FISCAL EXPANSION
CAROL PATON: Stimulus plan needs a fulcrum and lever to move our growth
At the centre of the plan will be an infrastructure fund, with implementing capacity coming from the office of the president
If ever there was a case to be made for extraordinary steps to help the country’s economic turnaround, now is the time. SA is not in a cyclical recession, some economists say, so a fiscal stimulus is not the appropriate remedy. This is true: it is far worse than that. We are emerging from an economic nightmare in which the key economic factors that need to be present for growth — confidence, fixed private investment and essential state-owned or regulated network infrastructure (electricity, water, rail, roads, broadband spectrum) — have been bludgeoned to the extent that the case to do business in SA has been virtually beaten out of existence. These are structural problems or a mixture of structural and organisational and political problems that need government-initiated solutions. Rescue and reconstruction is essential. However, all will take time to fix and in that time the economy will continue to contract and it is more likely that growth will stall. That is why the news that Pr...
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