And econocracy will, ultimately, be the downfall of the South African economy. This is according to Michelle Groenewald, an expert in economics at the North-West University’s (NWU) Faculty of Economic and Management Sciences in Vanderbijlpark.
Michelle took to the podium during the recent NWU Alumni Business Breakfast to not only share her views on the national Budget Speech and the State of the Nation Address (SONA), but also the socio-economic and political impact of these important national indicators.
Econocracy: a problematic trend
According to Michelle, the term “econocracy” defines a society in which economic growth and advancement are the main drive of politics and economic policymaking. In short: a technocratic process that excludes the man in the street from engaging with issues pertaining to the economy.
“It is important for all South Africans to realise that the budget is not just a set of figures aimed at economists and business sectors,” said Michelle. She added that if the notion of econocracy is tolerated, the budget becomes a one-dimensional tool without any impact. She is of the opinion that the budget – as does South Africa – has many stories to tell, and that all countrymen and -women should engage with economics and be rigorous with the quality and content of the information that is available.
“We should also be respectful of the fact that there are many stories being told in the budget, especially given the fact that this is an election year. I do however want to tell Joe Soap that there is no need to feel threatened by the budget speech or the implications – or stories – that is being presented,” explained Michelle.
The stories of the 2019 national budget
In her address, Michelle focused on four pre-identified stories to illustrate the responsibility the budget places on the shoulders of society.
- Story 1: The relationship between education and employment
According to Michelle the current rhetoric in the country has it that there are currently enough students in tertiary education to automatically address the employment crisis staring South Africa in the face. This is not true.
“It blows my mind that 52,4% of young people between the ages of 15 and 24 are unemployed! It is nothing short of a national crisis and I find myself being frustrated by the fact that as a country we do not have a national obsession with creating employment,” said Michelle. She added that there are so many stories surrounding the budget of how South Africa will afford what it needs to afford, but the reality is that the country’s tax base is spread thin and the current workforce lacks the essential skills to become employable.
It is her opinion that there should be a dire national conversation regarding unemployment and all South Africans should weigh in on discussions, critique, policy proposals and solutions.
She agrees that entrepreneurship offers a viable solution to unemployment but cautions that it should not be viewed as the only solution.
- Story 2: Debt
“In this coming year, we expect revenues of R1,58 billion and spending of R1,83 trillion. That means we will spend R249 billion more than we earn. Put another way, we are borrowing about R1,2 billion a day, assuming we don’t borrow money on a weekend.” This quote by Finance Minister Tito Mboweni tells, according to Michelle, another distressing story about the South African economy.
But, as is the case with most stories, there are competing narratives. If the public sector wage bill is cut, realistically it means that government will be cutting all public servant wages including that of teachers, doctors and lawyers.
- Story 3: Eskom
“I do believe that certain issues surrounding Eskom should be viewed in a more optimistic view,” said Michelle and explains that on a national level discussions are focused on attempts to find innovative solutions such as unbundling opposed to just another bail out. The deciding factor with regards to Eskom will however be determined by the success with which interventions are implemented.
- Story 4: The South African spirit
“At the end of the day, we need to ask ourselves if we are up for the challenge to build a future that will work for all of us. I am a fierce believer in the South African spirit and as such I plead with all my fellow citizens to guard against complacency,” said Michelle. She believes that it is up to each and every South African to take up the responsibility and privilege to help shape young minds and foster a culture of innovation.
“South Africa is a big and bold country with good people and an abundance of positive things to focus on. We owe it to ourselves to be part of the solutions towards a brighter future. The time has come to engage with the numerous stories being told about our country and to courageously stare down challenges. We owe it to ourselves to ask: how dare challenges stand in my way?”
* Michelle is a proud alumna of the NWU and holds a BCom, BComHons and MCom degrees from the institution. In 2017 she was awarded the Chevening Scholarship and completed her MSc in political economy of development at the University of London, School of Oriental and African Studies. Her research interests include the political economy of development, the critique of economic methodology, and the process of decolonisation relating to curriculum reform.
Michelle Groenewald.
