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The EFF Does offer South Africans a Way Out of Poverty

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OPINION by Molifi Tshabalala

By now, less than a week before the 2016 local government elections and more than two months since The Conversation had published Co-Pierre Georg’s article, Why Julius Malema’s EFF Doesn’t Offer South Africans a Way Out of Poverty, I had hoped that someone, especially from the EFF, would have engaged him. The engagement would help the electorate to make an informed decision at the polls on 3 August. Moreover, it would help South Africans to engage on informed national discourses beyond the elections.

A failure to engage Georg, who is an economy lecturer at UCT, has created an impression that everything he said is true. Fundamentally, I agree and disagree with him on some points. To start with, I agree with him that the EFF’s analysis of our challenges is not “completely inaccurate.” However, I disagree with him that it derives its existence from “anger about the excessive inequality in South Africa”.

As I read the article, one of the speeches that EFF deputy president and chief whip Floyd Shivambu had delivered in Parliament sprung to mind. “Let us not lose the class perspective and ideological analysis when dealing with issues of development because once we lose proper revolutionary theory and tools of analysis any revolution is going to fail,” he said, delivering his maiden speech.

Understandably, Georg does not pursue any revolution, but protects the current capitalist system. However, he should not lose the class perspective and ideological analysis. He says, for example, the EFF’s manifesto “is a continued attack on South Africa’s economic institutions.” This is the class struggle between the bourgeoisie (also known as the capitalists) and the proletariat (also known as the working class).

As spelt out by Friedrich Engels and Karl Marx in the Communist Manifesto, “The history of all hitherto existing society is the history of class struggles.”

The EFF derives its foundational creed from the Freedom Charter, which the ANC – at some stage during its struggle for freedom – adopted as its policy document. “The most important political document ever adopted by the ANC is the Freedom Charter,” said Nelson Mandela, delivering his opening speech in the Revonia Trial.

The charter, adopted sixty years ago at Kliptown, states that, “The mineral wealth beneath the soil, the Banks, and monopoly industry shall be transferred to the ownership of the people as a whole.” On the land issue, it says, “Restrictions of land ownership on a racial basis shall be ended, and all the land re-divided amongst those who work it to banish famine and land hunger”.

As part of his long walk to freedom, Mandela unequivocally endorsed the charter, whose fulfilment he said “would open up fresh fields for a prosperous African population of all classes, including the middle class.” He reiterated his commitment to the charter before his release in 1990.

“Nationalization of mines, banks and monopoly industry is the policy of the ANC and a change or modification of our views in this regard is inconceivable,” he said, according to a statement issued by the United Democratic Front (UDF) to allay fears that he had retreated from nationalisation. However, on his return from the 1992 World Economic Forum (WEF) in Switzerland, where world leaders – including those whose countries had previously pursued the model – had chastised him for nationalisation, he changed his mind, according to renowned Allister Sparks.

“He certainly changed his mind absolutely, [former President Thabo] Mbeki always took the blame (for an ANC departure from nationalisation) but it was Mandela who took that decision,” said Sparks, in an interview with Moneyweb. In contrast, the economic oligarchy offered the political elite the BEE to retreat from nationalisation, according to Moeletsi Mbeki, in the book, Architects of Poverty. He says the BEE, against which Mandela said “is a goal we fully support and encourage, but in our situation state control of certain sectors of the economy is unavoidable,” started operating in 1992.

The same year, the ANC held a national congress in NASREC, where it debated nationalisation and laid it to rest, revealed former SARS governor Tito Mboweni in the same interview with Sparks. It adopted the centrist RDP. Since 1996, the ANC has been pursuing largely neo-liberal policies, starting with GEAR to the NDP.

Through these policies, it has failed to transform the economy to enable a mass black participation. Hence, over two decades into democracy, the black majority is still locked outside the mainstream economy. Yet some people claim that our economy should to grow at a higher percentage to address the three challenges – inequality, poverty, and unemployment, which has been in a region of 25 percent for many years – facing the country.

In its 2414 manifesto, for example, the DA said it should grow at 8 percent. Even if the economy can grow at 100 percent, it would not benefit the poor black majority. Instead, it would continue to benefit the white minority, most of whom own the means of production. The black majority, on the other hand, is mere wage labourers, selling off its labour for unliveable pittances. The BEE has turned them into slaves of the white monopoly capital.

At its 2011 national congress, the Julius Malema-led ANCYL resolved that the government should nationalise the banks, mines, and other key sectors of the economy, as well as expropriate land without compensation. The resolutions not sparked investor fears, but also pitted the league against its mother-body on an ideological collusion course.

As Moeletsi Mbeki and his niece, Nobantu, point out in the book, A Manifesto for Social Change, the economic oligarchy is vulnerable to nationalisation. In other words, Malema had become a threat to the economic oligarchy, leaving Zuma at pains to assure it that nationalisation is not the ANC’s policy.

The assurance sunk in after Malema’s expulsion from the ANC. Once again, the ANC laid the nationalisation issue to rest at its 2012 national congress. The question, however, begs itself as to for how long. The time will tell.

Malema and Shivambu went on and founded the EFF on nationalisation of banks, mines, and other key sectors of the economy and expropriation of land without expropriation, as well as five other cardinals. This, essentially, negates George’s claim that anger about inequality in the country. It derives its foundational creed from the ANC’s retreat from nationalisation.

I also agree with Georg that the EFF’s manifesto is replete with unrealistic commitments. However, manifestos of the parties are replete with unrealistic promises. For example, they promise to create jobs while our economic is regressing. The IMF has further slashed our economic growth to 0.1 percent, begging the question of which investor would invest in the country one notch above a junk status. This reminds me when Zuma promised to create 500 000 jobs while our economy was in recession.

Unlike the ANC and the DA, whose job creation strategies rely on a foreign direct investment (FDI), the EFF commits to abolish outsourcing and employ the workers. I wonder how this would create jobs other than imposing additional financial burden on its municipality. For example, if an outsourced company employs a hundred workers and the EFF-run municipality terminates its contract and employs them, would it have created jobs? This is a change of employer, which comes with additional financial burden on the municipality.

In the same breath, I disagree with Georg that on a few issues. To start with, he paints a picture that we are inclusive economic institution and the EFF wants to turn us into the extractive institution. We are not, not by a long shot. A quintessence in this regard is the same institution of higher education where Georg works.

In late 2015 and early this year, a group of students, who belong to the Rhodes Must Fall Movement, embarked on strike to demand a number of institutional reforms. Their demands included an inclusion of black professors in the university’s management.

This is the same university where Xolela Mangcu works as sociology lecturer. Al length, he has written about racism and a lack of institutional reformism at UCT. Imagine if a professor experiences racism at the university, what about ordinary black staff members and students.

The UCT exemplifies the white monopoly capital. Hence, it would not surprise me if it emerges that Georg earns more than Mangcu. Economic racism is rife in the private sector. In some companies, white workers earn more than their black counterparts do, although they do the same work and are on the same hierarchical levels. In some instances, the black workers do more work than their white counterparts do, yet they earn less than they do.

On a tender system, which the EFF wants to abolish it, Georg says this would “diminish competition among businesses.” He goes on to add that, “Rather, the EFF wants to directly employ residents to do the same job, thus creating the same patronage network it criticises in the ANC.” At least he acknowledges that the system manufactures a private-public sector corruption, an insurmountable challenge facing the country.

The BEE is at the heart of the private-public sector corruption. South Africa ranks among the most corrupt countries in the Corruption Perceptions Index (CPI). A sad reality about the BEE is that it benefits the white people than the black ones.

Georg cites Venezuela and Zimbabwe as countries where nationalisation and land seizure policies have respectively failed. Yet he does not explain why they have failed, but dwells upon their resultant consequences.

Perhaps, he should first distinguish a failed policy from a policy that started on a path of success and, years later, fail to bear desired results. For example, if a successful company fails to align its strategy along with a market shift and, a few years later, do poorly, can Georg say its strategy had failed, or the management had failed to read the market trends and strategise accordingly to remain on a competitive edge.

Nationalisation in Venezuela, Cuba, and Zimbabwe, to name but a few countries, started on the path of success and failed to bear desired results years later. It did not fail.

To put the point across that nationalisation would fail in the country, Georg says, “Take power utility Eskom, for example, which would be insolvent without government bailouts, or national carrier SAA, which is currently in need of yet another guarantee from the National Treasury.” Clearly, he confuses nationalisation with neo-patrimonialism. At the heart of crisis at Eskom, SAA, and other state-owned enterprises lies neo-patrimonialism, not nationalisation. Neopatrimonialism is a standalone subject, requiring a different engagement.

In the first book, Moeletsi Mbeki debunks a perception that the land issue policy had collapsed the Zimbabwean economy. He points out that asbestos, gold, and tobacco were among the leading Zimbabwean exports in 1980s. However, due to health concerns associated with asbestos and tobacco, the developed countries outlawed them. This forced Zimbabwe to opt for cheaper markets in Africa, Asia, Eastern Europe, and Latin America. A drop in gold price also impinged on the Zimbabwean economy.

Moeletsi Mbeki also explain that industrialisation in Zimbabwe, as in South Africa, has been on decline over the past 40 years. His version correlates with The Africa Competitiveness report, which state that, “Agriculture continues to play an important role in terms of value-added on the continent, yet its decline over the past four decades has been largely offset by the larger role of the service sector while manufacturing has been stalling.”

The report goes on to add that, “For sub-Saharan Africa, the data show that although the agricultural value-added share in GDP has significantly decreased in the past 40 years (from close to 34 percent in 1965 down to 21 percent in 2010), the share of the service sector has experienced an increase and in 2010 accounted for close to 60 percent of GDP of the 11 economies in the same sample, most notably in the areas of trade (including hotels and restaurants, wholesale and retail), transport and communications, and business services.”

Essentially, the report paints a picture that even if the Zimbabwean government had not seized the white farmlands, the economy would still have fared poorly on two accounts. First, as the report points out, the agricultural sector had been on decline for 15 years before Zimbabwe had attained its independence in 1980. Second, as Moeletsi Mbeki points out, the industrial sector has also been on decline over the past years. The land seizure policy did contribute to the current state of affairs in Zimbabwe. However, Georg should not use it to ridicule the EFF’s policy on land.

As Georg points out, the EFF’s analysis of our challenges is not completely inaccurate. It is on point on nationalisation of key sectors of the economy, land expropriation, and state capacity, as well as abolishment of the BEE and the outsourcing. However, it needs some advice on how to pursue them and others not part of its revolutionary mandate.

It does offer the poor black people a way out of poverty. As to how it goes about pursuing them, also require a different engagement.

[Source: News24]
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