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Date
: 18/11/2004
Source: Ministry of Finance
Title: T Manuel: Bureau for Economic Research 60th Anniversary
Conference
BUREAU FOR ECONOMIC RESEARCH 60TH ANNIVERSARY CONFERENCE, SPEECH BY
TREVOR A MANUEL, MINISTER OF FINANCE, Somerset West, 18 November
2004
South Africa has earned an enviable reputation for sound fiscal
management and a progressive opening up of its financial markets,
within a prudent regulatory regime.
We have brought our budget deficit below 3 per cent of GDP, we have
inflation now comfortably within our target range of 3 to 6 per
cent, we have kept our balance of payments current account within
moderate limits, we have seen capital market interest rates fall to
their lowest levels in some 25 years.
We have achieved moderate growth of the economy, and there is
encouraging evidence of an acceleration in the pace of job
creation.
The fiscal and budgetary reforms of the past decade have built a
firm foundation for the years that lie ahead. But in the life of a
finance ministry there is no reasonable prospect of a gentle
rocking chair retirement: the challenges of the decade ahead are
formidable, and in some ways more complex, than the path we have
travelled already.
A decade ago, and in 1996 when the Growth, Employment and
Redistribution macroeconomic strategy was formulated, it was clear
what had to be done macro economically. We had to stabilise the
fiscal balances, we had to dismantle the exchange controls and
trade barriers of an over-protected siege economy, we had to steady
the inflation trajectory, we had to redirect public spending
towards investment in skills and redressing the distortions of
racially skewed social services, we had to reverse the decline in
infrastructure investment. There were varying opinions on the
details of the macroeconomic framework and of course there were
those who regarded the whole strategy as distastefully
Washingtonian. But in retrospect these were the right things to do:
and by 2001 we were able to adopt an expansionary and pro-growth
fiscal stance, in a context of renewed business confidence, a
declining debt-GDP ratio, moderate inflation and a healthy balance
of payments.
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