Opinion: Ben Turok's plea as Treasury reaches the point of no return
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JOHANNESBURG – I had an experience that is not explainable for a prediction of a black swan as the coronavirus in some jurisdictions is defined.
In September last year we had a discussion in our neighbourhood with a family .The wife of the other party asked a relevant question of what if both or one party perished, what would be the standing of the agreement since nothing was documented.
Astonished by this question, the husband turned towards me and asked, “Pali as a statistician, what would it be that would lead to such an outcome and what is the probability of that happening. Is my wife planning something?”
We laughed deleteriously to this. We made and agreement and relooked at it November. Little did we know that a threat of such a reality was only a month away in the form of Covid-19, starting in China, spreading across the world, and now in South Africa, which is becoming the epicentre.
It was impossible then to imagine the kind of a pandemic that was just a month away.
But it looks like there were other prophetic moments on a national scale, but also not heeded. Thirty days before his demise in November last year, the last duty of Professor Ben Turok was to pen an open letter to parliamentarians that they should not pass the Medium-Term Budget Statement tabled in October by the Minister of Finance last year.
I am sure Parliament took note note and considered the letter and took the best decision possible in their wisdom.
The question asked then by a number of people, including myself, was how the Budget would deal with South Africa’s high unemployment level and all other illnesses.
By its own admission the Budget was only going to generate only a pitiful million jobs in ten years, just as bad an outcome as in the State of the Nation Address, with the commitment to 2 million jobs. Both numbers were pitifully irrelevant where the joblessness stood at 10 million, escalating in ten years to an estimated 16 million.
The Budget was silent on poverty and inequality, while being rather up-beat on reducing debt.
If debt reduction in ten years can usher to South Africa a higher unemployment, poverty and inequality, then why should anyone buy into that journey to a cul de sac?
Beside, year in and year out, Treasury like the sun, which rises in the east and sets in the west, revises growth and revenue down and revises the deb- to- gross domestic product ratio up. There is no credibility in these projections anyway as they have proven not to be achievable.
But in addition then coronavirus struck.
Last week Turok’s plea to Parliament was now joined by 21 NGOs and by a number of economists calling on Parliament not to approve the Supplementary Budget because its preoccupation is towards the same cul de sac, just that this time the cul de sac is sure to be terminal.
The economists put before Parliament a tome of evidence of Treasury austerity measures that have made the President’s announced R500 billion stimulus package to be smoke and mirrors, an illusive pittance - just a mere R10 billion above the R26bn asked for SAA's rescue.
The letter that the economists and allied disciplines wrote to Parliament, is not oblivious of debt, but is just as mindful and captures Turok’s message when he implored parliamentarians on the matter of debt.
He wrote thus – that if you take on debt and give it to the Guptas and spoil it on corruption then do not expect growth, but expect debt to spiral.
But if you take on debt to expand economic activities and create demand through incomes earned by households - then you are generating growth, employment and better living conditions. In this regard the economists and Treasury are in agreement on trade and industry policy as well as the micro economic policies.
But those on their own by former minister of trade and industry, Rob Davies’ own admission, without macro-economic interventions suggested not only by Turok, but detailed also in the Six Pillar Policy Bridge by ADRS and Idlulamithi Scenarios, our Treasury's journey, especially during Covid-19, is one heading to a cul de sac.
The difference is that in this period this cul de sac is a point of no return. It is one where all and sunder can’t breathe and will perish.
It is a path if taken should be through deliberated evidence and public consent and not by Treasury on its own.
Dr Pali Lehohla is the former Statistician-General and former head of Statistics South Africa. Meet him on www.pie.org and @palilj01