South Africa's Rise or Fall: the IRR's report to our London Friends' Event - 25 June 2019

David Ansara | Jul 04, 2019
The IRR hosted an event in London to discuss the current state of the South African political and economic landscape and the role the IRR plays in advancing the Battle of Ideas. Participants were encouraged to join the IRR Friends program to support the Institute's work. Many South Africans living abroad still care very deeply about South Africa’s future prospects not just because it is the country of their birth, but also as the home of many friends and loved ones. Not since the crises of the 1980s has South Africa faced such a growing threat to its stability and future prosperity. Against this backdrop, the IRR continues to be a voice for real reform and effective policy making in South Africa. Whilst other organisations have bent towards populism and race nationalism, the IRR has remained consistent in its defence of liberal ideas, as it has done since 1929. As great crisis and change looms, South Africans living abroad have an important role to play in ensuring that the country of their birth moves towards the path of peace and prosperity. Critical to understanding how and why this is so requires a careful examination of the state of South Africa.
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South Africa’s battle of ideas will determine if South Africa is to rise or fall. The ideas that triumph in the battle of ideas will be the ideas which define the country’s next decade. The international community and South African expatriates have a vital contribution to make to this struggle.

If you want to help decide the battle of ideas on the side of freedom, prosperity and a united South Africa you can become a friend of the IRR and help contribute to our efforts to win the battle of ideas. Simply visit https://irr.org.za/join and sign up as a friend of the IRR and pledge to give a donation to fund our efforts.

With your help, we can turn the tide in the battle for South Africa’s future.

 

SOUTH AFRICA's RISE OR FALL - the full report

 

Too many analysts try to rationalise or normalise this behaviour to the point that they would have us believe that what we see with our own eyes is not really happening, that there is nothing to be concerned about as it is all part of an elaborate ‘long game’ that ends with a ‘new dawn’. The argument goes something like this: ‘the State/ruling party only assaults property rights/racial minorities/conservative blacks/ Western democracies/the market economy/freedom of speech and the rule of law in order to outwit those who would otherwise do so, and that in order to prevent such assaults you must support those leading the assaults, and even join in the assaults, because only if those now driving the assaults become even more powerful will they stop doing that which they are already so far advanced in doing. Give them a bigger electoral mandate therefore and the processes now in train will miraculously reverse themselves to produce a new dawn where property rights are secure, race and social relations are sound, the private sector rebuilds the economy, and civil rights and the rule of law are secured.

It is all completely and utterly mad.

In his famous speech in Birmingham, England in 1968, the Conservative MP Enoch Powell (whose 1959 speech on the Hola killings in Kenya would later be described as ‘the strongest statement on principle about Britain’s relationship with Africa ever made in the House of Commons’) said: ‘The supreme function of statesmanship is to provide against preventable evils.’ The trouble, he said, was that ‘such evils are not demonstrable until they have occurred: at each stage in their onset there is room for doubt and for dispute whether they be real or imaginary’ and that ‘people are disposed to mistake predicting troubles for causing troubles and even for desiring troubles: “If only,” they love to think, “if only people wouldn’t talk about it, it probably wouldn’t happen”.’

It is a sentiment we are confronted with every day.

Powell went on to tell the following story: ‘A week ago I fell into conversation with a constituent, a middle-aged, quite ordinary working man.... After a sentence or two about the weather, he suddenly said: “If I had the money to go, I wouldn’t stay in this country...I have three children, all of them been through grammar school and two of them married now, with family. I shan’t be satisfied till I have seen them all settled overseas. In this country in 15 or 20 years’ time the black man will have the whip hand over the white man.”’

Join me in rejecting the vile black man/white man analogy and replace it instead with the ‘whip hand of the State’, and you dare not think that there are not great numbers of South Africans, black and white, rich and poor, spread across the length and breadth of the country who fear for their future and that of their children. Argue the point and we will show you polling data on popular confidence and – always most revealing – data on how much private wealth has exited our country.

Powell continued by asking himself: ‘How dare I say such a horrible thing? How dare I stir up trouble and inflame feelings by repeating such a conversation?’

His answer was that ‘I do not have the right not to do so. Here is a decent, ordinary fellow Englishman, who in broad daylight in my own town says to me, his Member of Parliament, that his country will not be worth living in for his children. I simply do not have the right to shrug my shoulders and think about something else. What he is saying, thousands and hundreds of thousands are saying and thinking...’

We travel very widely and are regularly confronted by ordinary decent hard-working South Africans – black and white – who see through the faux confidence of the organised business community, express their disgust at the corruption and ineptitude of the ANC, their disappointment at the lack of courage of the Democratic Alliance (DA), their revulsion at the racism and violence of the Economic Freedom Fighters (EFF), and their hope and desire that someone will speak for them and their aspirations to live in a country that is prosperous and peaceful, and where people are free to choose how they want to live.

There is a watershed in the analyst community between those who in effect shrug their shoulders and those who do not, and that watershed is marked by a willingness to confront, however heretical it seems, the implications of the ideological currents that shape the decisions taken by the South African government.

A departure point from which to understand those currents is 1912 and the establishment of what will become the ANC. Moderate and conservative relative to what was to come, the party will pass through the 1920s and 1930s, even suspending some of its liberation demands in pursuit of supporting General Smuts’ efforts in the Second World War. But 1948 would herald Smuts’ defeat and, as white South Africa hurtled towards apartheid, the ANC was hounded into the arms of the Soviets and the East Germans whose embrace would infuse the party with much hard-left ideology, particularly after the adoption in 1962 of the doctrine of National Democratic Revolution (NDR) by the South African Communist Party (SACP), whose lobbying efforts would see the ANC adopt the doctrine at its conference at Morogoro in Tanzania in 1969.

The doctrine of NDR was based on Lenin’s theory of imperialism, which held that the wealth of the colonial powers arose solely from their oppression and exploitation of the colonised. From this foundation, Lenin argued that the purpose of anti-colonial revolutions must always be to dispossess the coloniser – and then embrace communism – failing which the colonised could never be free. The SACP made this theory applicable to South Africa by developing the notion of ‘colonialism of a special type’ – to mean that both the coloniser and the colonised lived together inside the same country, into which the coloniser had become permanently integrated. But, despite that integration, white/capitalist prosperity remained solely the result of the oppression and exploitation of the black majority, and indeed prolonged that poverty – and the coloniser, despite his integration, would have to be dispossessed if the colonised were ever to be free. The ANC has annually recommitted to the NDR, right up to this year.

Matters took a turn in Davos in 1991, when Nelson Mandela delivered an address in which he appeared to jettison such revolutionary dogma (the backstory is that he rewrote the paragraphs of the address prepared for him on economic policy – a great risk for him, as the ANC had yet to convene a major policy conference).

He emerged from Davos to tell his party that Afro-socialist experiments had failed and that South Africa would pursue a more pragmatic path. That, in turn, set in motion the chain of events that would isolate the hard Left in the tripartite alliance and culminate in the Growth, Employment and Redistribution, or GEAR, policy that sought to drive socio-economic upliftment through investment-driven growth.

Matched with the good fortune of interest rates that were cut in half, cheap surplus electricity, relatively low household debt levels, and the commodity boom, South Africa under Thabo Mbeki initially made some progress. The number of people with jobs doubled. Ten formal houses were built for every new shack being erected. The number of university students doubled. Economic growth rose to average 5% between 2004 and 2007 as government debt levels halved and a budget surplus was recorded.

But even as he was driving a socio-economic recovery he was planting the seeds of its collapse. His cruel health policies killed hundreds of thousands and saw life expectancy fall by 10 years; it was under his watch that the arms deal corruption set the precedent for the looting by the Gupta family, VBS bank, BOSASA and the many other horrors that lie waiting to be uncovered; it was during Mr Mbeki’s presidency, analysts forget, that South Africa first ran out of electricity; his Cabinet was instrumental in seeing merit give way to race in the civil service, which in turn set up the collapse of so many government functions; and it was his own unconscionable diplomacy towards Zimbabwe that enabled the collapse both of the rule of law and the economy in that country – and marked South Africa’s departure as a foreign policy peer of liberal democracies.

SOUTH AFRICA’S RISE OR FALL

Many years ago, we spoke on the same stage as a prominent Zimbabwean farmer who wept as he spoke of how he regretted that when they came to him he did not tell his countrymen what he feared the evidence clearly to show – about the trajectory of that country – but told them instead, in the face of that evidence, what he knew they wanted to hear, that it would all be all right. Had they known what was coming, they might have averted disaster. For several decades it was possible for IRR analysts to at once tell the truth about our country and argue that tomorrow would be better than today. But that is no longer the case. As much as we would want to say ‘it will all be all right’, we have to be guided by actual government policy, the ideology that underpins that policy, and the trends that flow from there. And what this establishes, there can be no other conclusion, is that South Africa’s future as a free, open, and prosperous society is far from assured and that the trends now assembled could easily tip our country towards a future of poverty and chaos.

Established in the 1920s, the IRR rose to become the most influential anti-apartheid think tank in the world and forged its unique methodology of using rigorous analysis, face-to-face lobbying, and media pressure to get politicians, government officials, and business leaders to abandon bad policies and adopt those that would advance South Africa’s future as a free and open society. It has throughout that history advocated for the rights of individuals to make decisions about their own lives, families, and businesses, free from unnecessary government, political, and bureaucratic interference.

In her The South African Institute of Race Relations 1929-1979: A short history, published in 1979, Ellen Hellmann said ‘the essence of the Institute’s work, trying to influence the minds of men, is by its very nature imponderable. Many believe that the effort has been meaningful... and derive comfort from the fact that proposals that appeared at first heretical when expounded on Institute platforms have become commonplace today’.

It is exactly the role we continue to play today and we again confront a daunting series of crises:

  • Today, less than half of young people have work – and on current trends will never work;

  • There are now more people in welfare than in employment;

  • The quality of maths and science education in schools is rated at 128 out of 140 countries;

  • Roughly 5 of every 100 children will go on to pass maths in matric with a grade of 50%;

  • Half a million of our fellow countrymen have been murdered since 1994 at a rate which is today 30 times higher than in most civilised societies;

  • Government debt levels have doubled over the past decade, the deficit again plumbs apartheid-era lows, and the State is fast running out of money;

  • Even if Treasury forecasts are realized, South Africa remains an emerging-market laggard in terms of rates of economic growth;

  • Less than half of people with matric are inclined to vote for the African National Congress (ANC) and less than a quarter of university graduates – in fact fewer people vote ANC than those who will not vote, while rates of violent protest action are up over 300% over a decade, collectively foretelling the prospect of political defeat for the ANC by the end of the decade and the prospect of a coalition with the hard Left.

  • As the fiscal and political pressure builds, the ruling party displays ever more dangerous behaviour. It turns with ease to hate-filled racial nationalist rhetoric; it sides too comfortably with the worst pariah regimes the world has to offer; it proposes media tribunals and hate speech laws in order to foster social cohesion; in response to depressed economic conditions it offers more State encroachment; there will be state-owned mining, and banking, and even pharmaceutical firms; poverty will be addressed via redistribution and historical injustices via expropriation; racial divisions via the stricter enforcement of racial quotas; jobs will be created by stricter labour laws and higher minimum wages; and its moves, now so swift, towards eroding the property rights that anchor human liberty in all free societies open the door to the further erosion of civil rights and the rule of law.

As Mr Mandela’s influence faded, Mr Mbeki would make two further, now politically fatal, blunders that later intersected to prematurely end his own political career. The first was to send the charismatic Jacob Zuma to wrest the rural Zulu nationalist vote from Inkatha, without appreciating that if Mr Zuma succeeded (where both Mbeki and Mandela had failed) he would come to inherit the mantle of Zulu nationalism and wield it as a weapon in the ANC – exactly as came to pass. The second was on HIV and AIDS. Here, Mr Mbeki’s missteps allowed the long-isolated Left within the ANC to regroup, fundraise, and develop platforms of influence around the AIDS pandemic that they later used to stunning effect to attack Mr Mbeki’s economic policy and to turn public and popular opinion against him.

Those two mistakes led to Mr Mbeki’s defeat at Polokwane in 2007.

The Left was happy to exploit Mr Zuma’s populism to eject Mr Mbeki, while Mr Zuma was happy to ride the wave of ideologically inspired anti-Mbeki media sentiment crafted by the Left. After Polokwane, the Zuma camp would go on to loot the State, while the Left clawed back, to use the revolutionary term, ‘the levers of policy influence’ denied to them since Davos in 1991. And, with those levers in hand, they turned the policy clock back to the socialist dogma of 1969, cancelling more than ten bilateral investment treaties, introducing mad immigration rules, the even madder National Health Insurance (NHI) proposal, the draft mining charter, hiking minimum wage levels, and turning the screws on ever more onerous racial edicts.

That these shifts further coincided with the global financial crisis in 2008 created the perfect governance, policy, and economic storm, best highlighted in South Africa’s rate of economic growth peeling away from the global average in a pattern last seen in the late 1970s, in unison with declining levels of job creation and declining popular confidence in the future – all of which we identified and began to track in great detail.

Those consequences generated the once unthinkable proposition (for ANC leaders – and many analysts) of the ANC surrendering its national majority. That fear triggered an internal power struggle between the ‘leftists’ and the ‘looters’, the victors at Polokwane, as both sides sought to escape responsibility for the ANC’s reversals – a struggle in which the Left ultimately prevailed by using the thesis of ‘State capture’ to discredit Mr Zuma sufficiently to bring Cyril Ramaphosa to power as ANC leader. However, this was by the narrowest of margins – 179 votes out of over 4 700 delegates. And while State capture had undoubtedly done much damage, it was only a part of the problem – and in our judgement not the leading part.

Today the ideologues whose policies were central to the disaster of the past decade are still in the ruling party and the government is pressing ahead with many of the same policies – a primary target of which remains the erosion of property rights.

If you are unconvinced, consider that our colleagues tracked more than 30 separate legislative, policy, and regulatory attempts since 2008 to undermine such rights.

These started with vociferous attacks on the willing-buyer/willing-seller policy at the ANC conference in Polokwane that informed the content of the draft Expropriation Bill of 2008, which in turn informed the dropping of the Proactive Land Acquisition Strategy in 2010; the drafting of the agriculture green paper of 2011, which forewarned of every risk from land ceilings to Expropriation without Compensation (EWC), all of which would be drafted into policy and legislation within the next six years; the 20% proposal in the National Development Plan of 2012; the 50/50 proposal that came hot on its heels; the Land Restitution Amendment Act of 2014 that sought to provoke hundreds of thousands of new land claims without the budget to finance them; the subsequent Property Valuation Act via which the State sought to escape that budgetary bind; the Agri Land Bill that sought to make the State custodian of all agricultural land, as the Green Paper had warned, thereby escaping any budgetary bind at all; the Regulation of Land Holdings Bill that would cap farm sizes and force farmers to surrender the surplus; and now the parallel processes of the pending Expropriation Bill and proposed constitutional amendment. Yet even this chronology contains just around 10 of the 30 plus markers in the pattern, each of which built one upon the other in a systematic and ordered manner.

In parallel with the policy process ran a related and still continuing campaign of political propaganda directed at commercial farmers: that they stole the land; were responsible for ‘original sin’; beat their staff; refused to pay fair wages; deepened rural poverty; refused to be part of building a better society; inflamed racial tensions; sabotaged land reform efforts; and thereby threatened through these and other sins the future stability of the entire country. It was a series of mantras repeated day in and day out on scores of media and political platforms.

The purpose of propaganda is stigmatisation and the purpose of stigmatisation is to make the targeted group ‘the other’ so that the society loses its ability to empathise with it, meaning that, should the State choose to launch an assault on that group, there is very little likelihood that anyone or any group would come to its defence. Such assaults can then be used to set policy precedents that can be expanded beyond the initial targeted group.

Put more simply, you inflame public anger against commercial farmers, pass laws to seize their property, and then expand the precedent to other sectors. And you get away with it because the society falls victim to the ‘first they came for the farmers but I was not a farmer...’ delusion.

Now we are at the brink.

That brink is represented best in the Expropriation Bill of 2019, the single culmination of the ideological, policy, and stigmatisation processes of the past decade. The Bill was tabled in December last year – a year after Mr Ramaphosa came to power, and drafted by his closest lieutenants and supporters.

Our colleague Dr Anthea Jeffery, undoubtedly South Africa’s leading expert on these things, writes about the Bill as follows:

‘The Bill is intended to complement a constitutional amendment by setting out some of the circumstances in which “nil” compensation may be paid. It also deals with the procedures to be followed in carrying out an expropriation.

According to the Bill, “it may be just and equitable for nil compensation to be paid” for expropriated land which:

  • is used by a labour tenant (one who works for the owner for part of every year in return for the land he uses);
  • has been “abandoned” by its owner;
  • is held “for purely speculative purposes”;
  • is owned by a state-owned entity which consents to the expropriation.

This list, with its five examples, is intended to reassure South Africans that EWC will be sparingly used and justifiably applied. However, the circumstances in which EWC may be deployed are expressly ‘not limited’ to those set out in the Bill. They may thus extend far beyond this short list.

The Bill empowers many organs of State, including all municipalities, to expropriate land or other property by following a set of specified procedures. These are heavily skewed against the owner and in favour of the government.

A municipality wanting to expropriate residential or other land – say, to reduce spatial apartheid and build RDP houses – must begin by investigating the property and negotiating for its purchase with the owner. If no agreement is reached, the municipality may issue a notice of its intention to expropriate. In this document, it must invite representations on the proposed expropriation and the compensation offered. The municipality is obliged to consider any representations received, but it need not respond to them or give reasons for rejecting them.

Once it has taken these simple preliminary steps, the municipality may issue a notice of expropriation. Under this notice, both ownership and the right to possess the property will automatically pass to it on the dates set out in the notice.

The date for the transfer of ownership could be a mere week after the service of the notice (the only time limit in the Bill is that this date must not be earlier than the date of service of the notice). The right to possess the property could pass to the municipality within another week.

Under the Bill, law-abiding home owners will have fewer rights than criminals illegally using their warehouse to store heroin and other drugs. Though the warehouse may be seized by the State, this can be done only after its use for criminal purposes has been proved and a court order for its confiscation has been obtained. But a home can be expropriated by a municipality by following the simple steps set out above – and without ever having to prove to a court that the expropriation is really in the public interest or that the compensation is truly just and equitable.

Senior leaders in the SACP, still an engine of ideas within the ANC, claim that the Bill is “a very good piece of legislation”. In fact, it is a draconian measure that can be used to strip millions of South Africans of their homes and other assets without the prior court orders, fair procedures, or equitable compensation which the Constitution requires.

In addition the ANC’s reassurances that the “nil” compensation provisions in the proposed Expropriation Bill of 2019 (the Bill) will be used sparingly overlooks the definition of ‘‘expropriation’’ in the Bill, which has been carefully crafted to allow nil compensation for a host of ‘‘indirect’’ expropriations as well.

To understand this, some definitions are required. A “direct” expropriation arises where the State takes ownership of property. An “indirect” expropriation could be either a “custodial” taking or a “regulatory” expropriation.

A “custodial” taking arises where the State takes custodianship of property, as it has already done for all mineral and water resources. A “regulatory” expropriation arises when the State, for instance, imposes price controls on a product, thereby preventing its owner from selling at market value. In this situation, the State does not acquire ownership of the product, but its regulations result in a loss to the owner.

Under customary international law, as well as most bilateral investment treaties (BITs), expropriation is defined in a broad way to include both “direct” and “indirect” expropriations. In South Africa, Section 25 of the Constitution (the property clause) does not define “expropriation”. However, the word – especially as contained in this guarantee of property rights – would generally be understood as having its usual wide meaning.

However, the Constitutional Court’s majority judgment in the AgriSA case in 2013 has already begun the process of narrowing this meaning. Here, Chief Justice Mogoeng Mogoeng ruled that expropriation requires the acquisition of ownership by the State. This meant that the State’s “assumption of custodianship” over an unused mining right (the issue before him) did not qualify as an expropriation or merit the payment of any compensation.

On this reasoning, further custodial takings by the State would not qualify as expropriations or merit compensation. Regulatory expropriations would be treated the same way, as these do not transfer ownership of affected assets to the State.

The Expropriation Bill includes a definition of “expropriation” which is clearly based on Mogoeng’s ruling. According to the Bill, ‘‘expropriation’’ means the ‘‘compulsory acquisition’’ of property by the State. On this basis, neither custodial takings nor regulatory expropriations will qualify as “expropriations” under the Bill. Hence, “nil” compensation will also be payable in these situations.

If no compensation is payable for custodial takings, this will encourage the State to take custodianship of all agricultural land, as the Preservation and Development of Agricultural Land Framework Bill of 2014 earlier envisaged. The government could also take custodianship of all other land – whether residential, mining, commercial or industrial – as the 2017 State Land Audit proposed and as the EFF constantly demands – and farmers/occupiers might then be invited to lease it under licence, subject to a host of empowerment requirements.

Under the Bill’s definition, a host of regulatory expropriations will also be able to proceed without the risk of compensation having to be paid. These takings will extend way beyond land – for both the Expropriation Bill and Section 25 define “property” as “not limited to land” (...including a liquor licence, as the Constitutional Court has already ruled).

On this basis, BEE ownership targets could be pushed up to 51%, without any compensation having to be paid for resulting forced sales of equities at prices below market value. Similarly, foreign security (and other) companies operating in South Africa could be subjected to 51% “indigenisation” requirements, again without compensation being payable. In addition:

  • export and price controls could be placed on coal and all other minerals identified as “strategic” by the government;

  • price controls could be imposed on all health services, medicines, and other healthcare goods under the NHI system;

  • medical schemes could be confined to providing a “single benefit option” in return for monthly contributions decided by the State; and

  • “prescribed assets” could be introduced for pension funds, thereby compelling them to invest in Eskom and other failing state-owned enterprises unlikely to deliver an adequate return on these investments.

All these regulatory expropriations are already either in the policy pipeline or under investigation by the ANC. If they proceed, many companies and other owners will suffer major losses, but will receive “nil” compensation under the Expropriation Bill.

Moreover, once Section 25 has been amended to allow nil compensation in appropriate (but no doubt unspecified) circumstances, any legal challenge to the constitutionality of these uncompensated losses will be difficult to mount.

This is what the ANC and its SACP ally have long been seeking as part of the NDR. The NDR’s overall goal is to take South Africa from a free market system to socialism and then communism. Towards this end, it seeks to “eliminate” existing property relationships, as the ANC stated at its Stellenbosch national conference in 2002.

However, this has to be done by incremental steps and in keeping with what the surrounding circumstances (“the balance of forces”, in NDR parlance) will permit. As the SACP cautions, if “premature attempts” are made “to eliminate all private property”, this can alienate citizens and “do incalculable harm to the quest for socialism”.’

Given what is at stake, the rise or fall of South Africa over the next decade will be determined as much as anything else by the passage of this single piece of legislation and the constitutional amendment that may or may not accompany it – both of which represent the final stages of a decade-long policy process, itself couched in a much older ideological battle.

We have long warned that the intention here is to see the State assume custodianship of all land in the country exactly as it did with mineral rights. In terms of agriculture, it may then look to offer leases to existing property owners on condition that they comply with licensing conditions which will be tied to meeting escalating BEE requirements. In other words, the State uses regulatory authority to force the owner of that asset to slowly surrender economic control of the asset and then ratchets up the licensing requirements over time. It is a method and principle that can be, and in many respects already is being, expanded to other sectors of the economy. The private sector becomes beholden to the State, the entre- preneur exists at the pleasure of the State and is slowly turned into a civil servant, and the State may use that regulatory authority to punish any group or individual that opposes its objectives.

A smoking gun, as it were, emerged in 2019 when an official of the Department of Rural Development and Land Reform stated in Davos that the intention of the drift of government policy was a ‘National Land Act that is like our National Water Act 36 of 1998; our National Environment Management Act 108 of 1998; and our Mineral & Petroleum Development Resources Act 28 of 2002’, and to change the Constitution to ‘vest land in the people of SA’.

In response, the FW de Klerk Foundation asked: ‘Can it be possible that the Government is seriously contemplating a constitutional amendment that would, in effect, transfer ownership of all land in South Africa to “the people” with the State as its custodian? The implications would be truly appalling and could precipitate exactly the type of Zimbabwe scenario that [the government] tells us it would be intended to avoid. And yet [this] scenario would be perfectly in line with the ANC’s National Democratic Revolution and its latest iteration – Radical Economic Transformation.’

We continue to argue that this is a very plausible endgame. It has been so for at least a decade – and arguably five decades.

Why is this happening with such speed now?

We know why it is not. There is no widespread demand to go back to land, as our polls – and the ANC’s polls – have confirmed. Nor is this about land reform, as such reform could be quite effectively executed within a framework that respects property rights and lends support to emerging farmers as we have repeatedly called for. Nor is this about jobs or welfare or poverty or empowerment, as we have demonstrated that land reform offers very little by way of solutions to these crises – the solutions lie mostly in cities and in higher levels of investment, a freer labour market, stronger property rights, better schools, and the pursuit of much higher levels of private sector-led economic growth. On the contrary, the manner in which the property rights debate has been handled is an important contributor to South Africa’s declining real per capita GDP level and stagnant job market.

The reason for the assault on property rights is this:

The ANC knows that its long-term future is now in doubt. While the ANC has won a majority in the recent election, less than half of people with matric or higher voted for the party and less than a quarter of university graduates. Fractionally over half of young people voted for it and just over half of its votes came from urban areas. The ANC tested whether it has lost the younger, better-educated urban vote. And demographic trends alone, that now replicate those that were faced by Zanu-PF 15 years ago, may therefore be sufficient to suggest that the ANC will surrender political control of the country by the end of the decade.

This is before you consider – what we have long established – that improvements in the material circumstances of people were central to sustaining the ANC’s strong majorities of the past 20 years. But without profound ideological modernisation the economy will not allow for further improvements, and living standards will slip, accelerating the party’s demise.

Unable to reform, the ANC cannot grow the economy to save itself and turns instead to base racial nationalist incitement to distract from its failures, animate its supporters to vote, and open the way to the erosion of civil liberties and the rule of law – should it in time come to that.

What we are witnessing on questions of property rights is therefore not about public pressure, or poverty, or farmers, or historical injustices or even land at all – and it is irresponsible to rationalise what we see as something it is not. Instead we are witnessing a definitive phase in the ‘battle of ideas’ over whether South Africa will survive as a modern, free, and open society or whether, as the ANC seeks to head off defeat, it will sink our country into a socialist and later communist morass of poverty, oppression, and State control. It is a battle for the survival of the rule of law, not just in South Africa, but – given the precedent-setting influence of South Africa – across the whole sub-region, too. And what happens to farmers is simply the litmus test of what will happen to us all – meaning, and given what is at stake for the whole country, that in many respects all South Africans are commercial farmers today.

It won’t happen. It is too mad. They won’t do it because it will destroy the country and with it the ANC. We got that for many years from the mining industry on mining policy – a sector that is now a shadow of what it once was. For ten years, we got that from the agricultural sector, even though its own future was immediately on the line, and now that sector faces the Expropriation Bill. In less guarded moments, key former influencers in the government and ANC of the Mbeki era concede that IRR warnings on corruption, race-based policy, and cadre deployment were prescient.

Another response is that, given what is at stake, how many South African, let alone foreign, investors are prepared to find out if our analysis of the implications of NDR ideology read against worsening economic and political conditions is right, to roll the dice as it were? A former colleague put it to a well-heeled dinner in Johannesburg, the attendees of which purported to be entranced by the prospects of a ‘new dawn’: ‘How many of you brought your money back into the country when Ramaphosa was elected?’ Data on net bond and equity flows for 2018 cement the point. The faux confidence expressed at such occasions and in business and the upper middle classes is expressed by people who collectively maintain an astonishing amount of their own money out of the country but tell those without such means that everything will be all right.

But the most compelling answer is this; that no liberation government that came to power through armed struggle in southern Africa has ever lost power – the MPLA in Angola, SWAPO in Namibia, FRELIMO in Mozambique, and Zanu-PF in Zimbabwe – and you dare not doubt that there are political leaders in this country who, despite the terror, the poverty, and the food/medicine shortages of Zimbabwe, see only one thing, that 39 years after coming to power, Zanu-PF is still in charge, and they see that as a success and think that maybe they may be successful, too. And more than that, that in conceding on the sanctity of property rights they have been given the means to do so.

Too harsh? Zimbabwe, South Africa as the world’s next Venezuela?

Well, here is the ANC in 2019, in a statement issued in the name of the head of Mr Ramaphosa’s office in the party responding to a perfectly reasonable observation from five of South Africa’s most significant trading partners on serious policy obstacles to investment.

The African National Congress (ANC) has noted with deep concern the interference by the Western imperialist forces like the USA, UK, Germany, Netherlands and Switzerland into the affairs of South Africa... the ANC condemns this dramatic holier than thou stance of these former colonisers and we would not like to relate to them on the history of master slave relations... we do not appreciate a threatening and bullying tone... they leaked their letters to the media, suggesting they had less than honourable intentions... The ANC wants to be clearly understood that we will not be fooled into swapping one attempt of State capture and corruption for another! This is how we view the interference of these five countries, as just another form of State capture. The ANC shall not allow South Africa’s Constitution and sovereignty to be undermined by these latter day colonialists.

These are countries whose companies and their shareholders are trying to invest in our country to create jobs and the like – which could be created anywhere else in the world. And with its back to the wall, and the State running out of money, this is how the party responds. Add to that South Africa’s support for the murderous and destructive regime of Nicolas Maduro in Venezuela, who won an election only by banning the opposition, and Mr Ramaphosa’s own call for targeted sanctions to be lifted against the murderous regime in Zimbabwe.

South Africa’s appalling foreign policy positions are a very good example of the sort of things that get rationalised and normalised by analysts and commentators to the point that they’d have us believe that the ANC did not really mean it. In the same way, Mr Ramaphosa did not mean that farmers are not being murdered in South Africa when he said that they were not being murdered. But apply just the slightest scrutiny and the rationalisation falls apart. It took an IRR intern an hour to produce the following brief foreign policy chronology:

February 2016: ‘As we mobilise our people, we must say be vigilant. You must see through anarchy and people who are out there in a programme of regime change. We are aware of the meetings taking place regularly at the American embassy... those meetings in the American embassy are about nothing else other than mobilisation for regime change. We’re aware of a programme that takes young people to the United States for six weeks, bring them back and plant them everywhere in the campuses and everywhere.’ – Gwede Mantashe – then Secretary General (and now chairman) of the ANC.

June 2016: ‘We have recently observed that there are efforts to undermine the democratically elected ANC government... they never stopped operating here... it is still happening now – the CIA is still collaborating with those who want regime change.’ – Zizi Kodwa, ANC spokesperson and head of Mr Ramaphosa’s office in the ANC.

June 2017: ‘We must be wary of countries in the North, particularly the United States (and its allies) as well as France in its former colonies, involving itself by military means on the continent.’ – internal ANC policy paper.

July 2018: ’We are going to support them [the Venezuelan government], we are not going to let them die alone. If it is necessary that we bring our soldiers to fight against the Americans we will do it, we cannot allow ourselves to be dominated by the American administration.’ – South African ambassador to Venezuela at an embassy party to celebrate Nelson Mandela.

None of this is empty rhetoric but reflects the content of a 2017 report which noted: ‘The 10 Countries with the lowest voting coincidence [at the United Nations] with the United States were, in ascending order: Zimbabwe, Burundi, Iran, Syria, Venezuela, North Korea, Turkmenistan, Cuba, Bolivia, and South Africa.’

That these are and remain our foreign policy peers is in and of itself sufficient to raise very important questions about whether any ideological reform at all, let alone a ‘new dawn, is underway within the ANC and the government. And that these are South Africa’s foreign policy peers is a warning of the type of regime that South Africa’s ruling party would have no principled objection to replicating here, particularly after reunification with the EFF.

Given the bankruptcy on display in the ruling party it is all the more disappointing to see the lack of courage within the DA. It risks now the epitaph of many prominent Palestinian leaders of ‘never missing an opportunity to miss an opportunity’. It has jettisoned much of its proud liberal heritage, replacing it with a poorly tailored, and ill-concealed, counterfeit of the racial nationalist politics of the ANC – while betting that as long as nothing better comes along, its voters will still vote for it, while hoping that maybe one day, if it had better voters, it would no longer need the support of those who vote for it today.

Whether the dangers can be countered and later reversed depends on one thing alone; the ability to force a new balance of power in South Africa’s battle of ideas. ‘Battle-of-ideas’ theory, in which we are much practised, holds that the winner in any great ideological struggle will ultimately be the side that injects the greatest volume of compelling argument into the public domain. Our methods are aligned very closely to the idea that the war in Vietnam was lost in America’s living rooms and on the streets of Washington and not in the jungles of Southeast Asia. Put differently, it is the ability to shape and command public opinion that determines public policy.

It is quite pointless, in our experience of many decades, to seek to convince a political movement to change its trajectory if it cannot at the same time be convinced that the balance of power in public opinion is against it. Remember that politics is about balances of power – create enough pressure to force such a balance and your ideological adversaries may change their perception of the balance of forces in public opinion, and then pull back.

We fight that battle by injecting vast amounts of information into the public domain in pursuit of the principles we have defended for 90 years. Framed on a wall in our offices is the mantra:

We stand for classical liberalism, an effective way to defeat poverty and tyranny through a system of limited government, a market economy, private enterprise, individual liberty, freedom of speech, property rights, and the rule of law.

Around those principles we specifically advocate for:

• Real economic empowerment – not the failed and counterproductive policies of the government. To really empower poor people, South Africa needs to focus on the root causes of poverty which can be found in bad schools, weak family structures, a sluggish job market, low levels of entrepreneurship, and an economy that is growing far too slowly. The government’s empowerment policies address none of these things and focus instead on racial engineering that undermines investment, raises prices, reduces competitiveness, and forces entrepreneurs to comply with costly administrative hurdles while offering little to the poor and the truly disadvantaged. The victims are black and white people who cannot get ahead because empowerment policy does not focus on the things that are holding them back. Enforcing the current policies more aggressively will change none of this. We promote a bold new approach to empowerment policy that identifies its beneficiaries based on their actual socio-economic disadvantage, and helps them to escape from poverty through education, entrepreneurship and employment.

• Property rights for all – every South African has the right to enjoy the benefits of their hard work, and the government must never again have the power to take that right away. The historical denial of property rights to black people is something the IRR fought bravely against for many decades, but is something that cannot be reversed by undermining property rights today. Without property rights, South Africa will never attract the investment it needs to grow the economy and create jobs, and this will worsen the circumstances and prospects of disadvantaged people. Property rights also anchor human liberty in every free and open society because a government cannot oppress people whose property rights are secure. We therefore advocate strongly against every law and policy that threatens property rights, and specifically lobby for policies that will use strengthened property rights to help the poor escape from poverty so they can also accumulate wealth and assets.

• Family choice – over how you want to live. It is not for the government to tell you how to educate your children, or to force you to use a dangerous public hospital or rely on an incompetent police force. We advocate for policies that allow communities to wrestle back control of their schools, hospitals, and police stations from politicians and lobby for the government to introduce healthcare and education vouchers that will allow communities to decide how taxpayer funds should be spent, for stronger school governing bodies, and for community police forums that will have the power to appoint police station commanders.

• Social justice and racial goodwill – our research shows that racism is not South Africa’s biggest problem and that the great majority of black and white South Africans respect one another and want their fellow countrymen to lead successful and prosperous lives. But some politicians, activists and journalists take pleasure in fomenting conflict and trying to turn communities against each other. This minority sees every slight and injustice as being the result of racism and racial oppression. They judge you not according to your individual circumstances, beliefs, or commitment to the success of our country but only according to your race and use that judgement to encourage the State to interfere in the choices you make about how you want to live. We think this is wrong and that the silent majority of South Africans who want to work together to build a better country must be given a voice. We therefore counter the hate-mongering in the media and social media by emphasizing the common ground that unites South Africans.

• Tax justice – today the government takes through taxation more of the money created by hardworking South Africans than at any time in the history of the country. Much of that money is wasted or misspent through corruption. Some politicians and activists then blame those same hard-working South Africans for not doing enough to create a better society. The tax paid by all South Africans and the jobs created by entrepreneurs have done an enormous amount to improve living standards, and this contribution must be recognised and celebrated. South Africa’s real problem is not that ordinary people do not do enough, but rather that the government wastes so much of the tax they pay. We therefore fight to make sure that more money stays in the hands of ordinary people who made or earned it so that it can be better spent to help create a prosperous society, while exposing and stopping the wastage of government resources.

• Freedom of speech – there should be no limits on what you are allowed to say or think except where such ideas threaten physical harm against another person. It is dangerous that South Africa has imported from Europe and America a culture that seeks to protect people from things they don’t like to hear through creating ‘safe spaces’ and savaging any person who holds an opinion that is not seen as politically correct. Political correctness is strangling our society and risks a tyranny of the minority where a small group of politicians, activists and journalists get to decide what you are allowed to say or think. We advocate against all threats to freedom of speech and all attempts to force ‘group-think’ in business, academia, the media, civil society, and politics.

• Political accountability – we think that politicians should be directly answerable to people. In South Africa you do not vote for an MP who you can call to account when the government acts against your interests. Rather you vote only for a party, which then appoints a certain number of MPs, depending on its share of the vote. This means that MPs are answerable to party leaders and this is the main reason why many political parties support policies and take decisions that directly threaten our future. We advocate for Parliament to be divided into an upper and a lower house where the MPs in the lower house will be elected directly out of community constituencies and be answerable only to the people who elected them.

Central to all of this is the unambiguous rejection of race as the basis of government policy. It is good and right for society to help those who are disadvantaged, particularly given our history, so that any child born in our country can rightly aspire to a middle class standard of living. But it must be done not on the basis of their race but on the basis of their disadvantage. Given patterns of poverty and inequality the great majority of beneficiaries will be black but they will be beneficiaries not because they are black but because they are poor. It is a subtle but profoundly important distinction upon which hangs the whole of South Africa’s liberal tradition.

If understanding and being willing to confront the ideology that shapes government policy sets the good analysts apart from the bad, then it is an understanding of this distinction that sets apart those who really work for South Africa’s long-term success from those who, however well-intentioned, wittingly or unwittingly remain part of the same problem that has held our country back for so many decades.

For the time being, this distinction, let alone the idea that race should not be the basis of policy, will remain heretical. Our objective is to change that and to ensure that in time the acceptance of the distinction, and the policy implications that flow from it, will become commonplace. Only if that happens does the ideological modernisation become possible that will in turn sweep away the raft of policies that stand between South Africa and its potential as a free, prosperous, and open society.

In this fight we have one great asset which is that, contrary to what is seen on social media and promoted in much of the mainstream media, South Africa is not a society divided against itself. Racism is not South Africa’s greatest problem. It stands out in our polling time and again that a comfortable seven out of ten South Africans, across lines of race and class, respect one another and remain much invested in the others’ success, while sharing a surprising degree of common ground on the importance of individual choice, property rights, a market economy, and the rule of law. The great unmet challenge of South African politics is to unite the middle of good, hardworking, family-oriented South Africans – black and white. That unity has threatened every government that has ruled our country and it is a threat we are working very hard towards making materialise.

I am delighted to report that over the past year thousands of people who agree with the principles that we have defended for 90 years have joined us as Friends of the IRR, making small monthly contributions averaging less than R100. It sounds insignificant, but collectively, multiplied thousands of times over, it allows us extraordinary influence. It also cuts our dependency on the donor community which is in the main hostile to the views we advocate. We have always been a highly innovative think tank, and had we not innovated to the extent we have over the past several years I estimate that we would today be 75% smaller in terms of staff, reach, and influence. But by animating the public to support us, we can by force of numbers better prosecute the battle of ideas and turn public opinion, opening the way for sane policies that respect property rights and thereby South Africa’s future as a constitutional democracy.

To encourage us further, know this: change in societies happens at points of crisis – and the direction of that change will usually follow that of the group which had the greatest influence on public opinion at the time of the crisis. The crisis is not far off now, and we intend to exploit it to help to define the post-crisis era.

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