the cat is black or white, as long as it catches the mice?’, says a Chinese politician.
ZAC: How damaging is the current lack of unity within organised business at a time when important messages need to be articulated to government on labour legislation, taxes, the investment climate and other key issues?
PRP: ‘Unity is strength’ is the well known mantra, and current circumstances highlight the extent to which insufficient unity in both business and labour can hamper or undermine broader goals. Nonetheless, although the lack of unity in organised business is regrettable, it has not prevented organisations like Business Unity South Africa and the Black Business Council from cooperating on issues of mutual concern, such as in Nedlac. So it is still possible for organised business, even though divided to some extent, to maintain its sphere of influence on certain issues. Ideally, there needs to be more rationalization and de-racialisation in organised business, to maximise its impact – and that should be the ultimate goal. In the meantime there needs to be pragmatic cooperation among those business interests to ensure that overall the voice of business is still heard effectively on key matters like the NDP.
ZAC: Your book is entitled ‘Zumanomics Revisited.’ How much does Jacob Zuma understand economics? And how damaging is it that there appear to be strong disagreements among his ministers over the way forward?
PRP: We should not expect Presidents or Prime Ministers to be economists. ‘Experts on tap, not on top’ should be the approach here. A President needs to surround himself with advisers who provide the expert input upon which he and his Cabinet need to make their decisions. I have suggested that, if it is decided that the National Planning Commission will not continue beyond its current five year term, President Zuma might consider a structure like the US President’s Council of Economic Advisers, which gives the President independent high-level economic advice. It will be essential for the success of the NDP if President Zuma, when re-elected, appoints a Cabinet team which is fully committed to making a success of the plan. Not only government, labour and business need to find better ways to work together, but collective responsibility at cabinet level is also necessary if the NDP is to be coherently implemented in the period ahead.
ZAC: You say "good institutions can erode under the weight of corruption, racism, careerism and patronage." Is government not then seriously eroded?
PRP: The thrust of the NDP is precisely on how we can strengthen our institutions in ways that will create an economy that will be bigger, stronger and better by 2030. This covers both the public and private sectors but the emphasis in the NDP on better governance is unmistakeable. Corruption is recognized as one of major concerns, which requires to be jointly and effectively tackled by government and business. The challenge is to build on our strengths and frankly address those institutional and structural weaknesses which threaten to push SA into a low growth trap.
ZAC: The ANC is likely to win the election next year, with JZ at its helm. How will you judge his second term?
PRP: It is when Presidents are re-elected to their second term that they begin to think about their legacy. Some observers believe that President Zuma is not really interested in his legacy after 2019. It would be surprising and unusual if that turned out to be the case. After all, it was President Zuma who appointed the National Planning Commission in 2010 and asked them to come up with a 2030 vision for SA. Although the NDP now belongs to SA as a whole, he has a big vested interest in its success. It will be during President Zuma ‘s second term that he will need to provide the political leadership needed to push the implementation of the NDP. By the time he steps down in 2019, when SA should be about one-third of the way to 2030, he will want to be able to say: “Look, the economy is beginning to turn around and we have been able to make a dent in unemployment, poverty and inequality”. His eventual legacy at the end of two terms as President of SA will lie largely in the state of the economy and it is by that yardstick that he is likely to be judged.
Let the debate continue. A lot is at stake.
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