[Debate] (Fwd) Erratic Moeletsi Mbeki on what ails SA

[Patrick Bond]

(What a pity, to have so many good ideas and brave arguments mixed up 
with whacky beliefs, e.g. what I highlighted in *bold*.)


    Our very stark choice


Sunday Times
Moeletsi Mbeki | 15 April, 2012 00:37
<http://www.timeslive.co.za/local/2012/04/15/our-very-stark-choice#>

I UPSET a Chinese diplomat a couple of years ago by predicting a bleak 
future for his country. I told him I saw a China whose landscape was 
dotted by sparkling mega cities - but these giant glass, steel and 
marble palaces would be uninhabited, the residents having perished from 
pollution.

*Unlike China, South Africa is not working, so it is hardly polluting. 
Our pollution - acid mine water, sulphur dioxide from coal-burning power 
stations, dust from mine dumps, silting rivers from soil erosion - comes 
from the past, when South Africa worked.*

South Africa's future is about conflict: social, economic, political 
conflict. This must surely be self-evident to most people.

If most of the adult population of a country do not work, the few people 
who do work must feed, clothe, house, and heal those who do not. But the 
few people who do work must also look after the wellbeing of their own 
families and close relatives as well.

Faced with this double burden, what do the employed people do? They 
borrow. They borrow to pay their taxes to keep the government operating, 
they borrow to pay school fees for their children, they borrow to feed 
the unemployed, they borrow to pay for toll roads.

The government borrows to pay the lavish salaries and allowances of its 
ministers and senior officials; to pay for the infrastructure the people 
cannot afford to use; to hire more people to collect unpaid service 
charges and to prosecute and disconnect those who are perennial offenders.

Not all is doom and gloom, however. South Africa has many rich and 
super-rich people. It also has a vast store of minerals that foreigners, 
especially Asians, are keen to buy. The rich mine owners sell minerals 
to foreigners and with the proceeds*South Africa imports* goods and 
services -*chicken, beef,* computers, 4x4s, *cooking oil, cattle feed, 
medicines, clothes, shoes* and petrol, to name but a few. So the vast 
amounts spent by the government on infrastructure will not all be wasted 
after all, as some of the infrastructure will be used to transport 
imports from the ports to the interior.

Indebtedness is one of the main factors that lead to social conflict and 
is a consequence of expected social conflict. Another important 
contributor to conflict is capital flight. The rich South Africans, 
having sold their minerals abroad, keep some of their money abroad. Vast 
amounts of the money paid by foreigners for South Africa's exports are 
not returned to the country, but kept outside the country illegally. In 
a conflict-prone land such as ours the rich keep vast amounts of money 
outside the country to ensure not all their wealth goes down with the 
sinking ship.

Capital flight, like indebtedness, fuels social conflict because funds 
that should be invested in the country to create employment are kept 
abroad, thereby contributing to creating greater unemployment at home.

Those who doubt the extent of conflict in South Africa need look no 
further than the ANC government's preparations. The government is taking 
active measures preparing to crack down on those who choose to express 
discontent with the status quo. These include:

  * The militarisation of the police;
  * Preparations to suppress freedom of the mass media;
  * Manipulation of judicial processes and personnel;
  * Purges of party members who propose alternative policies;
  * Refusal to introduce a constituency-based electoral system to
    complement proportional representation; and
  * Strengthening of the powers of chiefs over the rural population.

There are of course solutions to South Africa's economic and social 
problems. Repression is not one of them - we have been there with the 
National Party - and neither are capital flight and emigration.

South Africa is at the *middle stages of its industrial revolution*, 
which was started by the British during the last quarter of the 19th 
century with the beginning of the mining industry. The progress of South 
Africa's industrial revolution was sabotaged by white workers and by 
Afrikaner nationalists who opposed skills development among black 
workers so as not to have to face competition in the labour market from 
them.

*South Africa's industrial revolution, unlike that of the Asian Tigers, 
therefore got stuck midstream in the 1970s due to lack of skilled labour 
and political instability. The primary challenge is to remove the 
obstacles placed in the path of economic development by white workers 
and Afrikaner nationalists.*

In 1994 a new school of developmental saboteurs, the African 
nationalists, took control of the state and proceeded to add more 
obstacles to South Africa's industrialisation. One the first actions of 
the new rulers was to collude with the super-rich to sell South Africa's 
leading companies - Anglo American Corporation, Old Mutual, SA Breweries 
and Dimension Data - to the British.

Secondly, notwithstanding the room afforded by the General Agreement on 
Tariffs & Trade (the World Trade Organisation's predecessor) to delay 
removal of industrial protection, the new rulers proceeded to dismantle 
tariffs and subsidies with a predictable outcome - deindustrialisation 
and job losses.

Thirdly, and probably most importantly, the new black political elite 
continues to mismanage the education of the black masses.

Lastly, the new rulers entrenched the economy as consumption-driven 
rather than investment-driven.

For South Africa to create jobs we need to provide incentives to private 
sector managers and entrepreneurs to invest in new enterprises; to 
expand existing companies and to develop new products and processes. The 
labour force needs to be motivated to embrace productivity growth and a 
strong work ethic. This requires strong measures to combat inequality, 
not by bringing more people into social welfare programmes but by 
raising the education level of all South Africans.

South Africa's rulers must abandon the notion that they are perennial 
victims who must be compensated with cushy government jobs, luxurious 
lifestyles and a light touch on corruption. The state must also invest, 
but not in white elephants such as the Gautrain, nuclear power plants 
and decrepit public housing. It must invest in projects that complement 
the private sector and facilitate its operations rather than compete 
against it.

Last, but not least, organised labour must realise that Soviet-style 
socialism, which created protected employment on the back of producing 
shoddy goods and poor services, was always on a road to nowhere. While 
an unregulated free-for-all capitalism is also a non-starter, organised 
labour will get nowhere by piggybacking on the black political elite and 
begging for special treatment from the state. *Organised labour must 
also help to find a formula for raising the productivity and innovation 
of South African companies.*

  * Mbeki is deputy chairman of the SA Institute of International
    Affairs, based at the University of the Witwatersrand. He is author
    of Architects of Poverty: Why African Capitalism Needs Changing

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