Howard Barrell:OVER A BARREL
One of my more frequent experiences these days is being told by African National Congress supporters that I am a reactionary. There are various grounds for the charge. One is my backing for the spirit of pluralism and mutual tolerance that pervades our Constitution. The more common ground, however, turns out to be my praise for government economic policy.
I reserve my praise for government economic policy, as practised, of course. That is for the market-friendly variety that informs the government’s growth, employment and redistribution strategy (Gear).
I am no fan of the woolly wouldn’t-it-be- nice-if theology of most other ANC offerings on economics. The Reconstruction and Development Programme (RDP)is one such. Another is the ANC’s manifesto for this election.
The formulations in the manifesto and the RDP do not provide any guide to action. Instead, their primary role is to create the illusion that it is possible to achieve two or more mutually exclusive things simultaneously. An example is the assertion implicit in the manifesto that South Africa can attract foreign investment in labourintensive industry here while further entrenching workers’ rights.
Assertions of this kind are part of a cosy dream culture upon which much of the political left still depends for its peace of mind. Within the politics of the ANC itself, assertions of this kind are supposed to square the circle between those communists who dare still to speak communism’s name and the liberals in the ANC still shy of making the communists walk the plank. And all the while, that portion of the ANC with at least half a brain and some grasp of external realities gets on with running the country roughly in line with Gear.
We are talking here about a contradiction between expressed belief and practice in the ANC. It is an inconsistency in which we, as voters or commentators, are expected to collude. None of us is supposed to notice it and if we do, it is a frailty in the ANC’s make-up to which we evidently should not draw any attention. It amounts to what an occasional correspondent of mine calls a “cognitive dissonance” within the ruling party.
This dissonance plays havoc with our ability as a country to have an intelligent economic debate. The ANC, our overwhelmingly predominant political force, does not want an economic debate. This is because the party may rattle to pieces in the course of it. And most of the other significant parties – the New National Party, the Inkatha Freedom Party and the Democratic Party – are in fundamental agreement with the government’s pro-market practice.
The relative absence of an economic debate is a dangerous shortcoming.
For, as it was in the United States when Bill Clinton took on George Bush for the presidency in 1992, so it is in South Africa now: the principal issue “is the economy, stupid”. The primary question is: how do we achieve the optimal low- inflation, high-growth combination that will deliver wealth, jobs and reinvestment?
After the election on June 2 , most of the major choices confronting us are likely to be basically economic ones. For example, do we continue to try to service our existing level of accumulated domestic debt? You say yes? If so, then government borrowing will remain high, since governments usually borrow to pay back old borrowing; we can expect interest rates to stay high, because the government will still be competing aggressively with the private sector to borrow money; we can anticipate that new investment and economic growth will remain at low levels, because the cost of money will be high; and we can expect few new jobs to be created.
The alternative will be to privatise energetically and use the proceeds to reduce our debt levels. If we do this, then this should reduce government borrowing, reduce the cost of money and improve the prospects for economic growth and the creation of new jobs.
A second example: do we deregulate our labour market to facilitate job creation, and throw down the gauntlet to those union leaders and South African Communist Party leaders who may object?
And do we pass through Parliament a framework for employer-initiated retrenchments in the civil service and the defence force to get rid of the scores of thousands who draw a government salary each month but do nothing, costing us billions of wasted rands each year?
And do we further reduce tariff barriers against imports on the basis that we must force our domestic industries to become internationally competitive if they are ever to be able to grow beyond the limitations imposed by our really rather small local market?
These are big issues. And in the case of each of them are a hundred more questions of detail which also need to be debated. As the big issues are being avoided in South Africa, so too are the debates over detail. We can afford to miss out on neither. For questions like these are being canvassed among, and answered by, citizens in every get-ahead country across the globe.
There is a sense in which we will have come of age in an important way in South Africa when we too have an ongoing, informed economic debate between the parties and ourselves – when the party that wins a general election will do so for winning the economic debate, not because it has succeeded in avoiding it.