With the ANC’s pivotal elective conference less than a month away, Parliament released its High Level Panel’s report on “Assessment of Key Legislation” and “Acceleration of Fundamental Change”. The report mixes some worthwhile ideas with an inability to translate, into an SA context, the legislative and fundamental significance of plummeting global poverty.
SA’s private sector and NGOs are similarly coming up short. The economy will soon complete a decade of nil growth in per capita income and, despite a favourable global environment, SA has nothing resembling a workable growth model within reach. The panel should have drilled down to unpack the core blockages. Instead, it continued the well traveled path of suggesting modest improvements, notwithstanding SA’s dangerously declining fundamentals.
It looks increasingly unlikely that the ANC will find any path toward meaningful introspection before the country and the party suffer unaffordable damage. But why can’t SA’s world class business leaders and its impressive think tanks frame the issues in a way which produces a workable growth model?
Picking through the rhetoric and disappointments, two terms demand attention: social justice; and delusions.
Given the sophistication of its political structures, media houses, capital markets, businesses, and NGOs, SA should be able to avoid having its national dialogue made dysfunctional by delusional beliefs. Conversely, the South African environment has never spawned high objectivity and nimbleness for addressing tricky justice issues - particularly concerning economics.
Not only were the political shifts necessary for a fair society achieved, that achievement is the primary source of legitimacy for what has been a highly dominant political party. Thus the ANC’s leadership and supporters have expected it to exert its legislative powers to deliver economic justice. Nearly all South Africans have accepted this narrative whereas the evidence that it isn’t working, and can’t work, can be expressed with mathematical clarity.
SA’s upliftment strategy presumes legislation can shape the country’s consumption and investment patterns to foster broad prosperity. The panel should have done the calculations to test whether SA’s purchasing power is adequate to spur high volume poverty alleviation. It isn’t. The anchoring premise that legislation can achieve the widespread changes desired within even two generations is fundamentally misconceived.
SA suffers greatly from two scourges: the epidemic of extreme poverty and AIDS. While health and wealth rhyme and they are both central to well-being, health professionals operate within a hard science realm with well-established protocols.
Poverty alleviation is also accepted as being a highly specialised technical field in most parts of the world - but not in SA. Here a narrative has taken hold whereby social justice credentials accrue via association with the liberation struggle, irrespective of the required qualifications spanning economic development and commercial expertise.
SA’s delusional indulgences of the governing party’s perceived wisdoms peaked with the garlic and beetroot “remedies” for AIDS. The hard science underpinning health care would not tolerate such an absurdity. The skills and knowledge to design and grow an economy are also extremely advanced. Many ANC’s views don’t stand up to professional scrutiny; yet they remain routinely indulged.
The ANC’s desire to broaden prosperity through legislative fiat was always doable on a modest scale. This was misleading. Just because there is room for a few more people on the bus does not imply that there is room for everyone on the bus. Before the bus breaks, large-volume sustainable alternatives must be developed. Few of SA’s poverty intervention strategies are truly scalable even under favourable conditions. In a period of prolonged low growth, remarkably few of them are.
The party’s leaders, as well as the panelists who generated the report, steadfastly reject the basic economic development tenets which have been astonishingly successful at reducing poverty across the globe. That is, large scale poverty alleviation requires high-volume value-added exporting to wealthy markets.
A predictable consequence of a primary segment of society, such as a long-standing ruling party, achieving hegemony over social justice beliefs and then bending perceptions to suit its agenda, is that economic governance and policy making protocols then become broadly malleable as delusions flourish.
Many influential voices in the ANC believe fervently in the merits of their developmental state ideology. They will steadfastly resist its primary tenets being challenged as an objective review will show that their ill-conceived beliefs are vastly more damaging to the economy than corruption.
The ANC has allowed its unchallenged hegemony of social justice issues to block even its own ability to effectively scrutinise its core economic presumptions notwithstanding mounting evidence that they are unworkable. Such crucial underlying factors have been obscured in recent years by state capture headlines.
SA has long been highly vulnerable to social forms of manipulation as it is distant from large economies and lacks regional peer competitors. Also, social justice is an inherently powerful tool to hijack. When people don’t understand something complex, for instance, climate change or poverty alleviation, they revert to their values and the biases of the groups they have joined.
Both the ANC leadership and the panelists continue to support developmental state interventions which are ill-considered, unaffordable, or both. Business leaders mostly complain about corruption. They seem to think that if Cyril Ramaphosa prevails next month that all will be ok again. But too much has never been ok; a majority of South Africans are still extremely poor.
Social justice is the pivot around which the country’s politics and economics interact. Unfortunately, it is as if the country’s history, politics, and isolation were designed to preclude South Africans achieving objectivity and fluency around social justice issues. Thus the nation’s challenges are rarely grounded and framed such that analyses provoke debates leading to solutions. Rather, delusions and debates propagate more delusions and more debates.
It is unsurprising that a ruling party would exploit such a society-wide vulnerability, but the ANC has done so with modest concern for the ensuing consequences. The party has undermined its own interests while further entrenching mass poverty.
The template which was used to design the country’s constitutional democracy was developed over hundreds of years and then imported into SA. Nonetheless, the ANC deserves much credit for SA having cleared the toughest political hurdles necessary to achieve social justice. Conversely, SA’s governing party staunchly resists importing the tools and templates which have made possible extraordinary poverty alleviation across the globe.
Apartheid not only set the stage that led to the ANC being globally lauded in the 1990s as messiahs of social justice, it also covered with scar tissue the parts of the brain necessary to nimbly address vexing social justice challenges. It is almost as if in recent years the ANC has intentionally sought to nullify both its own credibility and the country’s cerebral scarring through rampant corruption spurring a fresh-start zeitgeist.
The ANC brazenly rejects the path so many countries have bravely navigated to transcend populist pressures in favour of sustained growth. This, as much as well publicised corruption, have now created serious ballot box risks for today’s governing party.
As a gauge of how prevalent misconceptions and delusions are, how many of the following statements are considered true by SA’s leading voices, or the majority of its voters, or both?
1. SA’s underlying economic and political prospects are encouraging.
2. Societies have wealth creation protocols resembling public health systems.
3. Inequality, not poverty, is SA’s primary social justice challenge.
4. Broad justice is a near or medium-term possibility in SA.
5. Acceptable outcomes can be achieved without massive shifts.
6. There is sufficient purchasing power in SA to achieve large scale poverty alleviation.
7. SA’s growth strategy should be regionally focused.
8. Overcoming corruption will spur adequate growth.
9. Improving investor and consumer confidence can provoke adequate growth.
10. High consumer indebtedness is not a problem so long as the lenders don’t lose money.
11. Household economics will inevitably improve alongside rising GDP.
12. Job creation and GDP are valid metrics.
Oddly enough, only the first statement can withstand serious scrutiny - and this presume SA’s next wave of leaders accept how delusional the other statements are. A broadly prosperous SA is a realistic scenarios. It would, however, require a transformation of the party far more radical than anything the nation’s current leaders are contemplating.
SA’s only path to broad prosperity is through engaging the world on its, not unreasonable, terms.
Shawn Hagedorn is an independent strategy advisor