Joel Netshitenzhe

Article: Letter from Tshwane

26 May 2000

Mass education in economics

South Africa needs an economic literacy campaign - a massive drive on the scale of the literacy campaigns in other countries, which opened access to the written word.

The Adult Basic Education and Training programme should be about economics. Analysts should organise colloquia, unencumbered by immediate considerations of market fluctuations. Universities should be beehives of economic discourse in the same way that activists in the past debated political issues. Assessment of essays and poetry in schools should award rhymes on economic growth and development!

A wild thought! Or is it?

How else shall we bring the current discussion on economic matters down from the elitist pedestal, enthused the colleague in Tshwane who made this proposal.

How do we ensure that mass literacy campaigns assist self-employment? How else shall workers be able to participate in workplace decision-making? How do we assist taxi operators, in their competition with bus companies, to go the route of incentives for passengers rather than resorting to the violent methods of early capitalism?

Shall we ever know, from current economic analysis, the balance among retained earnings, bank loans and floating of shares, as sources of investments?

And how do all the major government-led projects - from the Maputo Corridor and Coega to infrastructure development and investment incentives - relate to the economic development of geographical areas with potential; and how would this affect settlement patterns and urbanisation?

These and many other questions need serious debate, to define ourselves as an economy in the long-term.

Otherwise, the nation ends up a prisoner of financial market mood swings; its most profound examination of economic questions confined to inflation-targeting - a monetary policy issue related and critical to, but not about, the bricks and mortar of the real economy.

The thought about an economic literacy campaign arose in discussion on the current weakness of the Rand, the floods, and market woes of the "new economy". The fact is, these difficulties have dented the positive outlook that characterised the period of the transition to the Year 2000 and the opening of parliament. But is this justified?

Between 1996 and 1998 employment figures remained stable - though quality of jobs may have suffered. This, and major investment initiatives announced last week amounting to over R14-billion with a potential to create more than 16 000 jobs, do not receive as much analytical attention as the daily media dose on the JSE, Nasdaq and company results.

In President Mbeki’s discussions with business leaders in London and the United States, what was most striking was business’ profound appreciation of Africa’s challenges and a willingness to contribute to reconstruction. At the day-long workshop in London with representatives of UK medium enterprises, hosted by Minister Alec Erwin, concrete information was shared for immediate action. And the International Investment Council meets in South Africa in a matter of weeks.

So, there is interesting movement regarding the real economy. And this should give a spur to our efforts to resolve the many practical challenges.

For a start, Foreign Direct Investment trends (1998) show that South Africa attracts less than 10% of what goes to Chile or Australia. It cannot merely be distance from the North, for Australia is not much different. Nor the political environment, which is widely extolled. Nor returns, which are better on the continent than elsewhere.

One of the fundamental challenges is the size of our market and its buying power. The African Renaissance and our role in resolving problems in the 200-million strong SADC are therefore not driven solely by altruism; but also by a profound South African self-interest. The issues of skills and labour laws are receiving attention.

Secondly, the bulk of investments will have to come from within South Africa. What about savings, and are the large Funds investing in productive activity? How do we resolve credit allocation constraints; and should the private sector view institutions such as the Land Bank and the DBSA with anxiety?

Thirdly, growth in most of the economy will depend on expansion of Aggregate Demand particularly within the country. How is this to be achieved?

Lastly, in the past high rates of growth were accompanied by large Balance of Payments deficits. Have the export sector and capital inflows grown sufficiently to counter this? And what is the balance today between imports of capital goods and consumables - and should anything be done about this?

Answers to these and many other questions can only be found in frank engagement. Over time, these critical issues should feature in earnest in the Millennium Council of COSATU and business leaders, and in the Working Groups between the President and economic role-players. But such engagement should be informed by debate among the country’s economists and the public at large.

Perhaps we do need a mass economic literacy campaign.

Joel Netshitenzhe
CEO, Government Communications (GCIS)

Published in Independent Newspapers

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