ANCYL puts squeeze on economy

21 Jun.

ANCYL puts squeeze on SA economy.

The ANC Youth League has raised the pressure for revolutionary economic changes in South Africa with leader Julius Malema demanding that the constitution be changed to sweep away the property clause, that nationalisation be fast-tracked and that farms be distributed among farmers and peasants proportionately.

Responding to a series of incendiary comments by the increasingly controversial leader at the national conference of the ruling movement’s youth wing, Steven Friedman, a political economist at the University of Johannesburg said South Africa was “not en route to Armageddon” or a socialist meltdown.

Friedman said there was a lot of sound and fury surrounding Malema’s utterances, but raised the question: “What policy position that he has raised has actually been implemented?”

But Economists.co.za chief executive Mike Schüssler said ordinary people – particularly business people who invested in people and job creation – only read the headlines which shouted at them. Malema’s statements – including “it is time to dispossess our oppressors”, and “those who own the means of production refuse to transfer wealth to the historically disadvantaged” – did not provide a conducive climate for investment in the future.

Friedman, who regularly attends ANC conferences and policy-making sessions, said the struggles of the youth league were simply “ANC politics playing itself out”. People in the cabinet attending to the mineral resources and energy ministries had made it clear they did not favour nationalisation, as had a technical team on nationalisation set up after the national general council meeting last year in Durban.

While he recognised that President Jacob Zuma was zig-zagging and avoiding doing what former president Thabo Mbeki did – declaring youth league or allied organisation positions as wrong – to ensure re-election as ANC leader next year, it was important to note that the National Union of Mineworkers (NUM) had effectively opposed nationalisation as had the SACP.

He pointed out that Blade Nzimande, the SACP leader, and his deputy, Jeremy Cronin, argued that the desire to nationalise the mining sector was an attempt to raise the fortunes of existing players in the mining sector who wanted to boost their slice of the cake.

Notably Malema had last year proposed that a state mining entity should determine who would have licences “and who can’t”. Friedman noted that this was “basically a large patronage proposal… that the mining entity would hand out mining licences to privately-owned companies to make sure that connected people get the bidding”. Politically-connected people, many of whom financially backed Malema, were trying to maximise their leverage in the market place through nationalisation of this kind, said Friedman.

But, he said, he did not believe there was a hope of achieving this in mining, or agriculture or banking.

It was notable that Frans Baleni, the NUM general secretary and Development Bank of South AFrica vice-chairman, had made it clear that the organisation supported the Freedom Charter clause which said the resources under the earth belonged to the people.

This was not support for nationalisation but support for the existing position – the state at present owns the mineral wealth that is mined through licence by private companies.

Strongly worded positions on nationalisation did not mean that the youth were gaining ground. Significantly, he said: “The trade union movement is saying it has nothing to do with these proposals.”

It was notable that Malema who had gained “an indifferent matric” was worth millions. “Where does this come from? It is not (solely) through tenders… it is about people paying for his lifestyle. Senior people think what he says is conducive to their business.”

Friedman said he would not name those leaders but he did not suspect that they would become a predominant force in government.

“I am not saying there are no dangers…. People are looking at the wrong dangers of a zealous socialist nation… the problem is patronage politics,” Friedman said.

Goolam Ballim, Standard Bank’s chief economist, argued that in the context of vast youth unemployment, “the type of populist rhetoric that has been espoused by Malema” was finding resonance among the youth.

The party leadership needed to be more outspoken in future he suggested, noting that Planning Minister Trevor Manuel had voiced concerns about the neo-patrimonialism that could invade the government. This was where clients used state resources to secure loyalty of clients.

“Private individuals seek to attach themselves to the state in a rent seeking manner… it is seen as evidence of a national unravelling,” Ballim said.

Schüssler said Malema was becoming a source of worry for ordinary people. “Malema is not giving us a reason to stay in South Africa… that is the long and short of it.”

Malema reiterated his calls at this week’s ANCYL elective congress, where he is poised to get a second term as president of the league.

Source: Business Report