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A story goes that the ANC was looking for the head of its Department of Economic Planning. Nelson Mandela asked if anyone was an economist—Trevor Manuel raised his hand. It is said Manuel thought Mandela had said "communist". Either way, Manuel was appointed
Whether or not this story is true, Manuel, a Civil Engineering dropout went on to become Minister of Finance for 13 years. Even before becoming minister, the World Economic Forum already called him "Global Leader for Tomorrow"
Trevor Manuel is somewhat of a demigod in the finance world, he was even tipped to become Managing Director of the International Monetary Fund. With this much clout around him, it is important to look at his legacy as Minister of Finance in South Africa
Manuel's first accomplishment was when in 1993 he convinced Mandela to repay Apartheid bank debt. This is debt that was accumulated by the National Party to keep Apartheid going. He then negotiated an $850 million IMF loan that put an end to the ANC's big talk of economic reform
Between 1994 & '96, Manuel was Minister of Trade & industry, this is when he loosened up imports thus effectively destroying SA's clothing, textile, footwear, appliance and electronics sectors by lowering tariffs to below what even the World Trade Organisation wanted
When he became Minister of Finance in 1996, Manuel introduced the Growth, Employment and Redistribution Programme (GEAR) which was actually drafted by 17 white men from the Development Bank of Southern Africa, Reserve Bank, World Bank and the International Monetary Fund
By 2001, when Manuel's GEAR was abandoned, it had achieved only those goals most crucial to big business: reduced inflation, a business-friendly current account and the fiscal deficit lower than predicted. What about The "G" for growth? That was negative over 5 years
The "E" for employment resulted in annual job losses of 1-4% when Manuel was Minister of Finance. Unemployment went from 16% in 1995 to 30% in 2002. If you count people who had given up looking for jobs, that number stood at 43%
The "R" for redistribution resulted in average Black household income falling 19% from 1995-2000, while white household income rose 15%, which meant white people under Trevor Manuel earned R331000p/a compared to R55000 for Black people
In 1999, Manuel removed foreign exchange controls, cut the corporate tax rate from 48% to 30%, and allowed the country’s biggest corporations to move their financial headquarters to London, which meant South Africa lost tax revenue and had to increase borrowings and debt 3.5x
During the 90s and 00s, working with Tito Mboweni and Maria Ramos (his future wife), Manuel ensured that neoliberal managers were gradually brought into the Treasury and SA Reserve Bank
In 2001, 4 years after being crowned African Minister of the Year, Manuel declared: "I want someone to tell me how the government is going to create jobs. It’s a terrible admission, but governments around the world are impotent when it comes to creating jobs"
In 2008, a year after being named Africa's Finance Minister of the year for the second time, Trevor Manuel announced:
"We need to disabuse people of the notion that we will have a mighty powerful developmental state capable of planning and creating all manner of employment". Indeed, in 2009 SA lost 1.2M jobs & the economy contracted 6.4%, yet somehow Manuel insisted SA was not in recession:
"We are not in recession, although it sometimes feels in people’s minds that the economy is in recession, as of now we are looking at positive growth"
When Manuel was running rampant with neoliberal policies squeezing the country's poor, municipalities failed en-masse due to lack of funds resulting in more service-delivery protests per capita against local government than anywhere else in the world
In conclusion, some more of Trevor Manuel words of wisdom: "the privilege we have in a democratic South Africa is that the poor are unbelievably tolerant"
