We Need Policy Pragmatism and Economic Realism to Save the South African Economy
South Africa is facing a restive period of near-economic recession given the weakening rand, lethargic economic growth, high unemployment rate, chronic electricity outages, corruption and mismanagement. Questions abound whether we can get ourselves out of this morass. The attractive predisposition among some South African politicians and analysts alike has been the blame game on who did what, instead of cooperating to find practical and workable solutions for the benefit of South Africa.
It is worth noting the many causes of our desperate economic situation as expounded by many economic pundits. Chief among these are: the exogenous shocks following the 2008 economic recession that was occasioned by the reckless lending by the big banks in the US, the ones that were said to be ‘too big to fail’; the dipping commodity prices at the back of our failure to take full advantage of the boom years in prices of raw materials; South Africa’s ‘rigid’ labour laws and high volume of industrial strikes along with low production rates in critical sectors of the economy; South Africa’s disjointed economic policies and poor economic management.
Accordingly and as a consequence to the above, South Africa is now witnessing a growing crisis in the mining and steel manufacturing industries with the real possibility of huge job losses with devastating social consequences.
In this regard the interventions by government to work with the mining companies and employees to try and save both the industries and jobs should not only be welcomed but be supported by all. Questions whether such interventions by government are not a case of too little too late should be discouraged. We should rather focus all our attention to do whatever is necessary to avoid the almost inevitable catastrophic economic meltdown in the country.
In this regard, the ANC and government need capable and brave ideological and economic policy pragmatists that will be able to discern and implement what is economically possible, against that which is economically desirable. These ideological and policy pragmatists will have to be thoroughly abreast with the objective demands of the 21st Century economic logic. They should be able to make hard economic choices that may not be popular but necessary to avert the impending economic disaster.
In this connection, our economic policy pragmatists should negotiate and facilitate short to mid-term industry-based economic plans between government, business and labour. Such economic plans should be interim plans that will facilitate agreements on the industry-specific challenges. For instance, companies in the affected sectors or industries should commit to not only the taming of bonuses for executives, but also put in place profit-share schemes for workers when the economy improves. It cannot be that every time the economy generates high profit margins for these companies, they become indifferent to sharing the profits with workers.
On the other hand, employees should also commit to ensure higher production rates without unreasonable wage demands. Embarking on protracted strikes should also be avoided and rather committing to continue with negotiations. Such commitments from both parties should be legally binding to ensure implementation.
Further, the economic policy pragmatists also should have the guts to mitigate the economic challenge by putting plans in place to enlist many unemployed young people into work opportunities without some of the constraints imposed by our labour laws. This should be done with the expressed condition that as the economy improves, it will incrementally ensure the return to the obligations imposed by the labour laws.
In relation to the afore-going, the ideological and policy pragmatists should also be decisive in addressing the vexing matter of certain social grants that are creating an unproductive, state-dependent, out of school generation of youth that will grow up without any sense of responsibility. We need decisive but innovative interventions that will make sure that these young people are not condemned to unsustainable economic dependency relation with the state.
Indeed these grants are an important measure that without which, millions of our people will be condemned to grinding poverty. However, we need to make sure the out-of-school youth who receive these grants earn these grants by being productive members of society, either through community service, or going through skills development programmes. If government can force those it funded their education to do community service, it surely can do the same to those it gives social grants to. We need to start showing a greater sense of national tough love that teaches our young people responsibility for themselves and their country.
In all of this, it would therefore be important that the ANC - both as a governing party and leader of society - does not become imprisoned by ideological constructs, especially the archaic ideological precepts of the bygone era. Important as the ideology may be, people will not eat ideology in the immediate economic difficulties. We need pragmatism that will guarantee that the immediate needs of the working class and the poor are addressed using dynamic thinking that is not hamstrung by some archaic Marxist-Leninist ideology.
The fact is that Marxism-Leninism was never developed with such huge advances in capitalist information technology in mind. As a result the movement of capital from one country to the next at the click of a button could not have been in Engel’s, Marx’s or Lenin’s mind as they developed their theories on socialism, scientific socialism and communism.
Given that capitalism, like cancer, affects every facet of human life across the whole, unipolar world; and without any real threat from the small left splinters, no socialism, let alone communism, will ever be realised in South Africa. Not in the next hundred years! Comrade Jeremy Cronin and his ilk know this but would not come to admit it because they have believed in the eventuality of socialism for so long that to do so would not leave them with anything to live for.
Therefore in this context, the ANC can do without the populist axis of the ideological zealots that will opportunistically throw slogans to intimidate it and its government policy pragmatists. It is the ANC, not anybody else, upon whom historical necessity imposed a huge responsibility to lead both the process of social transformation and the South African society. This responsibility needs to be exercised with due care and circumspection to secure our future, whilst strategically avoiding costly ideological adventurism.
Which is precisely the reason we argue here for economic policies of the social democratic leaning as a more plausible option for South Africa going forward, especially when buttressed by the fundamental human rights of the liberal democratic traditions. The world has moved on. The ANC and South Africa need to move on with it.
Mzukisi Makatse is a member of the ANC and writes in his personal capacity.
