Round table discussion at the National Planning Commission Reply

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Prof Derick Blaauw was among a number of government, educational and non-governmental role-players invited by the National Planning Commission to attend a Roundtable Discussion on the Social Protection Floor and Cost of Living. The event formed part of a series of research engagements as part of the NDP’s focus to eradicate poverty by 2030. The event took place in Pretoria on the 8th of May 2017.  The revised White Paper on Social Welfare as well as draft paper titled “Analysing the impact of State services on the cost of living for the poor” formed the basis of the discussion. The paper was prepared and presented by Dr. Neva Makgetla as a technical and policy discussion on research pertaining to issues that needs to be reviewed for improved standard of living and social protection. The discussion focused on the quality of life for the poor in South Africa in the context of promoting implementation of NDP.

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A mini budget with a major message Reply

The MTBPS may be called a ‘mini- budget’ but it carried a major message: SA is in a low growth trap and until this changes, the government will have ‘to cut its coat according to its cloth’. Growth rates of 1.5% are simply too inadequate to sustain the socio-economic demands made upon them, as the widespread protests about university fees again confirm. The NDP interim growth target of 5% by 2019 is now well beyond reach. The MTPBS may have outlined the economic challenges facing SA realistically but message may not have been bold enough to meet them.

Prof Raymond Parsons

Prof Raymond Parsons

Although all roads to a better economic performance, employment and increased tax revenues lead through a much higher growth rates, this will now depend heavily on the actions of other Cabinet Ministers, and not just on the National Treasury. Decisions on issues like the investment bill, visa requirements and land reform undermine the policy coherence which Finance Minister Nene pleaded for in the MTBPS. Minister Nene cannot guarantee the future performance of his Cabinet colleagues, but this coordination in policy remains imperative.

Although on the face of it the MTBPS projects government spending limits and debt ratios which may hold the credit rating agencies at bay for awhile longer, SA’s public finances are not yet out of the woods. The economy as a whole remains fragile given external and internal pressures, which keeps the projections in the MTBPS vulnerable. The dangers of a debt trap or higher taxes still exist. Only a collective commitment to urgently and visibly implement the overall National Development Plan in a coherent and coordinated way will build the necessary confidence to create a bigger, stronger and better economy.

Prof Raymond Parsons of North West University Business School

Prof Parsons speaks at the SA-German Chamber of Commerce and Industry Reply

Today Prof Raymond Parsons is speaking at the SA-German Chamber of Commerce and Industry on the topic:

RECESSION, RECOVERY AND REFORM IN THE SA ECONOMY

Prof Raymond Parsons

Prof Raymond Parsons

‘In the fast-growing economies, policymakers understood that successful development entails a decade-long commitment, and a fundamental bargain between the present and the future. Even at very high growth rates of 7%-10% it takes decades for a country to make the leap from low to relative high incomes….this bargain will only be accepted if the country’s policymakers communicate a credible vision of the future and a strategy for getting there. They must be trusted as stewards of the economy and their promises of the future must be believed’- The Growth Report, May 2008

1.INTRODUCTION

May I begin by thanking you for the opportunity of addressing the Chamber today and sharing some thoughts with you on the interlinked subjects of recession, recovery and reform in the SA economy. As businesspeople interested in SA’s economic outlook it remains essential that you track and monitor the trends in the economy which influence your strategic business decisions in this country. You are an important foreign business constituency within the broader business community, and you have a significant stake in key sectors of this country’s economy.

About 600 German enterprises have started operations in SA and employ nearly 100,000 workers. You will therefore be aware of the extent to which the SA economy has been increasingly under the spotlight in recent months, against the background of both short and long term factors of significance to SA’s economic performance. Regular,  even daily, assessments of economic trends in SA are available and what is important here today is to stand back and try to form a balanced perspective about the welter of data that are currently available on the economic and business outlook. More…

RPP: Recovery and reform in the SA economy Reply

This article first appeared in the Sunday Independent on 6 July 2014.

Prof Raymond Parsons

Prof Raymond Parsons

The 20th anniversary of SA’s democracy, the 2014 elections and the advent of the National Development Plan (NDP), have converged at a time when key decisions must be taken and implemented to change SA for the better. The need for economic recovery and the reform agenda must now operate in tandem.There is no need to tick the boxes again, as the triple challenges of unemployment, poverty and inequality are sufficiently well-known. Having successfully walked the long road to freedom, SA is now inevitably involved in a long walk to shared prosperity. Its roadmap to 2030 is the NDP, with an action plan outlined in the state-of-the-nation address last month and in subsequent Ministerial initiatives.

Where many critics of the NDP are at fault is in not judging it by the test of using it. Of course, the NDP and its action plans have several pitfalls, but on the whole they are greatly superior to their many predecessors. Critics of the NDP look at the new model car from the pavement and point out all sorts of features which they think unsatisfactory. But they lack the courage to get into it and drive away. If they do so, they will not want to return to the ‘bad’ old way of doing things, but instead to get real movement into a better future for all. We may not get this opportunity again, so it is imperative to capitalise on it. We need to use the time given by the recent credit rating agency warnings wisely to tackle what has to be done. A week may be a long time in politics but five years is unbelievably short for delivery. More…