The latest economic review and outlook of the Western Cape, as presented by the new Finance MEC David Maynier is the classic reflection of a squandered economic dividend and historic advantage that the Western Cape is. Its poor economic performance also shows that the Western Cape government has no discernible economic policy. The Western Cape started on a much better economic footing in 1994 than almost all provinces. For example, by 1994, Western Cape already had 89% of its Residence having access to piped water, compared to 34% in Limpopo.
What has delayed Cape Town is lack of a properly defined economic policy, at once libertarian, decapacitating government to a bone and outsourcing everything, on the other hand jumping on populist anti-libertarian programmes, half-heartedly using government to reach out to the economically excluded majority.
Former DA economic MEC, now Premier, said in his 2018 budget vote, ‘our economy is not about dividing up the same old pie. Here, the size of the pie is growing’. The Premiers idea is that when the pie grows, everyone will get a fair share. This is utopian nonsense to which an end must be put because it deliberately seeks to ignore inherited advantages of unearned wealth, engineered white class and first mover advantage in education, which necessarily demands that the pie be sliced and shared, as a deliberate effort for fairness, even as it must be grown.
Today, the pie is neither growing nor getting sliced. When you don’t slice the pie, you deprive the province of massive and meaningful contribution of the majority of our people and inevitably stagnate the economy which should be flourishing given its historical economic advantages. As long as wealth is made and gained by the privileged few, our economic numbers will continue to be dismal. Its simple maths really. When you give 10 million rand to one man, he might spend 2 or three million of it. But when you give R10 000 to a 1000 people, all of them will spend their money and the 10 million that would have been missed by the economy will now be spent. We are missing economic growth from the demand side because wealth and business is highly concentrated.
Last year the City of Cape Town bought 387 million from hosting 30 conferences. All that money was spent in traditional affluent places like Waterfront and Kistenbosch. The city also brought 3.8 billions on tourism spend. Again that money doesn’t find expression in predominantly black and coloured areas. The DA is running an affluent white fiefdom in Western Cape with the people’s consent.
Here is the reality of the majority in the Western Cape. Black people are structurally unemployed, they face impossible costs of owning a home in upmarket neighborhood’s, they face prohibitive costs and racial controls in enrolling in good schools, blacks are left with schools without quality playgrounds, no music lessons, the pie seems to be growing for those who already have a slice, the well positioned, and others fall under averages and per-capitas.
Refusing to slice the pie frees those with unjustified enrichment and historic advantages from responsibility. Having a government that works for them, the Democratic Alliance government, encourages them to make huge investments in the Province, to create an illusion that focusing on growing the pie instead of slicing it. Doing business without responsibility is good for business. The rich would rather create a network of academics, businessmen, journalists and activists, to champion their cause, fight government, fight the ideological battles on the airwaves, indoctrinate the young in universities, and on a good day, buy themselves a government.
Cape Town continues to be one of the most unequal places in the world. A decision not to slice the pie endorses the prevailing inequality almost as a virtue. It celebrates the socially engineered inequality that in the eyes of the majority could never be justified. Former First Lady Zanele Mbeki once said ‘Black people see white people as a group that went to heaven without dying’. Their wealth and middle-class position was earned, or at least is largely unjustified.
Instead of broadening economic participation in business, the provincial government continues to help Big business, to cross oceans to sell their products and maximise their profits, by passing all regulations that are meant to protect this country and its people. This is while Small businesses, emerging and informal, are pacified with workshops and seminars and meagre funding. It is in fact small businesses, the black businesses that need to be taken across the ocean for real economic benefits.
DA government operates within the stereotypes to the tee. Big business, predominantly white, are helped to cross the ocean to maximize their profits and fund their friends. And small businesses, emerging and informal, are pacified with workshops and seminars and meagre funding. It is in fact small businesses, the black businesses that need to be taken across the ocean for real economic benefits.
Small businesses don’t need bandwidth barns and wifi sports. They need direct businesses from government. They need government influence and help so that big private businesses can do more businesses with small businesses.
The most egregious economic trick of the DA government, is to lull the local contractor with enterprise development programme and skills development, especially in the big projects space, the Industrial Special Zones, the Special Economic Zones, in oil and energy space, gas production, and in the green economic technology shifts, instead of real and meaningful stake in doing business with the big boys.
The reason is that this Western Cape government, being an executive branch of big business means it has no developmental Agenda. The result is this deregulation crusade, where everything is commodified, including human life. The convolution of the DA government and business, is partly as a result of the white network that goes hundreds of years. All the DA partnerships with businesses means that the regulator will be too compromised and too disempowered to rebuke the exploitative and reckless business practice. It’s an alliance that cripples the regulator and renders it as a business tool of power.
Twenty-five years into our democracy, the participation of our people into mainstream economy is still tentative, low scale with no political will to extend government contracts or convincing big business to do their big contracts with previously disadvantages company owners and contractors. This is because this government is a proxy of Big Business and every contract of this government is extension of big business power.
This might have continued in the former years where the world was duped with trickle down economics, today, that theory has been debunked. The economic opportunities, the work, the wealth does not trickle down. There is therefore a huge underutilisation of highly capable economic participants because we have a provincial government that protects the exisiitng big players instead of opening up the space for all players to make their equal economic contribution and give our provincial economy a leap forward. Economic transformation is the key to economic growth and its also good business.
If there is any hope to move away from these measly and pathetic growth numbers, the economy is going to have to open up to more players in a more meaningful way and the provincial government is going to have to remember its role as government and get out of corporate boardroom.
Yonela Diko is the ANC Western Cape Media Liaison Officer.