If implemented, the plan could reverse SA’s enthusiastic embrace of tariff liberalisation early in the democratic era, and could usher in an emphasis on government protection for companies — especially those funded by the state.
It also emerged yesterday that Patel’s role in government, and especially in formulating economic policy — the subject of intense speculation — had been broadened, even if details remained hazy. His department will now have “oversight” of important economic regulatory agencies, among them the International Trade and Administration Commission, which sets tariffs on imports.
Patel, a former trade unionist drafted into the Cabinet at the apparent behest of the African National Congress’s leftist allies in the Congress of South African Trade Unions and the South African Communist Party, is a vocal critic of liberalisation, which the left says destroys jobs.
While details of Patel’s strategic plan may go some way towards appeasing the left, it remained unclear yesterday whether it amounted to putting SA on a new growth path designed to address structural inequalities, as demanded by the left. It was also unclear whether Patel’s new duties meant he would now be in the pound seats of economic policy, as his supporters demand.
Yesterday, Patel remained coy about his role in setting broader macroeconomic policy, saying the “Cabinet” set policy.
Analyst Iraj Abedian, Pan African Advisory Services MD, said: “Patel’s department hasn’t yet evolved, and needs to be appropriately populated with people who understand development finance. After nearly a year, the department hasn’t taken shape as it should’ve; it’s been pretty much conspicuous by its absence from the policy formation arena.”
Referring to Patel’s “oversight” of several other agencies — among them the Competition Commission and the Competition Tribunal — Abedian said there was “an element of truth” in the suggestion that the change may be inspired more by the desire to increase Patel’s responsibilities than by concern for the proper running of the institutions involved.
Patel has also now been given responsibility for three development finance institutions, the Industrial Development Corporation, Khula Enterprise Finance and the South African Micro- Finance Apex fund, taking over from the Department of Trade and Industry.
According to the Treasury’s 2010 estimates of national expenditure, Patel’s department will “co-ordinate the development and review of economic policies and plans to address economic challenges and structural deficiencies”. It would help with efforts to “align” government economic policies and plans, and its political and economic objectives and mandate.
Source: Business Day
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