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Tuesday, July 30, 2013
Power-obsessed leaders fiddle while SA burns
It has been a week-and-a-half since Reserve Bank governor Gill Marcus and Finance Minister Pravin Gordhan both dropped bombshells on South Africa.
Without beating about the bush, they told us that the economy is tanking and tough times lie ahead.
The country is in economic crisis but no one seems to care much about it except these two leaders.
Marcus told us on July 18 that the Reserve Bank's economic growth outlook for 2013 had been revised down from 2.4% to 2%.
Then, speaking from Moscow the next day, Gordhan echoed Marcus and said the Treasury would cut its economic growth forecast for this year to as low as 2% because mining strikes and the recession in Europe would dent exports.
But it says something about our political elite, and our political culture, that these announcements have not made it into most newspapers.
Let's unpack what the two announcements really mean.
First, consider that the economy grew by only 0.9% in the first quarter, the slowest since 2009, when President Jacob Zuma's administration came into power. Consider also that we need the economy to grow at about 7% annually to lower the unemployment rate to 14% by 2020.
Then consider this: Marcus announced on the same day that the youth unemployment rate had reached 52.8%. Yes, more than half of all young people are walking the streets instead of working.
The Zuma administration's economic performance has been getting worse ever since it came into power. Gordhan's projections for economic growth have taken a beating every year. He promised 2.7% last year but gave us only 2.5%. He promised 2.7% this year but has already backed off to a measly 2%.
The implications are dire: unemployment is likely to rise and retrenchments will continue as businesses take strain. South Africans are hugely indebted as it is, but things will get worse.
So who cares? No one, it seems.
Election season is in full swing. A lot of mud, poo, scandal and tears are being flung about.
There is a lot of noise, but no real engagement with the issues that affect the poorest of the poor - the people whose lives are going to be devastated by inadequate economic growth, retrenchments and deepening unemployment.
We have forgotten about them.
Instead, the ANC, its allies and the twitterati were yesterday salivating over the Zwelinzima Vavi sex scandal.
The in-fighting and the divisions that have gripped the tripartite alliance - the ANC, labour federation Cosatu, and the SA Communist Party - are now more important than a serious discussion about what ails this economy and how we should go about fixing it.
Many political players are in this sad, pathetic state of disarray.
COPE is still in court fighting over leadership positions.
The Economic Freedom Fighters, despite the name, are nothing more than champagne socialists, drunk on the promise of power.
The party is only in its infancy but already it is flirting with dangerous religious quacks such as the notorious Pastor Mboro, of the East Rand.
The Pan Africanist Congress and Azapo are in tatters and will be wiped out in the next election.
The Inkatha Freedom Party is being consumed by its own ghosts.
The DA is bending over backwards to sign up a man associated with homophobia, sexism and an attempted murder charge.
All the while, the economy is tanking. If there is a case for Zuma to answer, this is it.
Since he came to power he has singularly failed to provide leadership on economic policy.
To avoid making a clear decision, he appointed four ministers to oversee the economy.
Gordhan and Minister in The Presidency Trevor Manuel have gamely tried to pull one way while Economic Planning Minister Ebrahim Patel and Trade and Industry Minister Rob Davies have pulled the other way.
It's a confusing mess. Four years later, there is still no certainty about our macro-economic policy.
The whole thing is a patch job. Last week, the ANC announced that it would establish yet another task team on the economy. Oh my, not another.
All this has consequences. South Africa has been wracked by service delivery protests: who is behind them? Answer: the young people walking the streets without jobs.
Now the populists are running around promising young people "economic freedom" and nationalisation of the mines and land - all of which could lead to a Zimbabwe scenario.
What will the hopeless, unemployed young do then? They will follow the populists because the ANC is failing them.
There's a popular phrase: "It's the economy, stupid!" Our leaders would do well to reflect on it before the nation goes bust.