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The finance minister is one wrong statement away from lighting the fuse, writes Yonela Diko
I grew up in what can be called the golden age in global economics – the 1990s and early to mid-2000s.
Sitting at the pinnacle of this era was the great Alan Greenspan, the cerebral and erudite central banker from the US who hovered over the world’s economy from the top of the Federal Reserve’s tower.
Marching alongside successive US presidents, he was arguably the most powerful man in the world second only to those presidents, if not as powerful.
Central bank governors of the world seemed to take after him in his unwavering beliefs in market fundamentalism, his convictions that markets were holy ground able to self-govern and self-correct, and that governments would do best to stay out of the markets.
Tito Mboweni was the governor of the SA Reserve Bank at the time and implemented almost a mirror image of Greenspan’s economics in how he ran the South African economy.
Inflation was still an obsession kept in check through steadily decreasing interest rates and was only raised when the economy was overheating.
The world economy was healthy and countries had high levels of dollar reserves due to high levels of world trade – it was a global economy at ease with itself. Globalisation was on a march across the world, lifting billions out of poverty and creating blinding wealth for those who were well positioned.
What was equally fascinating, due in great part to Greenspan’s discipline, was the tight ship Mboweni ran –he gave away nothing, which meant that the focus of pundits and analysts shifted to vain things as they searched for answers.
Mboweni’s professorial mannerisms, his shabby suits, his glasses, his refusal to show a particular emotion or seem excited – he was an academic who was businesslike in image, cool and unrattled; someone who offered no clues about which way the monitory policy instrument would go.
Caution was the order of the day.
His mannerisms were duplicated across the world by other central bankers, who were so cautious that even the colour of their suits, how they carried their briefcases and the size of the stack of papers they carried before announcing monetary policy committee outcomes would be used to predict which way the interest rate would go.
Central bankers gave away nothing.
Part of this caution was informed by their constitutional position, caught as they were between the executive and Parliament, and even the judiciary.
There could never be any level of bias that could either be perceived or imagined from a central banker.
Mboweni played this role with great skill, and even organisations such as labour federation Cosatu were left to criticise the capitalist system to which we are all slaves, but they could not deny Mboweni’s prudence with finances.
Today, Mboweni is not so guarded and cautious.
He is a finance minister and he certainly has more room to be less prudent and less concerned about his suits and files.
But the finance department still requires great level of prudence – and less personal rhetoric – so that budget allocation or financial interventions are not viewed as biased or factional or ideological, but merely pragmatic and necessary.
Mboweni’s mannerisms today lack prudence and decorum – he fights with everyone he does not agree with and has an air of arrogance that is far from being justifiable.
He is like a technocrat who had been itching to tell politicians how stupid they were, but was only curbed from doing so due to the discipline of a central banker and the power of politicians.
“Only foolish people out there think Zimbabwe must be given a loan by South Africa to breathe,” Mboweni might say.
People must think before they open their mouths; I am ready to go to war for reasons only known to me – all these are Mboweni’s views, said with such callousness and disdain by a former Reserve Bank governor tired of the shackles of respectability; a politician who seems to lack maturity and decorum; a human being disintegrating into a thousand pieces that cannot find a stable centre.
Mboweni is erratic and reckless in a way a finance minister should never be.
After just a few months in office, Mboweni has already called for privatisation; he has already asked poor people not to cry poverty and pay their e-tolls; he wants Afrikaans to continue its apartheid privileges.
One can predict that, one of these days, Mboweni is going to say people who receive state welfare are lazy; that black people must snap out of it and stop blaming apartheid; that apartheid was a choice.
Mboweni is one wrong statement away from lighting a destructive fuse.
However, what worries me the most is that Mboweni does not sound at all well informed.
I try to listen to every interview he gives or speech he makes, but I always come away empty. Mboweni seems stuck in a world that he used to know.
I mean, who still uses Y2K as a reference to technology in 2019?
Read: Mboweni must substantiate his tweet about Afrikaans at University of Pretoria
Unfortunately, market fundamentalism, privatisation and laissez faire are part of the world that Mboweni used to know, but that no longer exists.
After the global economic crisis began in 2008, the end of history that US political economist Francis Fukuyama declared during Mboweni’s era as governor came back with a vengeance.
Governments came back to rescue the market system, like socialism helping capitalism to survive, privatisation proved no different from public institutions in finance and operations, with just an extra burden of having to regulate a private monopoly that used to be a government monopoly.
New rules were introduced for the markets to ensure government no longer played a hands-off role, and the markets were proving to be their own worst enemies deeply in need of a guardian.
We have redesigned business schools’ curriculums to reflect the new business reality.
And, yes, black people called the sunset clauses out as white people proved to have negotiated in bad faith.
Black people could no longer be second-class citizens and would shred everything that continued to validate those uneven relations.
Mboweni’s worry about being recycled makes more sense now. He has no fresh ideas.
The world he used to know, along with its people, is gone. Those who have stayed are those who have adapted and changed with the times.
Yes, the Reserve Bank must be completely owned by the state, not because of its independence, but because of what it does.
It prints money, issues currency, manages interest rates and regulates other banks – it’s effectively a financial government.
Why should an institution that prints money be in private hands? Because they are nice people?
It’s an anomaly that must be corrected and Mboweni does not have to run amok and insult fellow leaders without content.
We need new knowledge. Famous economists Adam Smith and John Maynard Keynes may no longer be enough.
We must all pursue our doctorates and contribute to the new knowledge pool.
Diko is a media strategist and political commentator
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