[DEBATE] : (Fwd) Debating ANC sell-out to capital

[Patrick Bond]

(Why Mugabe is a useful idiot to neoliberalism: "Asked if a 
Zimbabwe-style shift to central planning was in the offing, Twine said 
the big difference was that the ruling party here had a lot more to lose 
from reckless policies. South Africa had a large industrial base and 
well-established middle class, while the economy was far more integrated 
into the world economy than Zimbabwe's ever was." Twine's spin ignores 
that Zimbabwe's most serious economic rot set in due to *excess* 
integration into the world economy thanks to ESAP; and the same goes for 
SA, which stands at an economic precipice because of excess financial 
and trade liberalisation since 1994. In search of his scare story, 
Davidson, of course, misses the erosion of centre-left influence within 
the Alliance after the peak at Polokwane last December.)

Zumanomics equals central planning and uncertainty - DA
June 29, 2008

By Donwald Pressly

Cape Town - Zumanomics is a policy direction that will cause economic 
uncertainty as the state carries out inappropriate interventions 
determined by a "central planning ministry", according to a Democratic 
Alliance (DA) analysis of comments made by ANC president Jacob Zuma and 
his supporters since taking control of the party in December.

Economists, however, see the probable Zuma era as being less 
dramatically socialist or interventionist than the official opposition 
may believe, with the realities of office likely to dampen radical 
policy shifts.

A call by the SA Communist Party for a high-level planning capacity for 
the state to be situated in the presidency was decried by the DA's 
national assembly chief whip, Ian Davidson, its finance spokesperson, 
Kobus Marais, and his deputy, Leon George, at a media conference at 
parliament on Friday.

If implemented, George said, this recommendation by a major supporter of 
Zuma could end up coordinating key strategic interventions and aligning 
"all facets" of economic policy, such as infrastructure development, 
industrial and energy policy, macroeconomic stability, safety and 
security and trade.

It would signal a move away from a democratic state to a developmental 
state, the DA said.

Davidson noted that a recent summit of the ruling tripartite alliance 
had called for a moratorium on privatisation, and under a Zuma 
presidency South Africa would more than likely see this trend against 
privatisation continuing.

While he had "flip-flopped" on his labour market stance - saying that 
minimum wages had the unintended consequence of "counting out the 
poorest of the poor" before retracting the message - Zuma had said he 
would "lay down his life" for the rights of workers.

There was also a danger of a shift away from inflation targeting - a key 
element of the monetary policy stance adopted under President Thabo Mbeki.

Davidson noted that the alliance summit had called for "urgent national 
reflection" on the appropriateness of inflation targeting and the target 
ranges chosen.

He argued that explicit inflation targeting anchored inflation 
expectations. "By abandoning this framework, we will lose this anchor, 
which will likely result in inflation expectations being revised upwards."

The DA argued that Zuma had underpinned the reticence of Cosatu about 
running a budget surplus. Davidson noted that in December Zuma said he 
differed with cabinet in terms of macroeconomic policy, questioning why 
a country with widening income inequality had a budget surplus. Then the 
summit had stated that the budgeting process should take into account 
urgent social needs and other priorities.
McCarthy Call-a-Car
McCarthy Call-a-Car


The three opposition MPs argued that in light of the increasing 
influence of Zuma's "leftist proponents", it looked increasingly like 
South Africa's economic policy strategy would consist "of an array of 
policies including an end to privatisation, continuation of onerous and 
job-crushing labour legislation, a review of current inflation 
targeting, a shift to a budget deficit and ramped-up government 
spending, and increased state intervention in the economy".

It was time for Zuma "to give a clear indication of the direction that 
economic policy will take under his likely stewardship as president", 
the MPs urged.

Brait chief economist Colen Garrow and Econometrix economist Tony Twine 
disagreed that there would be a headlong change in policy direction.

"I can't see a slide towards a command economy," Garrow said. But he 
could see a "tilt" towards the left.

He believed there would be less reliance on high interest rates to fight 
inflation and there might well be a widening of the inflation band. 
Food, oil and electricity could be stripped out of the inflation basket.

Radical action by a new team would elicit strong responses from the 
financial markets and the new government would be told "quite quickly" 
that radical policies undermined job creation and economic growth prospects.

Twine said a socialist movement had indeed won power in the 1994 
democratic elections. But steps had been taken quickly "and 
imperceptibly" to move economic policy to the centre ground.

He suspected that economic policy issues such as budgeting for deficits 
and hiking spending were on the drawing board now. When they became 
policy they would most likely be "less fearsome" than the DA projected.

Asked if a Zimbabwe-style shift to central planning was in the offing, 
Twine said the big difference was that the ruling party here had a lot 
more to lose from reckless policies. South Africa had a large industrial 
base and well-established middle class, while the economy was far more 
integrated into the world economy than Zimbabwe's ever was.

"Exposure to common sense in South Africa is greater than it ever was in 
Zimbabwe."