We can join the emerging super powers

2011-11-19 10:45

More than two weeks have passed since the ANC Youth League’s much-trumpeted march for “economic freedom”. Many commentators interpreted the event as a groundswell of popular, particularly from the youth, disaffection with the status quo.

Without a doubt, these are fundamental challenges in our society that need to be addressed with urgency and due diligence.

However, the subtext underlying much of the commentary was that the march presented a representative outpouring of widespread sentiment, a mini version of the Arab Spring youth protests , or the youth-led “Occupy” demonstrations in the West.

This interpretation misses the point on two key fronts.

First, the march, despite the hype, was less significant than it has been made out to be. It is estimated that only 5?000 people marched, many of whom were bused in from other parts of the country. To put this in perspective, it is about half the number that participated in last year’s march for school libraries and about a quarter of the number that participated in the Treatment Action Campaign’s mass action to put pressure on the Mbeki administration to roll out a comprehensive antiretroviral drug programme.

Second, viewing the march as part of a global youth protest movement conflates the very real challenges facing our economy and society with the narrow elite interests of the ANC Youth League. Julius Malema no more represents the poor than his demands present a blueprint for achieving economic freedom.

Amending the Constitution to allow for land expropriation without compensation, for example, would create considerable disincentives for local entrepreneurs to grow their businesses and employ more people. It would wreak havoc on property markets and further undermine already shaky investor confidence, resulting in further job losses.

Banning labour brokers would raise the barriers even higher for graduates and job seekers trying to enter the labour market. Research shows young, inexperienced, and low-skilled job-seekers would be hit the hardest.

Finally, amending South Africa’s foreign policy to further isolate legitimate democratic governments and forge even closer links with authoritarian regimes (such as Venezuela, Zimbabwe and North Korea) would weaken ties with important trading partners. This will negatively impact our export industries, precisely those sectors of the economy that tend to employ large numbers of low- and medium-skilled workers.

Real economic freedom is about creating the right conditions for the economy to grow so that jobs are created and increased tax revenue can be ploughed into social security. It is about creating space for people with ideas and energy to reach their full potential. Crucially, it is about developing innovative ways to grow an inclusive economy that recognises our history of discrimination and put in place measures for redress in a sustainable way.

We believe that the call for “economic freedom in our lifetime” is not ambitious enough. With the right conditions, the right policies and with dedicated and compassionate leadership, we believe that millions of jobs can be created and poverty can be halved in five years.

Brazil did it. In 2004, 20% of the population lived in poverty. By 2009 this was down to 7%. Extreme rates of poverty – people living on less than $1.25 (about R10) per day – declined even faster, from 10% to 4% of the population. Other successful developing countries such as Indonesia, Malaysia, Turkey, Argentina and, of course, India and China are seeing similar trends.

The key ingredient in all these cases has been rapid economic growth. Brazil’s economy grew at 7.5% last year. This was not unusual among leading emerging countries. Turkey’s economy grew by 8.2% during the same period, Indonesia’s by 6.1% and Malaysia’s by 7.2%. India and China topped the charts at 10.4% and 10.3% respectively. In this group of countries, rapid economic expansion has led to a burgeoning middle class and a new generation of wage earners. People are enjoying incomes and living standards that would have been thought impossible only a decade ago.

Last week, the DA launched the first phase of its 8% Growth Project. It is a wide-ranging policy initiative that tackles the fundamental problems facing our economy, and offers effective solutions to them. We believe that with our immense natural resources, industrious people and strategic position on the African continent, we can achieve 8% growth and join the great emerging powers.

The tyrannical regimes in the Middle East and North Africa – appropriately enough, led by just the same “strongmen” the youth league and its sympathisers so admire – fell because they failed to heed their people’s calls for a better life, preferring parasitic self-enrichment over the smart policies, strategic investment and good governance needed for rapid economic growth. Which side of history would you rather be on?

» James is the DA’s federal chairperson

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