South Africa remains in crisis at the start of this new year. It confronts a flailing Eskom and the prospect of persistent (often Stage 6) load-shedding. It faces falling tax collections and a revenue shortfall of R250bn over the next three years. It knows its rising public debt will plunge it further into junk status unless growth improves and state spending is checked.
The government is well aware of what needs to be done to bring the economy back from the brink. The Institute for International Finance (the global association for the financial industry), for example, has recently urged it to fix deteriorating infrastructure, stimulate private investment, tackle the skills shortage, and build up export competitiveness.
But the government is making little effort to implement such crucial reforms. Instead, its aim is to push ahead with ever more dirigiste and damaging interventions.
In December 2019 it gazetted the Draft Constitution 18th Amendment Bill, which seeks to allow expropriation without compensation (EWC) not only for land but also for the houses, offices, factories, and other ‘improvements’ on them.
The Bill further aims to give Parliament a blank cheque to enact (by 51% majority) any number of new laws expanding the circumstances in which EWC will apply. The Bill would thus allow the adoption of legislation vesting all land in the custodianship of the State – as the EFF urges and the ANC has long desired.
Also in December 2019, the government adopted almost all of the (often harmful) recommendations in the June 2019 report of the Presidential Advisory Panel on Land Reform and Agriculture. The state seems thus to agree that the owners of rural and urban land identified as ‘suitable’ for redistribution should have to donate or sell it to their municipalities – or face expropriation in return for what might often be ‘minimal’ or ‘zero’ compensation.
On 3rd January 2020, moreover, the government gazetted (for public comment within 60 days) a poorly drafted ‘National Policy for Beneficiary Selection and Land Allocation’. Though this document speaks of ‘rekindling’ black commercial farming, land allocation in rural areas is likely to favour smallholders: particularly women, the youth, and the disabled.
In urban areas, a major focus will be on land for housing. No less important, however, will be the provision of ‘commonage’ land for township residents who want to engage in ‘collective agricultural farming (sic) activities’, such as ‘grazing or cropping’.
Despite this apparent focus on the poor, the policy adds that the spouses of public servants will still qualify for land allocation, provided they disclose this link. Politicians in public office, public servants, and those working for SOEs will also qualify for land, provided they resign and wait out stipulated ‘cooling-off’ periods (one year for politicians, and two years for state and SOE employees).
‘Elite capture’ of land redistribution is thus likely to continue – especially as bureaucrats will know far more than ordinary people about the land available for allocation. Their greater resources (plus political contacts) will also help ensure they get preference in practice.
Under the policy, land beneficiaries will generally be confined to user or lease agreements and will not have secure ownership rights. On the contrary, allocated land will generally revert to the land department if officials decide that the conditions for its use are not being adequately met.
Few farmers can confidently invest in their operations in such circumstances. Few families can risk building or improving their houses in this situation. By contrast, if farmers and families had security of tenure, most would work hard at building up their assets.
Implementation of the policy will require cumbersome and costly bureaucratic processes. Officials will have to assess commonage needs in many municipalities, monitor land use, audit the skills of potential beneficiaries, and establish the ‘master farmer training programmes’ that experienced farmers will have to complete before mentoring farm ‘apprentices’.
Officials will also be expected to establish a ‘synced and properly seamless…land application system’ that will ‘endeavour to eradicate any form of fraud and nepotism’. In addition, they will have to maintain a national register to ‘monitor progress on all land applications’, and run ‘walk-in’ offices across the country where land applicants can be helped to lodge their on-line applications.
Several new state entities will be needed too. These will include a National and Provincial Land Allocation and Selection Panel, together (it seems) with ‘district panels’ and an ‘Approval Authority’. A dispute resolution system will be established, under which appeals will lie first to ‘the Selection and Allocation Panel’, then to the director general of the department, and ultimately to ‘the minister for final adjudication’.
The policy will thus require thousands of new posts for ANC loyalists. Yet the public service wage bill is already far too high – and must urgently be reduced to avoid a Moody’s downgrade.
What else is the government doing at this time of crisis? It is pushing ahead with the unaffordable National Health Insurance (NHI) system, which will drive many doctors abroad and truss healthcare up in reams of red tape. To pave the way for the NHI, it will soon scrap low-cost medical schemes and primary health insurance policies, even though these make private treatment affordable to millions of low-income households.
The government is also introducing a bill to expand state control over sport and, it seems, allow the minister to regulate the racial make-up of national teams. Based on a skewed analysis of data prices, it wants cell phone companies to provide free daily data to the poor and slash current prices by up to 50%. At the same time, however, it continues to block the self-generation (by mining companies and others) that could help overcome the mounting Eskom malaise.
The ruling party, in short, sees the economic crisis not as a reason to embark on real reform, but rather as an opportunity to forge ahead with its National Democratic Revolution (NDR).
ANC interventions thus remain aimed at eroding private ownership, expanding government control, and entrenching dependency upon the state. Its key goal, in this second phase of the NDR, is to ensure that ‘social needs are placed above private profits’.
This goal may sound laudable, but its achievement (as the SACP explains) is vital to the shift to a ‘socialised’ economy. This is one in which the private sector is still present, but business must kowtow to the state’s ever more intrusive controls even if these jeopardise its survival.
A socialised economy is also one in which many in the working class have been ‘de-linked’ from the capitalist system. This is a crucial NDR goal – and it explains why the land allocation policy seems to relish the prospect of millions of city dwellers engaging in collective cropping or grazing on state-controlled plots on the urban periphery.
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