South Africa’s ruling African National Congress is trying to achieve a messy compromise between state intervention in the economy and underpinning an open market, argued Democratic Alliance leader Tony Leon on Friday.
In his internet newsletter, SA Today, Leon took issue with South African Communist Party general secretary Blade Nzimande, who has disagreed with those who believe that the ruling party’s economic policies have shifted.
Leon said Nzimande described what he called “a growing disenchantment with capitalism within the leading sectors of government”, but argued that this does not represent a new or substantial change from past ANC policies.
Leon said perhaps Nzimande was right “in a deeper sense” although the SACP itself — through its members in government, Minister of Transport Jeff Radebe (formerly public enterprises minister) and Minister of Public Enterprises Minister Alec Erwin (formerly trade and industry minister) — could be accused of dramatic U-turns on economic policy.
“While Radebe committed his department to a rapid privatisation of major state assets such as Eskom, Transnet and others, Erwin has now declared that there will be no such privatisations, at least for the next five years.”
Leon accused the ANC government of “playing a double game. It has tried to convince the rest of the world that it is moving the South African economy towards freedom and openness.
“At the same time, it has tried to convince its supporters at home that it is using the power of the state to pursue economic redistribution and improve their lives.
“Yet the government has failed to make real progress on either front. Investment has remained low and the gap between rich and poor has increased in the past 10 years.”
Nzimande was inclined, Leon argued, to blame this failure on “the complexities of dealing with an imperialist-dominated global economy”.
Leon said that “the truth is actually far simpler: instead of maintaining a healthy mix of state and market, the ANC has tried to achieve a messy compromise between the two”.
“To create economic growth, the state must intervene in specific and limited ways: enforcing laws and contracts; collecting taxes; providing public safety, health and education; and uplifting the poor.
“The market must be left to buy, hire, invest, build and spend as it wishes, as free as possible from political constraints.
“The ANC has not followed this relatively basic formula; the state is intervening where it should not and is failing to intervene where it should. As a result, South Africa’s economic policies are filled with curious contradictions.
“For example, the ANC adopted the Gear policy of liberal economic reform in 1996, but has failed to remove all exchange controls, privatise major state assets or fix job-crushing labour laws.
“At the same time, the ANC says it is committed to redistribution, but opposes a basic income grant, which the DA endorses — a position President Thabo Mbeki reiterated this past week before the South African Council of Churches.
“In his column, Nzimande declared that ‘capitalism has failed democracy in South Africa’.”
Leon charged: “Communism, of course, failed democracy everywhere in the world, and failed to promote economic development, which is precisely why it collapsed. A few communist relics, such as the SACP, have survived, but the rest of the world has moved on.” — I-Net Bridge