It’s the economy, stupid!

Douglas Gibson wonders when people in govt will ask themselves whether their policies could possibly be to blame

It’s the Economy, Stupid!

1 May 2019

Bill Clinton would not have succeeded in South Africa. His famous election slogan, focusing laser-like on the American economy, “It’s the economy, stupid,” resonated there.

Our economy is in a bad way. For a few days in March the country teetered on financial disaster because of ESKOM’S problems but many voters ignore the economy in the election. Will voters punish the ANC for their mismanagement?

The ANC got us into this situation by ruining the Manuel/Mbeki turnaround and supporting the Zuma profligacy (with Pravin Gordhan as Finance minister most of the time). What was not looted was wasted by grossly mismanaged government departments and state-owned enterprises, bringing little benefit to the poor, or even the ordinary salary and wage earner.

The government has not proposed anything in the campaign that remotely resembles fixing the economy. On the contrary, it continues with the nonsense about the National Democratic Revolution and radical economic transformation, lovingly using the ideas so popular in East Germany and elsewhere in the communist world after the Second World War.

It wants the Reserve Bank to be nationalised – ignoring the Finance Minister and Thabo Mbeki who say this will make no difference to the operation of the bank but will undermine the image of South Africa in investment circles here and overseas.

This adoration of outdated ideology, with the party's EFF-like stance on the expropriation of property without compensation after amending the constitution, is irresponsible in the extreme. Instead of prioritising growth and job creation, the obeisance is to ideology that has already all but ruined us.

This government barely disguises its dislike for the USA. We benefit hugely from AGOA, giving us tariff-free access to the US market, and from PEPFAR, George W Bush’s presidential initiative giving mega-millions in aid to our HIV/Aids programme. Instead of valuing that and our favourable trade surplus, we sometimes adopt a hostile attitude towards the USA on the Security Council of the United Nations.

We seem happy to encourage the myth that politics in the United States is so messy and the country so divided that nothing gets done.

South Africa ignores the fact that American unemployment stands at 3.7%; that inflation there is 1.8% per annum; that their GDP growth this year will be 2.1%, and their interest rate is 2.5%. We can only dream of having such figures. Surely our government should conclude that we might just be able to learn from the Americans.

And the UK? The narrative is that the UK is such a political mess that it is a laughing stock. Do those who find it so amusing know that the UK unemployment rate of 4.1% for men and 3.8% for women is the lowest it has been for 44 years? Or that its interest rate stands at 0.75%? Or that its borrowings are at the lowest figure for 17 years? Can we not learn from the Brits?

Some people might feel it unreasonable to compare our economic management with those developed economies. Fair enough. How about comparing us with our friends in the BRICS group of developing nations?

According to the ILO, Brazil's unemployment is 13.7%. China's unemployment is 3.7%. India's is 6.9%. Russia's is 6%. South Africa's unemployment, at 27.5 %, is the highest in the world (apart from Lesotho, at 27.8%).

When will the people in government ask themselves whether their economic policies could just possibly be to blame? Will the voters not ask themselves whether the policies of the present government are responsible and ask further whether there are alternatives on offer that ought to be considered in voting on 8 May?

Douglas Gibson is a former opposition chief whip and ambassador to Thailand. His website is douglasgibsonsouthafrica.com

This article first appeared in The Star