Chairperson, I'm sure that the House has noted that there's a high degree of consensus in this House on where we are going and what we are doing. The exception, however, which surprises me, is the hon member for COPE who wants to start selling off enterprises. I think the DA is a bit embarrassed because somebody has stolen their thunder!
Chair, I had intended to speak about the impact of the global economic crisis on industry, worldwide and in South Africa. But yesterday I caught up with the London Financial Times and that changed my mind about how I should handle this matter. There was an article by Martin Wolf in the London Financial Times about the question of green shoots in the international financial crisis. What he has to say is very instructive because it impacts directly on what our Ministers and the departments are proposing and talking about.
Firstly, he says - and this is based on research in the United States - that the recession that we are going through matches the Great Depression of 1929. Japan's industrial collapse is worse than in the 1930s. There is the question of today's unprecedented stimulus to counter the effect of the collapse. The accumulation of private sector debt is huge in the US and elsewhere; and, therefore, what is required are aggressive monetary and fiscal policies throughout the world.
Now, the question, of course, relates directly to how we handle this budget in South Africa. Do we have enough of a stimulus? Is the infrastructure spend adequate to do what these international economists are saying?
Let me just briefly try and capture what the debate is about internationally. The London Financial Times has been leading a debate on what is called "the future of capitalism" in which the top brains of economic thinking, internationally, have participated: people like Krugman, Martin Wolf himself, and others.
The argument is, if you increase liquidity internationally by way of a stimulus - the way Obama has done - are you able to claw back the unintended consequences of such liquidity when you stabilise the international financial system? The conclusion that Martin Wolf and others have come to is that you can do so provided that your regime is credible and systems are sound. Now, nobody will argue against the case being made, here, that our systems are sound; our financial systems are performing well. And therefore, perhaps - and I say perhaps - we fall into the category of those who can afford a greater stimulus because we will be able to control the unintended consequences. This is the nature of the debate internationally. I recommend that you read the Financial Times because they go into this in detail and I wonder whether we are performing adequately in the light of those arguments.
This case is important for us and for this debate because, in my view, as Parliament we have to give adequate and, indeed, a great deal of policy space to the DTI and the Minister of Economic Development so that they are able to develop new thinking on how we handle the economy, how we restructure the economy and not be so timid, or intimidated by the talk about the need for responsibility, caution and prudence at the macroeconomic level.
That is a debate that has to take place in South Africa. I'm going to quote a few very short extracts from international economists to show what they say about how to respond to this global crisis that everybody is talking about.
Kenneth Rogoff, the former chief economist of the IMF, said: "We need aggressive macroeconomic stimulus." Paul Krugman, the Nobel prizewinner, says we need unorthodox remedies and we may run temporary deficits if the economy is depressed. Again, he talks about the need for economic stimulus.
The Conservative Party of the United Kingdom, Margaret Thatcher's party, has issued a statement saying that by rejecting the bankrupt ideology of free-market fundamentalism - I hope Cope is listening -Martin Wolf has made the point that neither fiscal deficits nor monetary expansion is a problem, provided - this is the point he made - the system is credible and the unintended consequences can be reversed in time.