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economic freedom economic policy fiscal policy inequality Uncategorized

Fiscal policy with Ayabonga Cawe and Zwelinzima Vavi

Days before Finance Minister Nhlanhla Nene delivered the national budget, I spoke to Ayabonga Cawe of Rethink Africa and Dalberg; and Cosatu’s Zwelinzima Vavi on the state of fiscal policy. Some enduring insights about inequality, economic policy and the state of South Africa.

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economic freedom EFF Video

The EFF phenomenon

The South African Civil Society Information Service (visit herehttp://www.sacsis.org.za/s/) hosted a dialogue on the economy. David Smith of The Guardian in the UK asked that the panel what it made of the EFF’s impact on South Africa, and whether it is pulling the ANC to the left. Here are responses from Ann Bernstein and Trudi Makhaya.

 

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Maponya has shown the way on beating odds

My 25 November 2014 column in Business Day:

THE library in our home was eclectic, reflecting the tastes of the two women who tried to have a normal life in Hammanskraal in the dying days of apartheid. My grandmother’s extensive collection of women’s magazines stood coyly next to my mother’s social science texts and novels.

Living in a small village rocked by its own traumas under a homeland leader who took himself too seriously, I tried to imagine what “central SA”, as we called it, must be like. Of course, we were close to Pretoria and Mamelodi, but it’s Soweto that came to mind when I thought about life beyond the bogus border post. When I tried to conjure up Soweto, I had Magubane’s desolate images for guidance. But I also had Enterprise and Tribute to thank for stories about men such as Richard Maponya. I knew, even back then, that there was more to our fragmented country than what Chimamanda Ngozi Adichie would call the “single story of catastrophe”.

For more http://www.bdlive.co.za/opinion/columnists/2014/11/25/maponya-has-shown-the-way-on-beating-odds

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ANC DA economic freedom economic policy EFF political economy

Election 2014: It’s all about the economy

The Economic Freedom Fighters party, with its vintage policies snatched hastily from the historical archives, should not be mistaken for a throwback. It simply understands that when people revolt, rarely do they replace an old order with creative, futuristic ideas. Be it the French Revolution, the Iranian revolution or the Arab spring, we find that old ideas find their niche after the upheaval. They may even come to dominate. Though the EFF is not about to deliver radical social change, it has chosen to frame its identity in revolutionary terms and it knows that innovation is not essential. Change, or the promise thereof, or even its illusion, is enough. Certainly enough for the EFF to gain the kind of electoral share that makes them power brokers.

The EFF’s undoing is that it promises economic emancipation but its policies reflect the opposite. This is not a real problem for them, of course, because they are not about to form a national government any time soon. The EFF promises freedom to toil under state monopolies in an economy with almost no space for black people (who they claim to emancipate) to participate in independent economic activity. In fact, it’s more of the same, with black people being dictated to in their economic lives. The party also indulges in an economic fantasy where South Africa’s industry is protected by high tariffs and tough localisation policies, yet the rest of Africa and the world embraces its products without so much as a phone call to the WTO. 

Freedom, closely examined, turns out to be a defeatist retreat from private enterprise couched in fiery language. Capitalism has failed to deliver for the South African masses, the rhetoric goes; but have attempts at communism delivered well-being anywhere?

The ANC tells us that it will be guided by the National Development Plan in its next term in office. It also tells us that it will continue to implement policy instruments such as the National Growth Path, the National Infrastructure Plan and the Industrial Policy Action plan. Its manifesto suggests an attempt to balance private sector-driven growth with state intervention, which promises to be extensive. Past experience shows that the party has struggled to strike this balance. The next government will continue to bumble along at the now-established Khongoloserate of growth which averages around 3% per year.

The EFF has the potential to provide scrutiny over government action, though it is difficult to speculate on the quality of its forthcoming contributions. Given its self-declared Marxist-Leninist Fanonian stance, it will reinforce, if not spur, the ANC’s drift towards state-led beneficiation and industrialisation in an uncritical manner.

Shooting at an unprecedented 8% growth rate, the DA puts forth a conventional growth model, which can generate some jobs (though not 10 million) and alleviate poverty and inequality. The risk of such a conventional growth model is that it cannot, on its own, deal with the legacy of centuries of oppression, which means that many people do not have the basics in education, transport and health for example. This approach also treats the outcomes of past injustice as if they were just a set of unfortunate and accidental deficits to be treated with gradual remedies. Our constitutional order, if it is to mean anything, requires a far more robust response to the effects of the systematic exclusion of the majority from the economy. The DA’s document on economic inclusion deals with this legacy, but this is a strain of thought that is under-developed and also under-exposed in the party’s communication of its policies and its previous engagements in Parliament. This is unfortunate, for a party which is not only the second most important in South Africa, but which hopes to occupy the Union Building.

Full article at Daily MaverickElection 2014: It’s all about the economy