Venezuela: Beware of those who steal from the poor in the name of the poor.
22 October 2018
I recently met with two Venezuelan opposition politicians who had travelled here to give us a first-hand account of how and why Venezuela has imploded. They gave us a clear and urgent warning not to head down the same dead-end road of populist, socialist policies that has led to Venezuela’s failure.
Just a generation ago, Venezuela was the richest country in Latin America with GDP per capita similar to Norway’s. Today it is a failed state with over 80% of its population living in poverty, battling food and medicine shortages. Its healthcare system has collapsed, and infant mortality has skyrocketed with malnutrition given as the main reason for baby deaths. Annual inflation is at 1000000% and the economy has halved in size.
Why? Because Venezuelans fell prey to the myth of the strong, charismatic leader. Hugo Chavez promised them a socialist utopia. He promised to be the Robin Hood who would take from the rich and give to the poor. His socialist agenda was the same toxic mix of expropriation, nationalization and institutionalized corruption that the ANC and EFF are flirting with here in SA.
What started in 2001 with a policy of expropriating unused land without compensation very soon ramped up to expropriating productive land and businesses. Food and other shortages arose as investment dried up. The state responded to food shortages with price controls, which inevitably caused even more productive land to fall into disuse. The state now controls almost all economic activity.
Economic oppression inevitably turned into political oppression, because a collapsing economy cannot fulfil the populist promises made to people. So, to protect their power and privileges, Chavez’s ruling party destroyed the democratic institutions – a free press, a functional legislature, free and fair elections – that would enable people to take back power.
Democracy has collapsed into authoritarianism, replete with intimidation and imprisonment of political opponents. It is very hard for Venezuelans to see a way out. So instead, they are getting out. Literally leaving the country in their thousands, in search of food, medicine and freedom.
Even though SA is in a critical state with so many crises vying for attention that we have become numb to most of them, we still operate under the assumption that “it will never happen here”. But that’s what the Venezuelans thought too. Hearing their story firsthand was a reality check. Because Venezuela’s early warning signs are flashing in SA today.
Ramaphosa’s ANC is moving South Africa decisively away from liberal democracy and towards more populist, socialist policies that concentrate power in the state. They are meddling more and more in the economy, even while failing in their core mandate to provide health, education, police, infrastructure and welfare services to the nation.
They are pursuing a raft of interventionist policies that will be disastrous for our economy: expropriation without compensation, the mining charter, proposed changes to BEE (the ANC’s fig leaf for institutionalised corruption), the recently tabled Employment Equity Amendment Bill which empowers the Labour Minister to set racial quotas in businesses, the National Minimum Wage Bill to be enacted soon, and the Competition Amendment Bill now before parliament.
The new finance minister, Tito Mboweni, is committed to pursuing further socialist, interventionism policies, if his recent tweets are to be believed.
Meanwhile, they are allowing the cornerstones of our democracy to crumble. Most damning of all is the breakdown of our criminal justice system. Ramaphosa has had over two months (and almost a year’s warning) to appoint a National Director of Public Prosecutions to head up the National Prosecuting Authority but has so far failed to do so.
This week, the auditor general confirmed that our government is losing over R4 billion in irregular expenditure every month and yet Ramaphosa has no sense of urgency to capacitate the NPA to deal with this corruption. It’s been almost a year since the Steinhoff scandal was exposed, but still no arrests or prosecutions have been made. It is unlikely that those in VBS and Vele who benefitted from the VBS heist will be arrested and prosecuted.
Because of all this, every single economic indicator in SA is moving in the wrong direction: our economy is contracting; unemployment, poverty and inequality are growing; investor confidence is declining as seen in the steady fall of the rand; ease of doing business is declining; food, fuel and electricity prices are going up with further fuel and electricity hikes in the pipeline; and national debt is growing – we recent passed the R3 trillion mark.
We’re in a vicious circle, as this downward trajectory pushes the ANC into a corner reducing their space to implement the necessary structural reforms and making them more likely to resort to further populism.
In desperation, they are turning to the EFF, whose support they will need if they get less than 50% in 2019. They teamed up with the EFF to take the Nelson Mandela Bay metro from the DA-led coalition, even though that meant returning it to the same people who stole millions from the city before 2016. Both parties are implicated in the theft of millions from Limpopo’s rural poor in the VBS heist.
The modus operandi is the same as in Venezuela. The ANC and EFF are stealing from the poor while claiming to represent the poor. Both parties are relying heavily on charismatic, popular leaders, and have little regard for democratic institutions that check and balance power.
Hugo Chavez, the great liberator, became the great oppressor. He exposed the myth of the strong leader and the perils of personality politics and populism. Today, the people of Venezuela can only dream of free and fair elections. While we still have the luxury of these, we should use them wisely, and fight for our freedom.
Just as it is a lot easier and cheaper to maintain a road than it is to build a new one once a road has fallen into total disrepair, so it is a lot easier to defend democracy while some of the basic foundations of democracy still exist. The 2019 national elections are the arena in which South Africans can fight for freedom and real reform that places liberal democratic institutions and good, clean government front and centre of SA’s agenda.
DA governments lead in provision of basic services, education, healthcare and job creation. We prioritise delivery to the poor and don’t tolerate corruption. In 2019, we are aiming to get the ANC below 50% in Gauteng and the Northern Cape. If we can lead coalition governments in those provinces, we can start demonstrating the DA difference there too.
Many voters believe that Cyril Ramaphosa needs a “stronger mandate” in 2019, so that he can save South Africa from the ANC. Effectively, this means they feel they should vote for the ANC to save SA from the ANC. Venezuela’s experience should warn people not to rely on personalities, but rather to support real reform and liberal democracy. In 2019, a vote for the DA will be a vote for strong, independent institutions that protect our nation’s freedom and wealth.