Africa-Press – South-Africa. While there are still several issues to iron out, there is an economic plan and social compact in place, despite what former president Thabo Mbeki says, writes Oscar van Heerden.
Harsh words were spoken by former president Mbeki at the recent memorial service of Comrade Jessie Duarte, and were clearly directed at our current president, Cyril Ramaphosa.
Mbeki spoke of matters that have been worrisome to him for some time and, dare I say, expressed concerns that have indeed been uppermost in the minds of many. It may have found resonance, but are the sentiments expressed by him correct?
After all, the president responded in his weekly letter to the nation that, in fact, there is a plan and that a social compact is in the last stages of finalisation. What to make of this showdown between these two leaders?
Cyril Ramaphosa: A social compact for growth and jobs needs to make a lasting impact
Before I get there, let us take a moment to reflect on the numerous plans we as a country have endured from the governing party over the last 28 years.
It started with the Mandela administration when the plan was the “Reconstruction and Development Plan (RDP)”.
Short-lived plan
This plan was short-lived, not because there was no commitment to its implementation, but because the then-new ANC government realised there was no money in the national kitty for its implementation. Remember the post-colonial rule book. When the coloniser sees the writing on the wall that their rule will come to an end, they put up a hell of a fight, spending most of the country’s money in the bank in pursuit of this purpose.
In our case, a further matter that drained our reserves was that our Reserve Bank Governor, Chris Stals, at the time was also instructed to defend the waning “rand” currency from international speculators. He was spending US dollars defending a lost cause, depleting our reserves, and making more dollar loans to offset this vanity project.
As you can imagine, the end result was an inherited debt forward book of the Reserve Bank and very little to no foreign currency reserves in the bank. So much so, that our new government of national unity had to go and borrow money from the International Monetary Fund just to be able to pay civil servants and hold credible elections in 1994. Yes, we did not even have money to hold our first democratic elections.
Anyway, I digress. There was no money for the RDP and it suffered a prompt and sudden death under minister with no portfolio, Jay Naidoo.
Then came the now infamous Growth Employment and Redistribution (GEAR) plan under the leadership of president Thabo Mbeki. It is also commonly referred to as the class of 1996.
Its a neo-liberal economic document aimed at upholding the Washington Consensus, according to the left and progressive elements in our society. It came under enormous criticism, but it held sway against the naysayers. In fact, eight long years of unpreceded growth, redistribution did occur in the form of social grants, especially the Child Support Grant and increases across the board for other forms of grants too. But, very little employment, unfortunately. There was some employment, but nothing that would alleviate our now crisis proportions of unemployment numbers. Twelve million unemployed, to be exact.
Plans under Ramaphosa
I must, at this point, also indicate that, under this plan, the governing party was able to replenish our foreign currency reserves to a respectable level, which was about $40 billion plus and growing at the time of Mbeki’s departure from government.
If I’m not mistaken, we have foreign reserves to the tune of roughly $50 billion now.
The Accelerated and Shared Growth Initiative for South Africa (Asgisa) was the next plan, followed by the New Growth Path and finally the National Development Plan (NDP), which gave us a 2030 horizon. All of these have gone through numerous iterations over the years, with some successes. So, Mbeki contends, since 2013 when the NDP came into effect, there has not been a plan since. This is patently false.
The Economic Reconstruction and Recovery Plan came into effect in 2018 under Ramaphosa’s administration, and it sets out a number of goals and objectives.
Bearing fruit
Over the last few years, a concerted effort has been made by all government departments to implement this plan and, dare I say, most of them are succeeding.
One only has to read the very informative article of my friend, JP Landman, “Connecting the dots” on 26 April this year to observe very clearly that this plan is not only being implemented, but is also bearing real fruits for our economy going forward. It touches on the macroeconomic framework, monetary policy, fiscal policy, structural reform, energy reform and infrastructure investments. A whole boutique of plans is underway and they are heeding results.
As for the social compact that Mbeki said is not there, well, the president indicated that progress to this end is at an advanced stage already, and that the delay is to make sure all social partners have bought into the compact and committed to its implementation.
Carol Paton: Business, labour and all of us just need government to govern
There have been a few compacts over the last few years, starting with the most important one which was the signing of the new democratic Constitution of the Republic in 1996.
Our Constitution and the Bill of Rights have set us on a respectable path towards a non-racial, non-sexist, democratic, prosperous future. It is world revered by most, and our absolute defence of it over the last few years, both civil and in our courts, have demonstrated our absolute commitment to it in defence of our hard-earned democracy. So, another one is in the offing, and I have no reason not to believe Ramaphosa on this one. This compact is simply critical to our joined future, both black and white.
As to the non-racial character of the governing party, of which Mbeki says is sorely lacking (I agree), well, this does require some serious introspection within the party but also as I have always contended, throughout our country as well.
The race question must be constructively engaged upon by all. The party, in many ways, reflects the broader society after all. I wrote sometime ago about this phenomenon, especially after the 2019 general elections, in which I stated that, when looking at the global neo-liberal capitalist system, the fear of the outsider (anti-immigrant) is widespread throughout Europe, and the old parties of the centre-right and the centre-left that have governed Europe since the war have been marginalised.
Bigotry, racism and xenophobia are on the rise and countries in the west and the north are looking inward at the expense of inclusiveness. One can thus talk of a sequential order that refers to British politician Jeremy Corbyn, Brexit, former US president Donald Trump, and French President Emmanuel Macron. They are in the same bag of populist insurgency against the old order, and that’s happening everywhere. Fascist and ultra-right parties are emerging from the woodworks. So why wouldn’t it happen in South Africa?
A cursory look at the results of the recent election suggests that the centre is not holding (the centre being the ANC and the DA) it also suggests strongly that in line with global right-wing trends, meaning, ultra-right, narrow nationalist and anti-immigrant approaches, we see that South African voters are adhering to inward-looking and protectionist trends.
Adriaan Basson: Mbeki must be sincere about his own role in the demise of the ANC
One may, for the sake of argument, want to see the big three – EFF, ANC and DA – as representing the left, slightly left of centre and right of economics, with each roughly representing liberal capitalism, inclusive growth, and socialism respectively.
However, underlying the big three parties are issues of identity and the fear of the outsider, just like in Europe and elsewhere in the world.”
For these reasons, we are not getting any nearer to resolving the race question or, as the ANC refers to it, the National Question, in Mzansi.
We have a long road to traverse still in resolving this one, unfortunately, but as to an economic plan and a social compact, I’m afraid Mbeki’s criticism in this regard is misplaced.
– Dr Oscar van Heerden is a scholar of International Relations (IR), where he focuses on International Political Economy, with an emphasis on Africa, and SADC in particular. He is currently the Deputy Vice Chancellor at the University of Fort Hare.
For More News And Analysis About South-Africa Follow Africa-Press
