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Good or terrible story?

THE ANC government has a good story to tell, President Jacob Zuma said when he delivered his State of the Nation Speech to Parliament. No, it is a terrible story, the combined opposition countered.

The question is, of course, how do you define a “good story”?

One indirect answer was furnished in the latest edition of the British news magazine The Economist. It carried an illuminating analysis plus a leader article about Argentina.

A century ago, Argentina used to be a country with a brilliant future. In the 43 years leading up to 1914, GDP had grown at an annual rate of 6%, the fastest recorded in the world, according to the magazine. It was among the ten richest in the world, ahead of even Germany, France and Italy, and its income per head was 92% of the average of the 16 richest economies.

And today? Its successful years are but a distant memory. Its income per head now equals only 43% of those 16 richest economies. It even trails Chile and Uruguay, countries on which the Argentinians arrogantly looked down as inferior.

What went wrong? The magazine identifies several reasons. Among them are political instability (military coups in 1930, 1943, 1955, 1962, 1966 and 1976), wild swings in economic policy (from free market-friendly to irresponsible populist hand-outs with borrowed money), protectionist trade barriers, bad education for all but the rich, huge income differences between rich and poor, et cetera.

In addition, the country has been ruled by a series of “economically illiterate populists”, including the present head of state, President Cristina Fernández de Kirchner, but this stretches back to Juan and Evita Peron in the forties and fifties of the previous century.

One of the most influential causes of Argentina’s decline was, however, rampant corruption. And, therefore, the conclusion is harsh: “In its economy, its politics, and its reluctance to reform, Argentina’s decline has been largely self-inflicted.”

Argentina’s opposite is probably Germany, which ended the Second World War in utter ruins. But Germany not only learnt from its authoritarian past to scrupulously adhere to democracy and the rule of law. Successive German governments also invested massively in good education on all levels. They practiced frugality, promoted a culture of hard work, and came down mercilessly on corruption.

Of course, Germany was helped by a culture of punctuality and a high work ethic, as well as a typical Protestant rejection of self-enrichment at the cost of society. All of this stood in stark contrast to the mañana culture prevalent in Argentina.

The question that will interest most readers of this column is, of course, whether South Africa can learn something from Argentina’s woes.

The answer must be yes, even though there are many differences of detail between the two countries. The main truth emanating from Argentina is that a country’s success or failure is at least to a large extent the result of choices made by its political and economic leadership.

Argentina’s failure is largely the result of wrong choices made by the politicians during the past century.

When The Economist looks back on post-apartheid South Africa in about 2194, no doubt it too will not judge the successive ANC governments very leniently. The late President Nelson Mandela will, of course, always be honoured for his role in fostering reconciliation, but he never pretended to be an economist. Things started going wrong even while he occupied the President’s offices in Tuynhuys and the Union Buildings.

First of all, the ANC’s policy of cadre deployment brought about a situation where ANC loyalists were put in leading positions for which they were not suited (except for the fact that they were supporters of the right faction of the ruling party). The catastrophic situation in the SABC leadership, ably exposed by the Public Protector, is a case in point.

Especially on local level, this has led to the most unbelievable corruption, mismanagement and decline.

But corruption is also protected even on a high level. The weapons procurement scandal, in which millions of kickbacks were allegedly paid to high-placed ANC cadres, will not go away, as will the Nkandla scandal, in which President Jacob Zuma’s luxurious palace complex was built with taxpayers’ money.

The difference between rich and poor has resulted in a super-rich black elite with little regard for their super-poor brethren in the squatter camps and townships.

South Africa is not Argentina. But just as Argentina always remained the country of promise which was never fulfilled, so South Africa may always be the country of tomorrow and never of today.

This is not self-evident. Provided that our leaders start learning from Argentina – and Germany – and make the right choices. But I am afraid a little voice deep inside me tells me this will not soon be the case.


- Fin24

* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.

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