South Africa’s Way Forward

Moeletsi Mbeki, with Refiloe Morwe, has written a must-read piece for South Africa watchers: “Economic Growth in South Africa:  Has the ANC Got It Wrong?” His bottom line:  yes, it has.

Like many other commentators currently writing about South Africa, Mbeki starts with the Marikana massacre, where he argues that the “ANC government demonstrated to the whole world that it is prepared to use all necessary force to keep South Africa’s…mines in operation.”

He goes on to argue that the basic cause of instability in South Africa is that the “transition to non-racial democracy” in 1994 was not accompanied by “change in the underlying economic structure.”  A consequence, he argues, is that any government is hobbled in terms of what it can actually do. But, the “capitalists”—owners and investors in the productive sector, which remains predominantly white controlled—face continuing uncertainty over taxes, the threat of expropriation, and corruption, and are therefore unwilling to overtly upset the present situation. Until this dichotomy is addressed, Mbeki foresees continued, and increasing, instability in South Africa. The ANC has bought-on to the unstable status quo, even while resentment against it is building among the poor and dispossessed who continually vote them into office. But, Mbeki posits no easy solutions: he observes that government efforts to radically redistribute wealth as advocated by radicals like ANC Youth League Leader Julius Malema will simply lead to owners taking their money elsewhere–outside South Africa. And that would make a bad situation worse.

With that as his central argument, he shares many other important insights in this short piece. One example: South Africa is an old country and an old society–that makes it very different from most other developing or middle income countries. He also highlights the failure of the education system to address the roots of structural unemployment–a major cause of poverty.

It might be objected that Mbeki has produced an analysis of what is wrong without providing solutions.  I do not accept that implied criticism.  Mbeki has tried to analyze the problem.  It is only when we understand what has gone wrong that we can think about what to do about it.

Mbeki is the deputy chairman of the South African Institute of International Affairs.  He is the brother of Thabo Mbeki, and was a frequent critic of the Mbeki government and of the ANC.  He is also a businessman.  He is the leader of an informal South African circle that is thinking hard about how to reform the South African educational system.