ASGISA+a+welcome+shift,+Nzimande,+Sunday+Times



=A welcome shift, but Asgisa’s devil lies in the detail=


 * //ANOTHER VIEW//**

Sunday Times, Johannesburg, 09 April 2006
The SA Communist Party has broadly welcomed the government’s Accelerated and Shared Growth Initiative for South Africa (Asgisa). It marks another step in building greater convergence on economic policy among ANC alliance partners. Gone is the insistence on rampant privatisation. Gone is the excessive focus on macroeconomic “fundamentals” to the relative neglect of the real economy. Asgisa calls for an active developmental state, for a comprehensive industrial policy and for integrated local development planning.

In particular, we have welcomed the manner of Asgisa’s introduction into the ANC-led alliance. In the January 2006 Asgisa discussion document, the government is at pains to insist that it is “a set of concrete economic proposals and not an overarching economic strategy”.

The initiative is characterised as “a broad framework of further steps that need to be taken ... Further work would be required to put them into practice, in a partnership among all economic role-players”.

This marks a welcome shift from the rhetoric of the latter part of the 1990s, when government economic policies were presented as “written in stone”, and Cosatu, SACP and social movement concerns were vilified as “ultra-leftist”.

Asgisa’s core objectives are to achieve growth that is accelerated, sustainable and shared. It correctly attributes current growth to two key factors: surging global primary commodity demand (especially from China) and significant buoyancy in domestic demand. We agree that we cannot rely on either of these for medium-term sustainability.

But while we shouldn’t be myopic about the prospects of demand-led growth being sustained forever, neither should we be embarrassed about domestic demand. This demand is partly the result of a major increase in the middle class due to the deracialisation of professional, managerial and skilled positions.

However, in the SACP’s view the present Asgisa document understates the equally important impact of burgeoning informal-sector activity, catalysed, we think, by a significant increase in social grant and broader social-wage transfers. There is still a tendency to think of social-wage transfers to the poor as “welfare”, which might be the “decent thing to do” but is essentially negative for growth. However, if we are indeed to have sustainable growth we need to promote dynamic connections between social-wage transfers and local-level productive activity.

Asgisa devotes considerable attention to identifying the constraints to growth. It lists a relatively volatile currency; costly and inefficient logistics; skills shortages; barriers to entry and lack of competition in key areas; capacity weaknesses in the state; the size of the domestic market; and our distance from major global markets. We agree with the relevance of all of these challenges. However, we have two concerns.

How we unpack a particular constraint is not a class-neutral matter. We always need to ask questions like: Skills for what? Logistics for whom? Already, in the elaboration of Asgisa, it is possible to detect a drift towards certain class-based assumptions.

Logistical constraints tend to be identified as those that impact upon the big mining houses and other large exporters. We certainly need to consider these seriously. But the danger is that we will focus all our resources on the “flagship” infrastructure projects (some of them potential white elephants) — Coega, Gautrain, the Dube Trade Port — while neglecting logistics for smaller producers and for the poor. Rural railway lines that have fallen into disuse, decent public transport, infrastructure provision for bicycles and pedestrians — these are the logistics needs for the majority of South Africans.

Our second concern is the somewhat economistic way in which Asgisa has set about identifying constraints to growth. The HIV/Aids pandemic is not even mentioned, yet over five million South Africans are living with the disease and more than half of all deaths in 2005 were due it. Surely this is a major constraint to any growth, especially shared and sustainable growth? And what about traffic accidents? Some 18000 die people on our roads every year and the figure is escalating. It costs our economy an estimated R38-billion a year (that’s two Gautrains every year).

There is another notable absentee from the list of constraints to growth. Deputy Finance Minister Jabu Moleketi flagged the matter in the paper he presented to last year’s ANC National General Council. Most of us focused on Moleketi’s proposals for a more flexible labour market, which were, in our view, correctly rejected by the NGC. Yet the paper also floated an interesting critique of present black economic empowerment (BEE) policies. Moleketi asked the pertinent question: is BEE contributing to growth? He suggested that it was not. It is largely a dis-saving, with deals financed through borrowing that removes significant amounts of capital from productive investment.

The SACP believes this matter should be pursued more rigorously in the context of Asgisa’s objectives. We should also consider how our attempts to build an effective developmental state are perversely undermined by relations between business and the political elite, and by the depletion of senior public-sector posts by private companies “meeting” BEE employment targets.

These are some concerns the SACP has begun to raise in its interactions with government and alliance partners. The key challenge will be to ensure that an accelerated 6% economic growth target does not crowd out the other key objectives of Asgisa — sustainable and shared growth.

Much will depend on the ability of the SACP and its alliance partners to mobilise millions of South Africans around their everyday concerns for things like jobs, sustainable livelihoods, land reform, financial services, a once-off amnesty from the faceless credit bureaus and decent public transport. Nzimande is general secretary of the SACP


 * From: http://www.sundaytimes.co.za/articles/article-business.aspx?ID=ST6A176571 **

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