Budget 2017 Opinion

Will Gordhan’s “fire-extinguishers” be enough?


Home South Africa is sitting on a tinderbox, surrounded by a forest of dry wood called the global economy and its own garden is pretty barren too.

This is the picture that emerged from Wednesday’s national budget delivered by our senior firefighter, Finance Minister Pravin Gordhan, who did his best to get some preventative measures in place to avoid the country’s social fabric being destroyed by revolutionary flames.

In this special post-budget edition of the Intelligence Bulletin we brought together a collection of articles, which we trust will give our readers a broad, holistic context in which to view this year’s budget – probably the most challenging since the days of the "Great Depression.”

Gordhan and his team’s gallant effort, under extremely taxing (pardon the pun) circumstances, could very soon turn out to be in vain. That is if, as is widely speculated, the boss of the Fire Department, President Jacob Zuma, fires him. That just could be the spark that triggers the tinderbox and sets the house alight.

Even if that spark is avoided in the immediate future, there are – judged by the first reactions – some smoke visible from the student corner of the garden. It will not take much wind to see flames developing soon on that front.

A much bigger danger for a flare-up, however, might be lurking just a month away on April 1, when some 17 million people dependent on social grants might not be paid because another key firefighter, Social Development Minister Bathabile Dlamini, has been negligent since a court order served on her in 2014.

Fuel of a revolution

As it has proven to be the fuel threatening to ignite the revolutionary fire in the wider global wood, a total loss of trust amongst the general public in the entire fire-department and its leaders, has also in South Africa, become the biggest danger to social stability.

This distrust is well illustrated by a “news-item” via the social media network that appeared on my screen on budget-day. It told me of, and asked comment on, the following story:

“At the end of March 17 million people will not receive their (social) grants and will have no money to live from. They rise in protest across the country. They will go into shops, take what they need, destroy and burn the rest. Nothing will be able to stop them because there will to be many of them.

Zuma will then intervene with the military and execute a military coup to turn himself into a dictator. Nobody will be able to do anything and people opposing him will be killed.

This is the only way Zuma can stay in power. This is why he does nothing about the grant issue – something he has been planning for three years.”

This narrative has probably developed out of the human propensity to develop conspiracy theories around issues too complex for them to come to grips with in a rational way.

However, the mere fact that it developed and is widely circulated, tells us how deeply in trouble and fragile social stability is in the country.

And, before we just point fingers at political leaders, let’s not forget that the captains of industry and commerce are also, or should be, in the fire station – in their own interest if their businesses are to survive in the long run.

Before one puts all your hope on that private sector team, consider the following advice from the economist of a big corporation to Minister Gordhan on the eve of the budget: “Tactically I believe that Treasury’s best move would be to announce a 2% increase in VAT and to adjust that number down to 1% after the initial pushback from consumers.”

This rings terribly cynical coming from someone who is supposed to be a scientific annalist and I am not surprised that world-wide the business community is also experiencing a credibility crisis.

What is needed?

As has been his custom, Gordhan was careful on the political terrain. He however did warn against populist rhetoric, and said the terms radical economic transformation, transformation, and inclusive growth are synonyms. “We need to get beyond slogans.”

In August 2015 we wrote: “South Africa needs an economic ‘war room’ for uncharted waters.”

On Wednesday Minister Gordhan, warning that one “cannot have a small elite group pocketing all the benefits of economic growth,” proposed that South Africa should formulate a new Charter of Economic Rights to supplement the Bill of Rights.

It is a sentiment that should be shared by all South Africans who truly put the interests of the country and all its people first above personal or sectoral interest.

Also read: S.A. economy not working for anyone

                   Explainer: trickle-down economics

                   The future is not what it used to be

                   Brexit: Will the Empire strike back?

by Piet Coetzer

Follow us on Twitter | Like us on Facebook
comments powered by Disqus

Subscribe to the newsletter

Final Word

Final Word

IntelligenceBul Final Word Confusing world of sluts, gays and lesbians https://t.co/qCz4oEd22o 0 years - reply - retweet - favorite

IntelligenceBul Let's Think Will Zuma admit that he is a “shady man”? https://t.co/sKBi6kL5lf 0 years - reply - retweet - favorite

IntelligenceBul Propery & Wealth Home-grown financial solution for a truly South African dilemma https://t.co/1XFQO45fNJ 0 years - reply - retweet - favorite