Fighting to balance the books

Fighting to balance the books

MASERU – THERE are broadly two ways to define Dr Moeketsi Majoro as a finance minister.
You can look at him as a politician, the staunch All Basotho Convention (ABC) supporter who is MP for Thetsane.
When the politician in him takes charge, Majoro will roll up his sleeves to hit the trail, addressing rallies and politicking. He might not be as gifted with the oratory prowess as Prime Minister Thomas Thabane, but he sure knows how to get ears pricked and work crowds.
He will not send them into a frenzy of excitement but he does enough for them cast votes for him and his party.

There is the Majoro, the technocrat who has a doctorate in economics. This one is an analytical wonk with demonic-like attention to detail. To ask Majoro about what economic problem ails Lesotho and Africa is to thrust him into his most comfortable sphere where his eyes shine as he effortlessly delves into the nitty-gritties.

Luckily, he is one for those who can explain an economic concept to a six-year-old and in a few lines. His sophistication lies not in using complicated jargon but simple language understood by a layman. As an executive director at the International Monetary Fund (IMF) he worked with 21-English-speaking African countries.

His beat was mainly on policy issues so it’s not surprising that he will summon figures and predictions without referring to any authority.
He knows economics like the way to his late grandmother’s house in Leribe where he grew up while his teacher mother was away working so he could eat.

But Majoro the politician and Majoro the economist are not exclusive. As finance minister he makes decisions as both a politician and a technocrat.
Technocrats, he says, are there to act as brakes on the excesses of politicians. “Politicians are linked with society so they bring a judicious mix of an expression of society’s aspirations. They want to do everything for their people”.
“There must be a clear line between the two. Politicians should say what they want and technocrats say this is how it’s done. They (technocrats) are an analytical bunch focused on helping politicians.”

‘Clear line’? How can that be so?
Here he is striding both sides of these well-marked territories with equal zest. The loathing between the vote-hunting politicians and the number-crunching technocrats is fabled.

There is yet to be a clear victor in the tug-of-war between the two. As finance minister, Majoro is holding the strings to a government purse that politicians always seek to empty in the name of helping the people. In cabinet, he sits with thorough bred politicians who are sometimes just a blink away from slipping into populist mantras and making policy decisions on the hilt as long as they make people happy.

His job as an academic is to help the politicians make the right decisions, he says.
He has to do this while remembering that he is also a politician like them. In a way, they all want what’s best for the country and its people.
In most cases politicians are well-meaning. It’s just that sometimes expedience takes charge.
So which Majoro decided not to review the Old Age pension in this year’s budget? Majoro answers that question without much pondering as if he doesn’t already know that there are people still fuming over the decision.

“It was Majoro the politician,” he says with a soft smile as he reclines in his chair. The spectacles are off and the American accent palpable. It’s time for lessons in both politics and economics. “The decisions politicians make today will come back to bite them tomorrow. Politicians should exercise their craft with prudence,” Majoro says. That is an emphatic statement from a politician who has understood that populist policies are a highway to economic ruin.

Having worked with politicians for the better part of his career, Majoro knows that the ululations of the masses come at a price. Often, the supposed beneficiaries of such policies will be its victims in future. He saw this in Zimbabwe where sound economics were put on a backburner to please people with policies sweet to the ears of the masses but pernicious and lethal to the economy.

Now that country sits on a mountain of debt as its economy creaks loudly, the masses squirming in poverty while the government is in sixes and sevens. Majoro admits he has immensely benefitted from sitting on both sides of the fence. Were he a politician who knows zilch about economics, he might not have seen the danger in increasing the old age pension at a time when the country is grappling with galloping debt and shrinking revenues.
So while he says he was thinking like a politician there is little doubt that it was the technocrat who supplied the analyses to arrive at that decision.
The government is in a financial mess and its coffers are empty. Any economist would have suggested such a haircut no matter how painful and unpopular it would have been.

Majoro is an economist who is being asked to do a lot with so little to deliver to a people with sky high expectations.
His decision on the old age pension was not entirely predicated on the need for austerity measures whose purpose was just to balance the books. And it’s not really a slap on the face of the old people of this country as some critics want to portray it.
There are substantial reasons behind the decision.

“In July’s budget we raised Old Age pension by 21 percent and child grants by 25 percent. Civil servants got three percent. Clearly, not all can fit in the basket,” he explains. Majoro therefore did not forget the old people but he remembered that merely eight months ago they had a massive boon. With those July figures in mind, Majoro had to decide between doing what is expected and what is right.

He opted to disappoint the old people and maybe a significant chunk of political sympathisers, not out of malice but necessity driven by pragmatism and consideration of historical decisions.

Yet even if he had tried to scrounge around for money to review the pensions, he would have probably found none. For years the government has been piling on debt to pay things like the pensions. Now that debt is hovering around M12.5 billion, nearly 40 percent of the GDP. This year alone, government will fund the M2 billion deficit through more borrowing that will bring the national debt to M14.4 billion.

“As the debt rises, interest rises and interest is paid first. We need to keep it under control. Our reasoning is that if we get to the point where the economy grows by five to seven percent we will be able to review the pensions.” Majoro seems to have swayed his colleagues in Cabinet on the contentious issue of Old Age pensions. That’s thanks to his analytical skills as an economist rather that his political strategy.

It is the political position that gave him the platform to convince and cajole fellow politicians to accept the economic argument.
Majoro recalls how difficult it was to get into the politicians’ ears when he was just a technocrat. He was principal secretary in the Ministry of Finance from 2004 to 2008. Before that he was managing the Fiscal Analysis office in the same ministry. His small team of about five would advise government on economic issues.

But because they were seen as mere technocrats fixated on policy rather than people, their advice was either outrightly ignored or taken with a pinch of salt. After all, they seemed to interfere with what politicians thought were real matters of the belly that would win votes. Once in a while, they would dispatch a research paper that would however fail to trigger politicians into action.

Although at the Fiscal Analysis office Majoro might have been on the fringes of the government’s policy-making apparatus, it was at least a perch from which he could exert some influence on policies. Even if the government was not implementing all the policies, at least he had given his professional advice. His voice on economic policy matters was now much louder than it was when he spent nine years as an economics lecturer at the National University of Lesotho (NUL).

Lesotho’s politicians have never warmed to the academia. They see university teachers as elites far removed from the people.
Majoro understood that his relevance in national economic policy matters would remain minimal if he stays in the academia. It is that ambition to influence policy that has defined his career decisions over the years.
Heading the Fiscal Analysis office helped but it had its own limitations. Being a principal secretary was almost perfect but his advice would usually be brushed aside when political expedience dictated so. That is however not to say he was not effective as a principal secretary. He says they transformed the ministry in those years.

“Unfortunately that progress has been rolled back because we are back to the terrible days.”
The position at the IMF seemed to be the perfect hill from which to shout words of wisdom to governments but that too was not enough because politicians would simply prod ahead on the path to self-ruin.

In all the positions, he had the economic mind to suggest policies but lacked the political leverage to ensure their implementation. Apart from the lack of implementation the Majoro who did not have political clout was always frustrated with the fact that government always treated fiscal matters as an accounting rather than an economic issue.

In other words, the idea was to balance books rather than predict and evaluate the impact of policy decisions on the economy. It is for that reason that he joined the civil service. Once in the government, he understood that without some political power his knowledge would not amount to much by way of a contribution to policies.

Now he sits in the chamber of power armed with the twin arsenal of political leverage and economic knowledge.
Things are much different now, he says of his new status.
From this vantage position he can now deal with four issues he says have always “fascinated” him.
The first is that despite huge investment in Lesotho’s education it is lagging behind.

“We are spending a huge portion of our budget on education but the outcome is still way behind what is achieved by countries that spend the same or much less.” He points to the teacher-student-ratio, classroom space and quality of students as some of the things that have not improved.
“We are already paying for these problems as we speak.”

To explain how this affects the economy, Majoro uses an analogy of students in primary school. At Grade Seven some of these students will drop out of the education system altogether and be quickly forgotten.

Shakeman Mugari

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