The phony radical transformation debate

File: If radical economic tranformation and “inclusive growth” are the same thing, then why does the ANC and its government have two names for it? by MIKE SILUMA. Photo: Gallo Images / Thapelo Maphakela

The trouble with ANC policy conferences, such as the one being held this week, is that policy formulation often occurs in the shadow of leadership succession contests.

The last conference in 2012 was dominated by what turned out to be a phony debate about what to call the process of leveraging post-1994 political power for the economic benefit of the historically disadvantaged, who are in the main black.

Then, the contending leaders for the ANC presidency (President Jacob Zuma and his deputy Kgalema Motlanthe) preferred different names for the process. Zuma favoured what was called “The Second Transition”, which became a key plank of his campaign platform.

Which prompted Motlanthe to ask famously, if derisively: “The second transition…from where, to where?”

Eventually, delegates cobbled together a last-minute compromise, emerging with a new phrase, “The Second Phase of the Transition”.

That phrase all but disappeared from public lexicon as soon as Zuma was re-elected ANC president – until now, when “Radical Economic Transformation” is all the rage. As in 2012, it is a rallying point for Zuma and his supporters – including, by extension, his preferred presidential candidate Dr Nkosazana Dlamini-Zuma.

This time, the ANC (as well as its government) has been tying itself into knots trying to describe this animal called RET, and whether it is the same thing as the concept of inclusive growth.

No less a figure than our keeper of the fiscus, Malusi Gigaba, explained it thus: “Whatever the name you call it – accelerated growth, radical economic transformation or inclusive growth, we want to address the plight of (the disadvantaged).”

Which raises the question: if RET and “inclusive growth” (initially emphasized by Ramaphosa) are the same thing, then why does the ANC and its government have two names for it?

Why cannot the ANC and its government say what they mean, and mean what they say? For a party that has professed its commitment to shoring up investor confidence through policy certainty, the ANC must realise it is doing a dreadful job of the task.

In the cold light of day, there is no difference in objectives between those who favour the term “radical economic transformation” and others who argue for “inclusive growth”.

That’s because there is consensus in both the ANC and the Tripartite Alliance (with the exception of the most incorrigible of the looters their ranks) on the imperative to close one of the worst income gaps in the world, and to improve the lives especially of poor South Africans.

This “debate” about what RET is or isn’t is, in fact, a major distraction to the greater, more important, task of finding solutions to South Africa’s grim and worsening economic situation. At its most cynical it is simply about factions trying to claim for themselves the title of being the most radical while in reality having none of the solutions.

To find those solutions, the delegates to the policy conference should be looking to the National Development Plan, which is meant to be our economic development roadmap. It identified three priority areas which had to be addressed in order to begin to change our economy’s downward trajectory. These were:

- Raising employment through faster economic growth.
- Improving the quality of education, skills development and innovation.
- Building the capacity of the state to play a developmental, transformative role.

Where the NDP says our unemployment rate should be 14 percent by 2020 (in two and a half years), our current rate hovers around 28 percent. Instead, the economy is shrinking – and shedding jobs by the tens of thousands every quarter.

The NDP also puts great store on the social partners (particularly government, business and labour) working together as a prerequisite to resolving our crisis. Yet what has set in is a deep suspicion among these formations.

For its part, the ANC, in its many guises, seems confused about how it wants to relate to business – in one moment calling for partnership with the private sector, in another regularly demonizing it as the great devil of our time.
For some in the ANC, radical economic transformation is all about de-racialising the commanding heights of the economy – by simply taking portions of white dominated business and giving them to well-connected black people.

De-racialisation is necessary as part of redressing the injustices of the past and building a more inclusive economy. But it is folly to assume that that in itself will miraculously give us growth - the game changer prescribed by the NDP.

Similarly, the popular approach the ANC adopted to land restitution is likely to prove detrimental to economic growth, employment and food security.

Two things are now acknowledged. One is that giving land to claimants with non-existent farming skills has left us with only dust bowls where once there would have been productive farming activity. The second is that land compensation via cash has done nothing to address the problem of black landlessness.

A more sustainable model might have been one which had at its heart the promotion of partnerships between incumbent productive farmers and new land claimants – in order to preserve land productivity and ensure skills transfer.

With regard to economic policy co-ordination and implementation, ANC delegates might want to answer whether it is necessary and in the country’s best interests to have four departments dealing with the economy? Apart from Treasury, we have the Department of Trade and Industry, the Department of Economic Development and the Department of Small Business Development.

The immediate challenge here being one of changing ours from a mainly extractive, to a manufacturing and value add oriented one.

Regarding skills development, delegates to the conference would do well to ponder whether our education system is delivering on what the NDP has recommended – and whether they possess the requisite skills to work in a changing, modern economy.

Currently, the system yearly regurgitates several hundred thousand young people into society without the hope of a job. Even among those who manage to enter higher education, too many end up unemployed.

It is, however, the third NDP priority that should worry conference the most – that of the capacity of the state to implement policy and direct social and economic transformation.

It is beyond dispute that what we have is a greatly enfeebled state. For instance, it is not, as the social grants debacle demonstrated, able to perform even the basic function of paying out social benefits – relying instead on a private, foreign owned service provider. 

Other sectors of government are in a weakened state too. Look at the public health system and the education sector. Their sorry condition is such that not even the politicians who oversee them or the public servants who run them will use them. See how many towns around the country are incapable of carrying out the routine job of processing sewerage and providing reliable, potable water.

Largely, this because, contrary to what the NDP has proposed, too many public servants are political “deployees” without required skills or qualifications. The question then is how will this weak state drive this much-talked-about radical change?

So beyond the smoke and mirrors of leadership succession, the so-called debate about Radical Economic Transformation has had one detrimental effect: to conceal the hard truth that the ANC is bereft of effective, sustainable solutions to our declining growth and rising unemployment.

And by the way, those attending the conference might want to put deadlines and numbers to their decisions. As the old management adage goes, you cannot manage what you cannot measure.

eNCA

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