Thabang Motsohi
Thabang Motsohi

The pro-poor rhetoric of the ANC government has failed to translate into meaningful economic policy

In my recent Op-Ed in this column I raised a serious concern whether the ANC-led government has paid required attention and effort to effectively address the structural manifestations of the apartheid legacy in a systematic and vigorous way beyond the usual public rhetoric about the evils of the system and the often repeated promise of a “Better Life for All’’ during their election campaigns.

The apartheid legacy inherited by the democratic government included shocking levels of racialized structural poverty, income and wealth inequality and unemployment. This toxic mix of social challenges is the outcome of a deliberate strategy that was intended to exclude the black majority from achieving their personal development and enterprise in an open society governed under conditions of social justice and fundamental human rights.

The unfortunate outcome of all this is in the high levels of social pathologies, anti-social behaviour and unacceptable high levels of crime especially in poor communities.

We have now successfully defined the type of society we wish to achieve in our new Constitution. And we have also followed this act with the publication of a series of laws that were intended to remove and reverse the discriminatory laws that conflicted with the values of the Constitution and the new society we intend to achieve.

However, the biggest and most difficult challenge is at the level of the political economy. The reality we must accept is that the uniquely high levels of structural unemployment in SA underpin and drive increasing poverty and the widening income and wealth inequality.

The post-apartheid democratic government was morally obliged to respond to high levels of poverty through a comprehensive set of social welfare grants aimed at alleviating poverty conditions. Other benefits extended to the poor include the massive roll-out of free housing to the poor in almost all black communities. More subsidies extended to the poor and indigent include electricity and water. These are part of a good story to tell in respect of poverty alleviation.

However, the massive structural unemployment that we have required a response that should have been anchored in policies that provided for mass low cost employment in retail manufacturing and a massive boost in informal employment or self-employment in combination with a very broad social security support directed at the unemployed. This should have been a classical and appropriate response by a government that is driven by a high level of consciousness for social justice as a political philosophy and that is also manifestly pro-poor in its policy outlook as the ANC has often claimed to be.

But none of these options are contained in the current development strategies and policies of the ANC-led government. The radical economic transformation promised at every political rally remains to be seen. What we have is a development policy framework and strategy that has put high premium on formal job creation in a high technology and skills driven growth trajectory. The paradox of this strategic response is that it is preferred in the context of labour market conditions that require the kind of jobs that can benefit the uniquely large and under-educated unskilled labour force that we have.

What has happened since the beginning of the transition period is that, despite the brief growth enjoyed up to 2008, the economy has experienced a steady decline in growth accompanied by increasing loss of formal jobs in the retail manufacturing sector, mining and agriculture. Unemployment levels have exploded, inequality has increased and poverty levels remain stubborn.

In contrast, the increasingly stringent labour regulatory conditions have benefited formal employment and unionized members both in terms of increasing wage levels and employment benefits. In the absence of a comprehensive social security system, the poor unemployed remain marginalized and trapped in poverty.

There was hope that the new South Africa would attract substantial foreign and domestic investment that would create jobs and reduce unemployment. But this failed to happen in a meaningful way and the Business Confidence Index remains low reflecting the lack of confidence in the political economy. In reality the flagship transition transformation initiatives like the Black Economic Empowerment have benefited the political elite and those within their circles. The uneducated poor remain decidedly excluded.

Quality education that is broadly accessible is generally accepted as the best and most effective instrument that can enable the poor to escape from their poor circumstances. Regrettably the dysfunctional school system that drops out no less than 45% of the original cohort before Grade 12 constitutes a spectacular policy failure for the governing party. A critical point to note is that these casualties are common in mainly Quintile one and two schools that are normally under-resourced and cater mainly to the poor learners in poor communities.

This is the segment that suffers under the stifling dominance of SADTU which has frustrated every effort to implement accountability in how the schools perform. For the poor, the state of the schools and the quality of education they receive, reinforces the poverty trap they wish to escape (Spaull, N, “Schooling in South Africa: How low-quality education becomes a poverty trap,” in South African Child Gauge 2015). Policy implications are massive.

Land restitution and re-distribution remains a third key area of glaring policy failure. The delays that have occurred despite promises to the contrary have no rational explanation. This is a very sensitive transformation undertaking and the ANC has lost substantial credibility because of the incompetence and tardiness in the implementation of its own policies in this area.

From the foregoing, it is clear that the governing party has failed to conceive and implement effective policy choices to respond to key and real socio-economic challenges facing SA. The often cited refrain is that the global economic conditions impose a major constraint to economic progress. What we fail to accept is that the disastrous leadership at the level of the political economy post 2008 is primarily responsible for the current state of the nation.

The post-apartheid reality is that political power relations have changed dramatically, but the undeserved wealth accumulated by whites under the apartheid system remains untouched. In fact, for many, the value of wealth that was accumulated has been rapidly increased by the global opportunities brought about by the democratic SA. What is clear is that the status quo constitutes a serious threat to our nascent democracy.

This raises a fundamental question. Did the ANC and its alliance partners have a comprehensive pro-poor post liberation strategy or was their attention primarily diverted to the task of occupying the attractive power positions in the new democratic state and access to patronage power that comes with them? Empirical evidence suggests this was the greatest motivator for the blatant self-enrichment behaviour that has been characteristic of state officials at all levels of government.

The patronage driven factional battles within the ruling party can only bode ill for the future. But the increasingly competitive electoral politics has ushered in a new and real possibility for new political power rearrangements in 2019 and hopefully better prospects for SA.