Moeletsi Mbeki: Wealth Creation

BusinessDay
February 10, 2011

Only a Matter of Time Before the Hand Grenade Explodes

I CAN predict when SA’s "Tunisia Day" will arrive. Tunisia Day is when the masses rise against the powers that be, as happened recently in Tunisia. The year will be 2020, give or take a couple of years. The year 2020 is when China estimates that its current minerals-intensive industrialisation phase will be concluded.

For SA, this will mean the African National Congress (ANC) government will have to cut back on social grants, which it uses to placate the black poor and to get their votes. China’s current industrialisation phase has forced up the prices of SA’s minerals, which has enabled the government to finance social welfare programmes.

The ANC inherited a flawed, complex society it barely understood; its tinkering s with it are turning it into an explosive cocktail. The ANC leaders are like a group of children playing with a hand grenade. One day one of them will figure out how to pull out the pin and everyone will be killed.

A famous African liberation movement, the National Liberation Front of Algeria, after tinkering for 30 years, pulled the grenade pin by cancelling an election in 1991 that was won by the opposition Islamic Salvation Front. In the civil war that ensued, 200000 people were killed.

The former British prime minister, Margaret Thatcher, once commented that whoever thought that the ANC could rule SA was living in Cloud Cuckoo Land. Why was Thatcher right? In the 16 years of ANC rule, all the symptoms of a government out of its depth have grown worse.

- Life expectancy has declined from 65 years to 53 years since the ANC came to power;

- In 2007, SA became a net food importer for the first time in its history;

- The elimination of agricultural subsidies by the government led to the loss of 600000 farm workers’ jobs and the eviction from the commercial farming sector of about 2,4-million people between 1997 and 2007; and

- The ANC stopped controlling the borders, leading to a flood of poor people into SA, which has led to conflicts between SA’s poor and foreign African migrants.

What should the ANC have done, or be doing? The answer is quite straightforward. When they took control of the government in 1994, ANC leaders should have: identified what SA’s strengths were; identified what SA’s weaknesses were; and decided how to use the strengths to minimise and/or rectify the weaknesses.

A wise government would have persuaded the skilled white and Indian population to devote some of their time — even an hour a week — to train the black and coloured population to raise their skill levels.

What the ANC did instead when it came to power was to identify what its leaders and supporters wanted. It then used SA’s strengths to satisfy the short-term consumption demands of its supporters. In essence, this is what is called black economic empowerment (BEE).

Read the rest here.

Comment: Moeletsi Mbeki is the brother of former president Thabo Mbeki for those who do not know. The two have never really agreed on much but both are cut from the same neo-liberal cloth despite the fact that their father, Govan Mbeki, was a tried and true socialist.

I agree with Moeletsi Mebeki's criticism of BEE. In theory the idea of playing catch-up via affirmative action programs is not without merit. However, as practiced in South Africa BEE is nothing more than an enrichment scheme for the connected friends and family of the ANC.

Is it possible to reform BEE? I don't think so. We have become too corrupt and adept at playing the game for very narrow gains.

We should be thinking about scrapping this selective step-up and step-over class redeployment.

Onward!