Does the IMF understand the ANC? - Politicsweb

Aug 03, 2020
3 August 2020 - So. The International Monetary Fund (IMF) has approved a $4.3 billion loan in “emergency assistance” to help the South African government address this country’s “challenging health situation and severe economic impact of the Covid-19 shock”.

John Kane-Berman 
So. The International Monetary Fund (IMF) has approved a $4.3 billion loan in “emergency assistance” to help the South African government address this country’s “challenging health situation and severe economic impact of the Covid-19 shock”.

Thereafter, says the IMF, “there is a pressing need” to ensure debt sustainability, fix state-owned enterprises, and implement other “growth-enhancing structural reforms”. “Urgency” and “steadfast implementation” to “achieve sustainable and inclusive growth” are devoutly to be wished.

If the IMF actually believes that any of these pious hopes will amount to anything, then it has not been doing enough homework. While that organisation was busy issuing its statement last week, Cyril Ramaphosa was simultaneously sending out one of his newsletters. This contained promises about fixing “fundamentals”, a “capable state”, new “sources of growth”, “reliable energy”, “access to broadband”, “competitive ports”, “efficient transport”, “improving execution”, speedier “implementation”, a “new methodology to develop an infrastructure pipeline,” a “growing small and medium enterprise sector”, “initiatives to improve the business environment”, a “robust programme of reconstruction and recovery”, and a “firm platform for industries with high potential to flourish”.  

All of this we have heard times without number. Some of it echoes intentions expressed by the minister of finance and the governor of the South African Reserve Bank in their letter of 15th July asking the IMF for the emergency loan. But the number of people who actually believe that President Ramaphosa has the intellectual conviction, leadership qualities, and political courage to implement any of these reforms is shrinking as fast as the economy. He long ago missed his chance to liberalise his government’s restrictive policies. And even if he now wanted to, which is doubtful, Luthuli House would not allow it.              

In his newsletter Mr Ramaphosa also said “an agricultural sector that delivers food security” was “relevant and urgent” among the “new sources of growth”. “Food security” is precisely what this country’s farmers already deliver, not least as they are busy harvesting one of the largest maize crops ever.

Mr Ramaphosa’s government is itself by far the biggest threat to food security: charitable organisations have to seek a court order to get the government’s own National School Nutrition Programme implemented during the current lockdown; ministers and officials shut down soup kitchens, prohibit the distribution of cooked food, peanut butter sandwiches, and food parcels, and otherwise obstruct charities that feed the hungry; and, of course, the threat of expropriating farms and other property has been renewed.

Mr Ramaphosa further wrote in his newsletter of “the need to bring together the best available skills”. This while his government is busy with legislation to strengthen enforcement of racial quotas in the private sector, one consequence of which will be to compel companies to get rid of skills possessed by people of the wrong colour.

“There is a strong commitment,” the president added, “to a social compact…so that the reconstruction of our economy can be a shared responsibility and a shared undertaking.” What this means is cajoling the private sector into complying with expropriation of private property, including land and the assets of pension funds. It also means compliance with “employment equity” quotas. It further means compliance with escalating “black economic empowerment” demands.

The IMF talks of “growth-enhancing structural reforms”. But when Mr Ramaphosa and his party talk about economic “reconstruction”, what they actually mean is implementation of their long-standing commitment to the national democratic revolution (NDR) and “radical economic transformation”, including more racial preferencing, expropriation, a growing role for the state to the detriment of the private sector, and hostility to capitalism and the white colonialists who brought it to these shores.

Cadre deployment across the public sector is one means of implementing the NDR. But cadre deployment is not limited to government and state-owned enterprises. It happens elsewhere too. Plenty of listed companies have long since invited party cadres on to their boards. Universities and the media are full of people who have bought into key aspects of the NDR, even if they have not all been formally deployed there as cadres.

The African National Congress (ANC) and the South African Communist Party (SACP) have never made any secret of their commitment to the NDR. Analysis of the policies implemented since 1994 shows that the overall thrust accords with NDR ideology, even though actual implementation is sometimes a case of two steps forward, one step back, as the political “balance of forces” shifts from time to time.

Yet rarely, if ever, is the NDR mentioned by the business community, investment and economic analysts, or the mainstream media. Only a handful of commentators - probably no more than a dozen in all – pay it any attention. The rest are still stuck with the notion that South Africa has “excellent policies but poor implementation”. They are ignorant of the NDR or they choose to ignore it. Either way they fail even to discuss it.  

Which brings us back to the IMF. It says South Africa has promised to manage the emergency loan “with full transparency and accountability”, but there are no conditions attached. In any event, the “structural reforms” the IMF has in mind are incompatible with the prevailing ideology of the two parties that are jointly ruling us. The ANC and the SACP know this. Does the IMF?

* John Kane-Berman is a policy fellow at the IRR, a think-tank that promotes political and economic freedom. Readers are invited to take a stand with the IRR by clicking here or sending an SMS with your name to 32823. Each SMS costs R1. Ts and Cs apply.

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