Shrinking government to allow the private sector to grow should be our nation’s motto. That is how it works and has worked all over the world. Even those nations frequently held up as paragons of welfare and compassion have moved on.
You see the cash crunch we are facing with your own eyes. Go to a government building for a meeting, and you see things for yourself. They can’t even serve you bottled water. They are unable to serve simple refreshments, even though that was not always necessary in many cases. So the signs of the cash crunch are out there for everyone to see.
But the long and short of this cash crunch is that, over time, the public sector has become outsized. There is no running away from that. This is where the correction needs to take place. And we all understand that the correction is bound to be painful. Over time, many in this country have behaved as though the government, by nature, has a perennial source of funds. They never imagined that the government could one day run short of money, despite repeated warnings from esteemed international organisations.
They saw countries in the region struggle, with some even failing to pay salaries on time but could not conceptualise that, something that happens to a country that has a large and unproductive public sector compared to the private sector. You need a bigger private sector simply because that is where wealth creation occurs. The bulk of the stuff they do in government adds little to wealth creation.
We have resisted calls to reduce the public sector. And we have even turned the notion of the privatisation of state-owned enterprises into a secular heresy. The very mention of the name privatisation is akin to using a swear word. However, no one gains out of this state of affairs. No one gains from continuing to bury their heads in the sand.
The cash crunch is apparent when you visit public schools or hospitals. The schools are in disrepair, while the ability of some hospitals to provide nutritious food to patients is at risk of being compromised. Surely this is not where we want to be.
There is a tendency among the professional class in government to try to sit out the current crisis, hoping that the situation will somehow improve. While hope is a good virtue, it is not a strategy.
The strategy for turning the situation around should follow what others have done around the world. Sweden is a case in point. We see Sweden and its fellow Scandinavians as our default example of the beauty of big government. However, Sweden has moved on since electing a market-oriented prime minister.
They have embarked on a series of reforms that have borne fruit. They have reformed the pension systems, reduced unsustainable unemployment benefits, reduced business red tape and cut corporate tax to attract investment. The tax cuts have led to the return of entrepreneurs who had fled Sweden’s notoriously punitive taxes. They have allowed the private sector to take over failing public schools and hospitals.
So this shows that a large public sector weighs down on growth and prosperity and needs to be pared back, irrespective of whether you are in Sweden or Botswana.