Financial Liberalisation Has Necessitated a Gender-Aware Policy Reform.

By Funzani Mtembu

In recent weeks South Africans have been overwhelmed with highly contested views on the South African Reserve Bank’s mandate. This happens post ANC lekgotla resolutions media briefing, delivered bysecretary general of the ruling party Ace Magashule. You can find the full statement here:
We not only came to full view of the depth of the divide within ANC, but what became especially clear was how factionalism can weaponize key economic functions which centre important debates. As a result,proponents of orthodox economics responded dismissively to what Magashule had presented. 

What one will dejectedly realise is the predominance of male voices in these economic debates. Yet another bitter reminder of the peripheral economic position women in this countryoccupy. Without sounding like a constant misery guts, I arguethat a developing country such as South Africa need to be gender cognisant. 
The 1994 transition to the so called democratic South Africa carried through neo-liberalism saw the integration of the country into global economy. Liberalisation of finance is one of the principles embedded within globalisation and this had varying effects towards our macro-economy. 
Note that globalisation has a broader scope, but for the purpose of this article, interest is in liberalisation of finance in particular, and also the effects it has had on monetary policy and trickled down eventuality oneconomic position of women. That is not to negate the importance of engaging other aspects of economic policy.
One undeniable effect that liberalisation of finance has had is the volatility of our macro-economy and the capitalist crises we have witnessed even in recent years, i.e. 2008 financial crisis. These crises which occur in advanced economies have great negative impact on emerging economies, who suffer little protection from such. The case is in South Africa today, where we are yet to fully recover from the 2008 financial crisis. Such macroeconomic uncertainties have tended to affect the vulnerable, the most.
The mandate of the South African Reserve Bank is price stability, i.e.inflation targeting. This is done through the control of interest rates, which have an inverse relationship to inflation. In his article here: the Wits University Professor, Prof Patrick Bond writes that “South African monetary management has landed us with an interest rate that today, among the major countries issuing 10-year securities, is higher than all others (including Venezuela) aside from Turkey, Pakistan and Argentina.”
Because South Africa has liberalised capital accounts – that is the easing of restrictions on capital flows across borders – there is pressure to keep inflation low and interest rates high, to attract foreign investments. A low inflation is good for wealth holders because real rates of return are negatively affected by inflation. As a result, central banks in countries with liberalized capital accounts such as ours feel pressure to keep inflation low. This leads to a contractionary monetary policy that has negative job growth effects. 

One of the take away points from the lekgotla report back, which all parties cannot deny, is the fact that poverty in this country remains gendered and racial. The populace which predominates our country, women, is prone to negative macroeconomic effects. That is because firstly women, particularly black women, still have control over very few assets to smooth income, secondly the responsibility of care in the household is on women and cuts in public sector budgets during crisis further increase women’s care responsibilities, as I have shown in my previous article here: Lastly, women are left with less choice but to take on more precarious forms of work during crises and in a contracting economy.
Another reality we have to be honest about is the fact that high interest rates have had a negative impact on small businesses. This becomes a double jeopardy for women who are in business and have the responsibility of household care. It has also resulted in an economy which is consumerist and with little base to produce. Such an economy cannot be viable for “quantity easing” as Magashule had suggested. The result of “quantity easing” is a weak capital account. The challenge is to have a policy mix that would create a productive economy, which can continuously reproduce to self-sustain. 
This is not to say that debates about the mandate of the South African Reserve Bank should be shut down, because of the politics around it. I am adding to the many other voices, who are advocating for there to be an open debate and a re-evaluation of the SARB’s mandate. I am also substantiating that, from a gender perspective, all this necessitates a conversation and gender awareness in policy making.
The president has recently announced that for the first time 50% of the cabinet is woman. I, like many other gender justice advocates, have questioned the role of power in these appointments. Do women who sit in positions of power have any leverage to influence the country’s dynamics? What the re-imagination of gender justice should enlighten, is the place, the role and the participation of women in this complex and nuanced political economy. 

Funzani Mtembu is an investment analyst, an activist, post-grad student at Wits and an advocate for a feminist economy and Pan Africanism. She writes and speaks on her own capacity on subjects such as feminism, political economy and social movements. 


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