Change your neoliberal ways. That was the call yesterday in response to Finance Minister Malusi Gigaba’s 14-point action plan which he unveiled last week. One commentator described Gigaba as like the little Dutch boy of legend who stuck his finger into a hole in a dyke to stop it leaking.
“Neoliberalism” is a set of economic policies that have become widespread during the last 25 years or so that some said were imposed by powerful financial institutions like the International Monetary Fund and the World Bank to favour the needs of rich nations who are decisionmakers at these institutions. Terry Bell, a labour analyst, said he did not believe that the 14-point action plan will help to regenerate the economy.
“The plan is just a stale repeat of the past. We have a problem with the whole process the country followed so far, we have certainly had it since 1996. “We need to change that neoliberal paradigm, not patch it up like a boy with his finger in the dyke,” he said. Ian Cruickshanks, chief economist at IRR, said the plan was nonproductive. “It’s the old same story as the existing 9-point plan. I see little advancement.”
Duma Gqubule, a director at the Centre for Economic Development and Transformation, said the plan will not result in economic growth. “This is not really a plan. The minister said it is not an economic recovery plan. None of the 14 points relate to growing the economy,” he said. Peter Montalto, emerging markets economist at Nomura International, said the plan did not seem to offer anything new, except for the specific time lines for implementation from next month through to March next year.
“Both of these factors have previously been missing from such plans, so while the content is not new, this does elevate it somewhat. “However, growth in the medium run will not come with a plan that doesn’t mention education or labour markets,” he said. Prof Raymond Parsons at NWU’s school of business and governance, said:
“We must see the plan as an implementation for existing policies and projects, but not announcing any new ideas or policies. “It is in its way an overdue action programme to drive the 9-point plan. Given the previous constant criticism that plans are not promptly implemented, we must welcome the fact that at least tangible deadlines have now been set for various ministers and projects.” Parsons said the latest action programme may therefore help to stabilise the economy, but it is unlikely to kickstart growth.
“That will depend on both the minibudget in October and on whether other promised structural reforms emerge later to turn the economy around. It also depends on political developments,” he said.