The sensible and careful management of our economy and public funds, and the pursuit of economic and financial stability is not an effort in the protection of “white capital” or the rich. It is a fundamental prescript in defense of our long-term welfare, and hard-won freedom. Critically, it is about the right to self-determination as a nation.
Over the years since the dawn of SA democracy, the sound and prudent management of fiscal institutions, and the strict regulation of financial institutions have managed to sustain democracy, sovereignty and the interests of ordinary South Africans, rather than the rich. The maiden democratic government took over a bankrupt country that had served the interests of the few, and was at the mercy of creditors. It established principles and institutions through which we could make our freedom and sovereignty ring true. If we learn one thing from the Greece experience, it is that even the oldest democracy in the world, with the best will and support of the people, cannot support democracy and autonomy while entangled in debt.
I have quoted in these pages before the words of Arianna Huffington who, as Greece found itself in the clutches of debt and global notoriety asked: “Can a truly democratic movement break the stranglehold of corrupt elites and powerful anti-democratic institutional forces that have come to characterise not just the politics of Greece, but most Western democracies, including the US?”
Huffington had hoped that what we saw come to bear in Greece in the form of the “leftist” Syriza party would represent a break from the rot that characterized that society, and led to its bankruptcy. As we know now, even though Syriza won the January 2015 election on the promise and mandate to challenge the country’s debt, and indeed their creditors’ controlling hand in austerity, they have failed to regain their sovereignty without the potential to destroy the livelihoods of the majority of Grecians, not the elites.
Therefore, those who claim that the scorn with which the President’s decision last week was received represents narrow sensitivity to the interest of capital couldn’t show more disregard for the long-term interests of South Africa and our democratic order. Indeed, those who sympathise with President Jacob Zuma’s decision to axe Nhlanhla Nene as an act of noble defiance to nefarious investors, or the rejection of neoliberalism, reject the very rudiments of our political socio-economic order. President Zuma did not extend freedom; in fact, he could not have done more to limit it in one decision. That decision signifies his failure, or indeed that of his sympathisers, to appreciate the complexities of our economic and financial infrastructure. It signalled its disregard for the structure and people who are not fools.
At the turn of this millennium, emerging Africa, now hailed as the fastest growing region in the world was hamstrung by debt, reaching average levels of over a hundred percent of Gross Domestic Product (GDP). In this sense, much of Africa was at the mercy of their creditors, and taking policy direction from them and from organisations such as the International Monetary Fund. They were directed to cut budgets on social programs and social infrastructure, leading to the development deficits we face today.
For itself, South Africa did not enter into democracy financially free, as it were. It was the careful stewardship and difficult decision-making of successive democratic governments that saw the country wean itself of high indebtedness, which had the potential to limit our ability to make the many policy decisions we have over the years. If we continue down the path of financial mismanagement and arbitrary decision-making, and borrow ever more with lessening ability to pay back, we will find ourselves where we and the rest of the continent once were, less than a mere two decades ago.
Should that happen, make no mistake that, as Greece experienced, our creditors will write our economic policies, and our treasured sovereignty and autonomy will ring hollow. Our right to vote for a government that represents our interests, the establishment of the rule of law, and freedom from arbitrary rule is what makes today’s South Africa a clean break from the barbarism that was apartheid. The president, along with other leaders of our society, has a definite duty to explain the decisions he makes. We do not live in an autocracy. We live in a democratic and open society, and should be free from arbitrary rule.
Our treasury, year after year, in its budgets, presents the government’s policies to better the lives of all South Africans through spending on education, health, roads and other social and economic infrastructure – as well as clearly articulate the desperate need to spend on those South Africans who would otherwise sleep without food and shelter.
In pursuit of all this, the treasury is aware that we simply do not have enough resources. Not because they are thrifty, seeking to deny the ambitions of some, but simply because within the structure and realities of this economy, we are not collecting enough from within ourselves.
The resentment of “white capital” or the rich, arising from the gross inequality we see in our society is not without merit. It is also true that over the years since we achieved political freedom, many feel that the policies and prescripts we have adopted have done very little to economically liberate all South Africans. The question arises therefore: if we reject these principles in the manner in which we saw last week and this week, what shall we replace them with, and with what predictable consequences? If we revolt against the status quo, and dismantle its institutions, what will we replace them with?
It may be that, as we have been hearing recently, that the architects of this economic order erred, or as has been argued, sold out to white capital. The question is, how do those who believe this propose we buy or take back and transfer these freedoms to the long suffering people of South Africa without making them endure the destruction that is sure to come if we are irresponsible.
We have the society we have. We do not have enough to fund all our spending, and thus we borrow from ordinary South Africans who work and save. Their savings are in shares in the stock exchange, in banks and in government debt. The destruction we saw last week struck not just at the financial freedom of individuals, but at the freedom of a nation as a whole, as Greece has seen. DM