Mathabo Le Roux
13 July 2009
Johannesburg — AS COMPANIES continued to bleed in the global downturn, the government's planned response to the crisis was still nowhere near implementation stage, sources said at the weekend.
A prominent trade union source, who declined to be named, described the process as being in a state of paralysis, and lambasted the government for lack of leadership in bringing the rescue plan to fruition.
He cited a lack of coherence between the different government departments responsible for implementing the plan.
"No one knows their roles," the source said. "They need to be carving out responsibilities for the different departments -- Trade and Industry, the Department of Economic Development and Treasury -- and resources need to be allocated, but this is simply not happening.
"There should be some leadership from the Presidency, and they have to decide which ministries should do what, but no one is making a move."
A private sector figure, who also wanted to remain anonymous, said business was frustrated with delays in implementation, which left many companies with no alternative but to enter retrenchment talks.
"It would be a great pity if the package becomes available after companies have already retrenched workers on a large scale," the business source said.
Figures show manufacturing in particular is bleeding with output in the first quarter contracting almost a third.
In the year to May, factory output dived 17,1% while mining output plunged 14,5%, numbers an economist said were "horrible".
More than 200000 jobs have been shed this year. Despite this dire situation, the government has made little progress in coming to the aid of struggling companies.
While some companies received help from the state-owned Industrial Development Corporation, none of the sector plans, envisaged as part of the comprehensive framework response to the crisis conceived in the National Economic Development and Labour Council (Nedlac) in February, was implemented.
The criticism comes in the wake of pronouncements by Trade and Industry Minister Rob Davies on Friday that state intervention in the economy should be scaled up to deal with problems of poverty and unemployment in the economy.
But it appears that inability to co-ordinate the functions of different state departments, which has been at the heart of government service delivery failure for years, has still not been addressed, even though President Jacob Zuma 's Cabinet restructuring was aimed at dealing with the issue of government coherence.
"It is unfortunate that the election came at a time that a lot of work should have been done on details of the package," the business source said.
"Political attention was focused on the election, and it seems so was much of the bureaucrats'."
Lack of co-ordination, which had also plagued implementation of the government's flagship growth strategy, the national industrial policy framework, had still not been resolved, while leadership from the Presidency had not been forthcoming.
The trade unionist also lamented the overall structure of the framework response as fundamentally flawed.
"They wanted to have an agreement at all costs, and now that framework seems unimplementable.
"When the framework agreement was negotiated, it tried to cater for too many interest groups. It tried to be all things for all people, so there are even contradictions within the document.
"It would be exceedingly difficult to implement," the trade union source said.
This is not the first time that criticism has been raised about the government's intended response to the crisis.
Trade economist Peter Draper, who heads the trade-throughdevelopment unit at the South African Institute for International Relations, said on the release of the document in February that it was inconclusive and incoherent.
Broadly modelled on the government's accelerated and strategic growth programme (Asgi-SA), the framework document for SA's response to the international economic crisis proposes a wide range of interventions.
Along the lines of the industrial policy, it envisages a role for the state and development finance institutions in funding vulnerable sectors such as clothing and textiles, mining, automotive and capital equipment; gearing government spending towards local procurement and generally promoting "buy local" campaigns; and using trade policy measures to protect local industries.
Echoing trade union concerns, Draper described the Nedlac framework as the product of discussions "held behind closed doors", with different business stakeholders "jostling to get a bigger slice of the pie".
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