[DEBATE] : (Fwd) Mantashe: double-talk?

[Patrick Bond]

(Some of this has quite reactionary potential.)

16 July 2008
Mantashe offers mixed signals on the economy
I-Net Bridge

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 
get alienated."

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 
spend?"

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 
worse.

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.