{"id":166115,"date":"2017-03-25T15:00:52","date_gmt":"2017-03-25T13:00:52","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=166115"},"modified":"2017-03-25T15:50:19","modified_gmt":"2017-03-25T13:50:19","slug":"the-anc-isnt-ready-to-radically-transform-the-south-african-economy","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/government\/166115\/the-anc-isnt-ready-to-radically-transform-the-south-african-economy\/","title":{"rendered":"The ANC isn\u2019t ready to radically transform the South African economy"},"content":{"rendered":"

There\u2019s nothing radical about trying to fix what doesn\u2019t work by making it work better, which is why the economic transformation<\/a> discussion document released by South Africa\u2019s governing party, the African National Congress (ANC), is not really radical.<\/p>\n

The document is also unlikely to renew the economy, ensure that more people are included and create conditions for sustained growth.<\/p>\n

It was released recently as part of the ANC\u2019s preparation for its conference at the end of this year. They\u2019re always preceded by a mid-year policy conference, which is meant to agree on resolutions to be put to the conference.<\/p>\n

It\u2019s ANC practice to release policy discussion documents in preparation for these meetings \u2013 hence the economic document. The party\u2019s leaders point out that it doesn\u2019t express ANC policy since delegates at the conferences could reject it. But it does give an important sense of the thinking of the party\u2019s economic policy strategists.<\/p>\n

In keeping with the current ANC rhetoric, the document stresses the need for \u201cradical economic transformation\u201d<\/a>. It says proposals for change should be judged by whether they<\/p>\n

radically and systematically improve the lives of those who are excluded and marginalised.<\/p><\/blockquote>\n

The document is filled with good intentions and worthy ideas. But it fails the test.<\/p>\n

More of the same<\/strong><\/h3>\n

The problem is that it ignores calls to seize land or rein in \u2018white monopoly capital\u2019 – the themes of today\u2019s \u201cradical\u201d rhetoric. These demands are either ploys by patronage politician\u2019s eager to get hold of resources or slogans pretending to be concrete recipes for change. It\u2019s not radical, nor will it achieve its stated aim, because it doesn\u2019t suggest ways of moving the economy from its current pattern which has produced low growth and continues to exclude millions.<\/p>\n

Like both sides in the economic debate, it doesn\u2019t seek a new path which will include millions more. Instead, it keeps alive the forlorn hope that the excluded can be absorbed into an economy built to exclude them.<\/p>\n

Perhaps the clearest sign of this is the discussion on employment. The document endorses the National Development Plan\u2019s<\/a> target of shrinking formal unemployment to 6% by 2030. It says this will be achieved by lowering costs, increasing investment and improving energy generation, transport and water supply.<\/p>\n

All would no doubt be widely welcomed. But all assume that the current system can be made to work better and so there\u2019s no need to change it.<\/p>\n

Tweaks are not enough<\/strong><\/h3>\n

The specific remedies which the document proposes lack the required innovation too. These include minerals beneficiation, incentives for manufacturing, reducing red tape, more training, more emphasis on research and development. They all assume that the economy needs tweaking, not changing.<\/p>\n

Even where it proposes measures which seem more radical \u2013 \u201cset asides\u201d for black businesses or speeding up land reform within the confines of the constitution \u2013 the document doesn\u2019t challenge the current framework.<\/p>\n

And so, despite some rhetoric to the contrary, it doesn\u2019t get to grips with the core reality that the formal economy is still an insider club which excludes millions. It\u2019s dominated<\/a> by too few players engaged in too many cosy networks, many racial patterns persist and potential in the townships and shack settlements is squandered. A core reason is that both the old economic elite and the new political leadership assume that the economy will reach its potential when everyone has what whites had in the 1960s \u2013 full employment and a stake in the formal economy.<\/p>\n

This ignores two realities. First, the apartheid economy worked for the minority because it excluded most people; it can\u2019t be extended to everyone. A real break with the past would mean negotiating changes which would bring in many new players and dropping the prejudice that wealth can be created only by formal businesses protected by a host of rules. This means accepting that people who make a living outside the formal economy are a potential solution, not a problem, if they receive more support.<\/p>\n

Second, the days in which manufacturing and mining could create millions of jobs are gone: the formal jobs the document wants to create are disappearing across the globe. The question is not how to get them back but how to ensure that everyone can make a living without them.<\/p>\n

Ducking the key question<\/strong><\/h3>\n

A sign that the document ignores inclusion is that it has nothing to say about township business besides a throw-away line about reducing costs. So a key question \u2013 how to link people in townships and shack settlements into the formal economy \u2013 is ducked. This despite the fact that it offers a far more credible way out of poverty than reviving jobs which are gone.<\/p>\n

Nor is there anything about how to revive mining areas<\/a> hit by the loss of jobs which will never come back. Or on how to stimulate economic activity for people who 20 years ago would have worked in factory jobs which have gone forever. And so there\u2019s nothing on ensuring that formal business and government strengthen economic activity on the ground rather than snuffing it out.<\/p>\n

There isn\u2019t much on the education and training needed to help people adjust to new realities. Or programmes to boost grassroots livelihoods \u2013 such as grants and local infrastructure.<\/p>\n

Only two proposals address these issues: the document calls for more effective rules to boost competition, and for changes to the settlement patterns in cities, which relegate the poor to the fringes where they are shut out of the mainstream economy.<\/p>\n

But neither proposal is fleshed out. It\u2019s therefore fair to question how much of a priority they really are.<\/p>\n

The ANC discussion document on economic transformation isn\u2019t radical enough not because it refuses to substitute slogans for thinking. Rather because it doesn\u2019t break with an economic debate which \u2013 on the left, right and centre \u2013 is about how to keep current patterns alive, not how to change them.<\/p>\n

By Steven Friedman,\u00a0Professor of Political Studies, University of Johannesburg<\/em><\/p>\n

This article was first published on The Conversation \u2013 read the original<\/a><\/strong><\/em><\/p>\n

\n

Read:\u00a0\u2018We are getting weaker\u2019: ANC<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

There\u2019s nothing radical about trying to fix what doesn\u2019t work by making it work better, which is why the economic transformation discussion document released by South Africa\u2019s governing party, the African National Congress (ANC), is not really radical.<\/p>\n","protected":false},"author":29,"featured_media":87066,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[25],"class_list":["post-166115","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-government","tag-active"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/166115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/29"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=166115"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/166115\/revisions"}],"predecessor-version":[{"id":166123,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/166115\/revisions\/166123"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/87066"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=166115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=166115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=166115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}