A dangerous pledge

2008-07-23 00:00

Even if Jacob Zuma succeeds in his desperate efforts to dodge his day in court, he is in danger of setting himself up to fail as South Africa’s next president.

This is because he has based his campaign on a populist pledge to deliver to the poor, yet the very nature of the campaign and the way it is being constricted by his supporters is making that objective look ever more unattainable.

Zuma should know the risks better than most. Populism is always a dangerous game, for it can all too easily produce a crisis of expectations when delivery falls short. The lesson of Polokwane was stark. There is no Big Man syndrome in this country: if you fail to deliver to the people who put you in power, you’re a goner.

If Zuma is to deliver to the poor, his government must have a healthy economy with a robust growth rate. More robust even than the 36 consecutive quarters of sustained GDP growth the Thabo Mbeki government has produced, for even the poor are better off now than they were before 1994 with a social welfare budget of more than R70 billion a year.

The problem is that the gap between those who have prospered massively and those who have gained only marginally has widened and this has caused resentment. But that widening of the wealth gap is a global phenomenon, not unique to Mbeki’s South Africa and stems from systemic changes taking place in the modern globalised economy that will not go away during Zuma’s term of office.

Zuma is going to have great difficulty achieving the growth rate he needs, for the boom cycle is over and the world appears to be entering a period of economic downturn, if not actual recession. He can look forward to leaner times, with increased inflation as food and fuel prices continue to rise and unemployment is more likely to increase than diminish.

Adding to his difficulties is that Zuma will be under pressure from the left wing of the ANC alliance — the constituency that is putting him in power — to implement some of its socialist policies. Depending on what those are, too much of this in a nervous international environment could further hurt our economy and render it even less able to deliver on Zuma’s promises to the poor.

No doubt our economic policy needs a little fine-tuning. We have been dragged too far to the right by the neo-liberal ideologists of recent years — those zealots Joseph Stiglitz calls “free market fundamentalists” — and now that their excesses are beginning to pop like bubble wrap it is time for a correction.

But that does not mean reverting to the socialist doctrines produced by the excesses of the Industrial Revolution in the 19th century. Those are not just yesterday’s

theories, but the day before

yesterday’s. As Georg Hegel noted, the dialectic pendulum keeps swinging, and we need a new

synthesis to meet the realities of the 21st century.

The central reality of this century is globalisation. This is not an ideological synonym for neo-liberal capitalism, as some imagine, but a word to describe the reality that the collapse of the communist empire turned the whole world into a single marketplace.

Coinciding with that was the great digital revolution — the greatest transforming event since Johannes Gutenberg developed the printing press — which gave us instant communication and massive technological advancement.

There are only two ways to grow an economy and that is through increased investment and increased productivity. In other words capital and labour — both of which have become hugely mobile as a result of these new forces of globalisation.

Investors, local as well as

foreign, now have the whole world to scan on their computers as they search for the most profitable places to invest their funds. They avoid those that look dodgy. They hate uncertainty. And if any place starts worrying them they can whip out their money and place it elsewhere at the click of a mouse. For the country concerned, that means loss of investment, which means reduced growth, more unemployment, a weaker currency, higher inflation and so a tougher time for the poor.

The same forces have also increased the mobility of labour. The massive advances in tech-

nology have put a premium on the need for highly skilled workers everywhere, creating a global shortage and boosting salaries, while at the same time sharply reducing the need for unskilled workers.

Thanks to race discrimination and apartheid, which destroyed our peasantry with a Land Act nearly 100 years ago, then stunted the development of a skilled

working class with the Job Reservation and Bantu Education acts, we have a shortage of skilled and an over-abundance of unskilled workers.

This is the tough situation that the ANC inherited in 1994. One must sympathise with the party, but in some respects it has made the situation worse. Instead of nurturing and rewarding what skilled workers we had and trying to produce more, affirmative action, cronyism, bureaucratic frustration and anxieties about the future of their children have driven thousands away to other economies that have snapped them up eagerly.

Meanwhile our unskilled masses have languished in unemployment as our labour laws have made it impossible to employ them at cheap rates, or easily dismiss those who prove incompetent so that employers would rather not take them on in the first place.

The result is that South Africa is falling between stools in this economically competitive world. We can neither compete favourably with the developed world as an exporter of hi-tech goods because we don’t have the skills, nor can we compete with the likes of India and China in the production of cheap mass-consumer goods because our trade unions won’t allow the low wages to make that possible.

So the unemployed stay that way. Poor and unemployable.

Nor has the ANC been able to improve the quality of education to close the skills gap significantly. We have one of the world’s most expensive education systems producing one of the world’s worst results, with tens of thousands of school dropouts joining the ranks of the unemployed each year. Our level of youth unemployment is alarming and surely closely related to our appalling crime rate.

The problem is poor teaching, especially in rural areas, where many of the teachers are under-qualified and undermotivated relics from the old Bantu education system. But they can’t be dismissed because their unions won’t allow it.

This is the vice in which Zuma will find himself squeezed. He understands the problem. In an interview with the Financial Mail earlier this year he noted that while many politicians speak of the need to help the poor, none actually speak for the poor. They are an unrepresented group, and in many respects the unions, which are the most vocal in expressing their pro-poor sentiments, are their worst enemies.

Zuma even suggested a deal with business, similar to one concluded between business, labour and the government in Ireland, which might include some unionist concessions to make it easier for young school leavers to get jobs.

But Cosatu came down on him like a ton of bricks and Zuma quickly retracted. With supporters like that, who needs enemies?

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