Phumlani M. Majozi, a senior fellow at African Liberty, discusses the economic policies of South Africa’s Economic Freedom Fighters (EFF), a political party that advocates for the nationalization of key sectors of the economy and expropriation of land without compensation. The article argues that these policies are outdated and unsustainable, and could lead to economic catastrophe for South Africa if implemented. Majozi draws a parallel between the EFF’s policies and those of socialist countries like Venezuela, Cuba, and North Korea, and highlights a lesson that can be learned from former President Nelson Mandela’s shift in economic thinking after attending the World Economic Forum in Davos, Switzerland in 1992. Read this piece below.
Malema must learn from Mandela
By Phumlani M. Majozi*
The Economic Freedom Fighters (EFF) is mobilising a national shutdown for next week. The protest is against everything that the EFF believes is wrong about South Africa – from blackouts to Cyril Ramaphosa’s presidency.
What does the national shutdown achieve? My honest view is that it does not solve any of South Africa’s problems. I think it’s a counterproductive move. No serious South African should support such. It is an attempt by the Stalinist, Leninist EFF to manipulate South Africans.
With the EFF’s planned shutdown, and South Africa’s crucial national election that is now a year away, I thought I should write about Julius Malema and his EFF this week. He’s one of South Africa’s very popular politicians who has grown his party in recent years.
The EFF will be amongst the political parties South Africans will choose from in next year’s elections. For the less-politically-informed, EFF’s policy ideas may seem to address South Africa’s socio economic problems. Since the EFF proposes nationalization of the key sectors of the South African economy. The EFF believes the ideal approach on land reform is expropriation of land without compensation.
All of EFF’s policies are outdated and were they to be given a chance, they would culminate into national chaos and stagnation we see today in Venezuela, North Korea, Cuba.
Mandela in Davos in 1992
America’s popular newspaper The New York Times once told a story on how South Africa’s first democratic President Nelson Mandela, shifted his public policy views in the early 1990s. It’s a beautiful story that must be told widely.
In 1992, Nelson Mandela and his African National Congress (ANC) delegation embarked on a journey to the World Economic Forum (WEF) in Davos, Switzerland. They travelled to Davos with the objective to present their economic policies to the world.
According to one of the then ANC delegates, Tito Mboweni, the delegation would make it clear to global investors that as South Africa was about to make a transition to a democratic society, its economy would lean more toward socialism.
The fundamentals of ANC’s then economic policies included the nationalisation of the key sectors of the economy. The party believed this approach to policy would help in addressing the major challenges South Africa faced at the time – dire poverty, lack of educational opportunities for the disadvantaged, high unemployment, and so on.
When the ANC mingled with other delegates from various countries around the world at the conference, they discussed their economic vision for what would then be soon a democratic South Africa. The party spoke about nationalisation; how the government would be the chief driver of the new democratic economy.
The Chinese and Vietnamese were baffled by the ANC’s statist ideas. To Mandela they said, “We are currently striving to privatize state enterprises and invite private enterprise into our economies. We are Communist Party governments, and you are a leader of a national liberation movement. Why are you talking about nationalization?”, according to The New York Times.
The Chinese and Vietnamese advised Mandela’s delegates that the idea of state ownership and increased state ownership would not lead South Africa to a prosperous society; that they themselves were doing away with such policies.
The Chinese knew very well what they were talking about. They had pursued full blown communist policies before. The problem was that communist policies never worked. It was in the late 70s that market reforms were introduced in China by President Deng Xiaoping.
After being ruled by a very destructive character, Mao Zedong, from 1935 till his death in 1976, in 1978, the Chinese introduced market reforms that would result in unprecedented national economic growth in human history. So there couldn’t be better people to advise Mandela, than the Chinese.
The ANC’s original document that entailed the specifics about South Africa’s socialist economic future, to be presented at the Forum was subsequently reviewed and amended before its presentation. They had learned that what they were about to present to the world would frighten investors and not be beneficial to South Africa’s economy.
Mandela’s views had changed, after the encounter with the Vietnamese and Chinese delegates at the Davos conference of 1992. He’s been quoted saying “They changed my views altogether. I came home to say: “Chaps, we have to choose. We either keep nationalization and get no investment, or we modify our own attitude and get investment.”
Malema and his EFF can learn something from Mandela
Obviously, Mandela learned something at Davos of 1992. A conversation with the Chinese and Vietnamese transformed his ideas about South Africa’s economy.
Julius Malema and his EFF must listen to those who argue that socialism would be a disaster for South Africa.
Even though nationalization and expropriation of land without compensation will be calamitous to our economy, the EFF continues to pronounce that such policies will help in addressing South Africa’s economic woes.
Suppose the EFF is voted into power in next year’s election; its policies would be a serious blow to South Africa’s economic progress. The results would turn this country into Zimbabwe, Venezuela, Cuba, North Korea.
One of the characteristics of socialism is that it sounds good on paper. However, in reality, socialism is unsustainable, and its eventuality is always an economic catastrophe; evidenced by what we have seen in Venezuela in recent years.
Nelson Mandela was convinced in Davos that markets are key to prosperity. But it was after he was advised by the Chinese and the Vietnamese. He was humble enough to learn something and change his economic thinking. Malema and his EFF followers must also learn and change their economic thinking.
*Phumlani M. Majozi is a senior fellow at African Liberty. His website is phumlanimajozi.com. Follow him on Twitter: @PhumlaniMMajozi.