Peter Attard Montalto
After yesterday’s SAIRR report on the NDP I feel I need to write a few lines in defence of the document. In many ways the NDP is a flawed document with internal inconsistencies. However I think we need to remember that it was the product of a politically hemmed in process involving a range of contributors across the political spectrum of the left which Trevor has managed to wrestle back into something that is still overall pretty market friendly compared with the thought processes going on elsewhere in government. On issues like the labour market my reading was slightly different to SAIRR. I think that taken as a whole the only option the NDP proposes is a relaxation of currently tight labour regulations albeit offset in part by greater regulation in some other areas. I also don’t quite understand where the NDP is going in saying that there should be a big step change increase in the level of state involvement in the economy. It says the state should be directing activity more in a variety of areas in the economy but often then goes on to say the state doesn’t have the capacity for implementation and instead needs to partner with the private sector. I also agree with the NDP concentration on lower wage growth as the only way to meaningfully dent unemployment given the current skills base. SA cannot skip going through this level of development straight to more skilled jobs base. The fact there is no costing I think is of little relevance to getting the policy debate in the right place.
Overall I think we should accept that the NDP is the best we’ve got in the current political reality and much better than many of the alternatives out there like the NGP. Equally a new process now of reformulating the document could lead to a dangerous step up in union and other leftist involvement in the process that was thankfully avoided last time around. In any case the SAIRR is not wrong that the NDP may well die a death of lack of implementation – I’ve commented many times in the past that outside the usual suspect ministries there is a leadership vacuum in government on the NDP. That is not a reason to simply throw the NDP out however.
I fully agree with the SAIRR zero-based policy recommendations of radical deregulation and the abandonment of racial policy, better education and a constituency based electoral system. The trouble is that in the current political dispensation that is not going to happen any time soon. These issues may not even play that strongly in the election campaign next year. Trying to cajole the government into the NDP or NDP like policies, using the document as a roadmap base not a bible, something that is going on led by various corporate groupings and charities may be the best hope of structural reforming and potential growth boosting progress in the short term. The NPC needs to take certain areas now and drill down with more detail, ironing out inconsistencies and providing some public and private pressure on implementation. This is starting to happen behind the scenes but could happen much more forcefully and publically.
Peter Attard Montalto is Executive Director, Emerging Markets Economist at NOMURA International.