Mantashe, Turok give ANC policy diverse shades of red
March 9, 2009
By Donwald Pressly
Two prominent men in the ANC represent the broad church - and at the same time the policy turmoil - that is our governing party. Oddly they are both communists.
ANC secretary-general and SA Communist Party chairman Gwede Mantashe spoke at the Progressive Business Forum, an ANC financing arm, in Cape Town last week. Ben Turok, ANC MP and trade and industry portfolio committee member, has just published a book entitled From The Freedom Charter to Polokwane: The Evolution of ANC Economic Policy.
Although Turok was forced out of the SACP long ago for some absurd transgression that only the foggy world of ideologues understands, he is a compass of economic redness. While he presents the wrong solutions, I believe his heart is in the right place. That place is with the people, who in this country are generally poor, likely to be unemployed and overwhelmingly black.
A Zapiro cartoon graces the front cover. A black woman with a baby on her back is at a pond near a shack, frantically washing clothes. A black man wearing patched pants sits on a box reading a newspaper headlined: "Budget Today." He quips: "You'll be glad to know that according to the analysts the economic fundamentals are in place." She throws him a black look.
Mantashe came under fire from a businesswoman who declared herself a lifelong, but angry, ANC member. She railed against allowing China to "dump" cheap and inferior goods in South Africa, causing thousands of job losses, particularly in the clothing sector. Mantashe did not wince. He argued it would be committing trade suicide to shut the borders. What if China, which buys iron ore from South Africa, finds the materials somewhere else?
Turok questions Gear, trade policy and the absence of a coherent industrial policy. Analysing the struggles to forge a trade policy, he notes that our trade has been characterised by "an extremely poor export performance" across the range of manufactured, technology-intensive and consumer goods.
He notes that trade policy was established within a framework that was set out in the Uruguay round of trade negotiations. Local content and trade-related subsidies were circumscribed. His argument is complex but his solution is that trade and industrial policies should be linked to broader macroeconomic policy.
Stabilisation policies have achieved the principle objectives of controlling major financial variables such as domestic debt, inflation and interest rates "but a heavy price was paid in the persistence of inequality, unemployment, poverty and the huge cost of consequent social problems", he says. His chapter on black empowerment and capitalist cronyism is a must read.
Turok is correct to some extent: prudent macroeconomic policies have not brought the anticipated investment - or even jobs. But greater protectionism, running higher budget deficits, higher inflation levels and reducing interest rates may have been even less successful in fighting poverty and unemployment.
It may be a relief that Turok is not in charge of policy implementation but the debate would be less rich without him.
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