30 years squandered: ANC chose control over growth and freedom - Hermann Pretorius

Key topicsANC ignored reform opportunities, entrenched state controlComparison with Estonia shows bold choices yield prosperitySA’s stagnation is ideology-driven, not a matter of timeSign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Hermann Pretorius.Dr Brigalia Bam, respected writer, activist, and member of the National Dialogue’s Eminent Persons Group, recently reflected that “(w)e never realised that 30 years will be too short for us to acquire the real democracy and better life for all”.But nonsense remains nonsense, even if spoken by an Eminent Person.Bam suggests that behind decades of failure sits an almost naïve ignorance, as though the ANC simply underestimated the scale of the Rainbow Nation’s challenges. The truth is much harsher: the ANC, with six consecutive terms of comfortable parliamentary dominance, did not naively lack time. It ignored warnings and made the wrong choices, deliberately. Thirty years is not too short to deliver real reform. Thirty years is a generation and certainly more than enough time for a government serious about growth and freedom to truly transform a country.Apartheid was not simply racial tyranny. It was economic sabotage: a quasi-socialist system of controls, exclusion, and enforced dependency that suffocated opportunity for the majority to entrench privilege for the few. By 1994, South Africa faced immense problems: mass unemployment, a majority without secure ownership, a state-engineered skills deficit, and deep inequality. Precisely because the inheritance was so dire, the policy choices made after liberation mattered.And for a brief moment, it looked as if the ANC might choose growth and openness.The first decade of ANC rule was, in fact, credibly imbued with pragmatism and prudence. The Growth, Employment and Redistribution strategy (GEAR) of 1996 cut deficits and encouraged private investment. Inflation targeting, introduced in 2000, stabilised the rand. By 2006/07, South Africa posted a budget surplus, and public debt fell to historic lows. These fiscal gains made possible the roll-out of a social welfare system. Trade as a share of GDP nearly doubled between 1994 and 2009. Millions of jobs were created during the 2000s boom. These were not trivial gains. They proved that when South Africa leaned toward markets and discipline, growth and employment followed. They also secured the ANC its most formidable electoral triumph: nearly 70% of the vote in 2004. Few governments worldwide have ever claimed such a popular mandate after a decade in power.Yet even in these hopeful years, the seeds of decline were already being planted. The ANC maintained its dedication to the Soviet-era ideological framework of the National Democratic Revolution (NDR), its annually reaffirmed foundational mission since the 1950s. It began to entrench state custodianship in ways that undermined opportunity even at the scale of individual economic emancipation through wealth creation. The 1997 Housing Act created millions of houses without true ownership: RDP homes are to this day shackled by legal restrictions that deny families the dignity of freely selling or leveraging them for genuine capital. These homes became ‘paternalistic’ non-value pseudo-assets.CustodianshipThe 1998 National Environmental Management Act and the National Water Act extended state custodianship over land and water, replacing secure rights with bureaucratic permissions. The 2002 Mineral and Petroleum Resources Development Act stripped mineral rights from private owners and vested them in the state, freezing investment and discouraging beneficiation. In terms of race-based policies, the apartheid-era categories of the repealed Population Registration Act of 1950 were dusted off to form the basis of preferential procurement and employment through BEE and race-rigged employment equity quotas. Far from correcting apartheid’s distortions, the ANC was starting to carry forward the command-and-control playbook. This was not ignorance. It was ideology at work.The consequences, three decades later, are impossible to deny, and tragic. Unemployment, around 20% in 1994, rose relentlessly to 32.1% on the official measure, and 41.9% on the expanded definition by the end of the third post-1994 decade. Fixed investment stagnated at around 14% of GDP, half of the 30% needed to drive sustained growth. Debt ballooned to above 70% of GDP. Energy, rail, and ports collapsed under mismanagement by state monopolies. Cadre deployment and corruption hollowed out institutions that might otherwise have delivered. Economic growth stuttered to paltry annual figures, barely rising above 1%. In per capita terms, South Africa’s GDP had stagnated to 2007 levels.And the truth is that South Africa’s leaders had better options, particularly in a historical period when many former USSR countries took the opposite route, away from a growth-suffocating state. Growth was a sustainable option. But the ANC increasingly chose party control, racialised redistribution efforts and fake transformation, instead of growth and freedom.A comparison with Estonia, over almost exactly the same period of post-liberation policy decisions, is devastating. Emerging from Soviet rule in 1991, Estonia’s liberation-moment inheritance was as grim as South Africa’s, with poverty, corruption, and institutional weakness. Yet its liberation leaders acted boldly and quickly, and unapologetically went for growth. They implemented a flat tax in 1994, developed one of the most simple and competitive tax regimes in the world, opened trade, privatised state assets, entrenched property rights, slashed a bloated state bureaucracy by a third, and digitised government to cut costs and gut corruption.Life expectancyThe results, well within the thirty-year window, proved extraordinary. Sub-$10-per-day poverty, affecting more than half of Estonians in 1993, fell below 3% by 2018. Life expectancy rose by more than a decade. Infant mortality dropped to Scandinavian levels.Estonia’s ranking for economic freedom leapt from 92nd in 1990 to consistently the global top-ten level by the end of its third post-liberation decade. And by stripping power from corruptible state officials, Estonia dismantled the pathological infrastructure of corruption: its Transparency International anti-corruption ranking climbed from 26 in 1998 to 14 in 2022. South Africa, which in 1998 had a similar ranking at 32nd, ranked 72nd in the world by 2022.The difference between South Africa and Estonia was never time. Nor, it should be said in anticipation of racialised invective, was it race. The socialists who governed Estonia into the ground were, after all, as white as those who put the country back on the path to prosperity. And one can look to the parallel socio-economic stories of East and West Germany or North and South Korea to appreciate that failure isn’t about race.Estonia’s post-liberation political class made bold, pro-growth choices immediately, and delivered prosperity within a generation. South Africa’s post-liberation political class, barring a flirtation with some elements of pro-growth policies, by contrast, deliberately entrenched custodianship, treated property rights as expendable, substituted redistribution for growth, and placed the party above the people through cadre deployment.Simply wrongDr Brigalia Bam is simply wrong. Thirty years is not too short. Thirty years is long enough to expose the true character of a government. Estonia used its first three post-liberation decades to achieve growth and build truly transformational and multi-generational freedom and prosperity.The ANC used almost exactly the same span of time to entrench control and patronage, cloaking elite enrichment in the rhetoric of fake transformation.South Africa’s tragedy is not that time ran out for an innocently naïve ANC, but that three decades of opportunity were wilfully squandered..*Hermann Pretorius studied law and opera before entering politics and, latterly, joining the IRR as an analyst. He is presently the IRR’s Head of Strategic Communications. He describes himself as a Protestant, landless, Anglophilic, Afrikaans classical liberal..*This article was first published by Daily Friend and iss republished with permission

30 years squandered: ANC chose control over growth and freedom - Hermann Pretorius

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