Still straddling old assumptions about the nation’s economy

ON MAY 20, senior ANC national executive committee member Jeff Radebe released the ANC’s discussion documents. These documents are drafted in preparation for the ANC’s policy conference projected to be in July in which delegates to the conference will discuss and make decisions on the party’s policy outlook. But to what extent can these proposals get South Africa out of its economic rut?

Before I delve into this question, there is one issue that is a welcome inclusion in the ANC’s policy outlook. It is that for the first time there is a chapter on Arts, Culture and Heritage. This is important given the need for the country to have a clear, and comprehensive, approach to the arts, culture, and heritage. The discussion of a dual system on health and wellness, in other words, the mainstreaming of traditional knowledge, is important because, at a later period, South Africa can have discussions about mainstreaming knowledge centres that focus on traditional medicine. In India, for instance, there are several faculties and universities focused on traditional medicine. Similarly, such discussions can also lead us to move beyond land for restitution and to discuss land for cultural purposes.

However, instead of discussing the commercial value of the art, culture and heritage industry, the chapter hedges this industry on national identity issues such as heritage sites and a Heroes Acre for Struggle icons and honoured citizens. This is an obsolete reading of this industry. And it is also a missed opportunity because 7% of all the jobs in SA – 1.136 million in the formal and informal sector – are related to the cultural economy. This is not an insignificant number. Also, the cultural economy grew at an average rate of 2.4% a year between 2016 and 2018, far faster than the rest of the economy in this period. The rest of the chapters are not new in terms of the ANC’s historical take on South African society. In other words, given the ANC’s bias for a mixed economy, the policy offerings concerning deregulation, attracting private market players, and cutting out red tape, among other interventions, are not new, although these documents seem to premise “transformation” on these issues.

For instance, the discussion on state-owned entities (SOE) is a bit weak on its reasoning. And these companies are important for the equitable distribution of public goods, and at a rate that is affordable to ordinary citizens. However, the discussion reasons that because state capture has made these companies prone to suffocating the public purse, the private sector, which is understood to be more efficient, can take on these functions at a more affordable rate. This is sketchy given the twin problems of a weak state and strong elements of corruption and collusion in the private sector. It will require more convincing.

What is also odd, however, is that, for instance, in the energy policy, there is an attempt to balance too many development trajectories. For instance, the documents discuss energy security in the context of a just energy transition. This is not possible. If anything, one would think that energy security would be a priority, something Mineral Resources and Energy Minister Gwede Mantashe has alluded to. Policy sequencing is the issue here. There is nothing stopping the government pressing for a just energy transition when energy has been secured.

The policy proposals on offer get more sticky, however. For instance, on the issue of localisation and public procurement instruments, the proposal is that a policy frame should be created for untransformed entities that can be globally competitive as opposed to focusing on transformed entities that do not have production capabilities locally. The problem here is that given the racial fault lines in South Africa’s economy, such a proposal would advantage oligopolies.

Not surprisingly, there’s also a pushback against expropriating land without compensation and against the nationalisation of the SA Reserve Bank. Given the ANC’s factional politics, this proposal is likely to antagonise the more radical voices within the party.

While this is not an exhaustive critique of the discussion documents, these proposals are unevenly weighted. In other words, some policy proposals do not get the same level of engagement, and depth, as others. However, the documents also demonstrate that the ANC moves between centre-left and centre-right politics in a manner that may lend credence to the more radical voices within the party. Among these, is the popular argument that President Cyril Ramaphosa and his faction are too accommodating of capitalism.

If anything, these are bold interventions within the ANC. And these interventions are likely to get a thumbs up from corporate South Africa since private market players are offered more leeway into markets traditionally the province of the government.

However, I don’t see how these proposals can extricate the country out of the economic rut it’s in.