Programme Director
Head of the school of economics and finance
Lecturers present
Students receiving awards
Parents, relatives and friends
As the MEC for Finance in the province it is my privilege to attend many functions as a representative of government. But today’s function is very close to my heart. I love young people and the enthusiasm with which they live their lives. You are young, you are innovative and you are not scared to open the oysters of life in search of the pearls inside.
Today I also have a favour to ask. I appeal to you to use your pearls of wisdom to help our nation. As finance and economic students you have knowledge and information that can help so many people to live better lives. At the Provincial Treasury I have initiated a financial literacy campaign. But we need partners. I urge you to move the knowledge from your computers to ordinary people. It will certainly improve people’s lives when they have a better understanding of financial management, such as budgeting, the consequences of buying items on hire purchase, avoiding the debt trap, etc.
Financial literacy, which includes saving, is at very low and almost insignificant levels in South Africa. I agree with Minister Pravin Gordhan that not enough has been done in the areas of financial education and economic literacy for South Africans. But together, we can make a difference.
We have come to the end of the academic year. This is the time when most schools review their progress and when deserving students are rewarded for their hard work. You are our present and our future. But you have a choice. You can be tomorrow’s Einstein, Adam Smith, Maynard Keynes, Mahatma Gandi or Nelson Mandela. Or you may turn out to be a burden on society, a straggler in the race of life, waiting for some one to give you a job or a handout. You can choose to take from society or to give to society.
Your future is in your own hands. In the words of Jean Nidetsch, “It is choice, not a chance that determines your destiny.”
Our compass is the values instilled in us by our parents, our schools and universities. Those values help us to grow up as human beings who will contribute to society. While we should focus on excellence in academics, we should never forget that education and learning goes much further than economics, mathematics or finance.
When we speak about education it is about the intellectual, emotional, cultural and social development of a person. It is no good developing a one dimensional person, who is good at crunching numbers but does not know how to be a good neighbour. Good marks are important but our country cannot afford that we live on our own planets, disengaged from the society and communities in which we live, work and play.
Our President has said it. Our Premier has said it, “Poverty is the single most serious threat to our democracy and the future of our country and continent.” To understand and tackle poverty not only in our province and country but in the world governments have to make decisions, based on credible data and evidence, i.e. decisions must be informed by science, not wishful thinking or thumb sucking. Proper research is critical for peace, stability and development.
Tensions within society are often associated with wide and widening gaps between the rich and the poor. Relations between and within communities suffer when people lack work and endure hardship, debt, anxiety, low self-esteem, ill-health, poor skills and bad living conditions. Therefore it is crucial that we, as government use our budgets and fiscal policies to promote social cohesion and reduce poverty. And to achieve this we need reliable information.
The role of our economists and researchers is to provide scientific evidence and information that can shape our development policies and programmes. Some people define the role of economists and researchers in the public sector as “preparing government to deal with current and future challenges and opportunities.”
We are currently dealing with very difficult global economic circumstances. The lessons we have learnt from severe global recessions in the past is that, in addition to weathering the economic storm, countries and provinces need to restructure their economies to prepare for the next wave of economic growth.
While South Africa has not been affected to the extent that a number of other countries have, we have certainly felt the pain. KwaZulu-Natal, which has become a global player, has been especially hard hit. More than 117 000 people lost their jobs in the first quarter of 2009, and a further 57 000 in the second quarter of this year.
In KwaZulu-Natal about 38 000 domestic workers, gardeners, nannies and other people employed in private households across KwaZulu-Natal lost their jobs between April and June this year, as KwaZulu-Natal’s middle classes cut their household budgets drastically during the recession.
The problem with statistics is that they lack a human face. Call it what you want being laid off or downsized losing your job hurts. It is one of life’s most traumatic experiences.
Sadly the effects are mostly likely to be felt by the poorest. And the hardest hits are likely to be women, who form the vast majority of the poor. When people suffer they usually look for someone to blame. A rumour has it that economists forecast nine out of the last five recessions! Since the recession started in the United State of America (USA) and Europe, the fingers were pointing at their economists.
The general opinion is that they failed to predict the economic crisis, and to provide solutions. One journalist felt so strongly about it that he took off in real economic jargon and wrote, “Take that, you pointy headed failures! Go jump off a supply curve!”
The recession has certainly dented the reputation of economists. But we need to be fair. Economics is not an exact science and economists are not sangomas. The economy is also too complicated for them to be spot on with all their predictions and solutions. And, in general, economists have made important contributions to our understanding of economic trends.
Ben Bernanke, who succeeded Alan Greenspan as chairman of the Federal Reserve compared economic forecasters with weather forecasters. They must deal with a system that is extraordinarily complex, that is subject to random shocks, and about which our data and understanding will always be imperfect. In some ways, predicting the economy is even more difficult than forecasting the weather, because an economy is not made up of molecules whose behaviour is subject to the laws of physics, but rather of human beings who are themselves thinking about the future and whose behaviour may be influenced by the forecasts that they or others make.
To be sure, historical relationships and regularities can help economists, as well as weather forecasters, gain some insight into the future, but these must be used with considerable caution and healthy scepticism. This begs the questions about the relevance of what we are teaching economic and finance students. Is our content still relevant? Does it encourage independent thinking? Can our students engage critically with the most important questions of the day? These are issues that must be confronted, not only in economic and finance courses and studies at universities, but by our education system as a whole. The promotion of science at all levels of our education system is vital in this regard as we develop South Africa’s and KwaZulu-Natal’s ‘ideas economy’. It is ideas, discoveries and innovations that will become the products and services of tomorrow. Bernanke warns against an attitude of resignation or fatalism. “While we may have limited control over the challenges and opportunities that will cross our paths we have considerably more control over how well prepared and open we are, personally and professionally, to make the most of the opportunities that life offers us.”
You will be entering a challenging world out there. You have been trained in a field that is exceptionally broad in its compass. At the Provincial Treasury and other departments economists and researchers are involved in policy formulation and operations to implement such policies. We need your analytical skills. We also need the truth based on honesty and integrity.
For those of you who have come to the end of your academic careers your days of lifelong learning have just started. The most successful people are eternal students. It is crucial that we maintain a broad perspective and willingness to expand our knowledge and experience.
Looking around, I am confident that we have a new cohort of researchers, innovators and entrepreneurs in the making. It is you who will drive our future economic success (or failure?) and you should all be very proud of yourselves.
I also thank the lecturers and staff for their dedication and encouragement to our students. I know that you are there for your students when the going gets tough, when deadlines loom, but also when the going is good.
To our award winners, your families, and friends you have worked hard and accomplished much. Congratulations, you have a great deal to look forward to, as many interesting and gratifying opportunities await you. I wish you the best of luck, but remember that luck is what you make of it.
Finally I would like to end with a poem from Dr Seuss, just to remind you to keep an open mind:
“My uncle ordered popovers from the restaurant’s bill of fare
And when they were served, he regarded them with a penetrating stare
Then he spoke great words of wisdom as he sat there on that chair, "To eat these things," said my uncle, "You must exercise great care
You may swallow down what’s solid
But you must spit out the air!"
And, as you partake of the world’s bill of fare, that’s darned good advice to follow.
Do a lot of spitting out the hot air.”
Issued by: Department of Finance, KwaZulu-Natal Provincial Government
20 October 2009
Source: Department of Finance, KwaZulu-Natal Provincial Government (http://www.kzntreasury.gov.za/)
