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28 September 2020 | Story Andre Damons | Photo Pexels
Dr Trevor Manuel, Chairperson: Old Mutual Limited and former minister of finance (top left), Ms Ann Bernstein, Executive Director: Centre for Development and Enterprise (CDE) (top right), and Mr Mondli Makhanya, Editor-in-Chief: City Press (bottom left), were the panellists at the University of the Free State’s (UFS) second Thought-Leader Webinar for 2020, which focused on the economy. Dr Max du Preez, Editor: Vrye Weekblad (bottom right), was the facilitator.

The state is broken, and the country cannot move forward unless the state is fixed and bold, tough decisions are made.

This is the opinion of panellists who took part in the University of the Free State’s (UFS) second Thought-Leader Webinar on Wednesday (23 September), which focused on the economy. This webinar is part of a series with the theme ‘Post-COVID-19, Post-Crisis.’  Dr Trevor Manuel, Chairperson: Old Mutual Limited and former minister of finance, Ms Ann Bernstein, Executive Director: Centre for Development and Enterprise (CDE), and Mr Mondli Makhanya, Editor-in-Chief: City Press, were the panellists. Dr Max du Preez, Editor: Vrye Weekblad, was the facilitator.

Country needs reform

Both Bernstein and Makhanya said that the state is broken, with Bernstein saying that the state is corrupt, and government decision-making bandwidth is much weaker than it used to be.

“The country is in a very serious situation and cannot do more of the same. We have to reflect honestly on what got us into this terrible situation, and then COVID exacerbated all our problems. What got us into it and what we have done previously has to change.”

“The country needs reform and it is my view that we will not move forward unless government’s credibility as a reformer is establish, and two and a half years of promises and very little action of any significance has undermined that credibility. I think you have to start from that,” says Bernstein.

According to her, bold choices must be made if we are to save what growth we have, if we are to expand growth, to expand more labour intensively. 

“South Africa has all the potential to be a great African economy, with all sorts of strengths that we could build on. But we keep disappointing.”

Building a capable state

Makhanya said going forward, a good starting point is to fix and build a capable state. “The fundamental thing of the NDP (National Development Plan) – a plan that can take us forward – was the part about a capable state.” 
“The state is very broken, and there is no way we can move forward while the state is as broken as it is now. This is what we saw during lockdown, when it was so easy for certain elements to steal from very essential funds that were meant to save lives. It was a classic example of a broken state.”

Another thing we absolutely need to do, is to have one message and one conversation.  

“Tough decisions should be taken. It was frustrating again to find us as a country talking about where to find R10,5 billion to fund our ailing airline. Why is this a priority? We know what our priorities are. We know Eskom is a priority, we know food security is a priority, unemployment is a priority. Why is it necessary for us as a country to have this hectic debate about having a national airline?” 

“Decisions need to be taken around the health of the fiscus, decisions around the public wage bill, around issues of freeing up enterprise, and about reforms. The decisions will take a long time to make and some of them will be unpopular, but they need to be taken,” says Makhanya.

According to him, President Cyril Ramaphosa needs to take these decisions. He also needs to tell himself that he would be happy to serve one term, and that he does not need friends to vote him back as leader of the ANC and as President of the country in 2024. President Ramaphosa needs to do things now, knowing that he will leave a legacy of having fixed a country, and importantly, having fixed the economy.

Announcement of hard lockdown saw the economy hurtling down a cliff

Dr Manuel said the hard lockdown announced at the end of March saw the economy hurtling down a cliff. This happened after three successive quarters of contraction. “We find ourselves at the base of this ravine, having tumbled down. How do we extricate the South African economy from where we are given the geography of where we are?”

According to him, the country has fewer options than we would like to imagine. 

“I think the 51% contraction in the second quarter must introduce a sense of urgency and focus the mind. We are not alone. But we need to be rigorously honest about where we are. And we need to also ask ourselves tough questions of whether we have the wherewithal to reconstruct the economy,” says Dr Manuel. 

According to him, the $3,4 billion borrowed from the IMF is unlikely to be sufficient, and there is a growing consensus that the full-on standby facility from the IMF will probably be needed.  

He says while the RFID has no obvious conditions, it is important to pay attention to the fine print. “In the letter of intent, which was jointly signed by the Governor of the Reserve Bank and the Minister of Finance, we committed to take action to revoke the upward trajectory of the debt-to-GDP ratio, and also a commitment to remove the structural impediments to growth. So, it is quite important to understand what we committed to and against what we will be measured.” 
“The IMF, in accepting those commitments, also warned about the urgency and the sequencing of the series of policy measures to prevent – in their words – the risk of social unrest. They also raised a series of red flags that are important in the context. The first is the growth of the public sector wage bill, something that is in the public domain and about which NEHAWU is threatening to strike. The second issue is the scale of transfers to state-owned enterprises. Thirdly, the risk of the curtailment of infrastructures.”

There has also been a flurry of policy writing and discussions. The National Treasury, Business for South Africa, and the ANC have written their own papers on reconstruction, growth, and building an inclusive economy.  According to Dr Manuel, however, the question is how to get things done. 

“The concern I have about these papers is that there is inadequate attention to public finance, which sets a frame for all economic development that needs to take place. And it is basically an equation – what you have to spend is the sum of what to tax and what you can borrow.”

What the country needs right now is clarity on the trade-offs, and not even the social partners paper deals with trade-off clearly enough. If you put money into an airline, it has to come from somewhere else. Your ability to govern and exercise choices is therefore severely limited.

News Archive

Situation on the Bloemfontein Campus, and letter to parents
2016-02-28

Letter to parents from Prof Jonathan Jansen, Vice-Chancellor and Rector of the UFS 

 

Statement by Prof Jonathan Jansen, Vice-Chancellor and Rector of the University of the Free State (UFS) about the situation on the Bloemfontein Campus


1.    As all of you know, last night we witnessed a really tragic event at Xerox Shimla Park on the Bloemfontein Campus on the occasion of the Varsity Cup rugby match between NMMU (FNB Madibaz) and UFS (FNB Shimlas).
2.    The game started at 18:30 and about 17 minutes into the match, a group of protestors sitting on the north-eastern side of the stadium decided to invade the pitch and disrupt the game in progress.
3.    After a short while, some of the spectators also invaded the field, chasing and brutally beating those protestors whom they caught.
4.    As a university leadership we condemn in the strongest terms possible the vicious attack on the protestors. Nobody, repeat nobody, has the right to take the law into their own hands. While the protests were illegal and disruptive, it did not harm to the physical well-being of the spectators.
5.    The reaction from the group of spectators, however, not only opened old wounds, it trampled, literally and figuratively, on the dignity and humanity of other human beings. This we condemn in no uncertain terms, and no stone will be left unturned to find those who acted so violently on what should have been a beautiful occasion that also brought families and young children together to enjoy an evening of sport.
6.    I cannot over-emphasise our level of disgust and dismay at the behaviour of the spectators. It is NOT what the University of the Free State (UFS) is about and we are working around the clock to gather evidence on the basis of which we will pursue both charges and, in the case of students, also disciplinary action on campus.
7.    At the same time, the invasion of the pitch is also completely unacceptable and we will seek evidence on the basis of which we will act against those who decided to disrupt an official university event.
8.    Clashes between students occurred afterwards on campus and members of the Public Order Policing had to disperse some of them. The situation was stabilised in the early hours of the morning.
9.    Disruption continued this morning (23 February 2016) when students damaged some university buildings, a statue, and broke windows. Additional reinforcements from the South African Police Service were brought in to stabilise the campus. Additional security has also been deployed.


Broader picture
10.    We are very aware of the national crisis on university campuses and the instability currently underway. While the UFS has been largely peaceful, we have not been spared this turmoil, as last night’s events showed.
11.    We are also conscious of the fact that even as we speak, various political formations are vying for position inside the turmoil in this important election year. In fact, part of the difficulty of resolving competing demands is that they come from different political quarters, and change all the time.
12.    We are therefore learning from reliable sources that the Varsity Cup competition is, in fact, a target of national protests in front of a television audience.
13.    And we are aware of the fact that these protests are not only led by students but also by people from outside who have no association with the university. Just as the violent spectators involved on Monday night also included people from outside the university.

The demands

14.    My team has worked around the clock to try to meet the demands of contract workers demanding to be in-sourced. In fact, this weekend past, senior colleagues sat with worker leaders in the township to try to find ways of meeting their demands. We were hoping that such an agreement would be finalised by Monday afternoon (22 February 2016), but on the same Monday morning workers and students were arrested after moving onto Nelson Mandela Avenue, after which the South African Police Service (SAPS) took over as the matter became a public safety concern outside the hands of the university. Since then, it was difficult to return the workers to settle on a possible agreement.
15.    The fact is that the UFS has been in constant negotiation with contract workers to provide our colleagues with a decent wage and certain benefits. In fact, towards the end of last year we raised the minimum wage from R2 500 to R5 000. We were in fact hoping that the continued negotiations would improve that level of compensation even as we looked at a possible plan for insourcing in the future. We made it clear that if we could insource immediately, we would, but that the financial risk to the university was so great that it threatened the jobs of all our staff. Those negotiations were going well, until recently, when without notice the workers broke away and decided to protest on and around campus.
16.    While these negotiations were going on, the Student Representative Council (SRC) on Monday 22 February 2016 also decided to protest. While the vast majority of our 32 000 students were in classes and determined to get an education, a very small group led by the SRC President decided to protest; some invaded the UFS Sasol Library and the computer centre, and with the President eventually made their way to Xerox Shimla Park on which route they confronted the police, interrupted traffic and in fact injured some of our security staff as well as police officials.
17.    The university is definitely proceeding to collect evidence on these illegal and violent acts and will also act firmly against students involved in these protests.

Summary
18.    The events of Monday night represent a major setback for the transformation process at the UFS. While we have made major progress in recent years—from residence integration to a more inclusive language policy to a core curriculum to very successful ‘leadership for change’ interventions for student leaders—we still have a long way to go.
19.    One violent incident on a rugby field and we again see the long road ahead yet to be travelled. As I have often said before, you cannot deeply transform a century-old university and its community overnight. We acknowledge the progress but also the still long and difficult path ahead. We will not give up.
20.    We have 32 000 students on our campuses; the overwhelming majority of them are decent and committed to building bridges over old divides as we have seen over and over again. So many of our students, black and white, have become close and even intimate friends working hard to make this a better campus and ours a better community and country. Like all of us, they are gutted by what they saw on Monday, but the hundreds of messages I received from parents, students, and alumni this past 20 hours or so said one thing—keep on keeping on. And we will.

 

The Big Read: An assault on transformation (Times Live kolom deur Prof Jonathan Jansen: 25 Februarie 2016)

 

 

 


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