SA’s schizophrenic approach to policymaking

Like most South Africans, I too get preoccupied with the ‘never-cease-to-leave-us-shell-shocked’ arena of local politics. However, I’d be remiss if I said over the past few weeks I hadn’t developed a public position that questioned the breakdown of the state approach to macroeconomic policy.

In this article I will focus on the often unclear and at times schizophrenic behaviour of some of South Africa’s macroeconomic policy directions. By no means is this a disparaging of the mental disorder. It is more to accentuate the fact that it is unacceptable to have policies that are not aligned, especially when so many of South Africa’s problems are directly located within the implementation thereof.

The politics of the tripartite alliance will continue to fascinate and attract those who are interested in how politics, labour and the economy collide. The interest in the interplay between economics and politics has been around for as long as we remember and will continue to lead us to ask difficult and sometimes hard questions – especially about the effects of politics on our economy. And if the past two weeks’ events are anything to go by, one can see that the political weather is changing in South Africa. A storm is coming.

What irks and depresses some of us, as South Africans, is not that we are a nation beholden to one man and his army of defenders, but that all critical government-led policies seem to be put on hold until party politics are sorted out.

Even more hurtful is how economies of nations such as Ethiopia and Rwanda are rising faster than ours. Their development models are clear and they are more focused on what they want to achieve and how they will do so.

Progress engendered by schizophrenic approach

While it’s agreed that the national policies should contribute positively to the economic development in the country, the task at hand is that we are yet to resolve a thorny challenge of the schizophrenic macroeconomic policy approach that is often contradictory. This is reflected in the path the country has taken when it attempts to jump-start the domestic economy through policies such as GEAR – a macroeconomic strategy, ASGISA, New Growth Path (NGP) and now, the National Development Plan (NDP).

Let me expand on that, as it seems our politicians have a hard time seeing any of these policies and plans to completion. They do not even stay with one long enough to learn best practice before discarding it for another. The short-termism has seen policymakers take faulty approaches, inappropriate actions, resulting in a sense of fragmentation. For example the NDP; does this plan boost the NGP or does it supplement, or contradict it? Ask any of the politicians you meet and tell us how they answered. Ideally the strengths of one should complement the other. But in practice, at the surface of the schizoid approach to policies, lies the danger for the South African society and economic future.

Of course failing to do the sensible thing is a long running behaviour often displayed by politicians and their policymakers. It is thus necessary to look at Europe – where poor economic policies of a number of its countries have resulted in financial crises with consequences for many of their citizens. 

What does it mean for the ordinary person?

Social media, particularly twitter, has low a tolerance for commentators, analysts and even columnists like myself. Rightfully or not, they lambast the ‘fearmongering waffle’ of our tone.

I’d like to believe otherwise. Without our interpretation and commentary on key aspects, such as macroeconomic policy, how will people effect change? Conversely, nobody likes the bringer of bad news or the ones shouting ‘I told you so!’

Still, a reminder never hurt anyone. Across the country and the world there are a number of frustrated companies and investors who cannot see the thread of the South African macroeconomic policy direction. The bad news, not only for those keen on private public partnership, but for the Joe & Jane Citizen, is that the next major threat to the economy (recession and a slow struggle out of the rut) could originate from the the unclear and contradictory way in which politicians interpret macroeconomic policy. The gulf between a policy such as the National Planning Commission and local municipality is so wide that it seems that politicians at various government levels never take the time to discuss their ‘theme’.

That imbalance and failure of many basic State-led programmes is the result of a lack of coordination in policy approach and direction among key politicians.

What needs to happen 

Crucially, for South Africa and our people, the task is much bigger than having policy harmony and an aligned approach. Unless the macroeconomic policies support the steady, sustainable and coordinated growth of demand for, and supply of, goods and services, we are in much bigger trouble than we think.

Let’s have labour market policies that play a strategic role in growing the economy by reducing structural unemployment. This is why careful consideration must be given to labour plans that will facilitate the matching of workers to jobs and keeping the unemployed in contact with the labour market while at the same time improving their skills.

Ultimately, a darkening of economic skies will continue to loom over South Africa, as shadowy and ominous as the split personalities of suffering schizophrenics.

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