SOUTH AFRICA’S ruling African National Congress (ANC) has veered sharply to the left and will go into elections, expected to be held in April, with a manifesto largely dictated by the country’s Communist party, according to senior party officials.
Under Jacob Zuma, its new leader, it has quietly adopted a radical platform of social policies which the business community claim are unaffordable.
The ANC already promises a free allowance of water and electricity to all and has introduced the largest welfare state ever seen in a developing country, with more than 40% of the population in receipt of state handouts.
Under the influence of its firebrand new secretary-general, Gwede Mantashe, a former leader of the mine-workers’ union and chairman of the South African Communist party, it is adopting policies and rhetoric based on left-wing states such as Cuba and Venezuela.
Hailed by Zwelinzima Vavi, the trade union leader, as “a peasant, a worker, an organic intellectual, a Marxist and an African communist”, the bearded Mantashe is loud, dominating and furiously partisan. He has purged suspected supporters of Thabo Mbeki, the former president, and those who show “insufficient revolutionary fervour”.
Under his influence the ANC is expected to propose, in its as yet unpublished manifesto, the introduction of universal health insurance, free education, the extension of child allowances to all children up to the age of 18, new maternity grants, wage subsidies, an old age savings scheme, subsidised housing for farm workers and military veterans, free food handouts to all poor families, an expanded public housing programme and the “transformation” of the private sector through the “development of cooperative financial institutions”.
Greta Steyn, one of South Africa’s leading financial analysts, describes it as “a massive shift to the left”. The markets, she says, are in denial and have failed to price in the risk of what lies ahead. What it means, she suggests, is that the country’s budgetary framework “must be thrown into the bin”. The markets, she warns, “should wake up and smell the rot”.
The ANC insists that its programme is affordable but has provided no costings.
Servaas van der Berg, professor of economics at Stellenbosch University, has shown that even a basic income grant of R100 (£7) a month would force up marginal income tax rates from 40% to 66%, without counting the cost of the rest of the programme.
The only alternative to tax increases would be massive foreign borrowing to fund state handouts. Trevor Manuel, the government’s finance minister, warns that South Africa already has one of the world’s largest current account deficits and needs at least £15 billion a year in foreign investment just to stay afloat.
Under Mbeki, president from 1999 until his resignation last year, the communists became increasingly bitter at what they regarded as their political marginalisation. However, Mbeki’s decision to ditch Zuma, his popular deputy president, in 2005, gave them a second chance. They rallied to Zuma’s defence and, buoyed by his strong Zulu support, triumphed when he became the ANC leader in 2007.
Although dogged by corruption charges, which he denies, Zuma, himself a former communist, will be the ANC’s presidential candidate.
He has allowed the communists to dominate the drafting process of the ANC’s new manifesto and the party’s economic programme. Mantashe continually stakes out positions some way in advance of mainstream ANC policy, coming out strongly for the creation of more state enterprises, particularly in the mining sector.
When business groups asked how this could be squared with Zuma’s promise of policy continuity, Mantashe brusquely told them that “continuity and change is a dialectical concept”. They were not reassured by the Marxist terminology.
Mantashe stands for the absolute supremacy of party over government. When black judges failed to find for the ANC in an important court case, he railed against them as “counter-revolutionaries” and “apartheid apologists”. He has already announced that after the election “we [the party] will sack any ministers who do not perform”.
The ANC programme calls for the assertion of party control over the central bank, with its interest rates set in line with social needs rather than for the control of inflation, as in the past.
Azar Jammine, the influential chief economist of the Econometrix consultancy group, warned: “The consequence could well be a huge withdrawal of money. This would mean that South Africa could be unable to finance its current account deficit, the rand would plummet, inflation would soar and it would lead to a financial crisis.”
Kobus Marais, finance spokesman for the opposition Democratic Alliance, accused the ANC of “having its head in the sand” and refusing to take notice of the international economic crisis.
Merely increasing child benefit to age 18 will, he said, cost an extra £3 billion.
Zuma, who knows relatively little about economics, seems unconcerned. “He is determined to take radical steps,” one of his closest confidants told The Sunday Times last week.
“He’s happy to do what the communists recommend if he thinks it will help the poor.
“But he knows the communists have their own agenda and there could be an early showdown with Mantashe, who seems to think that he will decide which ministers should stay and which should be sacked.”
ZUMA’S MANIFESTO
A pledge to create 5m new jobs
Family allowance of £15 a month up to age 18
Free universal health insurance
No school fees for 60% that currently pay for state education
Source - The Times
See also - Communists steer Zuma's ANC The Australian
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