ANC needs to confront capitalist system to deliver on promises
For the ANC to deliver on its promises, it needs to wean its government off the neo-liberal diet.
The essence of the ANC NEC message delivered by its president Cyril Ramaphosa at the weekend has left many South Africans optimistic.
At last, the ANC has a leader who is believable when he speaks. While this is good, it is disconcerting that the ANC does not seem to be ready to confront the capitalist system that has condemned millions of our fellow citizens to lives of brute survival.
It’s good that the ANC plans to reduce the concentration of ownership and control in the economy by expanding the mandate of the competition authorities and also plans to use state procurement and the awarding of concessions to promote broad-based black economic empowerment and encourage greater worker ownership.
But, for this to happen, the ANC needs to deal with the obstructive role that the National Treasury has played in our economy over the past two decades.
Despite the advances made in the past 21 years, the high levels of unemployment, poverty and inequality have been exacerbated by the neo-liberal paradigm, which remains dominant in driving government’s economic policy.
The neo-liberal economic principles and philosophies are premised on a belief that growth must occur first, then employment will follow and increase, leading to an improvement in the distribution of income.
It is now obvious that these policies will not help the ANC to address the colonial and apartheid fundamental contradictions that saw white monopoly capital taking charge of ownership of the economy, while the black majority remains enslaved in waged labour.
There will be no radical socioeconomic transformation while the ANC remains reticent to the idea of the review of the National Development Plan (NDP).
When the NDP was adopted in 2013, Cosatu argued that there was a need to review its economic and labour chapters to avoid a return to the same old conservative policies inherited from Gear. Since the adoption of the NDP, the economic contractions increased and job losses continued.
The last time when the South African economy was on a cyclical economic upturn leading to the 2009 recession, it was mainly driven by the 2003-2008 commodity (minerals) boom, debtfinanced consumer spending and a property market bubble, all of which are unsustainable. Since then, investment and production in mining and manufacturing declined, household debt remained high, and restrictive monetary policy tightened credit extension, thus dampening household spending and the property market.
On the other hand, general government services have been gradually contracting since Treasury introduced austerity measures to reduce the rate of growth in government spending, which affected aggregate demand in the economy, eventually causing a technical recession.
While it's imperative for our government to prove its ability and willingness to meet its financial obligations on time to many lenders, it is also important for it to prove the same commitment and ability to meet its service delivery obligations to the citizens.
It will not be enough for this new ANC leadership to only rid the country of the gangster capitalism and corruption that has become endemic under the fifth administration, but it also needs to rehabilitate its government from its addiction to neo-liberalism.