ANC – foe of the free market

On 25 March 2020, two days before the lockdown took effect, the Institute of Race Relations (IRR) issued a report entitled Friends In Need – Covid-19: How South Africa can save #LivesAndLivelihoods.

The purpose of the report was to recommend policies to assist in confronting the socio-economic and political challenges that faced us as a result of locking down the economy to halt the spread Covid-19.

Under huge pressure, our analysts carried out research and produced proposals on all the key areas – healthcare, income security, social stability, financial stability, and economic stability – that would be current and useful.

In the introduction, we said: ‘In this spirit, the IRR is determined to contribute to the vital search for effective solutions to the difficulties the country now faces, in express acknowledgement of President Ramaphosa’s challenge that “it is up to us to determine how long [the epidemic] will last, how damaging it will be, and how long it will take our economy and our country to recove”.’

The sixth element in the report wasn’t about policy: it was a warning entitled Civil Liberties. We ‘recognised’ that in the current circumstance, the government legitimately exercised its prerogative to limit constitutional rights by declaring a ‘state of disaster’ in terms of the Disaster Management Act, 2002 (Act).

We recognised that while the Act did limit some civil liberties, the declaration of a ‘state of disaster’ had been above board and in a broader spirit of the national interest, as evidenced by the response of opposition parties to the actions of the government.

We said that limitations on the Constitution would largely be acceptable to citizens. South Africans recognised that the government would take the lead in managing the response to the crisis by reducing the medical risk, provided the measures were rationally connected to dealing with the emergency and were strictly temporary.

On 15 March, Co-operative Governance and Traditional Affairs Minister Nkosazana Dlamini-Zuma declared a national State of Disaster citing the ‘magnitude and severity of the Covid-19 outbreak, which has been declared a global pandemic…’ and ‘the need to augment the existing measures undertaken by organs of state to deal with the pandemic’.

Appealed to everyone to comply

On 18 March, President Ramaphosa met leaders of political parties represented in Parliament. All agreed to the government’s plans and pledged their support for government’s measures, and appealed to everyone to comply.

We warned, however, that in these circumstances vigilance needed to be exercised regarding what might follow the sudden increase in state control. ‘The current crisis is not an occurrence in isolation from the political landscape, trajectories, and trends. That several legislative steps have been taken over recent years in the direction of an expansion of state power at the expense of the civil liberties of South Africans cannot be ignored. Truth and consequence cannot be casualties in crisis.’

We warned that the governing party might seek to capitalise on the crisis. The mistake, we said, should not be made of thinking a lasting trade-off must be made between the health of South Africans and their civil liberties.

Importantly we said that the powers of the private sector should be increased as a check on this power. Any potential government abuse of power should be offset by citizens and organisations empowering themselves in other ways. The private sector must lead hand-in-hand with government.

We suggested, probably a tad naïvely, that government must always aim at empowering industry rather than investing more money. ‘Together, state and people must be united in saving the country.’

South Africa didn’t have the resources necessary for a robust and reassuring response. State-Owned Enterprises (SoEs) could not continue to be rescued.

Most presciently, we said: ‘Great damage will have been done by the time it is over. This will not be irrecoverable, provided appropriate policies are put in place to encourage the type of wealth-generating, job-creating growth that South Africa requires’. This included rejecting B-BBEE, withdrawing expropriation without compensation, and depoliticising, skilling and motivating the civil service.

Sparse and poor

Ultimately, the rot set in. Dlamini-Zuma issued a ban on tobacco products using minority-view science; her reasons were sparse and poor. The Democratic Alliance has alleged that she also lied. On 29 April, Dlamini-Zuma claimed in a televised announcement that the ban was partly based on ‘more than 2 000’ public submissions supporting a ban.

However, in her response to a court challenge by the Fair Trade Independent Tobacco Association, she included all the public submissions she found to support her actions. The actual opposition to cigarette sales turns out to be a mere fraction of what she had claimed.

The move to Level 4 saw an unnecessary but draconian curfew, an incomprehensibly narrow exercise period, continuation of the ban on tobacco product sales, and the creation of a bizarre list of apparel that could permissibly be sold. The certification of charities distributing food to the hungry was bureaucracy at its most heartless.

Level 3 eases the lockdown but the apparent lack of logic continues: alcohol can be sold but not cigarettes, most businesses can open but not some, churches can open for up to 50 people, but not restaurants or hairdressers.

But our fears are being realised by leaked minutes of the ANC’s National Executive Council meeting of 28 May 2020. It suggests that the ANC and its Alliance partners at some point during the lockdown realised that the crisis could be used to more quickly advance the National Democratic Revolution towards a command economy.

The Sunday Times reported at the weekend that certain ANC lead­ers had been em­bold­ened by the dis­rup­tion caused by the lock­down and were us­ing it to push for rad­i­cal pol­icy im­ple­men­ta­tion or Radical Economic Transformation. Ramaphosa advocated for RET a few times during the lockdown.

This ‘re­cov­ery plan’ was sanc­tioned at the meeting. SACP leader Solly Ma­paila, who attended, but is not on the NEC, said the Covid-19 cri­sis pro­vided an op­por­tu­nity for the state to be ‘em­pow­ered’ to ‘dis­ci­pline cap­i­tal and the pri­vate sec­tor’, which was at its ‘weak­est.’

Very cynical view

This is a very cynical view of the havoc that the ANC’s supposedly medical lockdown has wrought on the private sector. It also confirms the Alliance’s disparagement of the private sector.

Ma­paila said the gov­ern­ment could re­po­si­tion its terms of en­gage­ment with busi­ness us­ing con­di­tions for the re­lief funds it was of­fer­ing to busi­ness. Mapaila’s comment amounts to economic blackmail.

‘We want a much more as­sertive state which is not ca­joled or bul­lied by the pri­vate sec­tor,’ he said.

Ma­paila accuses (SA Reserve Bank governor) Lesetja Kganyago’s mon­e­tary pol­icy as being been ‘pa­thetic, to say the least’. ‘With the new ad­justments made by the Re­serve Bank … now is the time to use quan­ti­ta­tive eas­ing.’

Trea­sury has estimated that between 690 000 and 1.79 mil­lion peo­ple could lose their jobs. Yet the NEC has instructed Enoch Godong­wana’s economic transformation committee to come up with a plan to save jobs. The idea of the ANC saving jobs would be risible if it weren’t guaranteed to fail. Godongwana wouldn’t say how it would be done, only that the state should be at the cen­tre of res­cu­ing the econ­omy.

There is a breathtaking arrogance in these proposals by a party that has done little positive for the economy since the halcyon days of Mbeki’s reign. This all begs the question: how does the ANC intend to fund everything?

Then, the classic ANC get-out-of-jail clause: ‘The pro­pos­als in the doc­u­ment were not nec­es­sar­ily the of­fi­cial po­si­tion of the party but were a com­pi­la­tion of in­puts from dif­fer­ent stake­hold­ers.’

The ANC wants to relax visa reg­u­la­tions by work­ing on the ‘next round of visa-free coun­tries’ when the bor­ders are re­opened, to save the tourism in­dus­try. That won’t be enough in an industry that pre­dicts about 600 000 jobs will be lost by Septem­ber.

Godong­wana also referred to a phar­ma­ceu­ti­cal com­pany being at a ‘con­cep­tual’ stage. ‘What peo­ple are dis­cussing in that doc­u­ment is state in­sti­tu­tions can play a crit­i­cal role — be­cause of their cur­rent ca­pac­ity – in the cre­ation of that phar­ma­ceu­ti­cal com­pany.’ What current capacity could he possibly be referring to?

The most terrifying thing about this meeting is that the ANC should even for a moment believe it can run this economy effectively, whatever type of economy it is.

The ANC Alliance, headed by Ramaphosa, is not a friend of the free market – it is a foe.

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