Many South Africans ask themselves how realistic election manifestos are. I am told Julius Malema has promised cash grants of R5 000 per month to those who qualify. The ANC has been touting the R350 per month grant and Panyaza Lesufi, the superstar of the ANC, has been offering Nasi ispani, junior level jobs, to thousands of Gauteng youth, although millions applied for these limited jobs.
All these election gimmicks and rhetoric come against the undisputed 15-year track-record of failure of the Ramaphosa-Zuma regime of the ANC.
Promises and failures are now inseparable. We now need a new story.
Reckless guesswork needs to be replaced with pragmatic solutions that are ambitious, grounded in hard empirical evidence and then tailored for South African conditions, history and culture. Solutions must be well designed, context sensitive and implanted only by the A Teams of RSA – not by failures and mediocrity.
Every proposal must have quantification and contextualisation, customisation for our reality of failing racial capitalism. The solution must be fully costed for the short-term, medium-term, and long-term once it is costed the funding mechanisms and available budgets over the long-haul must be identified and set-aside to sustain the programme. This must be accompanied by the human resources and all institutional capabilities and capacities necessary to sustain the programme.
Every programme must be traced back to several factors. For example, what does it do to the gross domestic product (GDP) growth rate, and what does it do to tax revenues collected, and does it positively impact the growth of other economic sectors?
This is so because the economy is represented by one major equation and when you touch one part of the equation you either reduce or increase the GDP. That equation is generally known as the GDP equation:
GDP = C + G+ I + (X-M)
So, the GDP is made up of household consumption (C), government expenditure (G), gross private Investment (I) and net exports (X-M). So, if we increase grants and wages, we can increase household consumption and therefore GDP. The same goes for increasing government expenditures and private sector investment, etc.
In all of this, we cannot just rely on theory – proper real-world examples from other successful countries must be examined so that the intervention is custom-designed for South African conditions.
In simple terms, Panyaza Lesufi and Malema need to supply the voting public with all the research they have done to prepare their respective interventions in this case, the Gauteng crime wardens and the R5 000 per month grant.
In all this, many things appear totally unaffordable in South Africa because the National Development Plan says our GDP growth rate must be 5.4% per year on average, and the African Union says all African countries must sustain a 6% GDP growth per year.
South Africa struggles to achieve 0.5% GDP growth rate per year, so we need to grow our GDP growth rate by about 12 times to normalise our economy to be able to afford the basics needed by every citizen. All aspects of the GDP must be fully activated, including tax and interest rates.
Over the past 40 years, China, a communist one-party state, has permanently lifted 800-million people out of poverty. This has been made possible by making sure that only the most highly educated and productive leaders are installed at every level of the state and performance managed. These leaders have scrutinised economic advice from around the world, including the World Bank and IMF and customised them for the real-life conditions in China.
It follows that successful programmes are not only products of ideology but also products of science, technology, innovation and empirical data.
Again, Japan has a debt to GDP ratio of 226.1% and remains a highly successful nation and a world super power.
In South Africa, many leaders and neoliberals sound the full blast of alarm when South Africa hits 80% debt to GDP ratio, because ideologically they believe that the ratio should be below 80%. That belief is not supported by hard evidence or any cogent economic theory.
Finally, every political party must table a manifesto that is characterised by understanding of the systems – such as the systems of governance that guide our role in the UN Sustainable Development Goals, African Union Vision 2063 and the NDP.
All of that must be linked to the creation of credible budgets, the building of competent implementation teams that conforms to the country’s constitution.
By Sandile Swana
• Swana is a political and economic analyst, an academic and a member of the 70s Group
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