If you put a frog in a pot of hot water, it jumps out. If you put it in cool water and heat it slowly, so the myth goes, it boils to death because it doesn’t notice the change until it’s too late. The frog in the pot myth could be applicable with regards to the current executive in Botswana. This is so because of the executive’s response to the prevailing economic challenges.
President Ian Khama’s launch of the Economic Stimulus Programme (ESP) in Machaneng last week once again sparked debate on the much publicized economic programme. Khama’s launch speech, just like his State of the Nation Address (SONA) in November 2015, and Finance Minister Kenneth Matambo’s budget speech three weeks back have been criticised for failure to recognise the “heat” that the economy is facing. The two addresses rather portray the government enclave’s usual gesture of “business as usual” due to their lack of in-depth and details.
Whenever they talk about it, technocrats portray the ESP as a panacea for all the problems bedeviling our economy, including the most obvious – unemployment, lack of affordable housing as well as high income inequality. Since the first announcement was made regarding this programme, the youth of this country have literally been dragged to the Finance Park based CIPA offices to register companies. Registration of companies, they have been made to believe, will become the vehicles that will ferry them to enjoyment of the fruits of this politically motivated ESP. We hope any disappointments that could come out of this whole process will not shatter the dreams of these budding ‘entrepreneurs,’ or shold we say tenderpreneurs.
Although we admit that it is too early to assess or even judge the ESP, given the lack of precise details such as its overall budget, we believe some comments could still be made about the plan and its possible outcome. One key question that keeps coming to head is, “how much time did the executive led by the president take to put ESP together? What was the level of input by members of the public, at least through their representatives in parliament? Such questions arise because we have been told that ESP has, in the meantime stood in place of the National Development Plan (NDP). Over the years, our NDPs have given room for predictability and accountability thus the international accolades that the country has received over the years. So to replace it with an ambiguous programme will certainly cause problems in future. Critics of this economic stimulus package fear that there will likely be rampant mismanagement of large sums of money that will be put aside for this programme. One is tempted to say they are right. Given our history as a country when it comes to public projects management, anything is possible. We ought to commend the President though, for assuring the nation that no corruption will be entertained during the implementation of ESP. We hope the situation on the ground will not be the opposite of what he says his “presidential inspectorate” will implement.
Nonetheless, given the speed that ESP has been introduced at, and the lack of critical information on its implementation which includes its source of funding, one is tempted to classify it under quack economics. One is tempted to further conclude that maybe the ESP has been guided by the government’s conviction that quack economics will somehow resolve our economic challenges.
As it stands, it is quite clear that government is determined to go ahead with this flagship programme, come rain or sunshine. It is not however immediately clear how far down that road the same government will be prepared to travel if intended results do not come around as quick as they should.
Do we have targets, say of sustainable jobs we want to create both in the short and long term or even of a number of houses we want to build and sell to Batswana by the end of this year? In China for instance, as a result of the 2008 financial crisis, the government adjusted property policies and offered favorable loan terms to boost the real estate market. As a benchmark, what can we do through ESP as a country to help thousands of our people who are desperately in search of a place to call home? Have we considered what we can do for people of Boteti district whose area remains so dusty despite the fact that we mine the precious stone from there? How about miners and diamond polishers who lost their jobs when their companies closed shop last year? In other countries they use ESP to curb such.
To put it in simple terms, a popular way to create economic stimulus is to have packages that will support businesses that employ individuals. Businesses, like individuals, are likely to spend any additional money they have at their disposal. Some of the money spent could be used to employ workers and make purchases from other businesses. Not only that, employees facing retrenchment could then be spared from losing their jobs.
Similarly, we stimulate an economy by getting money into the hands of people who will likely spend it. With that said, we wait to see how much money will be placed in the hands of ordinary Batswana. We read in another newspaper on Friday that the Batswana contractors might have been sold a dummy. If that is true, then shame on the ESP technocrats. If not true, then shame on the liars. While it rolls out ESP, the government should implement a definite policy to transform its growth pattern. Every sector (not just construction) of the economy should drive these changes, so as to hasten the process of getting the economy back on track. There is, however, a possibility that the executive knows what it is doing, but the #Bottomline is that failure to do what is right now will only mean one thing; we could find ourselves being a “frog in the pot”.