The solution to the problem of our failing economy lies in bold measures of transformation and a people centredeconomic development model
4 September 2018
The Congress of South African Trade Unions has noted the report that shows that South Africa’s economy, as measured by the GDP has shrunk by a further 0.7% and therefore plunging the economy into a technical recession.The federation is not shocked by these numbers because they reflect a paralysis in SA economic policy trajectory that we have been talking about. They are also a condemnation of the pro-business 2018/19 Government budget and other government policies. Government has infact unnecessarily squeezed the working and middle class families by raising VAT, sugar, fuel taxes as well as by adjusting income tax bracket creep by below inflation levels thus reducing the money workers have to feed their families and spend on the economy.
This Thatcherite assault on the working class has contributed to the economic slump because there is no domestic demand for the products that this economy produces. We have also seen no sense of urgency in recovering the billions that have been looted over the last couple of years.
South Africa’s economic challenges call for bold measures of transformation and not in marginal programmes and projects. Unfortunately the South African government believes that Foreign Direct Investment (FDI) is an engine for growth, job creation and poverty reduction. They have followed this neoliberal line of thought for the last 20 years with no tangible outcomes. Even today they are still preoccupied with creating attractive investment conditions that benefit Multinational Corporations.
It is now patently clear that the neoliberal policies based on “market forces” and international competitiveness are not going to solve our economic problems. These policies have seen more and more people sliding into poverty in this country.