The African National Congress (ANC) says the global financial crisis presents an opportunity to think differently about economic policy and planning, signalling that possible policy changes may be in the offing.
This weekend the ANC said there was near-universal recognition that “an unfettered free- market system does not have the capacity to address serious social and economic inequalities”.
This admission by the party, for the first time since President Jacob Zuma came to power, also suggests it is willing to make concessions on the economy that its leftist allies have demanded.
The comments in its
January 8 Anniversary Statement contradict assurances some ANC leaders in the party and the government have given on maintaining SA’s conservative economic policies.
The ANC calls for tighter regulation, saying “global financial markets must be regulated and governments must play an active role in the economy”.
The party was “determined” to use the space “strategically” to put in place a “more inclusive economic growth path” that addressed structural flaws in SA’s economy.
“Fundamental to the transformation of the economy for the ANC is the need to eradicate apartheid production relations and to bring about a more equitable ownership and distribution of wealth and income,” it said.
Centre for Democracy political analyst Steven Friedman said the ANC’s statement suggested there was a view within the party that believed a pro-poor policy needed to be pushed through, but he said the extent to which a shift in economic policy would occur depended on the balance of power in the ANC.
“Roughly, there are three views, one epitomised by Finance Minister Pravin Gordhan, who cares about macroeconomic stability; another group which agitates for leftist pro-poor policy; and a third group, which is bound by business links based on patronage from the state.”
Gordhan’s warning, that government revenue had declined and would affect the ability of the Zuma administration to make good on its promises, has been accepted by the ruling party.
The ANC said the global economic crisis had affected the “pace and sequencing” of delivery but pledged to take “bold steps” to mitigate the crisis.
It nevertheless recommitted itself to ensuring expenditure of the budgeted R787bn on improving infrastructure, and tailoring fiscal and monetary measures in a manner that complemented trade and industrial policies.
Zuma said there were indications SA might be recovering from the worst of the crisis but warned the recovery might be “slow” and perhaps even “temporary”.
“It should also be expected that the creation of new jobs on a massive scale will lag behind the economic recovery,” the ruling party said.
Gordhan’s warning, that government revenue had declined and would affect the ability of the Zuma administration to make good on its promises, has been accepted by the ruling party.
The ANC said the global economic crisis had affected the “pace and sequencing” of delivery but pledged to take “bold steps” to mitigate the crisis.
It nevertheless recommitted itself to ensuring expenditure of the budgeted R787bn on improving infrastructure, and tailoring fiscal and monetary measures in a manner that complemented trade and industrial policies.
Zuma said there were indications SA might be recovering from the worst of the crisis but warned the recovery might be “slow” and perhaps even “temporary”.
“It should also be expected that the creation of new jobs on a massive scale will lag behind the economic recovery,” the ruling party said.
The government’s promise to create 500000 jobs by December has become the first promise on which Zuma could not deliver. SA has already lost close to 1-million jobs and all indications are that there will be little relief this year.
Labour federation the Congress of South African Trade Unions is likely to use the opportunity to push the government to demand action on this front.
Source:
Business Day
