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We received the MTBPS with a mixed reaction of satisfaction and deep
concern. We are satisfied that all safety nets and social spending
remains unaltered in spite of the depression and that more money is
invested in the education of our children. We appreciate the
incentive given to employees to hire students that have just graduated.

However, for the rest we fear that the MTBPS reflects the old British
generals' attitude of muddling it through, and does so on the basis of
the recession being over by the end of the year and next year the
economy being on a growth rate of 1,5% to increase to 2.7% in the
following year and 3.2% in the next one. We cannot design our
response to South Africa's worst economic crisis on the basis of
unrestrained optimism and wishful thinking.

Because of this attitude, the MTBPS is ?business as usual' with a few
adjustments to get us through what it regards as a transient sticky
patch requiring no strategic adjustments. The interim solution is
borrowing our prosperity into interminable debts raising the deficit
from 1 to 7.6% of GDP, again on the assertion that this will be
sustainable because next year the economy will flourish again.

However, if it does not, this single action will place us in a vicious
economic cycle in which it will become necessary to raise interest
rates sky high to attract foreign lenders to buy more state
obligations to finance an ever-increasing budget, as the economy
shrinks under the combined negative effects of high rising inflation,
interest rates and a credit crunch.

The MTBPS fails to take the necessary measures to restructure our
economy to make it viable after the depression. It continues to pour
good money after bad in non-performing State owned enterprises and
parastatals, missing the opportunity to make necessary cuts which
would have reduced the deficit and improved future economic
performance, such as avoiding giving one billion Rand to the Land Bank
in the hope that after 20 years of solid management problems it will
now turn around, rather than merely merging it as a land division of
the Industrial Development Corporation where it would receive proper
management.

Similarly, billions of Rands are allocated to overlapping agencies
which all provide basically the same financial and other assistance to
SMMEs and which all could be merged into one in a matter of weeks, as
happens in the private sector with similar entities.

The list of possible savings is endless and reflects a list of missed
opportunities flowing from having insufficient appreciation of how
dramatic this economic crisis really is. Under the present conditions,
it may just be the case that this year's MTBPS will become the
beginning of a process which will disintegrate South Africa's
middle-class, commencing from its newly emerging segments which are
the most vulnerable and consist of those of us who were previously
disadvantaged.

Another opportunity has been missed to learn the lessons of the global
depression and make interventions which finally promote a viable
industrial basis for the post-depression environment. The MTBPS merely
increases the amount of subsidies and assistance to what it styles
?vulnerable? sectors of our economy, such as the automotive and
textile industries, without questioning whether they are indeed
?viable?, thereby setting the basis for long-term, ever increasing
financial assistance to these sectors. The end result is that we not
only need to pay highly inflated prices for a vehicle bought in South
Africa, but with our taxes we discount the price that foreigners pay
for the same vehicles sold abroad, while our textiles only remain
cheap because the estimated social cost of maintaining a single
textile job is R33,7 million a year.

The opportunity has been missed to make investments in which
Government operates as the nursery for new industrial sectors which
can produce the widgets by which our country can survive in the global
village. At the risk of oversimplifying, one can think how Switzerland
has ensured a very good living for all its citizens by providing the
world with two products, watches and chocolate, and one service,
banking. For fifteen years I have called on the Government to focus on
the need to develop an industrial basis as the prerequisite to job
creation, but no attention has been given to such difficult task.

By the same token, what has been identified as the Employment
Generation Programme attached to the Department of Public Works has
the flavour of multiplying people on a job rather than multiplying
jobs. At this crucial juncture of our history, we need an
infrastructure building programme which not only creates employment
but sets the basis for economic recovery and assists the formation of
a new industry.

This programme needs to be set in place before we are hit by the
additional recessionary effects of the post-2010 Soccer World Cup and
the fading out of major construction work envisaged for next year,
which one fears will become coupled with a foreseeable massive
depreciation of the real estate market and an increased wave of
foreclosures and non-performing loans.

I appreciate the indication given in the MTBPS that the policy of
devaluing the Rand has been adopted. However, this too will need to
reflect an overall industrial strategy and the understanding that
things may not be as rosy as one would hope. I appreciate that in my
reaction to the MTBPS I am taking more the side of fear than that of
hope, but on this one my duty to protect the people of South Africa
calls on me, as it should on everyone else, to plan for the worst and
act on that basis rather than making plans on the basis of our fondest
dreams.