Malaysia has new lessons to teach ANC about revival
FW de Klerk’s decision in February 1990 to release Nelson Mandela and unban the ANC caught most people by surprise. For the ANC it meant negotiating an acceptable constitutional settlement and developing — almost from scratch — the economic and social policy framework it wished to implement when democratic elections were eventually held.
Think-tanks and policy workshops produced a series of policy documents culminating in the Reconstruction and Development Programme, which became the party’s 1994 election manifesto.
Searching for effective programmes in a world where the collapse of the Berlin Wall had discredited the centralised government-controlled policies towards which the ANC had traditionally lent, many of its policymakers found inspiration in the economic and social successes of Malaysia.
Like many of the Asian Tigers, Malaysia had achieved rapid economic growth through policies in which the government played a leading role in what became known as the “developmental state”. This leading role for the state was critically important for ANC thinkers, for whom free markets were anathema.
Malaysia was an especially useful model because it had combined exploitation of its high natural-resource endowment in oil and gas with rapid manufacturing growth. This matched the ANC’s desire to reduce the dominance of mining in SA’s economy by promoting growth of manufacturing as a source of relatively well-paid jobs as the key strategy for tackling high unemployment and inequality.
MALAYSIA
Most importantly, Malaysia was seen to have made important gains in reducing the dramatic income disparities between its ethnic groups. Internal discontent with the seemingly dominant economic position of Chinese Malaysians had led to the expulsion of Singapore from the Malaysian Federation in 1965 and to race-based riots in the rest of the country in 1969. Malaysia had tackled these disparities by the vigorous enforcement of employment equity legislation and preferential procurement policies that favoured indigenous Malays over Chinese citizens. The advancement of Bumiputra (“sons of the soil”) communities was to be secured by preferential employment in the workplace and the accelerated growth of Malay-owned businesses — interventions that were also seen as the drivers of economic development.
While by 1994 Malaysia remained a racially unequal society, substantial progress had been made in reducing inequalities using these policies. Importantly, this had been achieved alongside rapid economic growth, proving that it was possible to achieve both objectives if policies were correctly crafted.
Employment equity, broadbased black economic empowerment and preferential procurement became important pillars of SA’s economic policy framework after 1994.
Progress in reducing the very high inequality has been disappointing. This is in part because of low economic growth, especially over the past decade. SA has failed to enjoy the powerful redistributive forces of rapid growth and job creation that benefited Malaysia.
Recent developments suggest that SA’s policymakers may need to again look at Malaysia for important new lessons. Malaysia’s gains in recent decades have been accompanied by government malpractices with significant political consequences.
In May, the party of liberation that had ruled Malaysia since independence in 1957 was defeated in its national elections. An opposition alliance attained victory under the leadership of former prime minister Mahathir Mohamad, 92, who mobilised public anger against the claimed corruption of the ruling party and the misuse of $4.5bn from Malaysia’s sovereign wealth.
Opposition parties focused also on the substantial growth in Malaysia’s debt to an unaffordable 80% of GDP. This is not much higher than SA’s debt when all the guarantees the government has issued to sustain the crisis-ridden parastatals are included.
INFRASTRUCTURE
Mahathir’s government has moved swiftly to cancel what it says are unaffordable glamour infrastructure projects.
It has vowed to reduce bloated spending on the civil service, to crack down on corruption and to increase parliamentary oversight.
The parallels with SA are obvious, including the nuclear power programme so vigorously supported by the Jacob Zuma administration, which almost everybody else believed was unaffordable and probably not needed.
Unlike Malaysia, where former party insiders ended up leading the opposition, SA’s governing party has changed its leadership from within.
Public anger at corruption probably cost the ANC power in Tshwane, Johannesburg and Nelson Mandela Bay in the 2016 local government elections.
The extent to which that anger may have been appeased by the leadership changes and by the new focus on “state capture” in the ANC will be apparent only after 2019’s general election.