The
past three decades of political spin doctoring has left us with a populist politics
that no longer seems to have a centre that holds. Disarray and uncertainty
characterises the political domain. At the global level Brexit and Trump have
left centrist politics and the global political establishment reeling from
shock. Locally, South Africans are caught up with the “Zupta” phenomenon, a
term that describes the close relationship between President
Jacob Zuma and the Indian born business magnate Gupta family who have quickly
become household names, accused of aiding – even mastering – the Zuma-aligned
patronage network’s efforts to “capture” the South African state. “State
capture” is on everyone’s lips these days in sunny South Africa.
Perhaps
it was naive to assume that years and years of neoliberal era spin-doctoring
wouldn’t eventually send politics itself spinning spectacularly out of control.
And despite the best efforts of moderates and progressive centrists, the gyre
seems to be an ever-widening one. Spectacle ‘trumps’ substance in this new
political terrain, where the performative has displaced the substantive, and where
‘truth’ is whatever one makes of it. Facts, expert opinion and the like has all
come to be profoundly distrusted. It is difficult to steer a course through the
noise and turbulence of the politics of the early 21st Century.
So
it is of paramount importance to interrogate the new trajectory that the ANC
has embarked on, one that promises “radical economic transformation” as a
solution to the desperate and critical challenges that South Africa faces 22
years into its transition to a democratic dispensation. Radical economic
transformation currently means different things to different people.
To its supporters radical economic transformation seeks to use the state’s large
procurement system to boost black industry and business. It is a long overdue
intervention in an overly centrist, neoliberal growth programme that has seen
inequality widen and unemployment reach disturbing proportions amongst the black
working class and the poor (especially amongst the youth) in particular. It is
couched in quasi-socialist rhetoric and is delivered with a touch of Fanonist
romanticism; as the President recently explained, radical economic
transformation means that “nobody will go hungry”.
To
its detractors it has been cast as just another ploy to complete the “state
capture” program so that the Zuma-led patronage network can enrich themselves
at the cost of the nation. It is nothing more than a ruse to deceive ordinary
black South Africans that the ANC is acting solely in their interests, and that the infamous Bell-Pottinger public relations machine, and
the Gupta’s media outlets – The New Age newspaper and ANN7 satellite television
station – have been deployed to spin out the rhetoric of “white monopoly capital” and “radical
economic transformation”. In reality, they claim, this is all part of a
programme to take complete control of the state’s resources and to administer
it for personal gain.
So it
is a profoundly binary casting of radical economic transformation that
dominates the political spectrum as it currently stands. Perhaps this is to be
expected, as the manner in which it has been introduced appears sudden and forceful.
Until recently, radical economic transformation was the cause of the ultra-left
Economic Freedom Fighters, and was dismissed as populist rhetoric (even fascist) by the ANC government, so there is reasonable cause for cynicism
at this recent twist of events.
What
radical economic transformation means is a work in progress, and it is clear
that while there is a conceptual foundation that underlies it – for example,
when listening to the new Minister of Finance Malusi Gigaba articulate it in a
recent interview at the World Economic Forum in Durban – there is a lot of work
still to be done in fleshing it out. So it should come as no surprise that it
is currently a framework that is riddled with contradictions.
One
of the central contradictions within the new push for radical economic transformation
is its overt dependence on the state procurement system. It is contradictory
because it effectively amounts to an overwhelming endorsement and promise to
expand and privatise the state, that is; where key functions and services are
increasingly outsourced to the private sector. In that sense it is a
whole-hearted endorsement to neoliberalism as a political and economic
ideology; privatisatisation of the state is a key prescription of the neoliberal agenda.
Moreover,
in the South African context, this is occurring in tandem with a bloating of
the state, and not a shrinkage of it. The state bureaucracy will be expanding while it likely grows its procurement based BEE ‘stimulus package’ at the same time. This presents the
very real danger of an expanding but inefficient state taking root due to a top-heavy
reproduction of unnecessary bureaucratic agencies that ostensibly oversee outsourced
functions and services, but which tend to self-replicate across the state in a self-serving
manner.
This can result in both an excess of rules and procedures, as well as an excess of bureaucrats, placing unnecessary constraints on entrepreneurs, investors and the like. In turn, this would also hamper and unduly constrain the ability to deliver on key public sector functions and services. While regulatory frameworks are critical for ensuring quality of delivery, it is a common rent-seeking practice to over-engineer regulatory frameworks so that rent extraction becomes normative. In order to get things done, one has to have access to those who directly control processes, and they require favours and 'compensation' in order to do so.
This can result in both an excess of rules and procedures, as well as an excess of bureaucrats, placing unnecessary constraints on entrepreneurs, investors and the like. In turn, this would also hamper and unduly constrain the ability to deliver on key public sector functions and services. While regulatory frameworks are critical for ensuring quality of delivery, it is a common rent-seeking practice to over-engineer regulatory frameworks so that rent extraction becomes normative. In order to get things done, one has to have access to those who directly control processes, and they require favours and 'compensation' in order to do so.
While
on the surface radical economic transformation may appear to be ‘radical’ in
that it creates the perception of a left-orientated programme to take control
of the state in order to better distribute the country’s resources and
administer the benefits from them (i.e. more equitably), in reality it is far
from a leftist approach. Rather, it is one in which the state expands as a
giant corporate executive that oversees a range of outsourced public functions
and services. Critically, this new programme of radical economic transformation
does not seek to build state capacity to deliver services, perform functions
and deliver public goods by itself.
As alluded to earlier, introducing
inefficiencies of this potential magnitude into both the state and the private
sector creates space for rent-seeking and the manipulation of bureaucratic processes
and systems, for example; ‘reverse fronting’ (i.e. BEE 'tenderpreneurs' acting as
brokers for public sector work to the broader private sector) and other
negative tactics such as kickbacks, bribes, etc. The business of BEE may
become more to do with administering state resources rather than addressing the
needs of those who are most in need of state support, that is; growing black
business and entrepreneurship, alleviating poverty, stabilising household
budgets, improving and ensuring service provision, protecting citizens from
risky financialisation practises, creating employment, expanding the skills
base, ensuring welfare, and guaranteeing safety and security.
One
worrying scenario is that the 100 black industrialists that are touted to be
created by the procurement based ‘stimulus package’ are unable, or do not
attempt, to expand into the broader non-state related private sector, precisely
because the fundamentals of the skewed market have not been addressed at a
systemic level. Banks, for example, may lend to a new black industrialist who
is covered by state guarantees in their dealings with the state, but they may be reticent to throw their
support behind the new black industrialist when they decide to make an attempt
at penetrating the broader market. Should this prove to be the case, it is
conceivable that the new 100 black industrialists may become more focused on the
state to facilitate their growth, resulting in increased competition for state
led deals, eventually resulting in the growth of black state-dependent
monopolies. As a system, neoliberalism is notorious for how well it supports oligarchic and
monopolistic systems, so it should come as no surprise that a stimulus package that – at its core – is devoted to outsourcing state functions and services,
would result in their monopolisation.
Moreover,
if the outsourcing of state functions increases, then it makes sense that the
size of the state should decrease. The alternative – which is important to
consider here – is an expanding professional state that retains significant
capacity to deliver its key services and perform its key functions. A
professional state that can deliver services from policy to planning to
delivery (i.e. the entire delivery chain) is an substantively different entity from one that is configured as an
executive that manages outsourced functions and services.
Which way to go requires serious debate, and anyone who is truly left-oriented would be extremely troubled about a ‘radical’ empowerment program that is premised on the neoliberal drive towards privatisation. Simply put, the longer the chain of delivery, the less efficiency and the more the opportunities for rent-seeking; predatory capitalism does not care whether it exploits the state or the consumer, as long as the profits keep flowing.
Which way to go requires serious debate, and anyone who is truly left-oriented would be extremely troubled about a ‘radical’ empowerment program that is premised on the neoliberal drive towards privatisation. Simply put, the longer the chain of delivery, the less efficiency and the more the opportunities for rent-seeking; predatory capitalism does not care whether it exploits the state or the consumer, as long as the profits keep flowing.
Moreover,
while an efficient state is necessary, efficiency should not come at the cost
of the states’ capacity to deliver services and perform key public sector
functions in the long term. That is, I am not making an efficiency-based argument
for the regulation of state functions and services by ‘market’ oriented principles.
Yet efficiency is important i.e. if we seek to deliver a realistic and workable new socio-economic compact where everyone enjoys equitable access,
mobility and opportunity, where services – especially critical ones such as
healthcare and education – are unquestionable rights, a society where everybody
enjoys a basic quality of life that is fair and ensures human dignity, one
where the resources of the country are effectively leveraged in service of its
people, and where historical injustices are unquestionably acknowledged and
faithfully and effectively acted upon.
In
order to deliver on such a mandate, it is more or less certain that an
efficient and competent state is required, so that the government that relies
on it to oversee radical changes in society can do so in reality (as opposed to
merely rhetorically). That is, to go beyond intention and actually deliver on
this kind of radical vision, it is only reasonable to expect that a
professional state – and not just an executive state – would be a prerequisite.
So in the current context, that is – a bloated state that increasingly outsources
its functions and services – it is not immediately conceivable that the desired
kind of radical economic transformation is possible.
Yet
if one looks to the public sector, it has clearly been expanding at a fast
pace. Public sector employment grew from 2.16 million in 2008 to 2.69 million
in 2014 (i.e. 2.37 million jobs in government and 322,960 in state owned
enterprises). Between 2001 and 2012, while the primary sectors lost 720,000
jobs, while the tertiary sector grew by 2,72 million jobs. Most of this tertiary
sector growth was in community, social and personal services i.e. in the public
sector. Growth in employment in the public sector has consisted, in large part,
of finance management positions, while growth in engineering and professional
positions has been modest and has remained stagnant in some cases. This
reflects a trend towards building executive
and not professional capacity within
the state.
The
public sector procurement budget is around R500 billion (it was over R800 billion
for the 2010-2011 period), and the public wage bill is estimated at over R500 billion (i.e. a third of the overall budget or around 12% of GDP). While the
public service is generally highly educated, admirably gender transformed (52% women) and racially transformed (i.e. 77% black African) and averages at 41 years old, and hence already plays a critical role in the transformation agenda
of the country as constitutionally endorsed, it’s sheer size and scope of
outsourced functions requires closer scrutiny and attention, especially in
light of the stated means through which radical economic transformation is being
proposed. If only the state and state-supported businesses are transforming, then
can transformation be spoken of in real societal terms?
It
is clear that the path that radical economic transformation is taking may be
unsustainable, in that it may not produce the results in the private sector
that it desires, and that it may result in unnecessary ‘bloating’ of the state.
So it is important to distinguish political spin from a real political agenda
when it comes to talk of radical economic transformation. Political spin is
typically when a political agenda is presented to people in order to mask the
real agenda, or at least to dress it up differently so as to make it palatable.
In
the political moment we find ourselves in there are many truths that can explain
how we arrived at this point. One such truth is the abject failure of transformation in the private sector and in former white institutions of
various kinds throughout society (e.g. in the higher education sector), and
even in many parastatals. The dismally skewed ratios of white senior managers, fronting,
high black staff turnovers, lack of diversity oriented transformation and plain
structural and systemic racism that goes largely unacknowledged; is itself
largely to blame for the emergence of this new vision for radical economic
transformation. In short, the lack of transformation in the formal economy and
institutions in society has led (some would say forced) black professionals and
entrepreneurs to throw their support behind an agenda that gives up on integrating
into historically white businesses and institutions altogether.
This
should send alarm bells ringing within white society, but they are drowned out
by the sirens that warn of the impending “Zanufication” of the ANC. Already
begrudging and disgruntled, especially with BEE, affirmative action, and the
uncertainties associated with political upheaval, social change and economic
uncertainty – which threatens their security, assets, investments and savings –
they are unable to discern the clear signal that is being sent to them. That
is, their rejection of affirmative action is finally being returned in kind;
black South Africa is tired of knocking on their door and is now going their
own way with the power and resources that is immediately available to them.
As a
minority, white people still own a large proportion of the economy (i.e. around the same percentage of the stock market as blacks do, although the percentage of black South Africans outnumber white South Africans by an order of magnitude i.e. approximately 80% to 8% respectively). White society, however,
is oblivious to its special position in South African society, and where it is
inherited from (i.e. structurally and racially unjust, exploitative systems
such as colonialism and apartheid). White society is too occupied with their
own fears to think about what role they have played in generating this new
radical trajectory. Their tacit, but systematic resistance to transformation and
change over the past 22 years, and their insistence on accommodating
transformation only on their terms, has contributed – in great part – to the
emergence of both the populist rhetoric
of exclusion and the proposed substantive program for radical economic
transformation.
The
‘deafness’ that has persisted is perhaps no surprise. White society in South
Africa is largely emotionally and spatially removed from black South African
society. And when they do endure honest encounters with black South Africans
they are uneasy and defensive, quick to dismiss experiences of discrimination
and systemic and structural racism. They often simply cannot move beyond denial
and are hence wholly unable to 'put themselves in the shoes' of
their countrymen. They retreat, as they have the privilege of being able to do
so.
For
black african South Africans in particular, the realities are too stark to
bear, and too densely and intricately woven into their experience of South
African society to retreat. They have to confront it. On the other side of
confrontation they envisage substantive liberation. So they must move forward
and make radical changes if necessary. The profound departure from the rainbow nation
narrative is precisely that black people have come to believe that only they alone
can bring about the changes that they so desperately need and desire.
Yet how we find agreement on what those radical changes are, and how we are to go about it, is an equally important question. If we are to call ourselves a society or a nation, then we should all have a say and play a role in constructing our future. That is plain common sense political realism and not altruistic fantasy. Surely we should be inviting the best ideas about how to achieve a new society? Or are we to allow are futures to be determined by elites who decide what is best for us?
There
is surely going to be a lot of political spin in this moment. The question is
whether we allow ourselves to become so tightly spun that we separate and
occupy different orbits, different realities, and lose the ground beneath our
feet, eventually spinning out of control; where the centre does not hold, is
neither here nor there, and only those who profit out of chaos and division
have a viable interest in our new future.
Thankfully,
there are some well-thought through conceptual contributions doing the rounds, attempting
to make sense of a way forward towards a society that has successfully broken with
its historical legacy of dispossession, exploitation and exclusion. The question
is whether the debate on radical economic transformation will be opened up to allow
for a diverse representation of perspectives, views and creative insights, or whether
it will become the prerogative of a few elite individuals and power-brokers who
lock themselves away and design our future for us.
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