Steven Friedman
24 October 2008
opinion
Johannesburg — FIGURING out what is happening in our politics can be difficult. Working out what is not happening is easier - and, sometimes, more important.
A process that is not happening is a shift to the left by the African National Congress (ANC), which has been touted repeatedly since Polokwane and, more recently, in the wake of last weekend's ANC alliance economic summit. But those who insist that the ANC has shifted its economic policy framework leftwards are ignoring the real story about economic policy-making in the governing alliance.
Analysts (such as this one) who argue that the ANC economic policy framework remains intact have never said that no government policies would change. That would be absurd; there is no society in which government policies remain exactly the same. Circumstances change - as anyone watching the world economy now can testify - and governments adjust accordingly.
What we have been saying is that the framework within which those adjustments are made will remain the same. Finance Minister Trevor Manuel's medium-term budget policy statement expressed this well this week, insisting that a deficit is planned not because the government has changed its "economic creed" but because circumstances have changed and adjustments to detail are needed.
The government's "economic creed" over the past decade has often been misunderstood by Jeremiahs on the left and wishful thinkers on the right. It has not been purely market-driven: it has, rather, been an attempt to address poverty and stimulate growth through a broadly market-friendly approach, but with significant welfare spending and regulation of economic activity.
It is some of that regulation, such as exchange control and the National Credit Act, that seems to have saved our financial system from the worst of the global credit crisis. Politicians and commentators who insist the ANC has shifted left need to show that it has broken with this framework by ditching the market-friendliness. And this they cannot do.
The most remarkable feature of commentaries proclaiming the shift to the left is how little evidence they muster. Earlier this year, an ANC alliance meeting was also reported to have prompted a leftward shift. The evidence? The ANC had agreed to discuss inflation targeting, it wanted Parliament to enjoy the right to amend money bills, and urged that some basic goods be exempt from value-added tax.
None of these proposals are left-wing - the legislature amends money bills in the US - nor have any of them been implemented. ANC secretary-general Gwede Mantashe says inflation targeting is staying, the scrapping of floor-crossing means that no ruling party MP who cares about job security will think of trying to amend a money bill, and there have been no fresh VAT exemptions since that meeting.
Claims of an alliance shift to the left now also lack evidence. One report proclaims a leftward "paradigm shift" because the recent summit wants a planning commission headed by the Presidency, which would align state departments with government objectives.
Not only is this not left-wing, it is not new since it faithfully endorses the Mbeki administration's approach to governing, with its stress on centralising decisions at the top in the hope that this will make the government work. It is a homage to former president Thabo Mbeki's approach, not a departure from it.
The other claimed evidence for a shift is that, according to South African Communist Party (SACP) deputy general secretary Jeremy Cronin, budget allocations will no longer be the monopoly of the treasury. But they never were: no budget is tabled without cabinet approval and so the national treasury has never decided allocations alone. Again, the change is more of the same.
Another attempt to show that the ANC has shifted dramatically was offered on radio by respected economist Iraj Abedian. He said the summit had shifted paradigm because: its summary document did not mention exports; it proposed prescribed investments (forcing investment in projects meant to serve national goals); and it promised a welfare state.
It is, first, worth mentioning that the summit did not commit the ANC to anything. It merely promised to look at some options. So none of the proposals that worry Abedian may be implemented. Beyond that, none of his three points suggests a shift.
This is not a good time to hold out too much hope for growth through exports, whatever your politics. But the document does actually mention exports approvingly. And, if the problem is that it does not mention them much, then neither did a 2005 document produced by the Mbeki government, which was rejected at the ANC national general council because it was considered too pro-business. A document said to show Mbeki's conservatism was much like one meant to prove his successors' radicalism.
The prescribed investment proposal is not new either: it was adopted by the 2004 Growth and Development Summit and endorsed by Mbeki's government. It was then a voluntary commitment by business, not a legal requirement, but again this is no change.
Finally, if a welfare state is one in which the vast majority of the budget is spent on social services, spending is tilted towards the poor and one quarter of the population receive social grants, then we have been living in one for more than a decade. The government has been trying to fight poverty since 1994 -- the summit merely proposes some ways of altering an approach that already exists.
The claim of a move left is based on two illusions: mistaking a stated willingness to talk about things with an intention to do them, and a failure to recognise the continuity between current thinking and that in the Mbeki era.
If a leftward shift is not happening, what is? First, leaders of the SACP and the Congress of South African Trade Unions had to sell support for Jacob Zuma to sceptics in their organisations by insisting that it would produce major policy changes. But they can't achieve those changes because there is no majority in the ANC for a decisive shift left. And so they have to pass off adjustments to detail as dramatic policy shifts.
Second, the ANC leadership has a dilemma. It is committed to the current policy framework - as its senior leaders have stressed. But its rebellion against Mbeki was a reaction to a leadership style which, among other features, was contemptuous of alliance partners who challenged economic policy. So the ANC leadership must be seen to be taking their allies seriously while not changing the policy framework.
What better way to do this than to create lots of committees to discuss policy, to promise to look at all suggestions -- and to ensure that no suggestions will be adopted unless they can be shown to be workable and all interests, including business, have a chance to discuss them? This is not a leftward shift. It is an attempt to prevent one by doing what Mbeki failed to do - bringing the alliance partners into the discussion in the hope of defusing tension. This is far more likely to preserve the current policy framework than Mbeki's approach.
For private economic actors, this is an opportunity: because debate on detail has opened up, it allows for more influence on policy by interests outside the government than has been possible for the past decade. Private interests with plausible ideas for tackling poverty and stimulating growth are likely to be taken more seriously than at any time since the 1990s.
The left has not taken over - but a debate on how best to implement the framework of the past decade has clearly begun.
Friedman is director of the Centre for the Study of Democracy, a University of Johannesburg and Rhodes University initiative.
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