Latest IRR reports assess ANC and DA economic policy proposals

How South Africa’s two biggest parties, the ANC and the DA, shape up in meeting the primary national challenge of stimulating economic growth is the thrust of the latest reports from the IRR.

Growth prospects of the African National Congress manifesto and Growth prospects of the Democratic Alliance manifesto examine the economic ideas in the election manifestos of the two parties against the singular overarching goal that any post-election public policy must achieve: vigorous economic growth.

On this depends every effort to reduce poverty, grow jobs, reconstruct failing infrastructure, and improve race relations.

Both papers were launched yesterday with an online discussion with the author, Ivo Vegter.

Vegter’s key findings on the ANC manifesto are that the document “promises continuity” and “undertakes to accelerate transformation, and ‘ensure the country is back on track to meet the aspirations of the National Development Plan’”.

Vegter writes: “The problem with this is that South Africa does not need ‘continuity’. A 2022 opinion survey by the Brenthurst Foundation found that 80.1% of respondents felt that the country was heading in the wrong direction.

“A poll conducted by the IRR in 2023 revealed that 71.7% of respondents said their lives had not improved over the previous five years. The ANC prioritises transformation over economic growth. It remains strongly committed to statism, interventionism, industrial planning and socialism. Its proposals to create ‘work opportunities’ (as opposed to sustainable jobs) mostly involve government make-work programmes, instead of fostering an economy in which the private sector can grow rapidly to create employment.

“The manifesto promises to fix a lot of things, without interrogating the ideology and policies that led to their being broken in the first place. It does contain some well-intended promises, but the credibility of those promises is significantly undermined by the failure of the ANC to fulfil nearly identical promises in the past.

“Ultimately, the manifesto, when measured in terms of its potential to stimulate rapid economic growth, fails on ideological grounds. It is far removed from the classical liberal principles of free enterprise and secure private property rights.

“History, both in South Africa and abroad, shows that the socialist policies the ANC continues to pursue lead to stagnation, unemployment, poverty and corruption. A manifesto that promises to redouble the ANC’s efforts in pursuit of the socialist National Democratic Revolution and the failed National Development Plan is not a manifesto that will lead to rapid economic growth and a vibrant economy capable of employing millions of people and lifting millions more out of poverty.”

On the ANC, Vegter concludes: “If the ANC retains its grip on power, which seems likely at least in coalition at a national level, South Africans should brace for further economic decline.”

Vegter’s key findings on the DA manifesto are that it “is a fairly growth-friendly document, that will – if implemented – achieve significant improvements in South Africa’s economic performance”.

Vegter notes, however, that the DA manifesto “does not strongly prioritise economic growth in and of itself, however, and this lack of focus leads to several oversights”.

“In particular, the DA missed a trick by not proposing voucher systems to fund private sector service provision to the poor, especially in the areas of education and healthcare. Its ideas in this regard are largely unoriginal and do not go far enough to systemically reverse the crises in which these sectors find themselves.”

Vegter writes: “Many of the DA’s proposals will prove to be easier said than done. Rooting out corruption and reforming the civil service will meet with powerful resistance not only from unions, but also from the criminal syndicates whose sources of taxpayer-funded revenue will dry up. The same goes for privatising some state-owned enterprises and reforming the rest.

“Reforming higher education funding will likewise meet with resistance, and students have already demonstrated their vandalistic tendencies when things do not go their way. Labour market reforms will also provoke powerful unions with a demonstrated ability to bring the country to its knees, with violence, if necessary.”

Vegter concludes: “These objections and caveats aside, the broad thrust of the DA’s manifesto is consistent with classical liberal principles, and much of it agrees, loosely speaking, with the problems and proposed solutions identified by the IRR in a series of papers focused on the economic growth prospects of South Africa.

“Despite a few notable lapses, the DA’s manifesto contains a wealth of good intentions and ideas. The party’s economic policy instincts generally distrust government control and embrace free enterprise and the power of markets. This is to be commended and bodes well for the economic growth prospects of South Africa under any future government in which the DA might play an influential role.”

You can watch yesterday’s webinar here: https://youtu.be/q7vGD8MR1ew

Media contact: Ivo Vegter, Tel: 084-210-2003  Email: ivo@ivo.co.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za