There is growing amount of evidence that the ANC's much-vaunted developmental state is unraveling at an ever-increasing pace, and that it is doing so for two fundamental reasons: first, because it is defined by a set of ideological ideas and premises which are poorly thought through and, as a consequence, both impractical and detrimental to our economic development; second, because the ANC - as a political party - is obsessed with power and control (best illustrated by its policy of cadre deployment), with the result that the notion of a developmental state is distorted from first principles and has become a proxy for hegemony.

Three recent particular pieces of evidence are testament to this:

First, it has recently been reported that ACSA is considering increasing its airport taxes by 132%. This follows reports that Finance Minister Pravin Gordhan is considering raising income taxes; that Eskom will be forced to dramatically increase its rates and that the Communications Department is mooting a 1% tax increase to help sustain the financial black hole that is the SABC.

These developments are the consequence of a government unable to properly manage those state institutions that report to it. Either they are poorly managed because senior managers are appointed on criteria that have little to do with their ability and everything to do with their political affiliation or, on the other hand, because the ANC insists that these entities be managed by the state, as opposed to the private sector.

This insistence is blind and unthinking. No amount of evidence, to the degree that the country can run out of electricity, seems to have any impact on the ideology that underpins the ANC's political programme. The consequences are now being carried by the tax payer, not simply in the form of income tax, but with regard to every interaction with the state in which one is required to pay a fee or levy. It is a sobering thought to consider that, were many of these public institutions private, they would have been liquidated some time ago. They are supposed to be the vanguard of the developmental state, but they are failing fundamentally to deliver on their mandate.

Second, yesterday Armscor fired its CEO, Sipho Thomo, following a disciplinary hearing. The consequence of this is that Armscor joins a long list of other critical parastatals without a senior executive manager in charge:

• Transnet: without a CEO since February 2009;
• SAA: without a CEO since 10 March 2009;
• Eskom: without a CEO since 5 November 2009;
• Denel (SAAB Aerostructures): without a CEO since 12 January 2010.

One must remember too that the Group Chief Executive of the SABC recently resigned after a period of intense turmoil, followed shortly by the replacement of the entire board.

In many instances these resignations are the consequence of political infighting and, certainly, there has been no express intent on the part of the government to promise that merit, skill and ability will be the determining factors in deciding on replacements.

Because political loyalty and the drive to control all aspects of the state supersedes expertise and competence the executive and the senior management of many public entities are run by jacks-of-all-trades who cross the line between business and politics on a regular basis, rather than professional experts with tailored track records who stay in a single position for a sustained period.

Popo Molefe, chairman of the Armscor board, was previously the North West Premier and then with PetroSA; Maria Ramos was with the Treasury, then Transnet, now ABSA; Dali Mpofu ran Boxing South Africa and the SABC at the same time, both very badly; the list goes on and on.

It appears there is no job anyone aligned to the ANC cannot do; but, at the same time, no job anyone aligned to the ANC can do very well.

Third, Eskom has announced that it's open to selling off a stake in various of its power plants to the private sector, in an attempt to generate the revenue it needs to fund its new development programme. Its new programme is, of course, a consequence of its fundamental mismanagement and years of inadequate investment. Thus, in spite of the ANC's vision, and not because of it, Eskom has been forced to reconsider its approach to the private sector.

True, it has not been bold enough to sell 51% of any entity yet, but necessity has forced upon it an option which runs against everything the ANC believes in. The vanguards of the developmental state are rebelling against it.

These three developments are only the most recent examples of a far broader and more comprehensive set of indicators which suggest that the ANC's notion of a developmental state is misguided and damaging to South Africa's well being. Often progress and necessary hard decisions are blocked or undermined by the unions, which wield an unhealthy influence over South Africa's best interests; the increasing centralisation of power in the hands of the executive is eroding away federalism and choice and our industrial policy is as incoherent as it is impractical.

The ANC is damaging South Africa's economy, it is limiting choice and it is preventing growth. Central to these problems is its warped conception of a developmental state and, unless the ruling party starts to properly distinguish hard evidence from a blind attachment to an ideology with no real merit, it is ordinary South Africans who will continue to carry the cost.

Statement issued by Ian Davidson MP, Democratic Alliance chief whip, January 21 2010

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