South Africa needs more than promises of 'structural reform' but real evidence, if President Cyril Ramaphosa hopes to see his policy choices vindicated by history.
Words are powerful things. They are the vehicle through which sentiments and ideas are shared, and thus through which worldviews are shaped – for which reason they are the tools of leaders.
They make what is complex comprehensible. They inform, explain and enlighten. They can also confuse and obfuscate.
South Africa’s economic crisis was brought into sharp focus by the release of its second-quarter economic data. The decline in GDP of over 16% from the first quarter – and a staggering 51% if this is annualised – which bespeaks a country in deep trouble.
Yet it was left to journalists and analysts to put this into a vocabulary that most of us can understand. ‘GDP plunge’, declaimed one. ‘Worst quarterly GDP drop on records’, said another. ‘Massive economic decline’, added a third.
In response to the numbers, President Ramaphosa added some words of his own.
“The economic circumstances created by the pandemic have caused hardship for many South Africans, and threaten the survival of businesses in sectors that are worst affected,” said a media release from his office. True enough, these are real-world circumstances that afflict the country’s people now, and will reverberate into their collective future.
He went on to call for vigorous action to get South Africa growing: “Now is the time to act quickly and boldly to place South Africa on a rapid growth trajectory. We cannot continue with business as usual. We will use this moment of crisis to build a new economy, and unleash South Africa’s true potential.”
This would be brought about by “urgent structural reforms, expanding employment programmes, facilitating large-scale investment in infrastructure projects, and implementing measures to promote localisation and enhance regional and continental trade”.
These are positive words, but not new ones. The phrase “structural reforms” has been in use since the president assumed office. It certainly has an air of profundity to it, yet what this means precisely is unclear. The media release is restrained on this matter too. Government’s plan will emerge from a “social compact” – so it is fair to assume that whatever reforms are to be implemented will be bargained for. Is there any consensus within the government on what “structural reforms” constitute, let alone among the (rhetorically designated) “social partners”?
Last year, in London, President Ramaphosa was asked about the timeframe available to him to get South Africa to implement a reform agenda.
“Not long,” came the uncomfortable response. He could point to some movement on trying to resuscitate some of the country’s ragged institutions; this is to be supported.
But the larger, more politically costly matters, such as reducing the cost of the public service, or reorienting policy, have been avoided. Whether the will to undertake them exists remains to be seen. There is little evidence that the commitment to do so exists.
Indeed, on policy matters, there is very little indication that any substantive reform is contemplated. The dogged commitment to racial empowerment policy is one example – as became clear during the pandemic in the apportionment of business relief, and in the determination to proceed with increasing the pressure on employers through the Employment Equity Act. The threat to Section 25 of the Constitution, and thereby the extension of the state’s reach to seize property, remains on track.
These are not reformist moves, and they belie the words that promise reform. They also make any recovery unlikely.
“Structural reforms” are indeed needed. The parlous state of the fiscus alone is a rock-solid argument for doing so. And it is delusional to believe that recovery will materialise while government shows little inclination to undertake them, while visibly driving policies hostile to investment and job creation.
Meanwhile, the president also attracted some attention for his comments to the SA National Editors’ Forum. Speaking about action on corruption, he was widely quoted: “History will absolve me.”
This is a jarring choice of words. To ‘absolve’ is to declare someone free of guilt. South Africa needs much, much more than this. It needs action that will “vindicate” – that will show the current set of policy choices were correct and productive. This is as important in respect of the county’s economy as it is in respect of corruption. Indeed, given the stakes involved, it may be more so.
But for now, we see words as a substitute for hard choices and resolute action. And as powerful as they may be, for South Africa’s economic future, words are inadequate.
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