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Submission to the COSATU Panel of Economists on “The Final Recommendations of the International Panel on Growth” (the Harvard Panel)
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Recommmendations of the Panel chaired by Ricardo Hausmann represent an outrageous disgrace. The Panel was appointed and made its first visit to South Africa in January 2006 with three further visits after six month intervals. It comprises 29 members (20 for the international panel, three other international co-authors and six South African authors). The Recommendations were released by National Treasury on 8th May, almost two and a half years after the Panel’s appointment. Over the intervening period, twenty background papers were drafted, less than one per member over more than two years (four members of the international panel do not figure as authors at all). The draft for Final Recommendations itself only covers sixteen pages of text, the 21 recommendations a mere four pages. In June, the Panel took their Recommendations on a “road show” in South Africa, providing briefings that generally did nothing more than offer summaries of their background papers. In short, irrespective of substantive content, the Final Recommendations are necessarily totally lacking in depth and breadth, and certainly by comparison with other reports and assessments of South Africa’s economy from before and after the end of apartheid. To put it crudely, there must be extreme doubts, worthy of investigation by interested parties, over whether those funding or supporting the Panel have received their money’s worth. In addition, as will be seen, apart from being extraordinarily narrow in scope and depth in terms of what has been done, the same applies to the application of the Panel’s analytical framework, even on its own terms, as is evidenced by comparison with The Growth Report, released at the end of May, 2008. This is covered in an Appendix to this Response.

This does, however, all have to be set in political context. It is generally acknowledged (and now privately admitted in private by Panel members) that the exercise was one of legitimising an increasingly unpopular government for its failure to deliver sufficiently on economic and social welfare for the majority of the population. The appointment of the Panel symbolised a mild shift in orientation from what was generally conceived to be neo-liberal postures on the part of government. In the event, the exercise has proven to be futile in light of political developments (symbolised by the replacement of Mbeki by Zuma as President of the ANC), and it must be suspected that the steam ran out of the Panel’s work both from the supply and the demand sides. The whole thing has ended in a whimper. This might explain the carelessness with which the Final Recommendations have been released. The National Treasury’s press statement lists only nineteen background papers, the Final Recommendation offers twenty, and two of these have not as yet been placed on the Harvard web page (although others listed as forthcoming are available). The press statement divides the papers into six categories but the numbering jumps from five to seven without a six. This is probably because Public Administration and BEE have been rounded together in five, with BEE presumably being separate as six previously. Each of these six categories, with BEE restored to independence, has its counterparts in the headings for the Final Recommendations. Crime, though, as listed in the Press Statement does not appear in the Final Recommendations.

Significantly, the one missing paper in the press statement concerns HIV/AIDS (and its impact on school attendance). The Final Recommendations make no reference at all to HIV/AIDS. This is indicative of a much broader neglect of major issues of compelling concern to the South African economy. On the one hand, there is at most passing reference in the Final Recommendations (report not just list of 21 policies) to the role of the public sector in health, education and welfare and economic and social infrastructure more generally such as transport, housing, energy, and water and sewage. There is no mention of agriculture, of urbanisation, regional development; and the words “poverty”, “gender”, and “race”, for example, do not appear once throughout the draft for the Final Recommendations. On the other hand, of the 21 recommendations, even those inclined to be favourable towards them would accept that at most...



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