Economic discussion paper was not written by Harvard professors – Mboweni

2019-10-24 13:22 - Lameez Omarjee
Finance Minister Tito Mboweni
Finance Minister Tito Mboweni (Gallo) ~ Gallo Images

Academics from South African universities, economists and even farmers contributed to the ideas behind Treasury's economic discussion paper published in August , Finance Minister Tito Mboweni has said, adding it was not authored by Harvard economists. 

The minister, who was answering questions in the National Assembly on Wednesday, was asked by EFF MP Floyd Shivambu if three Harvard professors had contributed to the economic paper. The paper proposed a range of structural reforms to boost SA's struggling economic growth, including a controversial suggestion to selling off coal-fired power stations to raise R450bn

The document, titled Economic Transformation, Inclusive Growth and Competitiveness: Towards an Economic Strategy for South Africa, attracted differing opinions. Trade union federation Cosatu criticised the paper, calling it "incoherent" and "unreliable", and suggested it could result in labour market conflict; however, Business Unity SA praised it for proposing "much-needed" economic reforms. 

Mboweni on Wednesday said that if Shivambu was implying the paper was authored by Harvard professors, that view was false. Rather, he said, there were three economic meetings held where contributions were made by many different people. 

As Fin24 previously reported, Mboweni had invited two Harvard professors - Ricardo Hausmann and Robert Lawrence - to the first economic colloquium held in December 2018. Mboweni said on Wednesday that a third Harvard professor, Dani Roderik, had also attended. 

"I think there is some kind of intellectual inferiority," Mboweni said in response to Shivambu's question. "Because Harvard University is there, [you think] only Harvard University contributed.

"But there were other academics who contributed," he said. "You are scared of Harvard professors so you lift them up higher than others," he said.

In response to Mboweni's comments, Shivambu suggested that Harvard research was funded by the private sector to specifically put forward capitalist perspectives on how to address challenges in the economy. This includes the unbundling of Eskom to support privatisation, Shivambu said.

Win first, then govern 

"If you want your ideological position to govern, you first have to win elections," Mboweni said. "You can't expect the ideological position of the EFF to be that of the ANC. It is not. You have to win elections first, maybe manage Johannesburg better."

The finance minister said the three Harvard professors were many participants who attended the colloquia. He added that input was also provided by also professors from South African universities, including Wits, the University of the Free State and Stellenbosch University, as well as economists from the private sector, the government and the SA Reserve Bank, and even farmers.

Mboweni said there had also been engagement on the paper with ruling party and business leaders.

"The rallying of support for this work is very important. As you know – policy at the end of the day is politics, you can't separate the two. Politics has to provide the leadership," he said.

"Most certainly we have had conversations with the National Executive Committee of the ANC…The economic transformation committee of the ANC has discussed these issues," he added.

After the paper was published in August 2019, Treasury asked for public submissions and received about 800. Mboweni reiterated on Wednesday that contributions that are internally consistent with the direction of the paper will be incorporated.

He listed the example of a submission about the abolishment of the central bank's inflation target, which is not "internally consistent" with the paper and therefore will not be taken into account.