I’m sorry to break this to you but we cannot just "open up the economy", as many have been howling. With this "open up" call we are just mimicking the Americans. We need to urgently devise our own way of facing a post-Covid future.
We have become used to mediocrity in SA. Unlike the US, with its record low pre-coronavirus unemployment levels, the SA economy was in a shambles. In February this year finance minister Tito Mboweni forecast that the economy would grow by 0.9%.
Come on. That’s the economy we are talking about re-opening? A no-growth economy? We didn’t even stop to remind Mboweni that last year he had projected growth of 1.7% in 2020. For 10 years this has been the story of the SA economy: downward revisions every quarter.
On May 14 last year Stats SA told us that the expanded unemployment rate was an astonishing 38%. Anywhere else in the world there would have been riots. Here no-one batted an eye. The rate for women was a staggering 41.5%. This year Stats SA can’t do any counting, but we can work out where that number is now. We were in deep trouble even before this pandemic. The Covid-19 whirlwind merely tips us over into even more dangerous territory.
I am still shaking my head in wonder at how trade & industry minister Ebrahim Patel dismissed economists’ reports that the economy is declining rapidly, saying the numbers were a "thumb suck". Really? The National Treasury itself projects a worst-case scenario of a 16.1% contraction in 2020. Others have predicted worse.
Patel is clearly not waking up in the night, like the rest of us, sweating bullets
Patel’s words mean he is not waking up in the night, like the rest of us, sweating bullets about what this catastrophe means. He should try reading the FM, perhaps. Several weeks ago the FM featured Johann Rupert on its cover, warning: "People speak as if this is just a blip, but I don’t think it’s like anything any of us have ever seen before … Economists are discussing if it’s a ‘V-shaped curve’, or a ‘U-shaped curve’ — it’s all meaningless. What they don’t get is that this isn’t just a pause — it’s an entire reset of our economic system."
We are in deep trouble, and we need far deeper and more radical solutions than "opening up the economy" or doing the same things we have done in the past. I fear we are obsessed with the moment. The future and what it looks like is what we really need to be focusing on.
What needs to be done?
Internationally, people such as Dambisa Moyo, a renowned economist and critic of foreign aid, have had Damascene conversions. Moyo wrote in The Economist last week: "A decade ago I gained notoriety as a critic of large-scale foreign-aid programmes that flow from Western countries to developing economies. I argued that over $1-trillion of aid provided over the previous 60 years had failed to improve living standards across Africa … Yet today it is clear that Africa urgently needs a substantial aid injection or it will be destroyed by the coronavirus."
Are our Ebrahim Patels prepared to have their own Damascene moments?
President Cyril Ramaphosa seems aware of the scale of the problem. Speaking to the KwaZulu-Natal provincial leadership last week, he said: "We are going to have to go for growth in a big and exponential way, and be willing and be brave and courageous enough to massify whatever needs to be done, because playing around on the edges with whatever efforts we are making — that time is over now."
That sounds great. Where is his plan? There isn’t one. Where is his team? Patel is not fit for purpose. Pravin Gordhan wants to pour more tax rands into a new SAA. Lindiwe Sisulu is running her presidential campaign. Mboweni is tweeting away at night, bemoaning his numerous defeats at the hands of cabinet colleagues. The rest of the cabinet thinks its job is to behave like kindergarten teachers, stopping the populace from having a cigarette.
There is no sense of urgency, no sense of dread, no sense that we face the greatest challenge of our lives.
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