The Politics of Economic Policies

By Leonard Gentle · 1 Oct 2010

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Truly, we live in crazy times. What are we to make of the ongoing spats in the ANC? Are these really about nationalists versus communists? What are we to make of the nationalist, Julius Malema, and his BEE friends fighting for the nationalisation of the mines? All this while Malema also tries to get his nationalist buddy, Fikile Mbalula, to replace the communist, Gwede Mantashe, as Secretary General of the ANC in 2012.

In the meantime, in order to distance themselves from such a heinous idea, the South African Communist Party attacks the idea of nationalising the mines, pointing to examples of nationalisation embraced by the Nazis, whilst attacking the nationalist ANC Youth League and its tenderpreneurs.

While COSATU, goes for the jugular and warns that the ANC government, under the leadership of the man they spent three years putting into power - Jacob Zuma - is becoming a predator state. The ANC National Executive Committee responds by threatening COSATU’s general secretary with a disciplinary hearing and the matter is only laid to rest after COSATU accepts that the ANC is the political centre, not the Alliance.

On the one hand, this speaks to a raging “battle for the soul of the ANC” and the direction of its policies, underscored by a sense that the Alliance is dysfunctional and that things are falling apart.

And yet, on the other hand, there is a smoothness with which the well-oiled machinery of the government’s technocratic and economic levers function. The Rand is one of the strongest currencies in the world today; there is massive net inflow of capital into South Africa. The World Cup went off with nary a whisper of any malfunction.

In the midst of the greatest economic crisis in world capitalism, South Africa appears to be a success story for big business.

How can we make sense of this schizophrenia?

On the eve of the ANC’s National General Council (NGC), there was much speculation about the likely debate on economic policy at the event -- especially in light of Malema’s call for the nationalisation of the mines and his posturing that the ANC Youth League would try and win this policy demand there. The recent release of COSATU’s economic policy document, “A Growth Path Towards Full Employment,” also added to the frenzy.

But the ANC NGC was not a platform for new policy decisions. It was not even a “National Policy Conference,” which at least has the mandate of reviewing and anticipating future policies to be debated and discussed at a “National Conference.” COSATU would know this as elementarily as it would know its A-B-C’s.

So, why release this document when it didn’t have a snowballs hope in hell of influencing ANC policy?

What are the politics of these economic policy interventions?

On the one hand, it could be argued that this document is about seizing a historical moment when all South Africans are signalling their desire for an alternative. And, when South Africa is waiting with baited breath for a solution to a universally agreed crisis. This may be true of the 1.5 million workers who have lost their jobs or the millions fed up with poverty and poor services.

But the languor and the complacency of the South African ruling class suggests the very opposite of a desire for something new.

The global capitalist crisis, by all accounts, has left South Africa in a (falsely) smug position.

South African bonds are booming and the Rand is strong. South African corporations are eyeing Africa to replace a declining European market. Moreover, President Zuma has called for more privatisation and internationally; he struts his stuff in China and is successfully seeing South Africa join the BRICs - Brazil, Russia, India and China - emerging powers with rapidly growing influence in world geopolitics, as America’s dominance in the global arena wanes.

If this is the political context, then it amounts to a misreading of the current balance of forces by COSATU.

And what of the strength and content of the document’s proposals?

If one actually looks at the text of the document itself and what it says, then one notices immediately how much it is an outsourced document drafted mostly by a team of COSATU-friendly economists, with past COSATU policies and current ANC positions appended -- even if this makes the document politically uneven and contradictory.

For instance, the document calls for a number of very radical things: reining in the privatised Reserve Bank; setting up a state housing company and a state pharmaceutical company; whilst at the same time repeating current, quite modest, government ministerial drafts like the Industrial Policy Action Plan and the National Health Insurance (NHI). Radical fiscal measures like super taxes for the very rich are combined with merely endorsing the idea that fiscal and monetary policy should work hand in hand with industrial strategy. The document abounds with graphs and flow charts showing how it is all supposed to fit together.

It allows for radical language and prescriptions to be ignored whilst the conclusions prepare the ground for the kind of general vague commitments to “decent work,” the NHI, industrial policy, green jobs and so on, which the ANC government can happily sign off on without really doing anything different.

It repeats the problems suffered by COSATU in the past, of announcements that “breakthroughs” had been won within the Alliance, of a “post-GEAR consensus” and “state-led growth,” which made little difference to the line of march that Mbeki took after the Growth and Development Summits held on his watch.

Politically, despite COSATU’s Central Executive Committee warning of the dangers of a “predator state,” there is nothing in the document about how the current composition of the ANC or the nature of its policies have given rise to the tenderpreneurs and other predators feeding at the trough. Recall that in the Mbeki era, COSATU did attempt to do this; branding the social force responsible for GEAR as the infamous “1996 Class Project.” Having identified the social force responsible for GEAR, the way forward became clear: mount a political challenge to win the ANC from this project. Well, that was the victory achieved at Polokwane in 2007 (so we have been told). 

But since then, we have had Zuma re-appointing most of Mbeki’s coterie of advisors in the Presidency, Trevor Manuel heading up the National Planning Commission, Pravin Gordhan continuing the same neo-liberal policies of his predecessor. Even going with more relaxation of exchange controls in this year’s budget speech, and now there is talk of a new round of privatisation. Eskom is preparing all the technicalities to make privatisation of electrical power provision possible and Transnet has called for expressions of interest for privatising unused railway lines. 

This is hardly the stuff of a “developmental state” or the leftward shift promised in the heady days of the victory over Mbeki and his “1996 Class Project” at Polokwane.

So while COSATU’s document purports to show a “new” growth path, it doesn’t do so. It fails to specify what political conclusions must be drawn from the current trajectory and thus, if one ignores some of the radical tone, it prepares the ground for a fudged political consensus with government.

Significantly, on the same day that COSATU released its document, the market declared its opinion - complete indifference! The markets rallied knowing that the ANC government would merely shrug it off as posturing.

If COSATU really wanted to enter this debate with muscle, it would have selected any one of a number of examples where the sheer rottenness of capitalism today is waiting to be publicly exposed. Not thereby to ignore the need for an overall programmatic response to the crisis, but to use the rapier of a strategic intervention on a specific economic issue, backed up by the cutlass of mass action.

Such an intervention would be primarily political, not “economic,” drawing on its strengths of mass pressure to force this government to carry out its ongoing (and much ignored) electoral mandate of making a difference to ordinary people’s lives. That is how you shift the ANC, its government and public opinion. That is how a real public debate can be held; not one conducted by rival economists in the business news. 

Contrast COSATU’s intervention with that of Malema’s. With all the ANC Youth League’s bling and crass opportunism, its single-issue political intervention on nationalising the mines at least puts the issue on everyone’s lips. And recall that the ANC government’s adoption of GEAR in June 1996 was not so much an economic programme (its prescriptions of privatisation and financial deregulation had already been carried out and its economic predictions were wrong), but a political statement to all that the ANC was business-friendly.                     

Currently, there is a growing public disquiet and therefore, political space, for public mobilisation on a number of issues, such as the Arcelor Mittal case of crony capitalism; the disgracefully high interest rates of the privatised Reserve Bank; the continued imposition of VAT at a time when the poor are being abandoned and more than a million jobs lost; the greed of the new round of speculators buying up government bonds. 

Any one of the above issues could have been the focus of a strategic policy intervention in the form of a focussed call for a specific economic policy change by the state, backed by a mass campaign of COSATU members and other working class formations. COSATU has had a history of such focussed campaigns before; for example, the anti-GST/VAT campaign in 1997 and the anti-privatisation campaign of 1996. These may not necessarily have won their immediate demands, but their mass character positioned COSATU as a hegemonic force within broader civil society and saw much public support.

There is a battle going on for the “hearts and minds of the ANC’ at the moment, but it’s not so much about changing its social base or the direction of its policies. It’s about 2012 and the succession battle for the leadership of the ANC. Any serious attempt at shifting away from the neoliberal paradigm strangling the lives of the majority, needs to look elsewhere than in these squabbles.

Gentle is the director of the International Labour Research and Information Group (ILRIG), an NGO that produces educational materials for activists in social movements and trade unions.

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10 Oct


What your Malema is proposing is what has taken place in Scandinavian countries in Europe. If it is good for European populations living in Europe, why is it bad for Blacks leaving in Africa?

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