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Johannesburg - The Democratic Alliance says it's rapidly becoming clear that despite ANC President Jacob Zuma's reassurances, economic policy continuity is not a foregone conclusion should he become South Africa's next president.
DA leader in parliament, Sandra Botha, says there's no good reason to believe that he'll not be the Congress of South African Trade Unions and the SA Communist Party's (key players that united behind Zuma's presidential ambitions) Trojan horse, heralding in a range of policies aimed at furthering the particular vested interests of these organisations.
Given the growing influence of Zuma's leftist proponents, Botha argues that it looks increasingly like South Africa's future economic policy strategy will consist of a smorgasbord of policies including an end to privatisation, continuation of onerous and job-crushing labour legislation, abandonment of inflation targeting, a shift to a budget deficit to fund a union-driven wish-list and increased state intervention in the economy.
The DA expects:
Increased state intervention. Currently, two pieces of legislation before Parliament, namely the Expropriation Bill and the National Health Amendment Bill, Botha says, are the by-product of the ANC's desire to extend state control over the economy In Polokwane, the party also resolved to strengthen the "role of state-owned enterprises".
"Add to this the plans of Public Enterprises Minister Alec Erwin to expand the role of state owned enterprises, as well as the moratorium on privatisation mooted at the Alliance Summit, and the picture emerges of the role of the state under the tripartite alliance," says Botha.
A central planning ministry. In Polokwane, the ANC resolved to demand "a strengthened role for the central organs of state, including through the creation of an institutional centre to prepare and implement long and medium-term economic and development planning". The SACP has called for the development of high-level "planning capacity" in the state. This "central planning ministry" would coordinate key strategic interventions, and align all facets of economy policy, such as infrastructure, industrial policy, energy policy, macroeconomic stability, safety and security and trade.
Botha argues that while the state has a role to play in promoting growth she says: "Given that the state lacks the capacity to drive these initiatives, at best, the expanded role of the state will further bloat the state structures and entail much planning with little implementation. At worst, the expansion of state intervention and state owned enterprises could impact negatively on critical public service delivery. Eskom serves as an obvious example."
Labour market policy. Early in the year, Zuma noted that labour regulation, including minimum wages, had the unintended consequence of "counting out the poorest of the poor". Cosatu ad the SACP rebuked him for his comments. Zuma retraced saying that he would "lay down his life" for the rights of the workers.
"We can thus expect a continuation of onerous and job-crushing labour market policy under the Zuma-led ANC," says Botha who adds that this will inhibit the alleviation of unemployment and facilitate a system of patronage.
Inflation targeting. Zuma has remained ambiguous, but, the DA believes he has implied a shift away from targeting, when he said "that there's some kind of problem there. And though I am not going to pretend that I have delved into the issue properly, it is something that I am going to get to."
Accelerated government spending. Cosatu has strongly criticised the budget surplus, arguing that given South Africa's significant developmental needs government should spend more - and obviously borrow more to fund this spending. On Manuel's fiscal discipline, Cosatu general secretary Vavi commented "I don't like the policies he has been pushing. We don't like boasting about a budget surplus".
Botha acknowledges that Zuma has recently remained vague in terms of economic policy, but in December last year he questioned why a country with widening income inequality had a budget surplus.
Botha points to parliament's adoption of a proposal to enable it to amend money bills and, amid, the "rumblings" from Polokwane, she says, there's potential that fiscal prudence will all but disappear in the new era of the ANC.
- Fin24.com