Cape Correspondent

CAPE TOWN Government was becoming less doctrinaire about issues such as privatisation, Ebrahim Rasool, Western Cape finance MEC, told an international municipal engineers conference yesterday.

Rasool said while it did not simply embrace privatisation and outsourcing models which denuded government of its strategic leverage, the aim still was to promote growth and development.

"The worst thing government could do is give away its strategic advantage," he said.

But there was no way in which the fiscus alone could meet the challenges of providing roads, transport, water and waste disposal.

Government had to act in ways that brought about the kind of public participation programmes in which government's presence could be used to "leverage and crowd-in resources and partnerships" within the overall process of providing infrastructure.

This was not a phenomenon faced by SA alone, he told municipal engineers from 17 countries.

Rasool said government had to address the gap between rich and poor.

Taking a coefficient of 0,58 for SA on an economic model used to measure the income gap between rich and poor, the MEC said this figure had improved slightly, but was still "dangerously high".

But when measured to include the "social wage", adding government grants to income such as pensions, social grants and child support benefits, as well as services such as health benefits, housing and free basic services such as water and electricity and basic infrastructure, this coefficient improved to 0,42, "a much more manageable situation".

"The problem though is that it shows the absolute dependence on government to push back the frontiers of poverty," Rasool said

Unless SA was going to build partnerships with more actors in society, it would increasingly have to contribute public funds in the form of cash grants and baskets of municipal services, "not to develop the country, but simply to hold back poverty".

Government could not do this on its own and what was needed was shifting citizens' dependence on state services to mainstreaming them into the economy.

Nov 05 2003 07:11:01:000AM Chris van Gass Business Day 1st Edition