BRONWYN NORTJE: Government flirting blindly with IMF love and its strings attached
Situation is more precarious than many believe and one sudden shock could put SA in free fall
Everything is fine until it’s not. When the most recent delegation of IMF staff finished their Article IV consultations in SA, they made it quite clear that we are walking an increasingly fine line between everything being fine, and needing a huge bail-out.
In the same way that Thailand, South Korea and Indonesia were "fine" prior to the Asian financial crisis in 1997, SA is just one current account blowout from being forced to go cap in hand to the very capitalist masters our government professes to loathe.
To put it another way, if we don’t sort out our social and economic problems soon, we run a substantial risk of being forced to choose between economic ruin and political chaos, or calling in the IMF. (For those of you in the know, calling in the IMF is just another variant of economic ruin and political chaos, but I’ll get to that later.) What surprises me is that despite this knowledge, there seems to be no sense of urgency from the government to tackle the very vulnerabilities that will put us at the mercy of the sort of neoliberal overlords they so despise. Yes, Finance Minister Malusi Gigaba has unveiled a 14-point action plan, but there’s nothing sufficiently radical in it to bring about any more growth than the economy is already eking out. There is no talk of how to deal with the crises at state-owned enterprises, nor is there any discussion of how to tackle the rest of the bloated public sector.If anything, the minister’s well-intentioned attempts to rein in (some) spending...
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