2021 Budget Speech Reveals Callousness of the BDP

While the COVID-19 virus does not discriminate against the poor, the BDP political economy does, writes Brother Chairman of the Real Alternative Party, GAONTEBALE MOKGOSI

In penning this article as a critique of the 2021 budget speech, the Real Alternative Party (RAP) laments the brazen nonchalance from the BDP government towards COVID-19 mitigation. Against a backdrop of the Coronavirus, there is a need to examine the merits of the budget speech as well as of the BDP government and its conscience.

Like other human tragedies, the Coronavirus pandemic has provided an opportunity to show the best and the worst in society: compassion, benevolence, resilience, generosity and consideration of the less fortunate than ourselves. Furthermore, the disease has given states and development agents time to think again, to strengthen and generate post-crisis imaginaries, activities and practices. Conversely, the BDP government was able to anticipate and at least plan for the inevitable arrival of the Coronavirus. They were also able to contemplate widespread and increasingly troubling predictions of its potential for overwhelming their country’s chronically underfunded public healthcare system. The pandemic has ultimately revealed much about the BDP government in its true colors.

The COVID-19 pandemic has exposed weaknesses of the BDP state as an economy and polity and revealed the latent potential of its inequities. The 2021 budget speech by Dr Thapelo Matsheka has exposed the BDP government and its lies, gross incompetence and flagrant neglect of its citizens in the fight against COVID-19. Despite the fact that over P2,4 billion pula was committed to fighting the pandemic, there is still a serious lack of provision of adequate supplies of personal protective equipment (PPE) for frontline healthcare and allied workers and death of Coronavirus testing for these workers and their families. Public access to quarantine and isolation facilities has not been prioritized. Embarrassingly, there are reported incidents of government failure to pay outstanding overtime to healthcare workers.

UPIC

Up to now the interventions of the BDP government is tardy, reluctant, inadequate and reactive. There is no special compensation scheme to cover all frontline workers (health, police, prison, education, social care workers) and their families who die from the Coronavirus as hazard pay and incentive to persuade health workers to be vigilant in the treatment of COVID-19 patients, often with inadequate PPE, diagnostic and therapeutic equipment and supplies.

In a nutshell, the BDP state has not prompted massive emergency economic assistance to paralyzed workplaces, workers and overburdened health facilities to enable frontline medical practitioners and healthcare workers to tackle the COVID-19 crisis safely and professionally. Against this backdrop, it is undoubtedly clear that the BDP state significantly underestimates the true extent of the pandemic in Botswana. Such is a sign of no foresight and presence of mind by the BDP government as it has clearly reneged on the initial Memorandum of Understanding on a COVID-19 response plan on the verge of the outbreak of the pandemic.

The 2021 budget speech also underscores the limits of BDP neo-liberal interventions which serve to privilege the interests of capital at the expense of savings lives. The speech reinforces existing and creates new patterns of inequality. Its package is very inconsiderate of the incidence, intensity and inequality levels of poverty of Batswana. The implicit economic value judgement of Matsheka`s speech deliberately chooses not to distinguish between the ‘statutory incidence,’ i.e. (the legal liability to pay the tax) and the economic incidence. The speech is insensitive to outcomes of raising tax on values of inequality aversion assumptions.

Seed

Considering that there are no direct price controls or restrictions which limit price flexibility in Botswana, producers and retailers are bound to raise prices to recoup their tax liability, so that consumers of the taxed products pay all or part of the tax. This is more so given the fact that illegal practice of tax evasion is reported (by OECD) to be very high in Botswana. In essence, VAT and sugar simulation model, though they focus on revenue aspects, their function will support income transfers from poorer members of society to corporate elites. It will be the low income earners, the unemployed and the elderly who will be seriously overburdened by indirect taxes (VAT, sugar tax).

Worse still, sugar tax, combined with the increased VAT, will force people into purchasing more energy-dense but less nutrient-dense food items. This will affect especially the poor as sugar is a product consumed disproportionately by them. Given the disparity of income gaps and the unemployment levels, the raise of VAT and introduction of sugar tax deserve to be seen in the light of ‘sin taxes’ and ‘welfare dominance’. In actual fact, taxing sugar is tantamount to removing a core substance from the menu of the poor. Considering that indirect tax changes prices, affects purchasing power and utility measure, the message that the 2021 budget speech is sending to workers earning below the threshold, the unemployed, the informal sector, the disabled and the aged is that they don’t matter.

It is also a known historical fact that the BDP government has long pushed a narrative where traditionally working class roles and roles in the public sector are deemed second tier. They willfully demonise these groups, vilifying them in the media and indicate that they are not valued. The BDP`s aim has always been to erode the very public sector institutions that we need to overcome crises like the Coronavirus pandemic. Yet these are the same workers on the frontline. It is health workers, delivery drivers and teachers and school support staff who are keeping schools open for vulnerable children and the children of key workers; not the ministers, permanent secretaries, directors and acolytes of the BDP. The political reasoning behind cutting on the public service wage bill is a choice rooted in austerity as opposed to public service inefficiency.

The real problem to poor economic performance in Botswana is wasteful spending, corruption and patronage involving high-level political leadership. It is on public record that state revenues are often used by ruling elites to enrich themselves and their families while buying support from the population with costly and inefficient subsidies. Funds are not administered transparently and the rule of law is not followed in Botswana. Essentially, corruption charges have been used mostly as a tool for political maneuvering among elites or for punishing those who challenge government integrity. Offshore financial markets and concealing plundered funds from Botswana elites also contribute to fiscal irresponsibility and mismanagement by resource revenues. To that extent, raising VAT and introducing sugar tax is to effectively transfer corruption burdens to the poor for which they (the poor) are not liable.

What is clear is that the BDP is not our saviour right now and it never has been. The BDP has failed to use the current state of emergency to start building a more inclusive and sustainable economy. It has failed to lay the foundation for a robust and inclusive recovery. Rather than playing a leading role and acting as the hero in designing and delivering immediate solutions in such a way as to serve the public interest, it continues to play its traditional naive patsy.This is Botswana under the BDP in all its upper middle income glory where the economy and wealth is more important than expanding the range of increased material wellbeing of all citizens under BDP rule.

RAP markedly prefers an economic plan that is clearly superior for the poorest of the population. There is an urgent need to use the current state of emergency to start building a more inclusive and sustainable economy by way of delivering immediate solutions to unemployment, especially of the youth, taking positive steps to integrate into global value chains in order to reduce the dominance of minerals in its exports is urgent. We desperately need to invest more in innovation – from artificial intelligence to public health to renewables. There is a need to take a series of tactical changes, including strengthening and broadening processing capabilities, bridging the infrastructure gap, developing sustainable textiles and apparel production capabilities, development of agriculture and manufacturing sectors entailing productivity of agricultural production, and developing competitive food processing and food retailing industries that are well integrated into the global market and strengthening the external image of the country as a destination of choice for the leather textiles and apparel industry. Moreover, COVID-19 necessitates for re-appropriating the economy to decide what we produce – for a safer, more secure, healthier and enjoyable way of life.

But lo and behold, this is the face of a capitalist state devoid of compassion with an ever fertile land for further inequality and suffering amongst the vulnerable even during a severe virus. To put it more directly, while the COVID-19 virus does not discriminate, the BDP political economy does. Such is the callousness of a capitalist state at its lowest!

Gaontebale Mokgosi

Brother Chairman

Real Alternative Party