Red alert: don’t dumb down key economic policy documents
LAST Sunday, 33 leading businesspeople published a call to action. They distanced themselves from the doomsayers, they committed to supporting the public sector in its programmes and in the fight against corruption, and they endorsed the National Development Plan (NDP).
On Monday, Cas Coovadia, MD of the Banking Association of South Africa, said the banking industry would be happy if the African National Congress (ANC) adopted the NDP as the "critical vision" for the country.
In principle, we should all be happy if leading sectors of business throw their weight behind the NDP and contribute to building a broad national consensus on a more equitable, inclusive society.
I say "in principle". Over the past few weeks, a campaign (under way for many months) has been unleashed not to unite our country, but to divide the ANC and its alliance partners on economic policy by dumbing down key policy documents and setting up false oppositions. With the ANC’s Mangaung national conference just days away, the campaign has reached a crescendo. I am not fingering the call to action by leading businesspeople — my problem is with the usual hangers-on, the neoliberal media commissars.
Journalist Ethel Hazelhurst, writing in Tuesday’s Business Report, for instance, tells us: "While business leaders have given a thumbs-up to Planning Minister Trevor Manuel’s vision for the next 20 years, the implementation and the future of his NDP rests with the deeply divided delegates to the ANC elective conference in Mangaung … Manuel’s plan is only one of three launched over the past three years and it is not the one favoured by the SACP or alliance partner Cosatu. Patel’s approach (in the New Growth Path) and Trade and Industry Minister Rob Davies’ interventionist Industrial Policy Action Plan (Ipap) are more to their taste."
On Monday, Tim Cohen in Business Day trotted out the same, and by now much repeated, spin. The ANC’s "sheer size", he wrote, "complicated by its alliance with the South African Communist Party and Cosatu, means it is trying to incorporate too many points of view … the ANC can’t decide whether to back the rabid (that is, bad) interventionism of Economic Development Minister Ebrahim Patel or the fine-grain (that is, good) incrementalism of Planning Minister Trevor Manuel".
Hazelhurst, Cohen and just about every other mainstream commentator, along with the DA, are trying to bill the Mangaung policy debate as a simplistic punch-up — the "moderates" in the ANC versus the South African Communist Party and the Congress of South African Trade Unions; the NDP versus the New Growth Path and Ipap; Manuel versus Patel and Davies; "incrementalism" versus "interventionism". (Ironically, in the very same column, Cohen goes on to attack the ANC’s alleged assumption that in economic policy "it all comes down to a binary decision…. That’s how people thought in the 1960s: they thought economics was a zero-sum game and that the central function of politics was the fair distribution of the surplus.")
Given their own rabid and retro binary prejudices, one doubts whether any of these commentators has ever bothered to do more than a rudimentary scan of the New Growth Path or the Ipap. But what about the NDP itself? Have they actually read it in all of its fine-grain? Or have they plucked out, with a very small pair of tweezers, a sentence or two, which they now hold triumphantly aloft like so many "Look What a Good Boy Am I" Jack Horners?
For the record, the Cabinet collectively has endorsed all three policy documents — the NDP, the New Growth Path and Ipap (now in its third iteration). There are strong and welcome convergences between all three (and other important policy positions — notably the infrastructure build programme).
They are, of course, also different in their scope, objectives, time frames and status. The Planning Commission that produced the NDP is not a government organ, for instance, and the NDP is intended to be a broad, society-wide vision. It is not that it is necessarily (as we shall see) less state interventionist than the New Growth Path or the Ipap, but it seeks to envision what all South Africans should contribute to a better South Africa by 2030. On the other hand, the New Growth Path and the Ipap are essentially government policy documents and their emphasis is therefore likely to be more (but not exclusively) on what the government has to do.
Also for the record, the ANC in Parliament has endorsed the NDP, while the SACP has welcomed its broad vision without necessarily agreeing with every detail. Conversely, and interestingly, Cosatu was (at least initially) critical of "Patel’s" New Growth Path — joining some in business in attacking (and misunderstanding) the "remuneration restraint" proposal, among other things.
It is important to understand that none of these policy perspectives presents itself as "written in stone", as the Growth, Employment and Redistribution (Gear) programme was once notoriously proclaimed to be in 1996. None is monolithically all right, or all wrong — they set out broad (and, let me emphasise, converging) guidelines for action. All will require continuing evaluation and amendments in the light of experience and the twists and turns of reality.
It is beyond the scope of this intervention to deal in detail with one of these documents, still less all three. What follows is a brief argument of why, at Mangaung, the ANC must not take the bait of simplistically playing off the New Growth Path (or the Ipap) against the NDP. The actual NDP, imperfect as it may be, needs to be defended against distortion beyond recognition by Hazelhurst, Cohen, the DA, Mamphela Ramphele, Centre for Development and Enterprise head Ann Bernstein and the rest of the tribe.
In the first place, in its general theoretical approach, the NDP breaks with the neoliberalism of the mainstream commentariat. It acknowledges important progress made post-1994 ("today’s South Africa looks very different from the one we left behind in 1994") — unlike the "worse than apartheid" misanthropy of a Ramphele or a DA (when it is talking to a white constituency). At the same time (like the New Growth Path), it acknowledges persistent problems — key among these, crisis levels of unemployment, inequality and poverty.
More importantly, unlike the neoliberals (who blame everything on the government distorting the market), the NDP attributes these challenges substantially to a systemic legacy still embedded within our society — like "skewed ownership and control: the corporate landscape … remains highly concentrated. This poses a barrier to business entry and expansion in key markets, which is critical to employment creation."
Another systemic and reproduced legacy feature mentioned in the NDP is the "spatial misalignments whether in reference to urban/rural or within urban areas, and binding constraints posed by poor physical planning and network infrastructure". Indeed, the NDP is particularly strong in analysing the spatial dysfunctionalities of our South African reality.
Even more important, the NDP reiterates the need for "strengthening the links between economic and social strategies", for "creating a virtuous cycle of growth and development", for simultaneously (an impossibility according to Bernstein) "eliminating poverty" and "sharply reducing inequality". These mark important (if tacit) breaks with the trickle-down, growth-then-development paradigm that dominated the orientation of Gear.
Of course, such a virtuous cycle needs to be embedded in actual policy perspectives and proposals — and, indeed, there is much detail in the NDP that reinforces the links between sustainable inclusive growth and social development interventions, in healthcare, education, public transport, human settlements, land reform, social grants and other areas.
There are times when the virtuous cycle between growth and development could have been better articulated in the NDP. For instance, while public works programmes are accorded an important place, they are seen as essentially stop-gap measures, rather than also programmes in which skills can be transferred and participants graduated into small, medium and micro enterprises (SMMEs), co-ops or formal public-sector employment. But there is nothing inherent in the logic of the NDP that prevents this kind of further elaboration.
What of the role of the state in the economy? Hazelhurst tells us that "Manuel’s plan … identifies the private sector as the main generator of jobs" (as if "Patel’s" NGP or "Davies’" Ipap disagreed). Clearly, in the reality of South Africa, any inclusive, job-creating growth path requires close co-operation with a dominant private sector. But equally, given our deep legacy of structural distortions, such a growth path requires decisive intervention and leadership from the state. This is why the NDP constantly reiterates the importance of "strengthening government’s capacity to give leadership to economic development". Such leadership is not about amassing bureaucratic power for its own sake, and it will certainly involve cutting down on unnecessary red tape in key areas noted by all three policy documents (for example, lightening the bureaucratic reporting burden on SMMEs).
But in many other areas the NDP is counselling firm, active (but capable), more (not less) state intervention in the economy. I don’t know if Coovadia, for all his welcome enthusiasm for the NDP, got as far as pages 129 and 130. There the NGP notes that "it is concerning that South Africa’s banks do not extend sufficient credit to businesses, especially SMMEs…. Several countries, most notably India, have specific quotas for credit to the business sector." (Now there’s an interesting idea — prescribed credit quotas imposed on private banks for SMMEs and co-ops.) But let me not be guilty of using a small pair of tweezers to extract a passing comment in the NDP.
The essential point is that at Mangaung, let us not get hoisted into the ring and shunted into opposing corners in a boxing line-up arranged for us by those who do not have the interests of the ANC, our alliance or our country at heart.
• Cronin is deputy secretary-general of the SACP and deputy minister of public service and administration.
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