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06 May 2020 | Story Dr Ina Gouws | Photo Supplied
Dr Ina Gouws

The President of the Republic of South Africa made another address to the country on Thursday 23 April 2020, indicating that the country will enter a phased approach out of lockdown in the coming months. This announcement was met with positive feedback not only nationally, but internationally. It was clear that the President consulted with many experts and also with opposition parties, which indicated that an ‘all-hands-on-deck’ approach was followed across party lines and varied interests. The plan seemed rational, well thought through, and clear: 
 
Support for lockdown
The government’s lockdown and subsequent restrictions on movement, trade and industry held wide support until now. The argument that people’s lives are most important and that the prevention of the spread of COVID-19 infection must be a priority, was accepted as rational. Truth be told, this strategy was entirely reliant on public trust and cooperation, which the President did have at the start of the lockdown. So, when he announced that the country would enter Level 4 from 1 May 2020, there was a sense of relief that progress was being made and that sacrifices made by all of us (some much more than others), have yielded some positive results. 
However, there was also an almost immediate realisation that this approach would have to rely on state machinery, especially on provincial and local levels, which – before the lockdown – was ineffective, to say the least. State capacity had been gutted by widespread corruption, incompetence, and the inability or unwillingness to hold to account those who are guilty of mismanagement and corruption. Add to that the planned deployment of more than 70 000 South African National Defence Force (SANDF) troops in our midst, as well as very little detail on how the R50 billion relief fund will be applied, and most importantly, how oversight over the spending will work. 
Cynicism is good 
This cynicism is being criticised as being uncooperative and that South Africans should only be proud of how government has met the challenges of this pandemic thus far. It is true that in the context of the country’s reaction to the pandemic, this government has done much better than most across the globe. The larger context of governance realities in the country cannot be ignored though. 
I was reminded of certain elements of the value of cynicism in an article by JR Macey. The article was written in the context of USA politics, but there certainly are touch points with South African politics. He basically argues that cynicism is good, and that people should be more cynical when it comes to politicians, officials, lobby groups, etc. As people, we are looking for leadership and sound decision-making. We expect good governance from the government. As South Africans, we have been consistently disappointed with our government in this regard for decades now. When it became clear that this virus was spreading across the globe like wildfire, we naturally held our collective breath. How will a government that can hardly keep the lights on or provide safe drinking water and whose public healthcare system has all but collapsed, deal with this virus when it finally arrives? All valid questions. We were appeased when the President announced a planned lockdown not long after the first cases were reported. We were impressed with the leadership from the Minister of Health and the experts he surrounded himself with. Rightly so. The President announced that the SANDF would assist the police in enforcing lockdown rules, but that they should perform their duty with empathy and in a spirit of service to the country. South Africans were supposed to feel secure. 
Cynics raise questions
Yet, cynics raised questions about the fitness of the untrained SANDF to perform these duties and of the SAPS which, according to the latest crime statistics, all but lost ‘the war on crime’. Cynics raised questions about the ability of the public healthcare sector to use the time bought by the lockdown to ready itself for the inevitable rise in the numbers of infected South Africans who would need very specific healthcare, and to protect its healthcare workers. Cynics questioned the lack of data with which decisions are made and the reluctance to start planning for getting out of lockdown for the sake of the economy. These questions were met with accusations of being unpatriotic, tone-deaf, and choosing to save the economy over dying South Africans.
These questions became prevalent after the announcement of the phased approach on 23 April. Commentators, journalists, politicians across party lines, as well as ordinary citizens once again began to realise the validity of being cynical. There are many reports of brutality by the SANDF and SAPS, so there are understandably fears regarding the deployment of thousands more soldiers. The phased approach will rely heavily on local government machinery; so, how will the accountability for financial and performance management work when it continues to worsen in most municipalities.
It is good to be cynical; cynics are believed to be more vigilant, to question, and to expect answers. The problem is that cynics often do not get the answers and then stop participating. This is something we as South Africans cannot afford at a time when our freedoms are encroached upon. We need to be more vigilant than ever. Listen to the cynics. See if their questions are answered (not spun), because the expectations from government in the coming months are going to be immense and South Africans must make these expectations clear.
Opportunity 
Provinces and local governments must carefully discern what these measures mean for each region and communicate this clearly. The latter has been sorely lacking up to now where most provinces and local governments are concerned. Oversight on all levels of government should not only be allowed but welcomed. There is time and opportunity to address all these concerns to prevent chaos and confusion. Public trust and participation are essential for this process to succeed. All the good governance principles such as transparency, accountability, responsiveness, etc., are required to ensure the success of the implementation of any government process, just as it has always been. This is an opportunity to use an enormous crisis to put these principles at the center for a change. One lives in hope...

Dr Ina Gouws is Senior Lecturer: Programme: Governance and Political Transformation in the Faculty of the Humanities.

News Archive

Inaugural lecture: Prof. Phillipe Burger
2007-11-26

 

Attending the lecture were, from the left: Prof. Tienie Crous (Dean of the Faculty of Economic and Management Sciences at the UFS), Prof. Phillipe Burger (Departmental Chairperson of the Department of Economics at the UFS), and Prof. Frederick Fourie (Rector and Vice-Chancellor of the UFS).
Photo: Stephen Collet

 
A summary of an inaugural lecture presented by Prof. Phillipe Burger on the topic: “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

South African business cycle shows reduction in volatility

Better monetary policy and improvements in the financial sector that place less liquidity constraints on individuals is one of the main reasons for the reduction in the volatility of the South African economy. The improvement in access to the financial sector also enables individuals to manage their debt better.

These are some of the findings in an analysis on the volatility of the South African business cycle done by Prof. Philippe Burger, Departmental Chairperson of the University of the Free State’s (UFS) Department of Economics.

Prof. Burger delivered his inaugural lecture last night (22 November 2007) on the Main Campus in Bloemfontein on the topic “The ups and downs of the South African Economy: Rough seas or smooth sailing?”

In his lecture, Prof. Burger emphasised a few key aspects of the South African business cycle and indicated how it changed during the periods 1960-1976, 1976-1994 en 1994-2006.

With the Gross Domestic Product (GDP) as an indicator of the business cycle, the analysis identified the variables that showed the highest correlation with the GDP. During the periods 1976-1994 and 1994-2006, these included durable consumption, manufacturing investment, private sector investment, as well as investment in machinery and non-residential buildings. Other variables that also show a high correlation with the GDP are imports, non-durable consumption, investment in the financial services sector, investment by general government, as well as investment in residential buildings.

Prof. Burger’s analysis also shows that changes in durable consumption, investment in the manufacturing sector, investment in the private sector, as well as investment in non-residential buildings preceded changes in the GDP. If changes in a variable such as durable consumption precede changes in the GDP, it is an indication that durable consumption is one of the drivers of the business cycle. The up or down swing of durable consumption may, in other words, just as well contribute to an up or down swing in the business cycle.

A surprising finding of the analysis is the particularly strong role durable consumption has played in the business cycle since 1994. This finding is especially surprising due to the fact that durable consumption only constitutes about 12% of the total household consumption.

A further surprising finding is the particularly small role exports have been playing since 1960 as a driver of the business cycle. In South Africa it is still generally accepted that exports are one of the most important drivers of the business cycle. It is generally accepted that, should the business cycles of South Africa’s most important trade partners show an upward phase; these partners will purchase more from South Africa. This increase in exports will contribute to the South African economy moving upward. Prof. Burger’s analyses shows, however, that exports have generally never fulfil this role.

Over and above the identification of the drivers of the South African business cycle, Prof. Burger’s analysis also investigated the volatility of the business cycle.

When the periods 1976-1994 and 1994-2006 are compared, the analysis shows that the volatility of the business cycle has reduced since 1994 with more than half. The reduction in volatility can be traced to the reduction in the volatility of household consumption (especially durables and services), as well as a reduction in the volatility of investment in machinery, non-residential buildings and transport equipment. The last three coincide with the general reduction in the volatility of investment in the manufacturing sector. Investment in sectors such as electricity and transport (not to be confused with investment in transport equipment by various sectors) which are strongly dominated by the government, did not contribute to the decrease in volatility.

In his analysis, Prof. Burger supplies reasons for the reduction in volatility. One of the explanations is the reduction in the shocks affecting the economy – especially in the South African context. Another explanation is the application of an improved monetary policy by the South African Reserve Bank since the mid 1990’s. A third explanation is the better access to liquidity and credit since the mid 1990’s, which enables the better management of household finance and the absorption of financial shocks.

A further reason which contributed to the reduction in volatility in countries such as the United States of America’s business cycle is better inventory management. While the volatility of inventory in South Africa has also reduced there is, according to Prof. Burger, little proof that better inventory management contributed to the reduction in volatility of the GDP.

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