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Jonas: Don’t tamper with economic policies

Johannesburg - Former deputy finance minister Mcebisi Jonas has advised that tampering with government’s macro-economic policies would be detrimental to the country.

Jonas said there were certain features of the economy that should be modified in favour of progressive growth, but the macro-economy was not one of them.

“Tampering with macro-economic policy is a dangerous thing to do at this conjuncture, and I think the space to manoeuvre is small,” he said during a question-and-answer session at the fifth annual lecture of the Mapungubwe Institute for Strategic Reflection (Mistra), held at the University of Johannesburg’s Bunting Road campus this week.

President Jacob Zuma removed former finance minister Pravin Gordhan and Jonas at the end of March and replaced them with Malusi Gigaba and Sfiso Buthelezi, respectively.

The lecture delivered by Jonas at Mistra was titled Radical Economic Transformation: Are Fiscal and Monetary Authorities a Help or a Hindrance?

Among those in attendance were members of the board of governors of Mistra, including its executive director and ANC national executive committee member, Joel Netshitenzhe.

Jonas also said there seemed to be a divisive trend among senior leaders within the governing party of making populist statements.

“If you look at their speeches, our speeches, they are increasingly being laced with racial undertones,” he said.

Jonas, quoting from other literature, said populism “gives absolute creative freedom to the bullshitter” and that it appealed to desperate politicians.

He further said the party and government needed to pay attention and show maturity when dealing with capital because “in a sense, they are part of the problem and part of the solution”.

READ: 8 things in the SA economy that must change

“You need maturity on how you engage with it [capital] as opposed to populist statements, which I think are becoming fashionable within the ANC of today. Did I say the ANC of today? Sorry, whatever it is,” he said asserting that the party’s historical ability to reflect, including within the alliance, had been lost.

He further pointed out that the term “radical economic transformation” had lost its credibility and he agonised whenever he had to use it.

Asked about the possibility of a state-owned bank, Jonas said state-owned entities were central to state capture and that another such entity would not be a wise move.

“When I was in Treasury, it took us 18 months to appoint the board of [SAA]. Not that we didn’t know who to appoint,” he said, elaborating on the lack of decisiveness within government in relation to parastatals.

Dismissing the idea of nationalising the Reserve Bank, Jonas said the portrayal of the bank as an institution that was controlled by outside forces was incorrect as the bank was accountable to Parliament via the finance minister.

The bank has more than 660 private shareholders, with 2 million issued shares and each shareholder having a maximum of 10 000 shares at an annual dividend of 10c per share.

“The [SA Reserve Bank] shareholders have no real power. The only thing they do is to vote for seven board members and the other eight are appointed by the president, and that includes the governor and three deputies. Again, it shows that this argument on nationalisation is not founded on facts.”

Jonas also said that, though the Constitution was sufficient, there were 28 instances in which it gave the president sole authority to decide on certain critical issues.

“Maybe when we drafted the Constitution we had a view that it would always be Mandela.”

There might not have been a consideration that someday the country would be led by a conflicted head of state, he observed.

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