THE greatest economic downturn since the Great Depression of the 1930s presents obvious dangers but it also offers South Africa a rare second opportunity to refashion its economy so that it finally lifts more people out of mass poverty.
However, to grasp the opportunity we will have to be innovative. Equally, we must act with urgency.
Sadly, it took confirmation of the news last week that South Africa has plunged into recession for the first time in almost two decades to shake government, business and labour leaders out of their complacency.
In his first state of the nation address today President Jacob Zuma must outline an immediate stimulus package which must point to a shift in both fiscal and monetary policy.
This is a crisis, so there has to be more flexibility with inflation targeting: lifting the upper bands surely cannot be imprudent. The Reserve Bank must also cut interest rates more aggressively as part of the package to cushion the blow to the most vulnerable and to kick-start the economy.
The time has now arrived for Zuma to start making really tough decisions. The first must be to tackle greedy bankers, who are strangling the economy with their selfish behaviour.
This recession will deliver a double whammy of misery. It will hit the middle classes, both black and white, as well as the poor. The black middle class, who have built their wealth on credit and don't have the social capital, are in trouble.But the poor, with little income, will be hit the hardest.
This is the moment to introduce a basic income grant by supporting poor families with school-going children up to the age of 18.
There has to be a formal intervention to put a lid on rising food prices that have soared.
But there must also be a ceiling on price increases by state-owned companies such as Eskom, Telkom and Metrorail.
The reality in this tough downturn is that the private sector is unlikely to be able to create jobs en masse. It will have to do that in conjunction with the public sector. Many companies can be rescued by their involvement as partners in a massive public works programme to build infrastructure. In all these public works there should be an insistence that only local products be used.
The public works programme must be rolled out more creatively to catch-up with the backlog of infrastructure in black areas.
Black economic empowerment must be scrapped in its entirety or at least be restricted to one person for each BEE deal. Transferring more than R500bn to a dozen black oligarchs, purely on the basis of their political connectivity, is scandalous.
Trade unions must now also become more creative. This is not the time to insist on wage increases of 15percent, as the National Union of Mineworkers did. They should consider job sharing, working half-time, taking a cut in salaries, to keep as many people as possible in jobs.
And company managers, whether in the public or private sector, must forego bonuses and take salary cuts.
William Gumede is author of Thabo Mbeki and the Battle for the Soul of the ANC