For many people the last 20 years was a period of lost opportunities characterised by mediocre progress on the economic front and unmet promises. On the contrary, the ANC claims that there is a good story to tell. For the owners of capital, it has indeed been a period of unprecedented growth in their wealth because for the first time they had unrestricted access to global investment opportunities that were previously denied to them because apartheid South Africa was considered a pariah state and subjected to international trade sanctions.
We have one of the most unequal societies in the world because the top 10% experienced the fastest growth in their wealth with the result that the wealth gap has widened.
We have also experienced growing indications that the poor and working class are showing unhappiness with their social conditions. This situation has inspired the emergence of new political organisations that have positioned themselves to the left of the ANC and that also claim to be the true representatives of the poor and the working class. This development has certainly played a major role in causing the ruling party to shift to a new policy focus and direction aimed at radical economic transformation.
We need to look into the performance of the ANC in power since 1994 to determine whether such a shift is credible and even possible under the current alliance formation.
Ideally such a shift would require a resolute and decisive leadership style that we have not witnessed in the past five years and the policy drift that we have experienced in that period also does not inspire. This drift reflects the inability of the ANC to transcend the divergent ideological perceptions within the alliance that constrain it from pursuing a coherent growth strategy and economic agenda.
For example, there are three key areas of concern where this lack of decisive leadership at the level of the ANC leadership has indeed contributed to the stunted growth we have experienced in the past five years and exposes the restraining power of the alliance partners.
First, the policy gridlock within the alliance partners has hindered the development of a coherent growth strategy that has the support of all stakeholders including business and labour. The National Development Plan is vehemently opposed by key members of Cosatu on the basis that it will continue the neoliberal growth trajectory adopted 10 years ago and that has, in their view, contributed to the current high unemployment and inequality levels. Much of the criticism though is without substance but rich in populist rhetoric. The fact of the matter is that the absence of policy clarity in this critical area is a major contributor to the negative perception among investors.
Second, our entrepreneurial activity ratio, which measures the level of business ownership, is very low compared to other developing nations. Many factors account for this negative trend and key among them are access to funding, limited information on available support and most important, onerous labour law and compliance requirements. Globally it is accepted that small business enterprises are the key to job creation and in our situation, the labour-relations requirements have been identified as the main barrier to growth in this sector. It is the labour union lobby that has contributed to the suffocating legislation we currently have. Even the World Bank has urged immediate relaxation to boost investment and job creation. Any hopes of getting Cosatu to relax its stance on labour flexibility are unrealistic.
Third, the lack of focus on quality education and what must be done to improve it is central to the challenge of the under-performing public education system and lack of skills. For example, a recurring weakness and feature of the public education system is the high dropout rate that occurs among the schools in quintiles 1 to 3, which mainly affects children from poor and black families. More than 50% of learners in grades nine and 10 are lost to the system due to this culling process that is designed to eliminate poor performers from sitting the final grade 12 examinations. The objective here is to improve examination outcomes for political purposes. But unfortunately this practice only serves to swell the unemployment numbers and it is the black children from poor families whose futures are stunted.
The role of Sadtu in obstructing all efforts at introducing performance management and accountability has contributed to the low quality of teaching and leadership in poor performing schools. Education administration is the responsibility of the department of basic education but in many instances Sadtu plays a decisive role in decision-making. The teachers’ union has stymied efforts in this regard since 2008.
It has become abundantly clear that Cosatu has become the single most important impediment to the efforts of the ANC to lead a radical transformation of the economy. The question is whether the ANC leadership has the guts and resolve to take action and lead decisively to urgently create the necessary environment to accelerate investment. Accelerating economic growth in the coming years is an absolute imperative given the real prospect of the ANC losing control of an additional one or more of the major metropolitan cities in the 2016 local government elections. Unemployment is the biggest driver of inequality and it is the private sector that creates jobs.
The accommodation strategy followed by President Jacob Zuma over the last five years aimed at managing factionalism within the alliance has clearly failed and his attention has been diverted from driving stakeholder engagement to agree a shared strategy for growth. The situation and challenge requires higher purpose leadership paradigm and qualities that have so far been absent. The second term provides the president with an opportunity to live a legacy in an area that will have a lasting impact.
But he faces very serious challenges ahead. There is a fancifully optimistic view that implementing the National Development Plan (NDP) will provide the desired impetus to our growth problems. The NDP is a good strategic vision. But there are serious constraints to its successful implementation because the ANC is stuck in the ideological grip of its alliance partners. For a strategy to succeed, it must be implementable. And unless the ANC liberates itself from this handicap, nothing will change.
Two options are possible in respect of the three issues raised above. Ignore the objections from Cosatu and the SACP and forge ahead or cut the alliance partners lose, move on with determination and manage the fallout that will be bound to follow and also dissipate over a very short time.