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Tuesday, 1 March 2011 Abdul Waheed Patel Managing Director

Presentation to the Joint National Assembly / NCOP Committees on Finance of the Parliament of South Africa Public Hearings on the 2011 Budget. Tuesday, 1 March 2011 Abdul Waheed Patel Managing Director ETHICORE Consulting & Advisory Solutions. Focus. ‘Long-termism’ and the National Budget.

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Tuesday, 1 March 2011 Abdul Waheed Patel Managing Director

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  1. Presentation to the Joint National Assembly / NCOP Committees on Finance of the Parliament of South AfricaPublic Hearings on the 2011 Budget Tuesday, 1 March 2011 Abdul Waheed Patel Managing Director ETHICORE Consulting & Advisory Solutions By Abdul Waheed Patel

  2. Focus ‘Long-termism’ and the National Budget By Abdul Waheed Patel

  3. Context • ‘Great Recession’ - Defining issue of our time, acknowledged in the National Budget Statement and Fiscal Framework • Exposed prevalent tendency towards ‘short-termism’ • An inter-generational challenge: - Business as usual? • An opportunity: - Emergence of next-generation sustainable businesses and governments, planning, allocating and utilising resources with a long-term view By Abdul Waheed Patel

  4. Strategic Imperatives and Shifts • Business as usual is NOT an option • From ‘Short-termism’ to ‘Long-termism’ • Including: - National budgeting - Public financial management and planning - Economic interventions - Associated oversight (i.e. the role of Parliament and legislators) By Abdul Waheed Patel

  5. Beginnings in SA & 2011 Budget • National Planning Commission • Monitoring and Evaluation • New Growth Path • ‘Green Economy’ • Draft National Climate Change Response Green Paper • Integrated Energy Resource Plan • Strengthening financial sector stability & prudential regulation …. to mention but a few By Abdul Waheed Patel

  6. Long-termism and the National Budget • Critical to further strengthening the MTEF approach • Giving practical effect to: • Money Bills Amendment Procedure & Related Matters Act • Parliamentary oversight and accountability • Inter-generational impact of the budget • National Treasury Budgetary guidelines (oversight, accountability and transparency) • Signaling and messaging to other non-state actors impacting on the reach of the fiscal framework By Abdul Waheed Patel

  7. Comparative Analysis • ‘Long-termism’ key to the success of the Asian ‘tigers’: - Typically think in terms of at least 10 – 15 years - Competitive advantage of economies and businesses - Characterising new multi-polar world order (Rise of China, India and Brazil) • USA: - Nearsightedness is the norm - Public and private institutions plagued by myopia - Quarterly earnings focus - Average CEO tenure dropped from 10 to 6 years - Governmental priorities lurching from election to election - Short-term offerings - Long-term woes fester By Abdul Waheed Patel

  8. Recommendations • Appreciation and recognition for a long-term perspective • Thinking differently about short term VS. long term trade offs • Reinforce faith in public finance management and oversight • Capacity of the Parliamentary Budget Office • Laying foundations for future: - growth and development - innovation and competitiveness - human development … that is sustainable, based on informed decisions weighing up short-term trade offs and long-run returns, risks, challenges and opportunities By Abdul Waheed Patel

  9. ETHICORE Consulting and Advisory Solutions T: +27 (0) 21 761 9866 F: 086 586 1102 E: intouch@ethicore.co.za W: www.ethicore.co.za 112 Pinehurst Road Lansdowne, Kenwyn (7780) Cape Town, South Africa Postnet Suite 53, Private Bag X3 Glosderry (7702) Thank you Questions? By Abdul Waheed Patel

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