SA’s economy is heading towards Ground Zero - Michael Cardo
Michael Cardo |
25 May 2017
DA MP says this is thanks to the nuke detonated by Zuma when he sacked Gordhan
Speech by Michael Cardo MP, DA Shadow Minister of Economic Development, Budget Vote 25: Economic Development, National Assembly, 25 May 2017
We need a Country Recovery Plan to mop up the Bryntirion Bomber’s mess
South Africa’s economy is heading towards Ground Zero. This is thanks to the nuclear bomb detonated by Jacob Zuma at his Bryntirion home shortly before midnight on Thursday 30th March 2017.
As if his first strike against the finance ministry in December 2015 wasn’t bad enough (R500 billion went up in a fireball when Minister Nhlanhla Nene was axed), the Bryntirion Bomber recklessly risked a second, potentially bigger fallout.
So, at the command of his paymasters, the Guptas, President Zuma sacked another finance minister who had valiantly battled against state capturers and looters.
In nuking Pravin Gordhan, Zuma got rid of a warhorse and replaced him with a clothes horse. All so that the Saxonwold saboteurs could raid the Treasury and feed off the fat of state-owned enterprises.
The mushroom cloud has not quite settled, but already:
·Two of the three international ratings agencies have downgraded South Africa to junk status;
·Growth forecasts have plummeted below 1%; and
·The ranks of the unemployed have swelled, with over 9 million people now jobless.
Meanwhile, the President’s patronage network in Cabinet remains intact. The unguided missile Faith Muthambi has been launched into a new portfolio, while that weapon of SASSA destruction Bathabile Dlamini continues to wreak havoc with our welfare system.
Nowadays, these political demolition jobs are justified in terms of “radical economic transformation”.
But that is just an empty, vacuous, populist slogan.
If you want to know about radical economic transformation, look no further than Brian Molefe. He was a member of the Portfolio Committee on Economic Development once, for all of two hours.
The point about Mr Molefe is that he has been so radically economically transformed that he could resign, retire and take unpaid leave from Eskom all at the same time. He could jump the ANC’s lists into Parliament, and jump out again when he wasn’t appointed Finance Minister. Throughout, he sought maximum financial advantage for himself and his cronies at the state’s expense.
That, honourable members, is radical economic transformation, ANC-style.
Mandates and institutional reform
It is the job of the Economic Development Department (EDD) to bring coherence to economic policy-making and implementation across state departments.
It must promote inclusive growth.
And it must tackle unemployment by accelerating job creation.
On every one of these metrics, the EDD has failed to deliver its mandate.
Now I certainly don’t hold the Minister personally responsible for that. He runs a tight ship; he knows his portfolio inside out; and in the unfolding battle between the ANC’s constitutionalists and its money-grubbing neo-patrimonialists, I’m sure he lines up on the right side.
But the fact is that his Department cannot justify its existence, financially or institutionally.
That is why the DA believes the EDD should be disbanded and its functions absorbed by other Departments.
Investment, Competition and Trade
Of the Department’s R797 million budget, over 85% (or R681 million) is channelled to Programme 3: Investment, Competition and Trade.
This is an almost 25% increase from last year’s allocation.
The bulk of it is for subsidies and grants to the Industrial Development Corporation (IDC), the International Trade Administration Commission (ITAC), the Competition Commission and the Competition Tribunal.
President Zuma wants to use the IDC and competition regulators to drive radical economic transformation.
But we need to ensure that these institutions don’t enrich politically-connected cronies in the guise of de-racialising the economy.
That is why the DA will watch closely to ensure that the R23 billion earmarked by the IDC for the Black Industrialist Programme serves to grow the economy and create jobs for the poor, not produce a new elite of radically transformed billionaires.
And that is why the DA will keep up the pressure on the IDC to reveal exactly who these industrialists are, what industries they’re building, how much money they’re getting from the IDC, and what the return on investment is.
In this regard, we welcome the IDC’s review of its confidentiality policy so that, in all contracts entered into from 1 April 2017 onwards, there will be greater transparency around funding to politically-exposed persons.
During his State of the Nation Address (SONA), President Zuma said that legislation was in the pipeline to amend the Competition Act. The aim is to “have a more inclusive economy and to deconcentrate the high levels of ownership”.
The Minister has expanded on this commitment today.
But let us be frank: the Competition Act is not the right tool for solving the exclusion of many black South Africans from the economy.
Making the economy more inclusive isn’t about breaking up large firms. There is no guarantee that smaller players will enter the market. And even with all the will in the world, competition law won’t change that.
Economic inclusion is about radically transforming our labour laws to create jobs. It’s about improving access to capital and credit for unbanked entrepreneurs. It’s about cutting red tape for small businesspeople. And it’s about growing the economy.
None of this can be done by the competition regulators. Competition policy can make the economy more competitive. But it cannot take on the role of labour policy or industrial policy.
So we need to guard against overreach by our competition regulators.
And we must insist at all times on the competition authorities’ institutional autonomy and integrity – however loud the chrorus of populist voices chanting the mantra of radical economic transformation might be.
This will be particularly important when the Competition Tribunal adjudicates the Competition Commission’s banks collusion case.
Country Recovery Plan
When the Bryntirion Bomber eventually goes, we will need to mop up his mess.
Neither the ANC government in general, nor the EDD in particular, is up to the task.
The DA’s Country Recovery Plan for 2019 is designed to empower entrepreneurs with access to capital, infrastructure, skilled labour, policy certainty and a supportive government.
Already, in the cities we govern – Cape Town, Nelson Mandela Bay, Tshwane and Johannesburg – we are transferring title deeds to township residents to give people a real stake in the economy.
When we govern nationally, South Africa’s cities will drive infrastructure development. We will give cities control of ports and economic development zones, and resource them to provide better public transport.
The DA’s Country Recovery Plan will rapidly transform the lives and futures of all South Africans.
By contrast, the ANC’s radical economic transformation (or “radical economic whatwhat”, as President Zuma recently called it) is a hollow slogan.
And we should see it for what it is before it leads to an economic nuclear apocalypse.