Hinting at change

2010-02-23 00:00

LAST week, the Minister of Finance, Pravin Gordhan, presented his maiden budget speech with much aplomb. He exuded confidence and peppered his speech with wit and humour. While the liberal press celebrated the fact that Gordhan kept the inflation targeting mandate of the Reserve Bank untouched, parts of the speech are worth revisiting because they suggest that there may be a shift in economic policy gradually taking place.

In politics, it is not just the dramatic change that must be watched closely, but also the small and seemingly inconsequential steps towards a new policy discourse. When listening to master wordsmiths like Gordhan, we should open ourselves to the possibility that innocent words are pregnant with meaning beyond the obvious.

I think the liberal press and orthodox economists may have wrongly conditioned their minds to scan the speech for “danger” phrases such as “jettison inflation targeting” and “nationalisation”. Not finding these phrases, these economists and journalists surmised that no shift had happened. While correct in saying that there is more continuity than change in the budget speech, the Congress of South African Trade Unions (Cosatu­) also missed the subtle changes, changes it campaigned for. In a way, both sides underestimated Gordhan’s ability to begin a shift in the discourse on economic policy in a non-dramatic fashion.

Neither group has prepared its mind for inconspicuous policy shifts. These are changes to economic policy that are made all the more inevitable by lessons being learnt from big economies that we emulate as they come out of the economic crisis. The message coming from major centres of the global economy is that macro-economic frameworks that, until recently were sacrosanct, are subject to review and change. It would be unwise for South Africa to buck the trend and stay the course of jobless growth. This would not only pose long-term risks to the economy, but would also render Polokwane a non-event.

Three ideas indicate the shift I see. Having committed the government to building on the solid foundations laid by the Nelson Mandela and Thabo Mbeki governments, Gordhan said: “We will also have the courage and humility to do things differently.” This could mean a new balance of forces in the trilateral engagement with business and civil society, one that may favour civil society more than in the past. The approach to engagement with social partners may open the policy space for partners to improve their influence in the constructivists’ sense. The idea that the creation of the developmental state goes beyond what the state has control over, namely public policy and action, but encompasses the shaping of a new national identity and responsible citizenship, also creates space for civil society to influence public policy outcomes better.

The second idea is that a new growth path is being forged, “a path in which equality and narrow self-interest give way to a longer-term, inclusive and broad-based development path”. Gordhan made a telling choice of words when he said that the common purpose established in the nineties laid the foundations he builds upon, but this now faces the challenge of disagreement on the “way forward”. This suggests that the new path will seek to reconcile the differing perspectives of interest groups that are bickering over what should happen to the economic policy that has produced waves of jobless growth and a few affluent tenderpreneurs in the sea of poverty.

The third element to scrutinise carefully is the idea that the Reserve Bank should not ignore broader economic and social questions when deciding on lending rates and monetary policy statements. It would be false to say that simply because inflation targeting was not jettisoned, the Reserve Bank has exactly the same mandate as it did under Tito Mboweni­. It seems to me that the Reserve Bank has been drawn into the complex task of using the instruments at its disposal to curb unemployment and poverty, its first move towards a developmental role. It may become necessary for the bank to bring social and political analysis into the body of evidence it bases its decisions on.

The closing statements reflecting on Amartya Sen’s The Idea of Justice also signal change. Gordhan­ took an interest in Sen’s challenge to economists and authorities­ to look beyond figures and ratios, and focus on lived experiences of people, when making their determinations about how to cause development to happen. By seeing the budget as a quest for social justice measured in improved conditions for all, Gordhan prepares us for more details on the new growth path that he is likely to present during his next budget speech, which will effectively be his first budget. He has already indicated that this year’s budget was prepared several months ago and so next year’s will be “markedly different”.

Gordhan has attempted to infuse humanist ideas into what is usually a terrain for economists fascinated with macroeconomic indicators, ratios and statistics. If Gordhan succeeds, he may disappoint ideologues on both sides of the ideological divide, but set us on a path in which the needs of the ordinary citizens and the poor predominate. Time will tell whether Gordhan will have the stamina and tenacity to navigate the arduous space between the right and the left extremes in our ideological battlefields.

• Siphamandla Zondi is the executive director of the Institute for Global Dialogue, but writes in his personal capacity.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.