Let us not pass on a poisoned chalice

Given South Africa’s cataclysmic unemployment rate of 37 per cent, the outside world must be amazed that we do not yet have a revolution on our hands. The danger does indeed exist and far-sighted politicians should understand that bold measures must be adopted writes the Free Market Foundation director, Temba Nolutshungu, in the latest edition of Rapport.  These measures should not pander to vested interests but instead take a broad view of all the challenges that confront our country. 

Temba Nolutshungu

 

  • Government should vigorously review all existing economic policies and scrap those which unnecessarily restrict the growth of the private sector since the private sector, not the state, creates sustainable jobs.  All policies which encumber the spirit of enterprise should be expunged from the statute books.  Government must ensure that the costs (in time and money) of starting up and running a business in South Africa are lowered, drastically in line with global norms. Policy measures informed by this basic principle will translate into an enabling environment for business and result in the explosion of the spirit of enterprise.  A proliferation of businesses, big, small, or informal, will create employment.  (It is estimated that some 68% of employees in South Africa work for SMMEs.)  A moratorium on the enactment of any new business related legislation would be a good start.
  • The government should consider implementing a proposal by Eustace Davie that anyone  who has been unemployed for six months  or more should be entitled to a Job Seekers Exemption Certificate (JSEC).   The JSEC would free a potential employee from our present onerous labour regulations and allow them to enter into a voluntary contractual arrangement with a prospective employer.
    • Individuals who exist on the margins of the economy should receive shares in state enterprises.  This would require means testing, which might involve the testimony of neighbourhood interests, religious institutions, family members and local charities. A burdensome exercise, but necessary to ensure that only genuinely poor individuals benefit.
  • The whole of South Africa should be declared an economically liberated zone, the essential characteristics of which would be: protection of private property; entrenchment of the rule of law which entails equality before the law, an independent judiciary and the certainty that contracts can be effectively enforced; adherence to the principle of willing-seller and willing-buyer (voluntary exchange which does not entail force or fraud); a low flat tax rate in place of progressive income tax, and myriad other taxes which  presently apply.
  • Affirmative action policies such as Black Economic Empowerment rules and score-cards should be revoked and all vestiges of race-based policies reminiscent of our ignominious apartheid past should be consigned to the dustbin of history.  Empirical evidence discredits the very concept of affirmative action policies as they have nothing to do with the empowerment of economically disadvantaged people but everything to do with the enrichment of politically connected black elites.  They certainly have little to do with Soweto, Mdantsane or Mitchells Plain, and definitely nothing at all to do with the people in rural areas.Further, they alienate a sector of the population which takes its intellectual capital to countries where policies do not reflect racial bias. There are hundreds of South African doctors in London, many of whom are black. Thousands, upon thousands of South African born people are choosing to live elsewhere. If conditions in South Africa were more acceptable, many of them would be enhancing productivity at home with their skills and stimulating the establishment and growth of numerous businesses.  The current rate of emigration of skilled South Africans is untenable and the policies which stimulate this emigration are economically maniacal.

Of greater cause for concern is that affirmative action policies are premised on the assumption that black South Africans cannot uplift themselves socio-economically without such measures.  Historical facts negate these condescending and disdainful attitudes towards blacks and should be treated with contempt.  To compare entrepreneurship in the townships at the height of apartheid with what took place soon after it was dismantled, gives you clear evidence that black enterprise is not lacking when conditions are the same for everyone.

After decades of affirmative action in the USA, blacks, as compared to other American ethnic groups, occupy the lowest rung of the socio-economic ladder. SA proponents of these racially discriminatory policies often resort to ad hominem attacks upon their critics, dismissing them as denialists (black critics) or as members of a rich and privileged minority advantaged by apartheid policies (white critics).  This is a mischievous endeavour to shore up policies that are morally indefensible, economically irrational and politically unnecessary.  There are feasible and credible alternatives which do deliver results.  Affirmative action is taking a backward step into the future.  It must go!

If positive measures were implemented, more businesses would be created and South Africans in the diaspora would likely come home and bring with them their intellectual and financial capital.  The country would experience a rebirth.  Domestic investment would be stimulated and foreign investors would find the country seductive.  This would translate into a high growth economy which could potentially set a new global benchmark.

All attempts made so far to resolve the unemployment crisis have failed.  But, as we acknowledge this, we should not seek a scapegoat to deflect attention from our failures.  . When we look to blame one or another group – often a vulnerable or conspicuous minority such as the banks, white farmers or foreign migrants – this causes us to lose focus on what needs to be done and the consequences are tragic.  Witness the holocaust unleashed by Hitler’s Nazism, or the genocidal war in Rwanda.  We can no longer afford indulging in the futile exercise of blame.

We need decisive action.

Here, post-communist Czech leaders Vaclav Klaus and Vaclav Havel loom large.  These statesmen introduced radical, ambitious measures which liberated the Czech economy from the state and put it in the hands of the people.  They gave every individual in Czechoslovakia shares in former state enterprises.  They were members of a corps of innovative leaders which included the Liberalni Institut think-tank and operated with such moral integrity and fixity of purpose that, from an outsider’s point of view, the results of their hard work were nothing short of miraculous.  Through their efforts, the Czech economy was rescued from stagnation and transformed into one of the most successful in the world.

In Vienna, I heard Vaclav Klaus respond to a question. He said, ‘Never believe politicians when they say that things cannot be done overnight, especially when they are in power’.

So apt here, today, where many who  advocate discriminatory laws in our post-apartheid South Africa and drip hatred in peoples’ hearts, have never suffered directly from the harsh practices of apartheid.

The words Dr Martin Luther King proclaimed in 1963 reverberate loudly in my mind and inspire my personal mission to fight for the repeal of all racially defining policies: “I have a dream that my four children will one day live in a nation where they will not be judged by the colour of their skin but by the content of their character…

Nelson Mandela ushered us into a future dramatically different from the past.  He embraced  his former prosecutor,  Percy Yutar.He embraced Mrs Betsie Verwoerd, the widow of Hendrik Verwoerd, a Prime Minister who had visited upon blacks some of the most vicious discriminatory laws. He embraced All South Africans and all the whole world.  As for me, I will not pass on this poisoned chalice of race-based policies and I challenge everyone who is bent on doing so.

All that is necessary for the triumph of evil is that good men do nothing” Edmund Burke (1729 – 1797)

Temba A Nolutshungu is a director of the Free Market Foundation.  The views expressed in this article are solely the author’s.