Can we create the SA we want to live in after Covid-19? – Business Day

So what more must be done? How does SA now best fix its economic future?

Despite the weak preconditions in the SA economy, we must recognise the extent to which the national lockdown has obliterated previous economic and fiscal benchmarks. The devastating economic impact of Covid-19 and the possible cushioning effect of various economic support measures introduced so far still have to play themselves out.

A revised budget has been prepared in light of the additional spending commitments, the loss of tax revenues and the consequent escalating debt burden arising from the health crisis. The rate of recovery in the short term depends on the strength of any revival in the world economy, on whether the economic support measures are effectively implemented, and on the pace at which the lockdown is phased out so that economic and business activity can resume. The rest we know.

This does not, however, mean a permanent doomsday scenario. What can be said is that this pandemic, like previous ones, will eventually pass. Indeed, a vaccine will one day be found. SA, along with many other economies, will eventually revert to what might in future be called the new normal. Yet even if the socio-economic contours in SA shift as a result of Covid-19, the underlying challenges will remain.

SAs historical imbalances have not disappeared.

We need to bear in mind that we cannot define or propose economic strategies without having a clear vision of a national purpose. This goes beyond economic theories and models; it is about the kind of society we wish to live in. And we must not forget what the long walk to freedom entailed or where the aspirations in our widely praised constitution came from, as we try to define a new national purpose for SA.

Often, our purpose as a nation does not come across in technical discussions of economic policy and its implementation. Such discussions frequently fail to take into account the impact of our economic decisions and activities on the institutional framework of the society we live in. The danger in this oversight is that our policy choices may invite changes in our society that we would not specifically have chosen, had we had the benefit of foresight.

The consequences of apartheid provide a powerful lesson in this regard for all South Africans. And now there is widespread concern about the violation of human rights brought about by the lockdown regulations.

We can only be assured that we will achieve our preferred type of social organisation if we know how it is likely to be affected by our chosen economic policies. This alignment also helps create policy coherence, public confidence and social cohesion.

Parsons is a professor at North-West University Business School. This is an extract from the chapter he wrote in Recession, Recovery and Reform: SA After Covid-19, a publication he also edited.

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Can we create the SA we want to live in after Covid-19? - Business Day