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Tuesday, August 6, 302 AP
Web posted at 1232 UST.
While the Weissman government of Rovens is not being celebrated for saving the country from the economic depression, there are signs that better times are ahead.
In the Treasury building in downtown Haastadt, President Weissman and his Finance Minister, Adolph Gottlieb, announced the economic scorecard figures for the past three months, the first true period of Weissman-Gottlieb financial management.
Unfortunately, the figures reveal that the country is still in a depression. Economic
growth for the second quarter of the year, April to June, was -1.6%, or -6.25% annualised.
While still representing negative growth, it is substantially less -- and thus better -- than
the first quarter's -2.4% (or -9.25% annual) and far better than last year's -14.1%.
However, inflation was -0.4%, a sign that suppliers are having to drop their prices even more than the previous quarter to get sales. Yet, once again, the decline in prices is less than last year, when prices fell by 2.4% over the year.
Wages also fell in the country to R5,300 a year, little more than R100 a week. (R1.00 =
C1.00) As this is below 300ap wage levels, all wage gains over the past two years have effectively
been lost.
And while wages are lower than they have been, unemployment is also higher than it has ever been on record, at 18.4% of the workforce, or three million people.
Yet, despite the gloomy figures, both Gottlieb and Weissman are convinced this represents a turn-around for the economy. It is the best growth figures in two years, and is coupled with news that investment is up 5.5%, trade up by 9.2% and exports up 8%, all the first growth since before the Tsarist regime's collapse.
"These are not random figures, unrelated coincidences, but a clear sign that the economy is turning around", Mr Gottlieb told the gathered journalists, analysts, bankers and investment gurus. Both Gottlieb and President Weissman know that it is positive announcements like this that will turn the economy around. Both are firmly convinced that only increased investment can save the country's economy.
"While the baseline economic growth remains negative, there are more than enough signs that the economy is turning around. Investment, trade, exports, are all up, interest rates are down, clear signs that business confidence is improving, and that this country is on the incline."
BALANCED BUDGET
Furthermore, the budget quarterly update is showing a balanced budget, except for the R342 million in debt servicing the government must attend to. With revenues down, due to the depression, the government slashed expenditure in April, actions that almost split apart the Weissman coalition government, but were ultimately passed. Gottlieb presided over the slashing of over 140,000 jobs from government departments, and cutting 4.8 billion Roj from the government's budget.
Finance Ministry projections now show that the government will, including debt
repayments, be running a R1.3 billion quarterly surplus, meaning the budget for the year is
projected to be about one billion Roj in the black, allowing the government to pay back some
of the R16.6 billion in crippling debt they have accumulated over the past three and a half
years.
"These figures demonstrate that this government is committed to fiscal responsibility", President Weissman boasted, "which will encourage greater investment and encouraging a greater confidence in the country and her institutions.
"With the communist rebellion close to a deal with the government, and special crime taskforces tackling this country's crime issues, this country, under this government, is on the right track to recovery.
"I made a commitment to the people of this nation, and these figures demonstrate that I am delivering!"
NOT ENTIRELY HAPPY
However, not everyone is delighted at the government's policies, not least the 300,000 former government workers who have lost their jobs over the past six months.
"This government has proven nothing more than they can be brutish and cruel in their application of policy", declared the Secretary of the Public Service Union (PSU), Albert Enyart, who describes his almost 900,000 members and former-members as "scared and angry".
"In the middle of the worst depression this country has ever seen, this government saw fit to put 300,000 workers out on the street, without prospect of new jobs, and without a decent system of social security available. This is simply cruel and inhuman behaviour, and not worthy of men who are regarded as this country's leaders", Mr Enyart concluded.
He also suggested that the PIMR coalition was "most clearly duped" into agreeing to the job cuts. The PIMR are a leftist coalition of small parties in President Weissman's ten-party "green" coalition, and the largest bloc in the government.
Mr Enyart has the support of most unions in his comments, who almost universally condemn the government's strict policies toward fiscal responsibility, arguing that the R1.3 billion surplus should be used to care for the unemployed and those employed on wages that are barely able to keep them alive.
"To run a surplus in a depression is simply perverse", declared one Unionist Confederation leader recently.
Mr Gottlieb conceded that unemployment remains one of the "greater tragedies" of the depression, but predicted employment to grow by one million people within twelve months, an unusually bold claim by the cautious finance minister.
Yet, the markets are not yet entirely convinced.
Conversely, or perversely, financial markets are not yet happy with the Weissman government, either. Chief economic analyst Hein Baker of Edgely Investments (Haastadt) sums it up best: "I think the international and particularly the domestic financial markets are taking a wait and see approach to this country before making a final assessment.
"While Mr Gottlieb and President Weissman are convinced this is a clear sign that recovery is on the way -- and there is no doubt that it does suggest as much -- there is no clear sign yet that this is part of a permanent upswing.
"I think this is what the markets are seeking."
And the financial markets, the voice of investors, are fuel for a modern capitalist economy, determining the state of the economy. Without investment, the country's businesses cannot build new factories, nor buy overseas equipment to fill their factories. If they get the investment, they can then export goods that will bring in foreign money, allowing loans and investments to be repaid, while keeping some for the country.
A nation is not unlike a corner store: in order to grow, it must have the confidence of the people buying from it, and confidence of investors in order to keep buying stock for its shelves. The Weissman government is attempting to build that confidence by being responsible with the little money it does have.
There remain obstacles, not least the political instability of the country, with a communist rebellion in one corner, and an unstable coalition government in the other. Lendosan officials have been noted as commenting that this instability should have precluded the recent C8 billion loan to the country.
President Weissman's government is acutely aware of these, and is working aggressively to minimise the risks for investors, the President told those assembled. The negotiations with the communists is one key "field of success" the government has been focused on since taking power.
Roven's economy is estimated to be 90.4 billion Roj, where one Roj equals a Christianan Crown, or R3,733 per capita, including estimates for the Pataki communist enclave, which is a non-cash economy.
Related Websites
Rovens Government Website
Vexillium Bank
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©Zeitgeist Magazine, 300 AP.
<TECH> ©Mike Ham, 2000. All rights reserved. No reproduction without, at least, tacit approval. ;-) |