ANYBODY remember the National Development Plan (NDP)? The economic initiative was the hallmark of successive ANC administrations. As late as January 2017 the plan was being touted as a vision for 2030, “the product of hundreds of interactions with South Africans, input from tens of thousands of people, extensive research and robust debate throughout the country”. When Pravin Gordhan was hastily recalled from London, whilst on an economic roadshow, it was the NDP, with its broad vision that he was selling to investors.
The markets were reassured by the long-term stability promised by Pretoria bureaucrats, and, after the Nene fiasco, (a foretaste of what was to come) not only was the economy in recovery, but the currency was even experiencing a bull-run, making the Rand one of the world-beating currencies of 2017, at least this was until President Jacob Zuma fired his finance Minister again, and then half-his cabinet while embarking on a course which took South Africa directly into the headwinds of currency volatility and the ire of ratings agencies. Within a short space of a week, the gains and momentum of the past 12 months were wiped out, as local banks lost heavily, and borrowing money on international markets suddenly became a lot, lot harder.
What happened? Can one put this down to the simple cult of personality surrounding the President? The Guptas and the intrigues of Nkandla and Pretoria, or BRICS? Here is one alternative version of events, and no doubt there will be others:
Frustrated by electoral inroads being made to the left and right of the party, the centrist ANC realised that something drastic needed to be done. Instead of meeting the official opposition the Democratic Alliance (DA) whose market-friendly policies and promise of renewal had resulted in astonishing gains at the polls, in both the City of Johannesburg and metros of Tshwane and Nelson Mandela Bay, NEC party insiders decided to quietly drop the NDP focus in favour of a new mantra — that of ‘Radical Economic Transformation’ (RET)
In effect, the ANC were now adopting the policies of the far-left Economic Freedom Front (EFF), promising massive changes in ownership, whilst debating expropriation of property without compensation, (an all too familiar bait and switch strategy) and thus a sure sign that groups such as Black Land First (BLF) were also beginning to dictate the ruling party agenda. Exactly what RET represents, is anyone’s guess. In all likelihood, it is mere code for a hodge-podge of incoherent leftist policies. If the ANC is to survive at the polls come 2019, it will have to enter into coalitions, and the dilemma remains that the DA and EFF are on opposite sides of the political fence so to speak.
The resulting drift to the far-left by the ANC under Zuma (even if by some accounts, simply empty promises) has had severe consequences. The fallout couldn’t get any worse than if Hugo Chavez had to suddenly arrive back from the dead, flogging the statist focus of big government and the anti-private property rhetoric which nearly destroyed Venezuela. So while ratings agencies were hammering the bond market, and the parastatals were still on life-support, we saw the travesty of Malusi Gigaba and the trillion-Rand nuclear debacle (read: expensive mega-projects) getting everyone in a tizz.
Unless Pretoria figures out a way to print money without encouraging further Rand depreciation, the big bucks flagship projects and renewable energy procurement touted before the downgrade are all but DOA. The only questions remains: Can the NDP be saved (or scaled back?), or will it take a defeat at the polls to realise, that when it comes to economic policy, nothing in South Africa is cast in stone? That the ANC is unlikely to be in power come 2019, with a workable NDP or not, is slowly dawning. Some 100 000 people from across the spectrum, marched on Friday while calling for the President to resign.
In a brazen “State of the Nation” address, uncharacteristically published by local newspapers over the weekend*, Malema, who technically cannot stand for parliament whilst under curatorship for mismanaging his own finances, called for mass expropriation of land and property rights. (See Ivo Vegter’s take on this issue here)
“We will pass legislation which will make the state the official and only custodian of all land in South Africa, in a similar way the Minerals and Petroleum Resources Development Act has made the state the custodian of our mineral and petroleum resources.”
Common property ownership has long since been abandoned in China and Russia. In South Africa it would instantaneously turn property-owners into tenants or wards of the state as all citizens suddenly became government employees in a perverse system that myopically fixes the problem of jobs with a stroke of the pen without actually creating any new jobs.
With the state controlling banking in South Africa under Malema, citizens will be expected to hand-over their current accounts to the state for safe-keeping — do we really trust the government to secure our money? Malema however chooses to deflect such criticism in his address, by referring to the “South Korean” banking system and thus may already be in talks to establish his own private investment bank.*
The ANC breakaway faction which has become the EFF party platform has simply adopted a hodge-podge of leftist demands, along with many of the supposedly radical policies of the North Korean dictatorship on the other side of the 38th parallel.
For example, the
The only bank available to citizens is thus the solitary Central Bank which has over 220 branches, all providing exactly the same choice in government banking.
The release of an unprecedented United Nations report detailing crimes against humanity by the North Korean regime of Kim Jong-Un has focused world attention once again on the problem of totalitarian states.
Startling details of the centralised, command economy of North Korea have emerged, such as the fact that each and every North Korean home has a speaker directly linked to a government propaganda machine.
Reports that children as young as 5 in North Korea are given special political education classes in which they are taught to hate “imperialists” as well as their own parents are rather troubling.
Despite the myriad problems, so poignantly related by images of malnourished children, Julius Malema, who resembles the portly Kim Jong-Un in stature, has already modeled himself on the classic “personality cult” figures once associated with Vladimir Ilyich Lenin and Mao Zedong, choosing to brandish a beret and the banner of ‘class warfare against the oppressor‘.
If may be early days, but the comparison with Kim Jong-Un , Pol Pot and other regimes such as the Castro dictatorship in Cuba, in which political education classes resulted in torture camps and political prisons overseen by psychiatric doctors, is not all that far off the mark.
The ANC once had its own system of political detention camps in Zambia. EFF are again taking up the cudgels on behalf of abandoned Marxist-Leninist policies.
NOTE: *Speculation is rife that Malema could be a Manchurian candidate for Asian business interests who wish to install him in government without bothering with an election result.
IT WAS bound to happen. With the collapse of the DA/Agang coalition, a new opposition coalition has stepped into the breach. This time it looks decidedly misogynistic and woman unfriendly. The Collective for Democracy (CFD) which formed in December last year has been under the radar until now. With the breakup of the much feted Zille/Ramphele relationship, a new political swing formation has been quick to capitalise on dissent.
CFD may have all the allure of a progressive movement but in reality it is nothing more than an evangelical Christian Coalition comprising the African Christian Democratic Party (ACDP), Congress of the People (COPE), the Freedom Front Plus (FF Plus), the Inkatha Freedom Party (IFP) and the United Christian Democratic Party.
CFD policies on the table include a hodge-podge amalgam of anti-abortion rhetoric, the end of abortion on demand, the teaching of creationism in schools, protection of white and black ethnic identity and if the EFF has its way, land redistribution and nationalisation.
Economic Freedom Fighters (EFF) and its firebrand leader Julius Malema could enter the coalition if the party gains seats in Parliament. The unproven red fascist party has entered a no-contest pact and partnership with the IFP.
IFP have attempted to distance themselves from CFD, but the rumours of an all out alliance if the ANC loses its majority in the election, persist.
Whether or not CFD, with so varied a political platform, will ever find the means to implement any of its policies, or broker the necessary political will and electoral expediency to get both the IFP and EFF on board, remains to be seen.
For starters, there are major contradictions within the collective and its partners.
For example, the COPE party manifesto promises the end of gender discrimination, but the party is governed by men such as Mosiuoa “Terror” Lekota, Lakota is a Roman Catholic, and while he may no longer be against the use of condoms for the prevention of HIV transmission, he most certainly is not in favour of abortion on demand.
The IFP on the other hand has tended to support those who oppose discrimination on the basis of religion, although the party favours Zulu traditionalism, it is not averse to siding with the evangelical agenda.
The EFF’s Julius Malema recently went on a pilgrimage to visit Nigeria’s foremost charismatic preacher, TB Joshua where he received blessings and elecution tips on how to approach the situation at Marikana. His oratory has much improved and he now claims to have found God.
EFF has been punting an essentially black supremacist outlook, but recently have taken to the same tactics as the DA in the quest for electoral power. The “rent-a-white” publicity stunts involving Wiekus Kotze have been all over social media. That a right-wing Afrikaner party such as the Freedom Front Plus could end up in a coalition with the EFF goes to show just how strange and fluid South African politics has become.
Arguably, EFF are the black version of the Freedom Front, and both party’s extreme quasi-socialist policies are really no different from each other. FF+ however, come from a tradition in which national socialism in the form of job reservation for whites, was in the exclusive domain of the Afrikaner minority.
Or will we see women’s rights disappear after the election, the repeal of the Choice on Termination of Pregnancy Act of 1996 along with abolition of pink rights such as the right to sexual orientation, contained in our constitution ?
Will we see a return to theocracy and the end of the separation of Church and State? Only a reasonable turnout at the ballot box will solve this one.
THE Economic Freedom Fighters (EFF) may appear like a bunch of attractive radicals but the party’s policies are Marxist fantasies that will take South Africa’s economy in the wrong direction. Our country has already experienced a ‘dirigiste’ economy with nationalised corporations called parastatals. Eskom and Telkom had to be bailed out last year with billions of taxpayers money. SAA and the Post Office fared no better.
Telkom posted one of the biggest non-mining losses in the South African economy last year with a 11.6 billion rand write down. The net loss for the year through March 2013 compared with 216 million rand a year earlier. Eskom’s losses are even more startling. The parastatal made a loss of R10.7bn through supplying electricity to Hillside, the bigger of the two aluminium smelters at BHP Billiton and is heading towards a R350bn debt trap. 2012/13 saw the SA Post Office post a net loss of R179 million, while SAA was bailed out to the tune of R550 million*.
South Africa’s experiment with the dirigiste economy has thus, largely failed. At very least, its parastatal dimension has ceased to be relevant in terms of economic growth. The resulting 25 billion rand plus annual drain on the treasury is nothing to be sneezed at. Paradoxically, direct investment in the economy by the state in the form of the Public Investment Corporation (PIC) has seen growth of 18% pa with R1.40 trillion in assets under management to date, including a range of equities publicly traded on the Johannesburg Stock Exchange.
Ultra-leftist political parties like the EFF opposed to the economic status quo, ironically continue to operate under the ruse that nationalisation is the answer to the supposed “neoliberal economy”. Quixotically promoting the old-fashioned command-style economics that characterised the policies of the former Soviet Union. These party factions fail to take into consideration the extent to which dirigiste interventions by the ruling party have already guided the development of the South African economy. The term dirigiste emerged in the post-war era to describe the economic policies of the French economy, which included substantial state-directed investment. The term usually denotes an economic system where the state exerts a strong directive influence in the form of a central authority as opposed to a merely regulatory, role for the state.
Expanding the uncompetitive and failing parastatal sector, and issuing new economic directives, for all their success and failures over the past 20 years in which the ruling ANC has maintained power, is not the recipe for job creation. In fact jobs and common land ownership, the rallying cry of South Africa 25% unemployed, may not be all that desirable. In an age of mechanisation and digital networks we are fast approaching the proverbial ‘end of work’ and a new economic paradigm termed, post-scarcity in which goods, services and information are universally accessible.
Another paradigm shift is the emergence of what is known as the “sharing economy” in which goods and property are shared or co-owned in innovative and new ways.
A different post-capitalist economic wisdom must therefore prevail. Think what would happen if the sovereign wealth of this country, invested in the private sector via the PIC, was redistributed in the form of a citizen co-ownership dividend? An unconditional basic income grant to all citizens funded via investment in a thriving market economy. Freeing citizens to become more than simply workers, we would end up with a sizable arts and culture sector along with unbridled academic and scientific inquiry.
Norway which reinvested profits from its oil and gas fields in the form of a sovereign wealth fund, has turned each and every Norwegian citizen into a millionaire. Switzerland recently voted to grant all its citizens a guaranteed monthly income of $2800. South Africa already has the means to do this, since the country has 80% of the world’s platinum supply and 50% of global gold reserves. This is more mineral wealth than is sitting in the bank vaults of Switzerland. If there is not enough money to pay our citizens each and every month, then why not a quarterly or biannual dividend? A real step-up, awarded in perpetuity, instead of a once-off sop to the prevailing discontent with our economic and political system.
Instead EFF plan to limit private ownership and state investment in the private sector by implementing regressive nationalisation policies that will take South Africa backwards. Zimbabwe is a case in point. The country has failed to correct its economic distortions and represents an abject lesson in failure, precisely what not to do so far as South Africa’s economy is concerned.
Supporting a party of commandeerists, who are thin on the wedge when it comes to individual human rights and who favour the same economic policies that have made ZANU-PF unpopular with investors, makes absolutely no sense. Economic directives too readily translate into directives aimed at undermining individual liberty. Bellicose party leader Julius Malema known for his often acerbic comments regarding South Africa’s white population has already expressed xenophobic views attacking South Africa’s Asian community while belittling Chinese investment. The EFF is thus feeding calls by black businessman to exclude Indians from state tenders. The apparent leftist overtones of the party disguise an essentially right-wing agenda in a political front whose ‘intellectuals’ are as prone to demand a totalitarian dictatorship as they are, the end of multiparty democracy.
Much like Don Quixote tilting at windmills, the playwright Mike Van Graan has endorsed the EFF, as the only party able to sock it to the ruling ANC. To provide some insight into Van Graan, I interviewed the man back in the day when the ANC was advocating policies very similar to today’s EFF. He might therefore be a little stunned to observe the manner in which age has changed his own political outlook, since the candid interview clearly shows how Van Graan is the kind of person who will be the first to cry foul when EFF cultural commissars start dictating the content of dramatic works, to redact such works in line with party centralisation and Marxist ideology.
The EFF are not the antidote to the ruling party’s lackluster performance. South Africa may need a radical adjustment to an under-performing economy trapped in slow growth mode, but this means moving away from the state-directed policies that have hampered growth and held-back development. Embracing a market economy balanced by a social democratic welfare state is the better solution.
THAT the far left Economic Freedom Fighter’s leader Julius Malema has absolutely no clue on how the economy works is best illustrated by his recent comments that ‘nationalised banks would run themselves, and without focusing on maximising profits, would keep their interest rates low so that all South Africans could afford a house and car.” While not going so far as abolishing the central bank or putting an end to usury, Malema sees low interest rates and nationalisation as key factors in ending neoliberal profiteering and the market economy in a heady mix of Marxist rhetoric drawn from failed experiments in state capitalism that saw the collapse of the Soviet Union and Eastern Block states nearly 25 years ago.
The EFF party manifesto is full of Marxist bluster, calling for the end of private companies and the expansion of the state from its caretaker role, to a more aggressive socialist platform that would essentially result in all forms of economic activity falling under the state purview, with the immediate consequence being the end of individual entrepreneurism.
That state capitalism is enormously bureaucratic and inefficient can be seen in South Africa’s ailing parastatal sector. Both Telkom and Eskom have been beset with problems regarding lack of competition, inefficiency, and inability to cater to consumer demand, with the result these state run corporations are only sustainable via huge bailouts funded by the treasury.
Telkom posted one of the biggest non-mining losses in the South African economy this year with a 11.6 billion rand write down. The net loss for the year through March compared with 216 million rand a year earlier.
Eskom’s losses are even more startling. The parastatel made a loss of R10.7bn through supplying electricity to Hillside, the bigger of the two aluminium smelters at BHP Billiton and is heading towards a R350bn debt trap. Making losses and providing bailouts to the parastatal sector are the exact kind of thing which Julius Malema and his brand of Malemanomics advocates — it is thus difficult to see any real ideological difference between the current administration and the EFF party, suffice to say that the aegis of parastatals would be increased while individual businesses would be contained, if not abolished.
Instead of ending South Africa’s ‘dirigiste’ experiment with state corporations and the abuse of state capital with the resulting enormous drain on the nation’s coffers, perhaps by providing alternatives such as cooperative and local economic solutions, and an unconditional basic income grant, the EFF seeks to up the ante by embracing the kind of mega-projects and foolish statist policies that reduced East Germany to a drab grey as the country failed to develop economically under Erich Honecker.
Another parastatal, SAA was bailed out to the tune of R550 million this year alone, and while the national airline marquee may bring pride, it certainly does not bring profit. The SA Post Office suffered a net loss of R179 million.
Clue to the thinking behind Malemanomics is the belief that the profit motive is behind South Africa’s super-exploitation of labour. Seeking to address the enormous disparities in income between the lowest paid worker and the highest paid corporate executive, Malemanomics with its logic of retribution and redistribution, would essentially end private ownership of property, turning all land over to the state and ending the willing buyer, willing seller principle. If this doesn’t turn every South African citizen into a tenant of the state, then the party’s lurch to the left could bring the kind of Zanu-PF rule that characterised the collapse in the Zimbabwean economy under Robert Mugabe.
Despite this statist orientation, it is unclear whether Malema will actually go ahead with any of his plans or be able to sustain his own rhetoric and party platform.
“An entrepreneur must be able to do business no matter who is in government. A real businessman doesn’t lose sleep over whether the [National Party], ANC or EFF is in power”, says the former ANC youth leader.
DESPITE claims to promote online freedom, to represent the “public interest” on the internet “when our freedoms in the networked world come under attack,” the Electronic Frontier Foundation started by mavericks Mitch Kapor and John Perry Barlow is impotent when it comes to jurisdictions outside of the territory in which it is based.
A recent complaint about having an online post unilaterally deleted off this very blog, by a host based in South Africa got the following response from Gwen Hinze, EFF International Policy Director: “We are simply not able to provide legal advice outside of the country in which our lawyers are licensed.”