THE best-case scenario for SA's new cabinet is for Economic Development Minister Ebrahim Patel to function as a kind of psychotherapist for Cosatu general secretary Zwelinzima Vavi. Patel will then leave the nuts and bolts up to his cabinet colleagues Pravin Gordhan and Trevor Manuel.
Gordhan is the new finance minister and Manuel is Minister of Planning in the Presidency. There has been a lot of speculation about how the three will work together.
But for Vavi, speaking on SABC 3 television news on Monday night, it was clear that his former trade union buddy Patel would be the main conduit for extensive demands for workers to influence economic policy.
Patel was general secretary of the SA Clothing and Textiles Workers Union (Sactwu) - a powerful body which showed its clout by pushing the DTI into slapping import quotas on Chinese clothing and textiles from 2006 to 2008.
Vavi said on TV news that he sees Patel's ministry as the place to go to for discussions on monetary and fiscal policy, and other areas of economic policy that need input from the workers.
Vavi's fantasies
It's an ambitious view of Patel's new role. It not only encompasses the budget (fiscal policy), but also interest rates (monetary policy) and even trade and industry.
The real question - the key one facing SA's economic policy future at the moment - is whether Patel will have the power to deliver on Vavi's fantasies.
Manuel, in the same news broadcast, seemed to see a much narrower role for Patel, speaking of his ministry handling small business development and job creation. In practice, then, Vavi might turn up at Patel's office, make himself comfortable on the couch, demand huge budget deficits and zero interest rates - and nothing will happen.
Gordhan will follow prudent fiscal policy - not forgetting, of course, the limitations imposed by the recession - and Manuel will kick butt to ensure that spending plans and other initiatives are actually delivered.
So, we would see Patel playing Sigmund Freud to Vavi's troubled mind, soothing the trade unionist's frayed nerves and making him feel like he counts. Hey, let's not be cynical. Patel might even take note of some of Vavi's less fanciful ideas.
At this point, it's difficult to really predict how things will go, because Patel himself hasn't claimed he will run the policies Vavi thinks he will control.
To get some idea of Patel as a negotiator - and that is what he will have to be, above all else, with Manuel on one side and Vavi on the other - one can go back to the framework for SA's Response to the International Economic Crisis.
This is a policy document drawn up by organised labour, business and government. Patel led labour in the negotiations.
Boring is best
The document contains some ominous protectionist rumblings. Among other things, it says: "Trade measures will be used to address import surges, dumping and to address the short-term crisis of vulnerable sectors." That could be read to mean more than just action against dumping; it could include tariff increases and even further quotas.
We now know that the DTI wanted to reinstate the quota on Chinese clothing and textiles imports, but the Chinese refused. That request to have the quota reinstated would have come directly from Patel. But it wouldn't have happened without a willing DTI.
Manuel has butted heads before with the DTI on protectionist trade measures, and can be expected to continue to do so.
It's important to note that, despite the protectionist tone of the framework document, little has come of the protectionism in practice. (Except, of course, for the abortive attempt to reinstate the Chinese quota.)
The rest of the framework document doesn't contain anything too worrisome. Just when one gets worried that it seeks an overly expansionary fiscal policy, or that it wants to interfere with the reserve bank, there's a comment about "sustainability" or recognising the independence of the central bank. The fact is that the document is rather boring - which is the best kind of economic policy there is.
The key point is that the framework document had Patel's buy-in, when he still worked for organised labour. If he can get labour in future to buy into similar documents, he will be a very valuable member of cabinet.
Perhaps calling him a glorified psychotherapist for Vavi is a gross oversimplification of the more nuanced role he is able to play.
- Fin24.com