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Zumanomics edited by Raymond Parsons
Jacana Media, Johannesburg? 2009
Review by George Lwanda, Lwanda is an economist with the South African Institute of International Affairs based in Cape Town
Unlike Jacob Zuma, this book has not stirred controversy – at least not yet! The book is a collection of ten essays by 16 authors on the future of South Africa’s economic policy. Parsons describes the book as an attempt to “identifying some of the key issues” confronting Zuma’s government. A gaze into South Africa’s pending “age of turbulence”. The book aims at speeding up the pace that “rhetoric ... gives way to sober reality”, claims Parsons.
In addition to this however, two other reasons may explain what motivated the book. Firstly is Zuma’s limited formal education which is a source of concern for many analysts. Arguably, this should not be the great concern that analysts have made it. Whilst education is advantageous, it certainly does not translate into good leadership and vice versa as the examples of Zimbabwe’s Robert Mugabe and Brazil’s Lula show. Another more plausible source of concern is that post-Polokwane ANC’s ‘influential circle’ has exhibited a purge of economists and business leaders in favour of intelligence “spooks”.
At the same time, Zuma is lauded as a consultative leader open to advice. What better way to offer the advice than in written form? The book is as sobering as it is probing and provocative. It is as lean and mean as an economics book can be and its greatest asset is its readability. It’s a book even non-economists can enjoy and understand without getting caught up in economics jargon and/or numbers. It certainly seems that it was written specifically with Zuma and the top ANC in mind.
Parsons starts the book with a preamble which is followed by ten essays and concludes with 70 key findings. The topics covered range from general economic policy to more specific aspects of economic policy such as health policy and human development. The book does policy makers and other stakeholders three major favours. It neatly documents South Africa’s past economic policies and their performance, provides a platform for the nation to actively debate and contributes towards the country’s future economic policy outside the auspices of the tripartite alliance and importantly it offers policy recommendations and flags important policy issues that need careful debate and discussion.
The book however generally makes no attempt at straying beyond orthodox neo-liberal economics. Only Parson’s essay on the role of the state half-heartedly criticises naked neo-liberalism and advocates for cautious state intervention. Beyond that the book is fiercely neo-liberal and dismisses any suggestions that the current global crisis is neo-liberalism on its deathbed. That’s debatable, given current events in the global economy. With governments now owning a major stake of the global banking sector, neo-liberalism is certainly under enormous stress.
Surprisingly the book does not probe the possible effects the global economic crisis will have on the country’s future economic policies. A look at the possible direction South Africa can take as regards the regulation of the markets would have been worthwhile. Similarly an examination of the country’s exposure to the global crisis, its ability to implement stimulus spending and the form that this spending could take would have been useful. This is especially since at the time of writing the book, November 2008, a number of economies had been severely affected and had approached the IMF for support. Additionally, the Economist magazine recently ranked South Africa as the most exposed of 17 emerging economies to the global crisis contagion. This suggests that our high level of exposure to the global crisis is bound to affect short term economic policies, a point the book misses.
The book is bound to stir varied responses amongst stakeholders. It will augur well with business and the National Treasury. “Mind the deficit” is a recurring message in it and this is the same message national treasury and business has been sending for the past 15 years. Large budget deficits, as the experience of Zimbabwe and Latin American countries shows, have the effect of undermining price and macroeconomic stability. The tripartite alliance partners COSATU and the SACP are of a different view. Like the famous Irish poet Oscar Wilde, they believe that “anyone who lives within their means suffers from a lack of imagination”. Consequently save for De Lange and Seymore’s trade, industrial and competition policy essay that will almost have COSATU’s Zwelinzima Vavi break into an “I told you so” song and dance, the alliance partners are bound to dismiss it as propagating more of what they have been disgusted by.
The need for comprehensive, up to date and timely economic data to influence policy formulation and implementation is another theme running throughout the book. Of importance is the need for national social accounting matrix (SAM) providing a conceptual basis for analysing growth and distributional issues within a single analytical framework. By mapping the interaction between production, income, consumption and capital accumulation, SAMs can assist policy makers understand the systemic inter-linkages in the economy. This can further improve policy formulation and implementation. Improving quality and depth of data and using consultative documents is arguably better than the envisioned planning commission. An immediate danger of the commission is a burgeoning of the bureaucracy and its processes. This comes with substantial transaction costs the economy cannot afford.
The recommendations chapter of the book suggests it was put together in haste. It is a collection of the conclusions and recommendations already contained in the individual essays. It is at this point the book turns into your orthodox boring to read economics book. Additionally, one is left with a feeling that the flow of book could have been improved. For example Abedian and Ajam’s essay which suggests South Africa can learn valuable fiscal policy space from South East Asia could have then be followed by Nokaneng and Harmse’s essay that analyses lessons South Africa can learn from South East Asia.
A broad implication of the book is that Zuma’s cosy relationship with the left is about to end. Echoing Reserve Bank Governor Mboweni’s recent sentiments, the book contends that the current global economic environment just won’t allow any leftist experiments without negatively shocking the economy. Zuma, or at least the top ANC leadership, seem to have realised this and have already warned the tripartite partners. The SACP and COSATU are nonetheless likely still push for a big policy shift to the left effectively ending the cosy relationship.
Rating:  [3 of 5 Stars!] |
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