Government's regulation trip isn't the right way to uplift the poor
July 30, 2007
By Donwald Pressly
If in doubt, legislate, regulate or direct from above. This appears to be becoming the ANC's maxim as it enters its 14th year in power - already a long time for any political party.
There has been much debate on employment equity, black economic empowerment and affirmative action in recent weeks. There has also been increasing tension between business and the government over the former's apparent unwillingness to "come to the party" on infrastructure provision.
June and July - during which, one hopes, MPs have been in their constituencies - has been a period of reflection on delivery and policy directions.
The overwhelming message emanating from all sides - including the ANC policy conference and the SA Communist Party (SACP) conferences - is that the South African state needs to fast-track delivery to the poor. This is, of course, the task of any government that owes the bulk of its support to the urban and rural poor. It would be foolhardy for any government to ignore such a large constituency.
The SACP, of course, wants the country to hurtle down the glorious path of socialism to a destination of true equality, where there are happy, well fed and rested citizens in every neighbourhood.
I imagine a country like the former East Germany is something which general secretary Blade Nzimande has in mind. If one believes that such a state will produce contentment and freedom, so be it.
President Thabo Mbeki effectively dismissed the socialist approach. He argued at the policy conference that the SACP should not dictate the terms of the national democratic revolution. Although he maintained it was perfectly entitled to fight for socialism, implying this was not the approach of the ANC.
But the distinction between these concepts - the national democratic revolution and the socialist revolution - is blurred. Extending the state's tentacles in the workings of the private sector is becoming increasingly apparent as the ANC focuses on delivery. It is a value system shared with the communists.
This translates into the minister of health believing she can regulate medicine prices at the retail level. It means the department of trade and industry has the notion that it can control producer prices in the steel and petrochemical industries.
The minister of labour says that affirmative action will not go away until apartheid is dead. He spots racists in capitalism at every corner. Then there is the minister of agriculture and land affairs, who wants to regulate - or even place a moratorium on sales of land to foreigners at a time when we are putting out the begging bowl for foreign direct investment.
We may not be on the road to Bulawayo or Harare, where President Robert Mugabe and his cronies have demanded that retail outlets slash prices, thereby crippling the workings of the free market and putting business out of business.
But there is a worrying commitment among the ruling elite to the belief that one can legislate and regulate the market and that this will magically uplift the poor.
Apartheid left a legacy of dominance by big companies in several sectors. This has meant there is little competition, the lifeblood of the free market, in a number of fields.
But one gets an overall sense that taking on these big players - De Beers and Mittal Steel South Africa come to mind - by threatening to impose prices and beneficiation requirements, is the wrong way to go. We need less governance, less intrusion, less of the Big Brother and significantly less red tape.
Surely a reduced role for government - particularly in the free market - would be a far better recipe to extract the poor from poverty than overregulation?