Opinionista Imraan Buccus 7 October 2019

ANC’s economic choices are critical for our future

Our future will be determined, in significant part, by the economic choices made by the ANC. But these choices will not be made on the basis of empirical evidence about what works and what doesn’t. They will be made on the basis of the political contestation within the ANC.

Millions of South Africans have been living in an economic crisis for years, in many cases for their whole lives. Millions face unemployment, and face their situation while equipped with some of the worst education on offer anywhere on the planet. But the crisis has now become generalised.

For five years the population has been growing faster than the economy, with the result that millions are getting progressively poorer. Last week the ANC released a plan for economic recovery – a list of aspirations that we have heard many times before; and is likely to go nowhere.

As Moeletsi Mbeki has kept reminding us; South Africa is de-industrialising at a rapid pace, and retrenchments are the order of the day. Retrenchments are now increasingly affecting the middle classes, many of whom are slipping into massive debt.

The reasons for the economic crisis are well known. The crisis in the education system is a fundamental problem, which means that the majority of South Africans are simply not equipped to work in the new globalised economy. Government has not been able to address the education crisis and the ruling party must be held fully responsible for this ongoing disaster.

As we all know, the state-owned enterprises were looted and mismanaged in the grossest way during the catastrophic rule of Jacob Zuma. At the same time, the elevation of people associated with the kleptocracy that thrived under Zuma to senior positions in the party has meant that the ANC s commitment to clean governance has been questioned. This results in a permanent and ubiquitous crisis of confidence.

Another important dimension of the economic crisis is that the ANC has consistently adopted regulations that enrich the black elite at the direct expense of the black majority. This is why South Africa missed out on the commodities boom that enabled the Australian economy to thrive.

No capitalist firm will invest in South Africa, and be forced to cede ownership and profits to elites linked to the ruling party, when other countries do not impose such onerous policies.

Also, constant talk about nationalisation and expropriation has spooked capital, domestic and international, with the result that there is minimal investment in South Africa. That has exacerbated the crisis of confidence among business circles.

There are, broadly, speaking, three dominant proposals for a way forward.

The faction of the ANC that was aligned to Zuma, and is now led by Ace Magashule, now supported by the EFF, aims to restore the kleptocracy that thrived under Zuma. If they are successful South Africa will rapidly collapse into the sort of crisis in which democracy will not be able to survive. Every effort needs to be made to expose and oppose all forces that aim to restore the kleptocracy.

The second proposal, supported by people like Tito Mboweni, business and mainstream economists, is for the proposal of a self-imposed structural adjustment of the sort usually imposed via the World Bank. This would entail an attack on the hard-won gains of the labour movement, privatisation, and mass retrenchments of government workers. This proposal is often accompanied by an increasingly hysterical anti-union discourse of the sort that marked the governments of Margaret Thatcher and Ronald Reagan. Global experience clearly shows that these measures would be for capital, but would hit the poor and the working class very hard. This would almost certainly increase social instability, as well as popular protest, xenophobic riots and so on.

The third proposal, championed by progressive economists like Duma Gqubule, Mark Swilling and progressive trade unions others advocates for Keyseniasn measures such as spending on social measures to provide an economic stimulus. Gqubule, for example, has called for a “R500-billion fiscal stimulus to be spent on infrastructure over three years”. Within the ANC, Cosatu and the SACP are likely to be supportive of these measures. Outside of the ANC unions affiliated with Saftu are not likely to support these measures.

Global experience shows that these measures can create a form of inclusive growth. However, social democratic measures can only work if there is a functional state – which we don’t have yet. If we are going to adopt progressive measures in response to the crisis we have to, as a matter of national urgency, act as swiftly as possible to restore the integrity of the state. 

Of course, this is no easy task for Ramaphosa, who faces intense push back from within the ANC, along with the EFF, from the forces that wish to see the restoration of the kleptocracy. However, if this is not achieved there is simply no possibility of an effective progressive response to the crisis.

But the most fundamental problem is that all three proposals for a way forward enjoy support within the ANC. And neither those who would restore the kleptocracy, nor the left nor the liberals in the party have enough power to drive their policy agenda to fruition.

Ramaphosa doesn’t have the backbone to offer decisive leadership with the result that the ANC remains in permanent policy paralysis. There are endless talk shops, endless committees, and endless lists of economic aspirations are set out in press conferences. But a list of aspirations is hardly the same thing as a set of concrete policy commitments.

Neither the liberals in the ANC, with Mboweni as their public figurehead, nor the left, with the SACP as its brains trust, nor the forces that wish to restore the kleptocracy, with Magashule as their de facto leader, will be able to win the battle of ideas if they lose politically.

Our future will be determined, in significant part, by the economic choices made by the ANC. But these choices will not be made on the basis of empirical evidence about what works and what doesn’t. They will be made on the basis of the political contestation within the ANC.

If there is no resolution of the political conflict we’ll continue to move around in circles with no real commitment to a way forward. If one faction comes to dominate, or if the left and the liberals are able to defeat the kleptocrats, then we might see some movement forward.

In the meantime, we drift, aimlessly, with lists of aspirations substituting for clear policy commitments, as the economic crisis deepens, and produces an escalating social and economic crisis. DM


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