CTA president was incompetent to propose wage freeze, says Castel-Branco

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CTA president was incompetent to propose wage freeze, says Castel-Branco

12:04 CAT | 23 Nov 2017

In file CoM: Castel Branco

According to economist Carlos Nuno Castel-Branco, the CTA’s austerity proposals are bad for the economy and for the population. But sociologist Elísio Macamo thinks that the Confederation of the Economic Associations proposals are not at all stupid.

Last Friday, the president of the CTA, Agostinho Vuma, proposed that, as austerity measures to address Mozambique’ economic crisis, the Mozambican government should not pay the 13th salary this year, and that salaries should be frozen in 2018.

Invited to evaluate these alternatives, economist Nuno Castel-Branco said that Vuma was unknowingly presenting a Marxist argument by equating the rate of profit on capital with levels of exploitation of the labour force.

He considered the CTA president unfortunate in his proposal. “Basically, what Vuma is arguing is that the rate of capital gains is much more important than living conditions.”

“I am not saying that he is incompetent in general, but cutting consumption expectations and opportunities even further makes the domestic market even less likely to be an important factor in the dynamism of the economy, which means that all economic growth is increasingly dependent on external factors.”

According to the Mozambican economist, “this type of measure now reduces the opportunities for capital to expand in an endogenous manner and thus be less dependent on large international capital. And in a context where Mozambique is discredited in the world economy, doing so reduces opportunities for raising capital. In that sense, I think he’s incompetent.”

Vuma’s proposal comes after the government allocated luxury vehicles to political figures according to the dignity of their position. In a context of deep economic crisis this has sparked outrage among the population, who are suffering most.

Are not there two weights and two measures?

Sociologist Elísio Macamo has a different way of looking at the situation, and doesn’t consider the CTA’s proposal entirely stupid.

According to Macamo, “the proposal even reflects a certain sensitivity to the situation in which the country is”, and categorically stresses: “Let me be brutal here: there is still to arise a world where difficult decisions will be taken by a minority The whole history of mankind is a history of decision-making, of transferring the costs of any major measure from one country to the majority. It has always been that way. And I am not saying I agree with that, but it’s normal for it to be so.”

Even though it is a common tendency in the course of history, measures of this nature in the context of crisis have a social price. Economist Castel-Branco refers back to the recent history of the country in order to point up the consequences of implementing proposals of this sort. According to Castel-Branco, “This is economically unsustainable, because the living conditions of the population are very bad and getting worse”.

The economist also warned that actions like freezing wages will affect an important sector of society and create social tension.

“I get the impression that he has already forgotten the 2008 and 2010 demonstrations. Maybe he needs to be reminded. Or perhaps he is creating conditions to be reminded of what such a measure means and what economic implications it brings with it. If that is his perspective – to create a crisis for people to remember the creation of a violent and chaotic response – then maybe he is doing something positive here.”

Sociologist Elísio Macamo prefers to see the case of the luxury cars to warn that the debate needs more depth: “Given the way I live, I do not agree with such a measure, except that I consider the discussion on the subject pathetic and almost stupid, because he’s suggesting things that are not essential.”

“If the government did not buy the vehicles, it would not even channel the money into useful things. So our concern should be to find out why we are living in a political system where such decisions do not happen. If we sort that out, then we will not have that luxury car problem.”

In 2014, the CTA offered former president of Mozambique Armando Guebuza a luxury car as a “souvenir”, but he returned it as contrary to the spirit of the law of public probity.

Source: Deutsche Welle