Let's Think

The ‘war room’ SA does need is for the economy

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The South African economy urgently needs a truly national, multi-sector ‘war room’ amid signs that the existing globalised economic construct is increasingly coming under structural pressure promising unstable conditions for some time to come.

While the highly divisible subject of an alleged underhand and extremely partisan ANC political ‘war room’ during the 2015 municipal elections, dominated news columns during the past week or so, unity of action on the economic front has become extremely urgent. There are plenty of signs that the fast-changing global economic order is reaching a crisis point.

It is reflected on the domestic scene in, among others, the crisis that has developed in the local poultry industry, bringing it to the verge of collapse in a trade war with the European Union, Brazil and the US, with hundreds of South Africans losing their jobs.

Late January the Department of Trade and Industry in a statement pleaded with the industry not to close down processing plants or cut jobs, claiming a government government-led “task force” (something which has become standard for governments when confronted with a crisis) to “deal with the crisis” has developed a collective action plan to support the industry and has made “significant progress”.

However, on the last day of January – only days later – an ANC National Executive Committee (NEC) lekgotla proposed that the government buy poultry farms and keep producing in order to salvage them and preserve jobs.  

Frankly, this not good enough. It takes government into a terrain that should not be theirs and, experience proved, on which they are seldom successful.

And how wide-ranging they envisage this role to be is clear from the words of its secretary general, Gwede Mantashe, who, at a media briefing, said: “This will not only require the state to buy‚ but it also means that the state will have to find new markets for the poultry that is produced in those farms.”  

Broader context

In the mid-1990s under similar circumstances, South Africa’s textile industry was all but closed down. It is a process that has been a long time coming as a by-product of globalisation, and which has gone into overdrive on the back of the so-called Fourth Industrial Revolution.

And it is not only South Africa that is wrestling with this problem as social unrest is building up worldwide, driven by jobless economic growth and increasing economic inequality. It is a socio-political environment that delivered the exit of the United Kingdom from the European Union (Brexit) and the election of a populist Donald Trump as president of the United States.

The later has already shown signs that a whole new geopolitical construct is developing out there in the wider world.

But, as far back as early 2014, it was clear that the growing economic turmoil was becoming a threat to democracy as a governance model. In February last year we wrote that “South Africa’s economy will be largely dependent on home-grown solutions to survive uncertain times, as a sense of near-despondency grips the global economy.”

That “near-despondency” has since deepened and the latest news about the cabinet lekgotla to set the scene for President Jacob Zuma’s upcoming State of the Nation Address (Sona) is not encouraging. In a statement last week the presidency said: “Given the continuing of slow economic growth, the Lekgotla will … deliberate strongly on efforts to reignite economic growth, working with other social partners, taking forward the achievements of the past year in promoting unity in action in protecting the economy and advancing growth in a difficult economic environment.”

Not only it is difficult to identify “achievements of the past year in promoting unity in action …” it also sounds very similar to what was promised in 2012.

In August 2015 we wrote that with “the world economy having entered uncharted waters, which has turned economic analysis into mostly a guessing game, cool, calculating heads and flexibility are called for” and suggested that maybe “the time has come to pull representatives from the leadership of these sectors together in an ‘economic war room’”.

Populist sloganeering with terms like ‘monopoly white capital’ will neither do the trick of turning our fortunes around, nor prevent the growing social revolution.

Leadership on all fronts will do well to head the words of retired deputy chief justice Dikgang Moseneke who last week wrote, “the country needs brave men and women with vision who will ‘buckle up’ and continue with the journey” (to transformation).

by Piet Coetzer

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