Rise Mzansi’s neoliberalism won’t work
A critique of its election manifesto shows the party doesn’t deliver the social democracy it promises
Founded in April last year, and led by Songezo Zibi, Rise Mzansi has emerged to contest South Africa’s seventh general elections. The party’s campaign rhetoric tells citizens that, in regard to governance, South Africa is not in need of new ideas. Rather, Rise Mzansi has thrust itself into the electoral landscape to solve the crisis of leadership which plagues the ruling party.
It assures prospective voters its members will provide the effective and ethical leadership that will build a “safe, prosperous, equal and united” South Africa in one generation.
The question is, what programme of reform — expressed through policy and legislation — would breathe life into these ideals?
When reading Rise Mzansi’s People’s Manifesto, it becomes clear the party is not the transformative agent needed to make this a reality.
A contradiction reveals itself throughout the manifesto — a rhetorical commitment to the values of social democracy while proposing neoliberal economic policies .
Why does this ideological contradiction matter? Rise Mzansi has committed itself to realising the country’s constitutional values, those being equality, integrity, solidarity and justice. Yet, 50 years of neoliberal economic policy in South Africa elsewhere have demonstrated how neoliberalism nurtures the injustices that undermine the possibility of realising the values of our constitution.
In varying degrees, depending on the presidency, neoliberalism has been an abiding feature of the government’s economic policy. This political project and its economic practices have heightened inequality, nurtured mass unemployment, disempowered workers, eroded public good, all while gradually stifling democracy.
Rise Mzansi lacks an ambitious blueprint for economic growth. Moreover, the party’s manifesto fails to recognise the systemic nature of unemployment and advances policies which remain within the framework of neoliberal ideology.
A shortage of skills alone cannot explain South Africa’s high rate of unemployment. The crisis emanates from a structural flaw in the economy — the ANC has not seriously pursued a programme of social development and industrialisation, while keeping the country on a path of export-oriented growth, dependent on resource extraction, high consumption by the affluent minority and low wages.
After the wave of globalisation in the 1990s, the ANC opened South Africa’s economy to competition on the international market, seeking to attract foreign investment. But through the neoliberal policies of the Growth, Employment and Redistribution (Gear) plan, the country underwent premature deindustrialisation.
This resulted from structural adjustments such as the removal of import surcharges which protected local industries and, as argued by Patrick Bond, “joining the World Trade Organisation on adverse terms, as a ‘transitional’, not developing economy. This led to the destruction of many clothing, textiles, appliances and other labour-intensive firms.”
Moreover, the reforms of Gear and subsequent policies have left the country’s economy vulnerable to the shifting interests of investors while rendering our economy overly sensitive to global events. In one year, mining companies can report stunning profits and in the next rising costs and international price fluctuation can threaten thousands of jobs.
Sustainable industrialisation, equitable economic growth and social development requires a capacitated state that can effectively plan interventions and stimulation of economic activity. But Rise Mzansi’s policies are self-defeating in this regard.
This is evidenced by the party maintaining the myth that “the government simply does not have the funds needed to pay for our expanding priorities”. This was a disappointing assertion to see in a supposedly socially democratic manifesto.
The myth of the government reaching a “fiscal cliff” serves two purposes: first to undermine the potential of forging a state with the democratic orientation and institutional capacity to facilitate economic intervention, growth and social development. Second, the absence of a capable state creates justification for the private sector to undertake responsibilities that should be the government’s.
Let it be clear, reports of a fiscal crisis have been drastically overstated to justify the austerity measures implemented by the treasury.
These short-sighted and severe cuts to government expenditure on basic services and social security are a key element of a broader agenda of structural adjustment in pursuit of a liberalised energy sector, a reduced public sector and a precarious, but cheap, labour force.
According to the Institute of Economic Justice (among numerous civil society organisations) “the budget mismatch [on both the revenue and expenditure ends] is within historical norms, considerably below recent revenue windfalls, and well within government’s ability to close without resorting to chaotic budget cuts”.
The chaos referred to here is evident in our understaffed hospitals, decaying infrastructure, overwhelmed police and debilitated education system.
The growth of South Africa’s public debt, specifically the debt-to-gdp ratio, is not a minor concern. But, as highlighted by numerous critiques of the treasury’s 2023 medium term budget policy statement, the majority of public debt is owed in rand, massive public funds are available for concessionary lending and, as argued by the Alternative Information and Development Centre, “the debt-togdp ratio is in line with the average of middle-income and emerging economies”.
Rise Mzansi’s myopic subscription to the treasury’s fear-mongering exposes the party’s lack of imagination and its lukewarm approach to the country’s economic stagnation. If the government is indeed broke, and if Rise Mzansi aims to remove constraints to economic growth, one must ask: “What is its fiscal strategy?”
How would it raise resources to tackle crime, education, improving the civil service or Eskom’s dysfunction? So far, Rise Mzansi has no compelling answer to this question and its ambitions for development and economic growth appear pie in the sky.
The poor answer Rise Mzansi does provide is mobilising private sector investment, specifically “private investment in public assets”.
This is likely to result in rising government debt, weakening state capacity, diluting economic sovereignty and rendering public goods and basic services unaffordable for most. Why? Because private investors are accountable to shareholders, not the public, and seek investments that yield profits.
One would assume that a party which claims to embody values of social democracy would advance progressive fiscal policies in the interests of South Africa’s poor and unemployed majority. These could include an increase in the corporate income tax rate (which sat at 40% in 1994 and has declined to 27%).
Moreover, recent research has shown a graduated wealth tax on the richest 1% of the population, between 3% and 7%, could raise R140 billion in annual revenue. Rise Mzansi proposes no changes to a tax regime and fiscal framework that serves the interests of the rich and corporate elite.
Redistribution is vital to short-tomedium term economic growth but so is investing in economic production. A socially democratic government would invest in public ownership of key assets and industries, using public works programmes to create jobs, boost skills and create well-functioning infrastructure crucial to sustaining investment and business confidence.
Let us not forget, a capable state and effective government is indispensable if a country wants to retain or heighten its economic sovereignty. A weak state and public sector create opportunities for developing countries like South Africa to be coerced (by foreign finance institutions, investors, finance capital and so forth) into pursuing economic policies that are not in the best interests of its citizens.
Beyond curtailing irregular and wasteful expenditure (and introducing a progressive fiscal framework) a true social democratic party would discipline the private sector for its corporate crimes and use some of the sector’s resources for the socio-economic priorities highlighted in its manifesto: education, food security, healthcare, social services and policing.
The United Nations Convention on Trade and Development said last year South Africa is losing more than R62 billion a year to illicit financial flows. Other estimates place illicit outflows between 2009 and 2018 at $20 billion. It is absurd that the most unequal country on Earth does not seek accountability for such excessive corporate impunity.
What Rise Mzansi fails to acknowledge is that domestic resource mobilisation is possible, to drive public investment in social development and employment, and the choice to not to tax the rich and discipline the private sector is a political one born out of a neoliberal economics unsuited to South Africa’s needs.
Rise Mzansi proposes no changes to a tax regime and fiscal framework that serves the interests of the rich and corporate elite