Frightening, important read on vital topic

2017-11-06 11:15
On the brink.

On the brink.

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This is probably the most frightening book I have read this year. The title On the Brink is extraordinarily apt because that is exactly where South Africa is at the moment. In fact, some pessimists cited by author Claire Bisseker claim that we are already over the brink and heading relentlessly towards joining Venezuela as one of the world’s most unhappy nations.

In lucid prose that even those unversed in the complexities of “the dismal science” will have no difficulty following, Bisseker teases apart the interwoven strands of the country’s macroeconomic situation to present a devastating picture of a country blundering along in the wrong direction under the malign leadership of a venal president and his merry band of crooks and looters.

The book is divided into four parts. The first deals with the political situation and includes a chapter by Rob Rose on state capture. The book then moves on to a fiscal overview, painting a gloomy picture — and this in June 2017 — of a government facing a crippling debt burden as a stagnant economy and a shortfall in tax revenue begin to bite. Along this road lie further rating agency downgrades and possibly a default, leading to the need for an IMF bailout and the stringent structural adjustment programme that this entails.

The author quashes the enthusiasm expressed by certain politicians for turning to the supposedly more sympathetic Brics for assistance by pointing out that for most of the aid given, the same IMF rules apply.

The third part of the book provides an economic overview, showing how policy confusion, a predatory, rent-seeking government, a poor education system largely hijacked by labour union Sadtu, an inflexible labour policy and a failure to focus on those parts of the economy that will start the process of reducing unemployment and fuelling growth have all contributed to the fix we find ourselves in now. One chapter in this section is titled myths and legends and it discusses a number of commonly held beliefs that are not supported by the available evidence. One of these is that the National Development Plan is too complex to be applied successfully. The author argues that the NDP, although officially adopted by the government, has never been put into operation and represents the country’s best hope of getting out of the economic and fiscal dead-end we currently find ourselves in.

The final part of the book is titled “End Game” and it is here that Bisseker draws on the work of a number of experts to come up with what needs to be done if South Africa is to pull back from the brink. Clearly, the first order of business is to get rid of our “gangster” president and his numerous hangers-on.

After this, Bisseker identifies five areas that need priority attention. The first is addressing the skills constraint — South Africa ranks 102nd out of 144 countries for the availability of scientists and engineers, behind four other African countries. Bisseker argues that in order to kick-start the economy it will be necessary to import skills.

Another step on the road to economic recovery is to hike South Africa’s savings rate to fuel higher investment. A third step would be to reform the country’s transport and communication network to increase efficiency and reduce costs.

A fourth step would be to shift the economy into a more labour-intensive growth path. One way this could be achieved would be by exempting smaller firms from the automatic extension of bargaining council agreements. A final step would be to increase competition between firms in order to reduce South Africa’s unacceptably high margins. Add to this a willingness to find innovative solutions to complex problems and South Africa could well be back on a high growth path in a few years’ time.

This is unquestionably an important book on a vital topic and should be read as widely as possible, particularly by those who favour dangerous populist solutions to our complex problems.

• Simon Haw is a retired teacher. He has written histories of Maritzburg College, the Natal Education Department and The Witness as well as contributed to numerous history and social science textbooks.

Read more on:    pietermaritzburg

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