[DEBATE] : (Fwd) Debating ANC sell-out to capital
pbond at mail.ngo.za
Mon Jun 30 04:22:19 BST 2008
(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
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
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
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.
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
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