How the ANC exploits misplaced patriotism

8 May 2023

President Ramaphosa’s investment drive was never going to spur strong growth. Rather, engaging with investors should have alerted the ANC leaders to how their policies imperil the economy. We have, belatedly, acknowledged that ANC leaders aren’t swayed by such concerns and that their support for Russia reflects the party prioritising its internal funding needs over creating jobs through exporting to western nations.

Despite their policies having been routinely anti-growth, criticism of the ANC has fixated excessively on corruption. How is this explained?

The plot of "The Emperor's New Clothes'' was not original when it was written nearly two centuries ago. Writers had long observed that groups sometimes ignore the obvious, and that when this reflects loyalty to a leader, it should be resisted in favour of speaking truth to power.

The tale revolves around dubious characters selling an emperor a suit of clothes that is, allegedly, invisible to those who are stupid or unfit for their positions. The pseudo suit makers pretend to make a suit, and the emperor pretends to wear it. His subjects also pretend to see a suit - until a child points out that the emperor is not wearing any clothes.

Threadbare claims

Recent comments from investors, economists and business people resemble the ‘not wearing any clothes’ variety. We should further acknowledge that tolerance for our president wrapping himself in threadbare claims traces to the ANC exploiting misplaced patriotism.

His predecessor’s reckless embrace of patronage allowed Ramaphosa to adorn himself in the values that the Mandela-branded transition had inspired. That era’s virtue-heavy aspirations enthused a patriotic vision whereby all South Africans would be, to put it starkly, validated. Whites were to be rehabilitated from international pariah status; blacks were to be respected and compensated for being oppressed.

A militant liberation movement was expected to transform itself into a political party accountable to the people. Local business leaders and investors, along with their international counterparts, were to endorse the transformation by investing in the new South Africa. Gushing global acclaim ignored that a plan to achieve broad prosperity never materialised.

An anthem was written; a flag designed. Patriotism flourished while the commitments necessary to achieve high volume upliftment were ignored. Instead, the electoral appeal of redistribution was stoked to camouflage increasingly pervasive patronage.

Huge purchasing power

Meanwhile, technological advances amid a rules based international system led to border-agnostic supply chains spurring global growth while plunging poverty. Emerging nations found they could sustain high growth by integrating into the supply chains which tapped the huge purchasing power of wealthy western nations. This path has lifted nearly 1.5 billion people, predominantly low-skilled workers, out of extreme poverty since our 1990s political transition.

Integrating into the global economy is irreconcilable with the redistribution focused policies which feed the ANC’s massive patronage network. To counter criticism, the ANC asserts, or at least implies, that pushbacking against BEE or localisation legislation is racist and unpatriotic.

While corruption and patronage overlap, much patronage is legal. Patronage doesn’t abruptly violate our sense of patriotism whereas corruption does.

Economic development basics

South Africa has, by far, the world’s most extreme - and most extremely entrenched - youth unemployment crisis. The ‘haves’ have responded by contemplating the fiscal feasibility of sub-subsistence payments in perpetuity.

There are no solutions being advocated by any of our leaders as indulging our misplaced patriotism convinces us that we can solve our problems by coming together as a nation. Today’s economic development basics must be ignored to entertain such delusions.

The expression “commodity curse” refers to how difficult it is to transition from over reliance on commodity exporting. Our experiment with investment-led growth was doomed from the start. Acknowledging this must now enthuse our national dialogue with the insights that can inspire workable solutions.

The commodity boom that produced five years of five percent growth, beginning about twenty years ago, seemed to suggest that SA could ignore how rapid diffusion of knowledge and access to affluent consumers were pummeling poverty globally. SA’s exceptionalism was being showcased for all to see - or so it seemed.

This narrative was as false as it was appealing. That commodity boom traced to a country, China, that was successfully executing an economic strategy which used success at value-added exporting alongside high household savings to fund massive infrastructure investments. While the ANC categorically rejects this approach, the surge in commodity demand boosted not just GDP but the rand as well. A stronger rand led to lower interest rates which fueled much debt funded consumption in SA.

False dawn

But none of this was sustainable or repeatable. Per capita income soon peaked as the boost faded. It was very much a false dawn. We weren’t close to levering commodity wealth into broad prosperity pre-1994 and the ANC’s approach has been similarly hopeless. We probably have the world’s highest inequality but this is no longer determined by race. Our inequality among blacks is as extreme as it is between whites and blacks. This reflects transitioning from a white patronage system to a black patronage system.

The majority of South Africans who are poor are overwhelmingly black and the young among them are far more entrenched in poverty than their parent’s generation. Battling the world’s worst youth unemployment crisis can’t begin until we reject the ANC’s twisted version of patriotism.

Big business’ attempts to pursue investment-led growth jointly with the ANC were justified in the sense that discussions with investors should have instilled within our ruling party a sense of how sustained high growth is achieved. We now know, however, that ANC leaders prefer to focus on feeding their seemingly insatiable patronage network.

Not a viable option

Autarky, a country’s pursuit of economic independence, has become a prominent geopolitical topic because countries are having to acknowledge how it is not a viable option. The US has recently ratcheted down the belief it can decouple from China; Europe’s de-risking language has been adopted. Maybe Brexit will eventually benefit the UK but rejigging its supply chains is proving to be harshly painful.

The ANC wants us to think that we can solve our problems internally because patronage and competing internationally are inherently irreconcilable. Russia, the world’s most resource-endowed nation, and the ANC’s role model, has provoked sanctions which threaten to undermine its economic prospects for many decades. Our self-imposed localisation policies have similar effects - as will our continuing to align with Russia.

We must shift our focus from race and the past toward growing employment through pursuing far deeper global integration. As a first step, we should better appreciate how our ‘wishful-thinking’ style of patriotism has been exploited in ways which pummel prospects for the majority of young South Africans.