Duma Gqubule’s comment that structural reforms would be counterproductive in our deep depression is correct . Removing stifling regulations and cutting government spending have been found by the IMF to have a disappointing effect.
This is the experience in the normal world: suddenly cutting regulations and state spending, with an “over to you” to the private sector, takes a long time to deliver growth. However, it is critical to realise that SA under the ANC is far from any semblance of normality. It is not regulations per se that undermine our economy. Our debilitation is rooted in ideology.
What causes the flight of skills and capital, and deters investment, is fear. This fear is well founded. It is grounded in the declared ANC objective of the national democratic revolution. What this entails is never detailed. However, the safe conclusion — for anyone betting money and skills on SA — is that it means the ultimate destruction of the market economy, the nationalisation of land, and the marginalisation of minorities.
Communism and African nationalism are the goals. To unleash growth in SA all that is required is the explicit rejection of these revolutionary aims. The plethora of regulations — even BEE shorn of quotas — can be accommodated by investors and entrepreneurs. But few investors will tolerate the risk that their business will be bled to death by a government that detests everything market capitalism stands for.
In a sense, we are fortunate. The option of strong growth is readily available. We have all the ingredients we need for sustained, inclusive growth. All it would take is for the ANC to abandon the revolution. Seldom has a national crisis had such a simple — and intractable — solution.JOIN THE DISCUSSION: Send us an e-mail with your comments. Letters of more than 300 words will be edited for length.
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