Editor's Note: The current Covid-19 crisis has highlighted the issues surrounding race-based policies with numerous jobs on the line as the nation rejects white-owned businesses when it comes to relief funding.
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A few days ago, Business Day ran a letter which questioned the IRR’s concerns about expropriation without compensation (EWC). While their correspondent agreed that EWC was a dangerous and destructive idea, he shrugged this off by claiming that President Cyril Ramaphosa had cleverly played along with the idea to maintain support within the African National Congress, while simultaneously undermining it.
This is essentially the ‘long game’ argument that has been circling the president since he took office, and indicated his support for the policy. Evidence for it has never been convincing, but our critic believed he had discerned some in an apparent change in rhetoric accompanying the pandemic.
As the letter writer put it: ‘The coronavirus pandemic has finally provided the opportunity for Ramaphosa to further weaken this discourse, or even to completely abandon it, however subtly this may occur. Already “equal” redistribution is replacing “radical” redistribution. The competent Oom Cyril is well aware that expropriation has no substance when an economy is collapsing and propertied taxpayers and farmers become gold.’
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But if rhetoric is a guide, President Ramaphosa has rather challenged this line of thinking. Invoking images of war in an address to the KwaZulu-Natal Provincial Command Council earlier this week, he stressed the ‘challenges and opportunities of the situation’.
‘Covid-19 is quite frankly giving us an opportunity to relook at our economic side of life to see how we as South Africans reconstruct our economy after coronavirus,’ he said. The key to future economic direction would be ‘radical economic transformation’. ‘
'Radical economic transformation must underpin the economic future that we will need to craft going forward.’
This is an often-heard term. Long associated with the ‘state capture’ grouping of the ruling party, it is – as prominent SACP veteran Jeremy Cronin remarked in response to Ramaphosa’s comments – ‘a call that the SACP has long made’.
It is difficult to put a precise definition on what this means. The phrase emerged under former president Jacob Zuma, promising to change the structure and (racial) ownership of the economy, redistribute land to ‘the people’ (or ‘our people’) and generally to use the muscle of the state to banish want and poverty.
Not merely a matter of economics, it was about reshaping – radically, one understands – South Africa’s political economy. Once achieved, society will be remade. Thus, enemies would need to be identified and confronted. This came to be known as ‘white monopoly capital’. EWC, a radical plan for remaking the countryside and dealing with the supposed resistance of farmers to land reform, would be an intrinsic part of this agenda.
In some ways, it is really not an especially novel idea, and has deep roots in ANC and SACP thinking. It mirrors concepts within its National Democratic Revolution, ideas around a developmental state and ultimately the march to socialism. All of this would, presumably, need to be done under an ‘hegemonic’ ANC, ever vigilant of the counter-revolution hiding in the shadows. This was, after all, a party that had described itself as ‘the most important moral voice of the country on almost any question facing the country’.
The connotations of ‘radical economic transformation’ are clear enough. It is impossible to imagine that President Ramaphosa does not grasp this. It is difficult to avoid the conclusion that comments of this nature are meant to signal an endorsement of these ideas. President Ramaphosa has, in fact, repeatedly endorsed EWC. Whether or not this is contrary to his personal inclinations is beside the point. The governance and policy direction over which he presides will have their impact independently of his intentions – and will almost certainly survive his presidency and establish the framework for his successors’ actions.
For the past two years, EWC as a ‘radical economic transformation’ flagship has been sailing on, despite the widespread rejection of and resistance to it from ordinary South Africans, and apparently impervious to the damage it has done to South Africa’s economic fortunes. It continues a push – ongoing for the better part of a decade – to degrade private property rights and to expand the latitude for state intrusion.
Indeed, those wishing to understand official attitudes towards property rights could do worse than recall the case of David Rakgase, a successful black farmer who sought no more than to buy the land on which he worked – in terms of an agreement concluded nearly two decades ago. Yet government has doggedly fought this in court, and when compelled to honour the agreement, presented him with a vastly enhanced price tag.
Journalist Karyn Maughan commented in her coverage of the case that it seemed to suggest that nationalisation of land was a plausible endgame. Certainly, as far as the government was concerned, Mr Rakgase was not going to qualify for anything beyond state tenancy. Its own papers told the court that its redistribution operated on the ‘principle that black farming households and communities may obtain 30-year leases, renewable for a further 20 years, before the state will consider transferring ownership to them’.
This was quite remarkable. The president had, initially, pledged in 2018 that the EWC drive would result in enhanced property rights for all – although when presented with an opportunity to demonstrate this, failed dismally.
Even those not concerned with the protection of private property should be concerned. Shortly before the Covid-19 pandemic hit, the ANC had announced an intention to amend the constitution to place EWC decisions within the purview of the executive rather than the courts. The precedent this would set is deeply concerning.
And during the pandemic itself, whatever admiration may be due the president and the government he leads must be tempered by disappointment at the dogmatic refusal to let go of ideological fixations, even as the country’s economy faces ‘total destruction’ (Ramaphosa’s words). The decision to link state support for distressed firms to Black Economic Empowerment status is an illustrative case.
The Covid-19 pandemic has disoriented the world, and opens up possibilities that might earlier have been unimaginable. In South Africa, it offers the dire prospect of accelerating a policy trajectory that will provide ideological satisfaction to some, rich pickings for a few, but economic hardship for most. It is foolhardy to rely on the (supposed) personal beliefs of the president, who has shown little inclination to act on them. His invocation of ‘radical economic transformation’ is a warning of where the country may be headed.
Terence Corrigan is a project manager at the Institute of Race Relations. Readers are invited to take a stand with the IRR by sending an SMS to 32823 (SMSes cost R1, Ts and Cs apply).
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