ANC’s ideological indulgences distract from tackling poverty, unemployment in SA

The corruption, incompetence and ideological indulgences of the ANC, are so extreme and unrelenting that they distract the nation’s attention from developing powerful solutions to address pervasive poverty and unemployment. In this article, Shawn Hagedorn highlights that while revelations of the ANC’s misdeeds and advancing ill-advised legislation may dominate the discourse, the country’s focus should be on developing solutions for the poor and unemployed. Pursuing investment-led growth and wealth distribution alone will not resolve the issue, but integrating into the global economy is key. Hagedorn argues that the ANC’s anti-competitive, anti-business policies are causing entrenched poverty in South Africa. This article first appeared on the Daily Friend.


How the ANC distracts us from solutions

By Shawn Hagedorn*

Our ruling party’s corruption, incompetence and ideological indulgences are so extreme and unrelenting that they distract opponents from developing the powerful solutions which could attract disaffected voters by overcoming pervasive poverty and unemployment.

Sustaining attractive life-styles for South Africa’s middle and upper class should not be a high bar for a competent government to clear. As this is not happening, our political discourse targets the ANC’s abundant governance shortcomings. Meanwhile, most South Africans are poor with dismal prospects and there is little interest in rigorously exploring what is necessary for them to uplift themselves.

The ANC’s widespread patronage ensures it much electoral support. If the economy was booming with meagre unemployment, the electoral value of patronage would tumble.

Failures, foibles and fumbles

As this isn’t happening, the ANC’s failures, foibles and fumbles keep our discourse focused on “injustices” at the expense of developing solutions. Both revelations of its misdeeds and its advancing ill-advised legislation distract us from addressing the dismal prospects common to most South Africans. From the perspective of the poor, their interests are given short shrift while the better-resourced ‘talk their book’. Many of them have responded by, in effect, disenfranchising themselves.

Among the ANC’s more recent successes at shaping narratives is one that is as disturbing as it is telling. Our youth unemployment crisis threatens to undermine our economy and social cohesion for decades to come. Yet somehow the ANC has succeeded at framing it as a moral trade-off between fiscal rectitude and compassion as expressed by lower-than-subsistence payments. Rather than focusing on solutions for the poor and unemployed, the ANC is among those supporting investment-led growth.

Prioritising investment-led growth has its merits, but it isn’t working. Nor can it possibly overcome our youth unemployment crisis – which provides an enduring backdrop for those wanting to topple our constitutional democracy.

Pursuing investment-led growth also very much prioritises the interests of the haves ahead of the have-nots. Making employment gains contingent on attracting investors was sensible in pre-1994 South Africa but such thinking needed to be updated long ago.

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Wealth distribution

Nor is the fixation with wealth distribution going well. National assets don’t exceed liabilities sufficiently to pay subsistence payments to unemployed young adults. This puts the accrued damage in perspective while depicting a precarious trajectory.

Economic development in the 21st century is not about people taking their place in the queue and waiting for their moment to move forward. Countries, companies and workers need to, ever more frequently, earn a place in global supply chains – not patronage networks.

Colonisation and imperialism were profoundly unjust. Yet, when this becomes an excuse for not competing in the global economy, the penalties exacted become prohibitive. Among the reasons that historical exploitation can’t provide countries a free pass today is that there are so many former colonies which sustain high growth through the pursuit of competitive excellence.

The big picture is that two hundred years ago there were about a billion people and over eight hundred million were extremely poor. Today, the ranks of the extremely poor have declined by roughly ten percent while the volume of those who have transcended subsistence living has increased by a factor of about thirty-five.

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Global integration becomes essential

Two centuries ago, agricultural land was central to prosperity. Then industrialisation happened, thus creating much demand for natural resources. As the pace of change increases ever more rapidly, land and commodities lose relevance as global integration becomes essential.

It would seem that our views of global integration were shaped during the sanctions era. As today we have access to nearly all consumer goods, and Amazon is landing on our shores to help deliver them, it would seem that we are integrated into the global economy. However, a far better gauge would be the portion of young workers who add value within global supply chains. This number is perilously low due to the ANC’s anti-competitive, anti-business policies.

The global economy is very good at upliftment, whereas integrating into the global economy is inconsistent with ruling parties of resource-rich countries solidifying their electoral dominance through patronage. This explains much of South Africa’s and Africa’s entrenched poverty.

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Humans are extremely tribal

To go a layer deeper, humans are extremely tribal whereas economic development places great reliance on trade. The general trend was for kin-based clans to trade with each other until, eventually, countries were formed. Countries then further advanced through trade and economic integration.

As people became more prosperous, they wanted a say in how their societies were governed. Advancing from might-is-right to constitutional democracies was a slow, arduous journey. The early efforts have been romanticised but they were ugly affairs. The US’s first hundred years of constitutional democracy spawned massive patronage which took longer to purge than slavery. The French Revolution spawned a democracy which was soon usurped by Napoleon and his imperial desires. While the Haitian Revolution was fuelled by much heroism, that country has long been the poorest in the western hemisphere.

Our mid-1990s transition was internationally feted. Yet our apartheid-to-Mandela journey seemed to numb us to the reality that integrating into the global economy was not a choice but an economic imperative. It is possible for us to sustain rapid job creation only if we reverse the ANC’s localisation policies – which are central to their patronage structures.

We don’t focus on such issues, as the ANC’s endless misdeeds constantly distract us.

*For 20 years, Shawn Hagedorn has been regularly writing articles in leading SA publications, focusing primarily on economic development. For over two years, he wrote a biweekly column titled “Myths and Misunderstandings” without ever lacking subject material. Visit shawn-hagedorn.com/, and follow him on Twitter @shawnhagedorn

The views of the writer are not necessarily the views of the Daily Friend, the IRR or BizNews.

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