16 October 2017
Far too little notice has been taken of a recent statement by the South African Reserve Bank that "the 2010s will be the second-worst growth decade in South Africa's post-war economic history."'
Recorded in its Monetary Policy Review published earlier this month, the statement amounts to a damning indictment of the management of the economy by the ruling African National Congress (ANC). The economy is "stagnant" despite "strong" global growth and easy financing options. Domestic growth has stalled because of "political and policy uncertainty" which has "depressed confidence". As a result, "investment is contracting" and potential growth is "very low".
Taking into account growth since 2011, and the bank's expectations over the next few years, the current decade will probably see average growth of 2% or lower. The worst decade in our post-war history was the 1980s, during most of which PW Botha ruled the roost.
That was the decade in which violence flared up in response to Mr Botha's plans to introduce the tricameral parliament, representation in which was confined to the white, coloured, and Indian minorities. The ANC and its allies launched the "people's war" designed to make the country ungovernable. People were burnt alive by being "necklaced". Images of policeman sjambokking demonstrators had foreign television audiences riveted, states of emergency were declared, and thousands were detained.
South Africa was also at war in Angola against the MPLA and its Russian and Cuban allies. When the Commonwealth sent its so-called "eminent persons group" in an effort to bring peace to the region, the South African Defence Force torpedoed the mission by attacking ANC targets in Botswana, Zambia, and Zimbabwe.
All of this was grist to the mill of the ANC and its sympathisers, who were determined to throttle the South African economy to force regime change. No matter that the United Nations was packed with governments which did far worse things to their people than South Africa ever did, the apartheid regime was the one everyone delighted in hating. Eventually even Ronald Reagan and Margaret Thatcher had to acquiesce in at least some of the demands for tighter sanctions. Foreign investors were in any event leaving the country in droves.
The 1980s were of course the decade of the "Rubicon" speech delivered in Durban on 15 August 1985 by President Botha to a global television audience. Assiduously marketed abroad by his foreign minister, Pik Botha, as the harbinger of reforms that would pull South Africa out of crisis, the speech instead conveyed the impression that truculent and belligerent Afrikaners were not going to be pushed around by anyone.
The global reaction was swift. More and more foreign bankers announced they would no longer roll over South African loans. Our reserve bank had no choice but to declare a unilateral moratorium on repayments, the so-called "debt standstill". It was not long before the American congress passed the Comprehensive Anti-Apartheid Act.
Even though Mr Botha was busy with reforms such as the repeal of the pass laws, and setting up a cabinet committee to look into black political rights, nothing could stop the tsunami of international loathing which hit the country. Annual average growth of only 1.6% during that decade was the result.
Today South Africa is ruled by a party which has long been the darling of the global community. Even though the ANC's image has become somewhat tarnished in recent years, many commentators think the organisation is simply going through a bad patch and will soon recover its supposed former glory.
The reserve bank speaks in euphemisms, as do most business representatives, economists, journalists, and ratings agencies. South Africa's problem is not political and policy "uncertainty", but the untrammelled corruption of the ruling party, its lawlessness, its greed, its incompetence, its cronyism, its growing racism, and its hostility to private enterprise.
With the whole world eager to help and to applaud its success, the ANC has pushed the economic growth rate down to levels last seen under the excoriated PW Botha. That is actually quite an achievement.
John Kane-Berman is a policy fellow at the IRR, a think-tank that promotes political and economic freedom.
