EDITORIAL: What is needed to fix economy
Presidential candidates Dlamini-Zuma and Ramaphosa both recognise they will need the business community in a post-Zuma phase that includes an economic Codesa
The two top contenders for the ANC presidency recently outlined their priorities for the economy and how they would go about fixing it should they come to power.
As the ANC succession race is not much about policy, the messages were really aimed at the wider public and in particular the business community, which both candidates recognise they will need in a post-Zuma phase.
Both call for some kind of economic Codesa. Nkosazana Dlamini-Zuma compares this directly to the constitutional negotiations and says that similar negotiation on the economy and land ownership is necessary and easily possible. Cyril Ramaphosa talks of a "new deal" for jobs and growth to be negotiated by all stakeholders in the economy.
Ramaphosa’s exposition, which he delivered at a public meeting in Soweto last week, drew mostly from the National Development Plan. He spelled out 10 priorities in a sort of apex of importance with job creation and investment at the top. Along with these goes the need for confidence-building measures and an economic recovery programme.
There is a danger that many years will be spent on this learning curve again
It includes an action plan of programmes – like the youth employment scheme he has been developing with business – and policies, like special economic zones and tax incentives for small and medium enterprises. Investor-friendly policies – fiscal discipline, caution over debt – are promised.
Essentially, this is the language of ANC economic policy orthodoxy as we have known it, espoused by the national treasury and the ANC’s own economic transformation subcommittee. It is also the language of business. Dlamini-Zuma’s plan, which she outlined in Business Day last month, is less specific and more political. It is captured by three priorities: economic transformation; education; and the need to build a developmental state.
Both redistribution – for example of ownership -and growth are captured under the heading of economic transformation. Key sectors and activities will be the oceans economy, mining, petrochemicals, food and beverages and beneficiation. Job creation will be stimulated by an "entrepreneurial industrial policy and plan".
The land question needs to be solved through a negotiation so that there is land both for agriculture and urban development. This should be a democratic process involving black and white, and urban and rural.
Education is an apex priority. SA needs an all-encompassing skills revolution that would train and empower teachers, upgrade educational facilities and adjust curricula to prepare young people to play a role in a global and pan-African world. There is scant recognition of the role business and private investment would play; the key driver of economic change and growth is the developmental state. For a developmental state to flourish, corruption must be rooted out, the public service and local government made more responsive and state enterprises placed "at the centre of transformation and fulfil their mandates".
Dlamini-Zuma’s plan for SA sounds a lot like the policies of the left-leaning parts of the ANC – best expressed by Cosatu policy documents -through the 90s and the 2000s. Because the role of private investment in growth is not appreciated, disproportionate reliance is placed on the state to solve redistribution issues and get the economy growing.
When Jacob Zuma came into office, his big promise was job creation. Like her, he believed the developmental state would lead us to prosperity. So each government department was told to provide plans of how many jobs it planned to create. It was years before Zuma concluded that it was not government but the private sector that is the driver of job creation. Unfortunately, he did little to encourage the private sector to do so.
Should Dlamini-Zuma win the ANC presidential race, there is a danger that many years will be spent following this learning curve again.