When FW De Klerk announced the unbanning of the ANC, SACP and other organisations on 2 February 1990 - thirty years ago this week - South Africa’s “reset” button was pressed and a new era of political freedom ushered in. It required immense personal courage from De Klerk and Mandela, both of whom placed country over party.
But economic freedom did not follow. Instead, the number of unemployed has risen from 3.7 million then to 10.3 million now. This is a major national crisis and far worse is yet to come as Eskom follows SAA into a death spiral, battered by a corrupt, incapable state. Our economy teeters on the brink of collapse.
Looting, bailouts and mismanagement have spun national debt out of control, yet our government continues to spend almost R1000 million more per day than it earns. That is why it is targeting people’s property, pensions and incomes, causing ever more capital and skills to flee our shores. We’re caught in a low-growth, high-debt trap and the situation has become highly combustible.
South Africa urgently needs another “reset”. We need sweeping structural reforms – a radical change to the “rules of the game”. The DA is not alone in calling for this change. Finance Minister Tito Mboweni warned last month: “If you cannot effect deep structural economic reforms, then game over!”
It’s five minutes to midnight. Moody’s is set to downgrade our credit to junk status soon after Mboweni delivers his budget statement later this month. This will raise the cost of future borrowing and accelerate our decline, just as a loss of confidence in SAA has accelerated its descent. As it fell to De Klerk and Mandela in 1990, so it falls to Ramaphosa now. On Thursday 13 February, he will deliver his third State of the Nation Address.
This is his Rubicon moment. He can continue to choose dithering over decisiveness and keep playing by the current rules of the game - in which government plays an ever-greater role in the economy and “transformation” is achieved by BEE, EE, EWC and political patronage – or he can change the rules of the game to unleash private enterprise and entrepreneurship.
The current rules are failing South Africa unequivocally and dangerously: inequality and poverty are both growing.
This week, the Democratic Alliance released a draft document titled “Values and Principles” ahead of our policy conference on 4-5 April. It is intended to be the social contract between the DA and the people of South Africa, and the solid foundation on which all in the DA can work towards a common purpose.
It is also the basis for a new set of rules for South Africa, one that would lead to an open, opportunity society for all. It envisages a social market economy in which participants (businesses and consumers) rather than government decide on what to purchase, where to invest, and how much to produce.
Mining Minister Gwede Mantashe’s announcement at the Mining Indaba this week that the government is now preparing to allow mining companies to generate their own electricity speaks volumes. It is simply crazy that we need permission from government to be self-reliant.
Mantashe also proposed a new state-owned power generation company. This is mad, bad idea. South Africa needs an energy market that is open and competitive, in which everyone capable of producing energy can do so and sell it to anyone who wants to buy it, at whatever price they agree upon.
There are plenty of Independent Power Producers in South Africa who are ready and willing to generate electricity, thereby diversifying our energy mix, and making it more reliable and cheaper. Open, competitive markets should be the norm in our society and the DA’s draft document provides the basis for establishing this. I invite you to read it and give us feedback. We have set up an online portal for public submissions, which will go live on Friday.
The path Ramaphosa chooses for South Africa in his address to the nation next week will define his legacy. Whether or not we “reset” South Africa will define our future. I believe the values and principles set out in our draft document hold the key to greater equality and real transformation in South Africa. Poverty and unemployment have been coded into our system and we can code them out with a new set of rules. It’s time to join the DA in building these.