As the dust settles over a stormy night of politics in South Africa, the new dawn that so many of us were hoping for to revive this frail economy has not materialized. Instead Zuma gave a speech in which he hardly mentioned the National Development Plan, their well sounding master plan from only 2 years ago. Instead of following on with a market friendly approach, he almost did a u-turn and his ideas on how to heal the many shortcomings of this economy by suggestions with a distinct communist flair. Have we not learned by world events over the last 80 years, that communism is the biggest failure in modern economic times? It caused more people to end up in absolute poverty and despair than any of the world wars put together. In contrast, capitalism, even though not perfect, has lifted millions out of poverty. In fact the wealth enjoyed by those fortunate enough to live in free market economies is higher than it has ever been. Yes, those societies produced a few extremely rich people, but on average everybody is much better off than they were only 30 years ago.
None of the politicians, listening to their top commander (Zuma) giving the State of the Nation Address (SONA), really inspires confidence. Most look like they are there just because there is a big banquet after the SONA, that they don’t mind nor do care the message Zuma gives. Zuma’s ideas on how to get this economy up on its feet again are more about how much more the state can control and interfere in the free market system. Members of Parliament enthusiastically applauded when he said that foreigners are not allowed to own land. Have they forgotten that if it were not for the help of foreigners that it otherwise would have been very difficult to overthrow the apartheid regime? Instead of freeing up the electricity market, he burdened Eskom (a state owned company that by any accounting standard is bankrupt) with another future nuclear plant. Have we not had enough proof that the monopolized control doesn’t work? Most of the jobs that were created were in the public sector, while the private sector is still struggling with too ridged labor laws, red tape and skills shortage. None of the fundamental bottlenecks have been addressed. Instead Zuma celebrated an agreement with China that allows us to export Maize and Apples there, but there won’t be any Maize or Apples to export if his farm reforms go through.
Zuma was at a juncture, go left and turn to communism or right to follow market friendly approach. Given the pressure that the ANC is under from the left (the other members of the triparty alliance), it would have taken a strong leader, somebody with a plan and a vision, to implement more reforms to make South Africa more market friendly. Zuma turned left.