Comments by Frans Cronje to the Heritage Foundation, Washington DC, United States of America, April 29 2015.

The long march of the South African left: the ideological underpinnings of current government policy in South Africa

If you represent a large corporation in South Africa, or serve as a diplomatic representative of a leading Western government in my country, the past three to four years would have been difficult for you. You would have experienced a rising degree of official indifference – even hostility.

Policy in areas such as intellectual property rights and migration might have seemed almost calculated to undermine your interests in the country. European nations have had to make sense of the unilateral cancellation of their bilateral investment treaties with South Africa. The United States has faced South Africa’s very obstructive diplomacy over the African Growth and Opportunity Act (AGOA).

When you look at some key socio-economic indicators, this behavior seems even more peculiar. South Africa had GDP growth of just 1.5% last year. This year will not be much better. Its debt levels are escalating. The fiscal deficit now precludes the government from implementing many of its social policies. Half of the country’s young people are jobless, and socio-political instability is escalating. South Africa is down in its trade relationships (facing a trade deficit) with every major economy and region of the world except for non-oil countries in Africa and, very significantly, the United States.  

From a Western perspective, you might think the South African government would be doing all in its power to attract fixed investment and expertise to grow the economy. Considering the enormous benefit South Africa draws from AGOA, you would think the government would have launched a diplomatic effort to ensure the long-term future of that agreement. But South Africa is not doing these things.

Many diplomats and business people cannot understand this, as it does not accord with the image of South Africa as Mandela’s ‘rainbow nation’ – essentially, as a leading emerging market crafting its politics and economics on the model of a Western democracy. But that country really does not exist anymore – and there are doubts if it ever did. My role this afternoon is to try and help you understand what has gone wrong in South Africa and the implications for how its government makes policy.

A word on who I work for. I represent a leading, privately funded, South African think-tank - the IRR. We are one of very few market-friendly civil society organisations in Africa. Our track record over more than 80 years is without comparison both in terms of the rigor of our analysis and our unwavering support for political and economic freedom. We also emphasise the importance of South Africa establishing sound economic and diplomatic relations with Western nations.     

So what is going on – why do those relations seem to be failing?

My point of departure is that the South African government - of today - is driven at its core not by the Constitution, nor by any of the formal economic policy blueprints it has adopted, but rather by the ideology of the National Democratic Revolution or the NDR. Understanding the NDR is the key to understanding South African policy thinking.

My senior colleague Dr Anthea Jeffery, one of South Africa’s top policy analysts, is the leading expert on the NDR and its implications.

Her argument is as follows:

The theory of the NDR has its origins in Lenin’s theory of imperialism, which claimed, in the early twentieth century, that Britain’s wealth was derived solely from exploiting the people in its colonies.

Adherents to the NDR see South Africa as ‘a colony of a special type’ in which foreign colonizers have become a permanent part of the population instead of going ‘home’.

In the late 1950s, much attention was given by the Soviet Union to the need for NDRs in former colonies that were newly independent. The aim was to move these new states away from market economies, bypass the capitalist stage of development as much as possible, and move steadily to socialism. At much the same time, the communist party in South Africa started to argue that wealth in South Africa had nothing to do with skills or technology but was derived solely from exploiting black people. Over the following decades, as the communist party strengthened its dominance over the African National Congress (ANC) (the party that has governed South Africa since its first democratic election in 1994), communists became the key ideological drivers of the ideas underpinning the liberation struggle – and of the NDR.

Their influence was such that at its Morogoro Conference in 1969, for example, the ANC signed on to the ‘colonialism of a special type’ ideology and also committed itself to the NDR. It further asserted that the only way to correct ‘historical injustices’ within South Africa was through the destruction of existing economic and social relationships within the country.

This perspective became ever more deeply ingrained in ANC policy thinking in the last two decades of apartheid rule - I would say into the very early 1990s. While the NDR’s ideological influence over government waned after Mandela’s release and into the mid-2000s - something I will address in a moment - it never completely faded away and has shown a resurgence in the past decade.

How and why has this happened?

Every five years, the ANC holds national conferences to set the agenda for the following five years. Since 1994 at each of these conferences, the ANC has expressly recommitted itself to the NDR.

At the Mafikeng conference in 1997, for example, the party identified the key goal of the NDR as being ‘to liberate Africans…from political and economic bondage’. Fair enough you would say - except that to achieve this end, it stressed the need to sever ‘the symbiotic link between capitalism and national oppression’, in order to ensure the ‘redistribut[ion] [of] wealth and income’;

Despite the forlornly dated tone of these conferences South Africa’s former deputy president (under Mandela), and later president, Thabo Mbeki, and his pragmatic finance minister, Trevor Manuel, - with the express backing of Mandela - had been an important countervailing force and done much to reduce communist influence within the government by centralizing policy making in the Presidency - at arm’s length from their party.

This was certainly the case over the decade that ran from the mid-1990s through to the mid-2000s and saw South Africa briefly exceed growth rates of 5% of GDP. However, the communist party (that governs in coalition with the ANC) was outraged and led a major campaign to unseat Mbeki and thus regain policy control over both the ANC and the South African government. This campaign reached its peak at the 2007Polokwane conference where Thabo Mbeki was axed as ANC leader – forcing him, in time, to resign as president of South Africa.

The success of this campaign can be understood when you consider that four in ten cabinet ministers are now members of the communist party. Our trade minister – who took the lead on the AGOA negotiations – is a senior member. The communist party still believe deeply in the need for a ‘vigorous and vigilant dictatorship…by the people against the former dominating and exploiting classes’. They are also believe deeply in the importance of resisting any attempt to ‘restore white [read Western] colonialism’. 

Indeed in a speech ten days ago, at an Asia-Africa, summit our foreign minister made three references to colonial oppression in her first five paragraphs including a warning to counter the threat of neo-colonialism – much to the confused amusement no doubt of the many Asian diplomats in attendance. It is a story that perfectly, if sadly, illustrates the gulf that is emerging between the post-colonial trajectories of South Africa and much of Asia.        

You will now understand why the key ‘strategy and tactics’ document to emerge from that 2007 conference described the post-Mbeki ANC as ‘a disciplined force of the Left, organised to conduct consistent struggle’. The conference also stressed the need to change ‘colonial production relations’, and called once more for a fundamental change in the ‘ownership and control of wealth’.

It noted that the ‘balance of forces’ had shifted since 1994 ‘in favour of the forces of [leftist] change’. It also talked of ‘placing ANC supporters’ in structures of civil society and then ‘using them to influence the intellectual and ideological terrain’ within universities and the media. In addition, it emphasized the need to ‘reshape’ business operations towards the ‘outlook of a national democratic society’ – code for a socialist society.

The Mangaung policy document, adopted five years later (in 2012), endorsed the Polokwane one and added to it a preface confirming the need to ‘eradicate the legacy of apartheid colonialism’ – code of capitalism. This preface also urged further ‘interventions…to speed up change’, and stressed the need to confront ‘the dominance of the capitalist system’;

The interventions foreshadowed in these documents have been increasingly evident in practice over the past four to five years. A need to ‘confront’ capitalist ‘dominance’ is also what inspired South Africa’s tone on the AGOA negotiations.

What, then, are the current ideological/policy goals of the South African government?

-  liberate South Africans from the exploitation still implicit in ‘colonialism of a special type’ – and of which Western investment is seen as both a symptom and an extension;

-  ‘eliminate apartheid [ie existing] property relations’ through the ‘redistribution of wealth and income’, which implies a need  to reduce or take control of Western interests/assets in South Africa;

-  establish an ‘African hegemony’ in political, economic, and social life and so reject and limit Western influence;

The overarching goal is to push forward with the NDR because it:

-  offers the most direct route to a socialist and then communist society.

One of the ramifications of this ideology is that the post-2007 ANC does not see itself as an ordinary political party bound by the ordinary rules of the political game, but rather as a socialist liberation movement with an historic mission to implement the NDR. This, in its view, means that it is also uniquely entitled to rule. This stance makes it contemptuous of Parliament, opposition parties, a free press, an independent civil society, and adverse electoral outcomes – along with Western ideas and influence.

The current ANC also does not regard itself as bound by the Constitution. It sees the Constitution negotiated during the democratic transition not as a solemn pact, but rather as a tactical compromise to be modified as the balance of power shifts in its favour.  In addition, the ANC constantly white-ants constitutional provisions it sees as standing in the way of the NDR.

Contrary to what you might therefore expect, SA’s current priority on economic policy is not to stimulate growth, but rather to bring about the redistribution of existing wealth from whites/colonists/imperialists/Western investors – either to the ANC’s own leading cadres or to the State itself. As just one example shows, it now seeks the indirect expropriation of the foreign-owned security industry, which is expected to surrender 51% of its equity or assets to South Africans. Such interventions, we have no doubt, will in time spread to other sectors and other foreign-owned industries as well.

Core natural resources – water, mineral wealth, and land – have already been vested in the State or are increasingly moving into State ownership. Ironically, though this is being done in the name of redress for past wrongs, all black South Africans are increasingly being barred from individual ownership of these key assets.

Instead of encouraging private investment and helping poor South Africans gain jobs, income, self-reliance and economic independence, a critical part of the current ANC’s strategy - to lead the country into socialism - is to constantly put forward the idea of a strong ‘developmental’ state, which will provide more and more people with cash grants, along with an expanding list of other ‘free’ goods and services. On this foundation, the ruling party constantly pushes for ever more State intervention in the economy – and ever greater dependency of people on the State.

Here, the ANC has had great success, for its position on the overriding importance of the developmental state is now commonly endorsed by most commentators in the media, civil society, and the wider political sphere. There is regular overt hostility to the profit motive and to private enterprise.

Significant progress has also been made with the goal of promoting increasing dependence on the government. More than 16m people (close on a third of SA’s population) now receive cash grants from the State every month, while millions also benefit from a wider ‘social wage’ that includes free housing, largely free basic education, and free basic electricity and water. More and more people thus rely on the State for money, goods and services, while the idea that they should be able to earn their own income and pay their own way seems increasingly odd to many commentators and is regularly derided as right-wing propaganda.

It comes as no surprise, then, that key Cabinet ministers, supported by civil society, are keen to ‘roll back’ market provision in areas where it still exists, such as health and education. In the context of National Health Insurance proposals, for instance, the current health minister would like to get rid of private health care and bring all health care services under government control. Such ‘roll-back’ thinking explains policies that seek to limit the role and influence of large, mainly Western corporations. The government’s recent assault on intellectual property rights – that threatens a damaging precedent for US firms across the developing world – is particularly relevant here.  

Fortunately, there are also many countervailing factors to the NDR, and these include:

First, the ANC recognises that the ‘balance of forces’ must be correct before progress can be made with the NDR. As with other revolutionary movements, it tracks the balance of forces very carefully, and accepts that it may be necessary to take one step back in order to take two steps forward;

Second, the communists in the ANC know that the collapse of the Soviet Union brought about a fundamental shift in the global environment. This has inhibited the rapid post-apartheid implementation of the NDR which they had earlier anticipated. They continually monitor the global environment and have drawn comfort from the 2008/09 global economic crisis and the way in which this, according to the organization, has helped discredit free markets;

Third, the government has long been anxious to retain its ‘sovereignty’ over South Africa and to avoid a debt trap which could lead to structural adjustment programmes under the auspices of the IMF or the World Bank;

Fourth, the ruling tripartite alliance (comprising the ANC, the communist party and the biggest trade union federation, Cosatu) is riven by division, as is the ANC itself. The ANC also knows that it has lost much of the moral high ground it earlier enjoyed, and that its cadres are heavily involved in corruption and factionalism (and are widely known to be so). As the party itself acknowledges, state resources are now often used to fight internal battles within the ANC, for different factions and individuals are constantly jockeying to get ahead and so gain access to lucrative government posts which can also be used for personal enrichment.

These countervailing factors are all important. However, their strength  is reduced by the current climate of ideas, which is hostile to business and private enterprise and receptive to the idea of State control. Too many people now buy into the seductive but ultimately paternalistic, and therefore offensive, notion - that underpins ‘development state’ thinking - that the poor can be helped by development projects, aid, and handouts. This is to enslave them to a life of material and later political dependency on the State – and plays perfectly into the menacing prospect of a socialist future. Their only salvation rests in the creation of an economic policy climate in which they can help themselves.  

There is no need therefore, here in Washington or elsewhere, to be ‘confused’ (as many analysts and diplomats tell us they are) by the apparently illogical policies of the post-2007 South African government or its growing hostility to Western nations. Understand the NDR and you will understand the ruling party and its communist allies. The collapse of the Mbeki-administration in 2008 (after Mbeki’s ouster as ANC president at Polokwane in 2007) broke the dam of internal resistance to the NDR. Hence, the current party leadership has now moved into high gear in implementing the NDR.

What we are seeing (and is particularly relevant to US interests and to the future of AGOA) is a calculated and determined push by a leftist government to turn against the West and undermine Western interests in the broader Southern African region. This is what your diplomats and corporate CEOs need to understand if they are to begin the long march to safeguarding their interests in South Africa – and if they are to also play a part in protecting the country’s future as a free and open democracy.  

Frans Cronje heads the IRR.