[DEBATE] : (Fwd) Mantashe: double-talk?
pbond at mail.ngo.za
Thu Jul 17 05:59:20 BST 2008
(Some of this has quite reactionary potential.)
16 July 2008
Mantashe offers mixed signals on the economy
Mixed signals about how the new leadership of the ANC will manage the
economy were given today by Gwede Mantashe, the party’s secretary
general. Picture: Vathiswa Ruselo.
MIXED signals about how the new leadership of the ANC will manage the
economy were given today by Gwede Mantashe, the party’s secretary general.
Addressing asset managers of Nehawu Securities, the black-owned stock
broking firm owned by the National Education, Health and Allied Workers
Union (Nehawu), he said that the ANC will intervene in the economy where
intervention is needed, but ultimately it will have a positive effect on
markets "because it will be positive intervention".
"I would be telling you lies if I were to say there is no change," he
said. Drawing on the theories propounded by his communist mentors (he is
chairman of the SA Communist Party) he spoke of "dialectical change and
continuity being quite critical if we are going to move forward".
He told the meeting that the tight fiscal policy of the early years of
the ANC government had the effect of doubling unemployment from 15 to 30%.
He said the first decade of the ANC government over-emphasised creating
the right environment for business. "In future we will concentrate on
the lower levels of society," he said. "People who only smell prosperity
But he also said that "I am not one of those who believe a budget
surplus is a curse". And he said the party is not going to abandon
inflation targeting. But, he said, the question is the target range and
how to implement it. Monetary policy "should not focus on inflation
without relating to unemployment".
On the budget surplus, he said: "If you look at budget surplus, you
should look at institutional capacity. Is it because of a more
sophisticated revenue collecting system, or a failure of government to
He suggested that because of the effect of the current account deficit,
we don’t have a surplus, we have a deficit, sustained by capital
inflows. He suggested that a budget deficit will only make the situation
However, he indicated that the government will continue to grow
investment spending. "The infrastructure development and maintenance
programme will continue very seriously," he said.
The aim will be to grow employment – to create "decent" jobs, not just
any jobs. "The social grant regime we are having cannot be sustained for
very long," he said.
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