Unpacking UDC's economic and jobs rationale (Part 1)
Bakang Ntshingane | Friday September 20, 2019 12:09
Although the party itself has not had the best record of being a reasonably effective opposition movement, their electoral targets, especially on the economy, are worth giving careful scrutiny and engagement.
It seems a reasonably gifted economics graduate crafted them. Botswana’s opposition parties have been done a great disservice when it comes to the level of engagement and scrutiny they are afforded.
This has been to both their advantage and their detriment. It has meant that some of their great work has gone unappreciated and some of their outrageous ideas and tactical blunders have missed intense debate and critique.
It is up to the UDC and their ‘frenemies’ over at the Alliance for Progressives to ensure that Botswana’s political system becomes competitive by offering voters an irresistible alternative to the Botswana Democratic Party (BDP).
This is why I’m fascinated by the idea and prospect of an Umbrella government. Whether they have successfully convinced me that they are a worthy political choice is a debate I’m still to wrap up myself.
And so, it is critical for the health of our democracy that we closely examine the official opposition and their ideas as a government in waiting. Of particular interest is the party’s electoral pledge around the economy, jobs and infrastructure investment.
We must test the UDC’s economic claims and economic plans against both reason and pragmatism. The manifesto itself is a nice package that covers almost everything that an aspiring government must aim to give its electorate. Some of its ideas have populist undertones, but as an opposition party, fortunately they have the luxury of selling pipedreams.
The UDC’s key commitments of 100,000 jobs in 12 months, a living wage of P3,000, old age pension of P1,500, free sanitary pads, tablets for learners, tertiary education student allowance of P2,500 and reopening of BCL Mine have stimulated public debate around the elections.
All of these are great ideas that speak to what many ordinary citizens are concerned about. Of course, some of these promises are outright populist, but voters perhaps get a sense that the Umbrella collective gets it.
The pledges around the economy and jobs will have several ripple effects on the economy in the event that we wake up to an Umbrella government on the morning of October 25 or 26. One of those effects will be a larger than life public spending bill that taxpayers will have to foot.
The UDC places the urgency for action on a below-potential economic growth rate of 3.8 percent, unemployment, corruption, poverty and income inequality. They pledge to create 100,000 jobs in their first year in office. I do not know how they arrived at that number, but their justification for it has made sense in some quarters and hasn’t in others, depending on who’s talking.
The party also targets an economic growth rate of six percent to eight percent per year while they are in office. Those are fair numbers, possible but difficult in the current global economic climate.
What falls short in this rationale is a comprehensive breakdown of what it will take to move the country’s growth rate from 3.8 percent to six percent or eight percent. South Africa’s economy is not even growing at our rate and they have a bigger, more diversified economy than Botswana’s.
These seem like small numbers, but to double the economic growth rate is a lot easier said than done. The key question of what causal economic mechanism will move the country from the current growth rate to six percent remains largely unanswered.
The most recurring theme on this aspect is a lot of policy recalibration talk that gets mistaken for economic activity. Although there’s a relationship between policy and a progressive economy, it still doesn’t constitute economic activity.
The Umbrella’s commitment to targets is commendable. They have an appetite for checks and balances. But targeting a growth rate of six percent to eight percent per year is a tricky spot to put yourself in. A short, immediate or long-term timeline would have been a target that can be further broken down into smaller, manageable timelines.
The UDC lists a few economic activities and commits to SMME development, reopening the BCL Mine, and casually lists some new ‘frontier’ industries to venture into. Brilliant ideas, I’ll say. Green energy, green bonds, green infrastructure and industrial hemp are the current rage in Europe and in economic literature.
Botswana is beyond capable of venturing into these exciting, new uncharted paths, and these would be great talking points for the Umbrella’s re-election if they make it to the State House this time around.
I’m also very sceptical of the heavy state-driven undertones that I pick up from the manifesto. We can all agree that we have had enough heavy state-driven economic development to last us a lifetime. The next government should step back and let the private sector drive innovation, development and investment in key economic areas. A government should only be concerned about its job, no matter how cliché that sounds.
There are more questions than answers from the UDC’s economic thought process, but kudos for getting the conversations going. Will economic growth directly translate into less economic inequality? Who will foot the bill from their increased infrastructure and wage spending? Even in the event of a phased implementation, as they suggest, the State would have to spend tonnes of resources setting up, growing and nurturing the industries and projects until they are mature enough to stand on their own.
Again, a mixture of giving, taking and targeted policy interventions would make this work. A 100,000 jobs and a decent living wage obviously rolls off the tongue, almost akin to ‘a chicken in every pot and two cars in the garage of every home’ type of promise.
Growing the economy is necessary but not a sufficient condition to dealing with income and wealth inequality. We must take cognisance of the fact that economic growth does not guarantee a more equitable share of the pie.
With the amount of policy frameworks re-orientation and shifting that an Umbrella government would get into once assuming state power, any of the pledges that they made would likely be realised fully in the second or third year of their term.
Never mind the infighting that is highly likely to continue even after winning the election. The Umbrella remains a collection of strange bedfellows who have a lot less in common, tonnes of issues to iron out and a lot of ‘getting to know each other’ to do. Before they know it, they’ll be going back to the polls to ask for a renewed mandate at the end of their first term.
In addition, a lot of the party’s signature pledges will hike public spending, causing a huge dent to the fiscus. A UDC government will still be inheriting the same institutions that BDP has been operating under, with the same bureaucracy. Reorganising the Treasury to accommodate the amount of spending in their first year will be a daunting task.
Any amount of economic growth that the UDC envisions will also depend on how our neighbours are doing and how the global economy is also performing. The national economy does not exist nor function in a vacuum.
Any party that commits to putting people first deserves to be given a chance. I buy into some of the Umbrella’s ideas, but perhaps from a state planning, pragmatic point of view, I don’t buy into some of their timelines and economic rationale. That doesn’t mean they don’t have genuinely great ideas.
The Umbrella must be applauded for the discourse and nuance they have brought, in good measure of course. I’m optimistic that they will be upfront and honest about how practical their propositions are, but I wouldn’t bank on any political party or politician doing that.
*Bakang Ntshingane is a graduate student at Chonbuk National University’s Department of International Trade in South Korea. He thinks and writes on the intersections of politics, international trade and foreign policy.