In his State of the Nation Address President Jacob Zuma trotted out a Nine Point Plan to “ignite growth and create jobs”. In one way or the other, this plan merely echoes or rehashes the aims and promises of:
1. The Growth Employment and Redistribution policy (GEAR), adopted in 1996
2. The official embrace of the United Nations Millenium Development Goals with the key aim of halving poverty and unemployment by the year 2014.
3. The new Accelerated and Shared Growth Initiative for South Africa (Asgisa) adopted in 2006
4. The National Development Plan (NDP) and the New Growth Path adopted in 2013.
The first three have failed miserably in achieving their stated goals. If anything, matters have only become worse. The NDP has just about been started in name. Judging by the grandiose, glorious and positively astonishing promises in its Executive Summary, of a stronger economy – jobs, education, health and generally a far superior existence for all citizens and businesses compared to the present by the year 2030, a veritable paradise on earth for all within the capitalist system at that, one cannot but conclude that these are just another set of facile, empty promises or nothing more than wishful thinking. (See www.gov.za/issues/national-development-plan–2030)
In the early days of his tenure as Minister of Finance, Trevor Manuel declared that a minimum annual economic growth rate of 6% rate would be required if unemployment was to be reduced. This growth rate has never been achieved and in the NDP the 6% has conveniently been dropped to 5%. In 2014 the growth rate was a mere 1.5%, while the present minister of Finance, Mr Nhlanhla Nene has revised the former estimate for 2015 to 2% with expected growth rates of 2.4% in 2016 and 3% in 2017. The government excuses itself largely by putting the blame on the world economic recession over which it has no control and more immediately, the mismanagement at the ESKOM power utility. With all the economic and financial expertise within reach then why the empty promises in all their plans?
To make matters worse, South Africa is sinking deeper and deeper into a debt trap. Nene has stated that “Over the next three years, government’s gross debt stock is projected to increase by about R550 billion, to R2.3 trillion in 2017/18. Redemptions on debt issued over the past decade will add R190 billion to the medium term borrowing requirement. Interest on state debt will rise from R115 billion this year to R153 billion in 2017/18….” and “Net loan debt of the national government is expected to stabilise at less than 45 per cent of GDP in three years’ time”.
In an article in Business Day Live (“SA walking into a debt trap as its fiscal deficit mounts” 01/11/2014) a Mr Dawie Roodt earlier warned that “State finances are in a mess. Since 2009, the state has been running a huge fiscal deficit. Every year since 2009, the size of the deficit relative to the size of the economy exceeded the rate at which the economy was growing. What this means is that if the rate at which the state borrows exceeds the rate at which the economy expands, the state’s debt relative to the economy will continue to increase, and interest on debt will go up.”… Eventually we will reach a point at which we have “too much” debt. We are probably there now.” He further declared that “In the February budget, the minister budgeted for total revenue of R963bn for the full fiscal year — which will end in March next year. Already there are signs that weak economic growth is having a negative effect on state revenue”. We can make further observations that by the year 2014 the debt-to-gdp ratio had increased to 43.2% . This implies that for the year February 2014 to March 2015, the government has had to spend about 12% of its revenue just servicing debt, and rising.
These are the warnings of a bourgeois economist, at that, which is an admission that their hopes that the ANC government could manipulate capitalistic economic control according to their wishes has gone hopelessly awry, as has happened in Greece, Spain and elsewhere. Politically, the facts are enough for anyone to conclude that the government is once more trying to fob us off with vacuous promises which cannot be fulfilled by the year 2030 or even much later, as long as it continues on its neo-liberal economic path. Instead, the country is heading for a critical socio-economic-political crisis. The radical left will have to contemplate putting serious and concrete political demands before the nation, instead of only relying on supporting issue-based, localised, economistic struggles in the attempt to win attention.