PALI LEHOHLA | SA, where the cat’s colour is as important as its ability to catch mice

SA presents itself as a country of deep conundrums, one in serious need of catharsis to achieve enduring social compacts. They are underlined by Saul seeking to be Paul and the Prodigal Son seeking cleansing after wasting his fortunes and being picked from a pigsty by his father. The book of Acts throws up several conundrums regarding Saul’s name-change to Paul, often referred to as the Damascus moment. Saul the persecutor is said to have been blinded by light on his way to Emmaus. Jesus ordered his rescue and restored his sight, after which he became the apostle Paul. Another transformative moment is captured in the Gospel of Luke, in which Jesus narrates the parable of the Prodigal Son, who through greed asks for his inheritance. His father obliges. He squanders it on wine, women and worldly wonders, ultimately becoming poor. He finds a job on a farm and works in the pigsty. It is here that his father finds him, cleanses him and restores him, but his siblings are unhappy about the gesture. This column focuses on the possibility of a Damascus cum pigsty moment for SA.

When Andrew Donaldson talks about the South African economy you need to pay attention. He recently spoke to financial journalist Alishia Seckam at the Think Big Series. He has been quoted as saying: “South Africa’s public-sector employment programmes were too small and unambitious.” In a webinar on budget prospects and how SA can extricate itself from the Covid-19, unemployment, poverty and inequality crises, Donaldson labelled budget proposals austere, saying the consequences of such will result in worse outcomes for SA. His remarks predated last year’s July riots, the recent floods and supply-chain disruptions.

Deng’s tactical compromise was in the context of a well-defined economic policy and paradigm in China. So when Donaldson makes these profound statements in the context of our unclear and undefined policy arena, the cat’s shade also matters.

SA’s deepening crisis has precipitated debates on the correctness or otherwise of policy positions and postures it assumed in the run-up to the 1994 settlement an thereafter. Donaldson, like many of us who were in the thick of things, albeit in different roles, was in the Treasury from the beginning of the transition and probably bore the fiercest critique on what became derogatively known as the class project of 1996 — to date an unsettled debate on what policy position SA best represents. Is it Gear (growth, employment and redistribution) or RDP (reconstruction and development)? Thus, when Donaldson speaks on policy matters, especially those drifting from Gear, you need to take note. This matter is not one of dogma or one that fails to appreciate the pragmatism captured by former Chinese president Deng Xiaoping when he said: “It does not matter what shade of red the cat is, as long as it is good at catching mice.” Far from it, in that Deng’s tactical compromise was in the context of a well-defined economic policy and paradigm in China. So when Donaldson makes these profound statements in the context of our unclear and undefined policy arena, the cat’s shade also matters.

Donaldson reflects on the decade 2000 to 2010 and remembers how unemployment declined from close on 30% to about 20%. But this progress can be neatly split into the Gear period of about 1996 to 2002, the AsgiSA (Accelerated and Shared Growth Initiative for South Africa) period of 2003 to 2007 and the financial crisis of 2008 to beyond 2010. In each, distinct policy postures were assumed that led to the changes Donaldson reflects upon. Thus, it is prudent to inspect those policy positions to address the myopia of policy in which SA finds itself. 

The Gear and RDP cats were distinct in their ability or lack thereof to catch mice even before we spoke about their colour. RDP was dislodged largely by the third leg of the Mont Fleur Scenarios, which addressed the transition, asking three questions. Two generated consensus for the settlement with relative ease and were confirmed. First, was there going to be a settlement? Yes. Second, will the transition be speedy? Yes, assisted by Nelson Mandela becoming de facto president and announcing an election date in response to Chris Hani’s assassination. There was no going back. The third was a sticking point and confronted RDP squarely. It was on economic policy. On this question the ruling party vacillated. The key question making Donaldson’s contribution relevant: what economic path was SA going to follow?  Was it going to be mainstream, orthodox economics or the heterodoxy contained in RDP? Colloquially, the Mont Fleur Scenarios posed the question as a leading one — a no-no in social science. Mont Fleur asked whether the settlement would be based on populist economic policies. By default, this labels heterodox economics as populist without saying what mainstream economic policy framework is. SA fell for the mainstream, orthodox bait.

Since then the cat’s colour has mattered. The decadal experience of performance into distinct chunks of economic performance does matter because at least two of these chunks were driven by two distinct economic policies and even had scenarios driving these choices. The first two years of the decadal experience had the Gear hangover and the economic performance thereof is well recorded. The next four years, 2003 to 2007, were driven by AsgiSA, a clear policy position with significant heterodox choices that resulted in employment growth, economic expansion, borne out by GDP, and social expansion, such as redistribution and access, and child support grant coverage. The government deliberately changed gear from Gear to a more heterodox approach to development and results for that period speak for themselves. 

However, as the 2008 financial crisis crept in, the wild policy cat that enjoyed freedom and adventure became beholden by the cage of its master’s making — a capitalist crisis of mainstream economic thought was the leash the austerity measures that followed from 2010 that pulled SA back to mainstream economics, where it has languished ever since. This has now been compounded by its Prodigal Son and own goals of corruption, including a dozen years of wanton political mismanagement. 

Coming back to the book of Acts and the Gospel of Luke on the Prodigal Son, what questions should we pose to first? To Donaldson: are we having a Damascus moment in policy-making or are we still encouraged to teeter on mainstream economics, even when the concept of social compacts makes it clear this will be the wrong choice?  To the ruling party and government: what are the lessons about the Prodigal Son? Are you capable of claiming you have cleansed yourselves and are in a position to manage relations with your blood brothers who have been loyal to kin and brethren? Have your fathers slaughtered fattened calves or have you slaughtered them?  Expropriating public confidence and abusing it materially for your own ends is what is at stake. The Gospel of Luke advises differently, as does the Future we Chose that the government published in 2008. For SA to plod its path out of this conundrum towards true economic social compact, these are all worth investigating.

Dr Pali Lehohla is a professor of practice at the University of Johannesburg, a research associate at Oxford and the former statistician-general of SA. Meet him @Palilj01 and at www.pie.org.za