It is indicative of President Jacob Zuma’s larger-than-life personality that so much of the international press coverage of him has ignored what the people of South Africa have elected him to do: run a country of huge income inequality which, despite growth rates of over 5% per annum since 2004, has failed to make any meaningful inroads into reducing poverty. Instead we have heard ad nauseam about the multiple wives, the rape trial in which he claimed he avoided HIV infection by taking a shower, the alleged corruption and the very un-Mbeki like dancing to the campaign anthem ‘Bring Me My Machine Gun’.
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| Edited by: Raymond Parsons Reviewer:Â Joe Powell |
Zumanomics, a collection of essays from prominent economists edited by Raymond Parsons, the co-ordinator of the National Economic Development and Labour Council, attempts to take a more policy-orientated look at the challenges facing the Zuma presidency.
 Strategies to ride out the global recession feature prominently, with Abedian and Ajam warning against the fiscally unsustainable nature of some of the populist elements of the Zuma agenda. Inevitably this will be an area of tension. There are huge expectations from the economically marginalised majority who feel they have finally elected someone who speaks their language, and yet financial realities mean many will be let down.
According to du Toit and van Tonder, the idea of ‘two economies’ is critical to understanding South Africa. The first economy, encompassing a small minority of the population, is characterised by wealth creation, high output, low fiscal debt, healthy consumption and well-functioning markets. The second, however, sees extreme poverty, high structural unemployment and poor socio-economic potential. Students of Uganda’s economic progress would recognise similar dualistic traits here, albeit with an even smaller number engaging in the productive sector.
According to this thesis the role of economic governance should be to create an environment in which people are able to move out of the second economy, and therefore out of poverty. Nokaneng and Harmse use examples from Southeast Asia to inform how this transition can be made in South Africa. For them the key is a shift from labour-intensive agricultural peasant production to small and medium scale manufacturing. They also suggest a focus on export industries, accompanied by efforts to attract Foreign Direct Investment. These ideas are nothing new, as anyone who has read Ha-Joon Chang will attest, however it is illuminating that even relatively wealthy South Africa is found to be woefully deficient in terms of industrial strategy.
Indeed what role the state should be playing in economic development is a theme that underpins much of ‘Zumanomics’. Parsons suggests a ‘collectivism index’ to monitor state involvement in the South African economy and highlight excessive intervention. As the state machine has become tainted by poor service delivery, corruption and unnecessary bureaucracy, it is safe to assume that the index would be popular with the private sector. However, the banking failures in Europe and America have shown that effective regulation is still an integral part of a well-functioning economic system. Indeed it is somewhat ironic that an African bank has yet to go under during the current financial crisis.Â
Zumanomics can be heavy going, but then it is hard to see how essays on inflation targeting and labour policy could ever be anything else. In all, it is refreshing to read a serious analysis of the problems facing sub-Saharan Africa’s industrial leader, and there are no shortage of lessons for Uganda. It is a popular misconception that the state sell-off of utilities for example, has hurt the Ugandan consumer and harmed the economy. However, a quick glance at the country’s roads should be enough to realise that it is no use putting the state in charge unless it has the capacity to deliver. A focus on effective regulation of the private sector is in fact a far more useful job for the state to play in Africa. Whether that is what Zuma has in mind remains to be seen, but it is certain that the whole continent is watching with great interest.
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