AFTER President Jacob Zuma had delivered the state of the nation address, Finance Minister Pravin Gordhan was spotted sitting in an aircraft’s economy class. While the gesture was symbolic, it was not unimportant. This, I suspect, was Gordhan’s way of giving some content to the austerity measures announced by the president in the Sona.
In a small but not insignificant way it was also an attempt at confidence-building by sending a message, particularly to rating agencies, that the African National Congress (ANC) government is serious about staying on the path of fiscal prudence. In other words, he saw the need to send a message about the effective management of the budget deficit by setting an example through political performance art.
But the day before Gordhan delivered his budget speech some Cabinet ministers were spotted in the business class of a flight to Cape Town. Obviously, they were on their way to Parliament and were clearly not in a mood to follow Gordhan’s example. This is not just about whether Cabinet ministers were in the business or economy class of a flight. The symbolism goes much deeper and amounts to a metaphor about the climate and political context in which the finance minister was to deliver the budget speech.
In this regard, I must say right at the outset that one of the reasons behind the underperformance of our economy is the fact that South African society still suffers from a conflict in moral, political, economic, policy and other perspectives about what constitutes a moral and civilised society. Another problem is a byproduct of the Nhlanhla Nene debacle.
The president has been quite consistent in his view that he did not err when he removed Nene as finance minister. To this, he added this week that Des van Rooyen was the most qualified finance minister he has ever appointed. What is becoming clearer is that Gordhan was not Zuma’s choice. In my estimation, this lends some credence to rumours a clash is brewing in the ANC and government because of perceptions that some ANC government deployees are taking instructions from the West, transnational corporations, big business, powerful families and hidden policy lobbies.
Apparently the clash that is brewing is between those who supposedly take their instructions from the West, on the one hand, and those who supposedly jive to the dictates of Russia and the East, on the other. What this signals is the possibility of higher levels of political and, therefore, policy uncertainty because of internal ANC dynamics that may sharpen around policy differences within the ANC and the alliance as we approach the governing party’s 2017 national conference.
Given that Gordhan is expected by some economic players to act outside the wishes of the president and the party, did the budget speech strike the right balance between the interests of the party, the markets and rating agencies, big business, and the working class and poor citizens?
Austerity plans such as managing personnel costs in the public sector, freezing some posts in the public service, merging South African Airways and SA Express, accelerating private sector participation in the ports and freight sectors, reducing the number of municipalities and setting up task teams of big business and representatives of the government, are all steps in the right direction.
But viewed against demands for deeper cuts in the public service wage bill through measures such as a freeze in public sector salaries, downsizing the public service, and a new and comprehensive growth plan, as well as greater levels of privatisation of state-owned enterprises, the speech did not go far enough. I suspect there may have been enough in it to avoid a downgrade in June, but not necessarily in December.
Viewed from the perspective of poor citizens, the speech was largely a consolidation of work started after the 2009 and 2014 elections and, therefore, amounts to a holding pattern that will not satisfy those on the left of the political spectrum. The imperative now is unity behind short-term measures that open up opportunities for longer-term planning.
• Matshiqi is an independent political analyst