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Not wasting a crisis

Ramaphosa spells out what the SA economy will look like post the Covid-19 crisis.
The president says SA's new economy 'must open up new horizons, and offer new opportunities to all South Africans.' Image: Shutterstock

President Cyril Ramaphosa is not wasting the opportunity brought by the Covid-19 crisis to restructure the South African economy.

When giving his address on Tuesday evening on the economic and social actions government is taking to tackle the crisis, he was short on specifics but said he will take the opportunity to push through much-needed economic restructuring.

“We are resolved not to merely return our economy to where it was before the coronavirus, but to forge a new economy, in a new global reality.”

There will be no going back to business as usual, as the coordinated efforts by institutions across the social and economic spectrum have laid the foundation for the country to go in a new direction.

“Our economic strategy going forward will require a new social compact, among all role players — business, labour, community and government — to restructure the economy and to achieve inclusive growth.”

Ramaphosa said the country would have to wait until Thursday for more details, but did lay out a broad agenda for South Africa post the Covid-19 crisis.

“Building on the cooperation that is being forged among all social partners during this crisis, we will accelerate the structural reforms required to reduce the cost of doing business, to promote localisation and industrialisation, to overhaul state-owned enterprises and to strengthen the informal sector.”

No going back

In a sense, this agenda is not new. Looking back at his State of the Nation Address in February, he had already committed to tackling several of the things in last night’s speech.

Watch: Watch Sona 2020 here

The problem is that he never seemed to have the clout in his own ruling ANC to push through the much-needed changes.

Take South African Airways (SAA) for instance. Before the national lockdown grounded its fleet, Minister of Public Enterprises Pravin Gordhan had fought to keep the troubled airline alive, despite it going into business rescue.

With no cash coming in, Gordhan and SAA’s trade unions are clutching at straws. In a statement released just prior to Ramaphosa’s address, the Department of Public Enterprises said the government was “in no position to provide more capital to SAA and that all parties need to commit to a creative solution for SAA to avoid a scenario where the business rescue is deemed to have failed”.

Read: Government meets with SAA unions, and there’s still no money for the airline

Unlike Gordhan and the unions, the business rescue practitioners have skipped the bargaining stage of grief and gone straight to acceptance, as they proposed selling off SAA’s assets last week to pay severance packages to its 4 700 employees.

Though Ramaphosa has shown some remarkable fortitude when it comes to facing up to the difficulties brought by the Covid-19 crisis, his timidity has at times gotten the better of him, like when SAA’s business rescue practitioners said it would have cut jobs to keep the airline going. Ramaphosa publicly bulked at this, seemingly forgetting that there was nothing legally he could do to stop it.

There will be no going back on Thursday when he spells out his plan.

He can’t announce that he is setting the country on a new route but then backtrack because he did not think out all the consequences when starting out on the journey.

For now, we should be encouraged as he has shown some admirable resolve. It was not easy to extend the lockdown by two weeks, but he did it knowing the pain it would bring.

And although the recovery is still some way off, at least he has a vision for how the country will be once it comes to fruition.

“Our new economy must be founded on fairness, justice and equality. It must use every resource, every capability, and every innovation we have in the service of the people of this country. Our new economy must open up new horizons, and offer new opportunities to all South Africans.”

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A bit short on specifics.Roll on Thursday

More motherhood and apple pie statements I’d guess. The major beneficiaries of the existing state of affairs are the Cadres so it’s like asking Turkeys to vote for Christmas – ain’t gonna happen.

I heard nothing to suggest that he has the clout now. Did I mishear, or did he utter the words ‘radical economic transformation’ which usually come from the opposing faction’s songbook ? The message was decidedly mixed and much of the high-sounding rhetoric could as well be interpreted as cover for more subsidisation of SOEs under the pretext, say, of preserving jobs. Or maybe he’s still just trying to please everybody all of the time. I would hold off on the new dawn pictures until we hear some details.

That last paragraph you quote has the characteristic attempt at conveying inclusivity while maintaining a Nationalistic note. Does ‘the people of this country’ mean the same thing as ‘all South Africans’ or does it include all the Zimbabweans, Malawians, Somalis, Bangladeshis, assorted Europeans etc who (legally) live, work and contribute here ?

New economy? Right. Just idealistic goals without any substance or real action plans.

“Our new economy must be founded on fairness, justice and equality. It must use every resource, every capability, and every innovation we have in the service of the people of this country. Our new economy must open up new horizons, and offer new opportunities to all South Africans.”

So in short this is an acknowledgement of their current failures.

Expect widespread nationalizations and raiding of pensions, wealth taxes etc.

In short welcome to United Socialist States of Azania !!!!

Everyone seems to forget that the whole world was heading to recession before Covid-19 took any hold at all.

If you want “fairness, justice and equality” then you have to change the world’s financial system, and in particular the use of usury in the role of lending. It is mostly about the rold of debt in world and the cost of debt. Let money be more of a means of exchange than a means of dependency and control.

“With a gun a man can rob a bank, with a bank a man can rob the world.”
― Carter Glass

A new economy in a new global reality. What does this mean? How can a politician create a new economy, and how can a politician create a new global reality? Entrepreneurs create economies, and innovators, brilliant scientific minds, gifted artists and brave explorers create new global realities.

A politician and a public official do not tick any of the boxes. They exist at the expense of the population. Therefore, the only way they can create a new economy and a new global reality is by expropriating the population. They have a new name for this “new” process – Modern Monetary Theory. MMT is the last stage in the age-old evolving cycle of money that has been with us from before the time of the Great Kahn. It starts with a barter economy, evolves to tokens like shells or shark-teeth, then commodity money, then gold and silver coins, then representative money, then a fiat currency and lastly MMT which is money based on debt. Then the cycle is completed.

The phase we should prepare for after this “new reality” has run its course, is a return to the barter economy.

Government control of business and citizens through military and police is the ideal opportunity for the creation of a new socialist state.

With a little help from their friends.

Can you see the opportunity to cease a socialist state?

“But why in justice should the government borrow money? Why should it not just issue it? The bankers are expert distributors of money….but where they only lend back to the government money of which society is the real creator, they are performing no service at all. As Mirabeau said at the time of the issue of the assignats, why should a government lend to itself and pay interest to someone else for doing so?” – Christopher Hollis, Breakdown of Money, 1934

I understand the skepticism of some of the comments here. But we need to back this man and all work together. He is the best chance we have for a new economic dawn. Let’s support wherever we can.

@ Jo Slow – You have no choice if you are domiciled in SA, just make sure you accept and swallow your daily dose of pills given to you by your “Man” I.E the ANC.

“and offer new opportunities to all South Africans”…er well except those in the tourism smme industry, no those must just be for BEE. Perhaps your speech should be backed up with a similar approach to relief packages?

Larry, to my mind it looks like he has changed his view. Big business is taking a beating, as is everyone, but the hardest hit are the very poor, the blue collar worker who might be retrenched and the small business owner(SMME).
I think pressure from a number of factions and lobby groups are having effect, and social reform has long been lacking in SA.
The reality is that the unions have benefitted from a bloated and growing government wage bill and this has always been the tri-part alliance. Covid has changed all this. SARS, UIF, GEPF are all going to be under serious pressure hence the reality of it all

With economy in depression and rand haircut of 30%, it’s time to talk more welfare grants,SOE bailouts and bullet trains again.

End of comments.

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