ECONOMIC FREEDOM IN OUR LIFETIME: Can we have a proper debate this time?

Joel Netshitenzhe

As the delegates of the ANC Youth League rose from their 24th Congress, the slogan of 'economic freedom in our lifetime' on their lips, the "lost generation" seemed to be returning the favour of generational stereotyping. We, the older lot in society, bemused by a misshapen movement taking root in spite of our apprehensions, had by some quirk of fate become the "bewildered generation". Mesmerised by the antics of individuals, irritated by the seeming immaturity of it all, and bedazzled by the media focus on palace politics, the historic nature of the moment seemed to escape us.

In its January 8th Statement this year, the ANC asserts: "Political emancipation without economic transformation is meaningless. That is why we have to commit ourselves to economic freedom in our lifetime, and the ANC must continue to be in the forefront of that transformation."

What indeed is "economic freedom" and how can it be attained? Is there a common and coherent storyline across society on the final destination and how to reach it?

This historical moment calls for serious societal debate. Imploring the ANC leadership to put its foot down and suppress the debate will not put the genie back in the bottle. Launching ideological missiles about who is more Left and the vanguard of workers, or speculating whether this campaign is a proxy for ANC palace politics, will not smother the appeal of a sentiment.

It is no accident that this issue emerges in this stark form 17 years after the attainment of democracy. Having obliged Kwame Nkrumah's injunction to "seek ye first the political kingdom", economic liberation is an issue that post-liberation states on the continent and elsewhere had to come back to.

The efforts sometimes resulted in welcome success. In many other situations, failure by society honestly and rationally to engage the issue, poor policy choices on the part of leaders, and a brittle and corrupt state produced disastrous results. On the extreme, predatory elites used so-called economic liberation policies such as nationalisation, indigenisation, price controls and tariff barriers for self-enrichment.

It should be expected that youth in our country would be at the forefront of the economic freedom campaign. Just on access to economic opportunities: the employment ratio among 15 - 24 year olds is 13.2% compared to 40% in Asia and Latin America. 48.2% of those available to work in the 20 - 24 age cohort are jobless. 86% of unemployed youths have not gone beyond Grade 12; and two-thirds of these have never worked. This not only has major macro-social implications including crime and youth mortality as well as socio-political stability especially at local level. It is patently unsustainable.

It can be argued that this problem affects many countries. Besides the youth of the Arab Spring, there is concern in Japan about the so-called freeters (freelance arbeiters), mileuristas in Spain and the UK's NEETS (not in education, employment or training). This is what Peter Coy of Bloomberg Business Week describes as "the common element [of] failure - not just of young people to find a place in society, but of society itself to harness the energy, intelligence, and enthusiasm of the next generation".

The irony which is not irrelevant to our own discourse on economic freedom is that in Spain, for instance, the youth's "May 15 movement" of massive demonstrations has led to the recent defeat of the Socialist Party in regional and local elections. According to the Financial Times (17 June 2011), the right-wing Popular Party is expected to win the next general election. And so, counter-intuitively, socio-economic difficulties result in the rise of the right-wing, as the Left is unable to pose and mobilise around alternatives to the status quo. Under such circumstances, phenomena such as Louis Bonaparte's lumpen proletariat in 19th century France, the Tea Party extremists currently in the United States and the Green Bombers across the Limpopo river can gain prominence.

While there may be structural causes to youth marginalisation in many countries, a major contributor to the current problem is the global economic crisis.

South Africa differs in the sheer size of the problem, the low education and skills levels, the very high levels of inequality and the historical and racial dimensions to the phenomenon of youth unemployment. In our situation it is systemic, manifesting even during high growth periods. As the National Planning Commission (NPC) points out in its Diagnostic Overview, the central problem in our country is that too few people are involved in economic activity.

If the slogan, "economic freedom in our lifetime" has to have any meaning, it should aim at addressing this fundamental challenge. The root causes of the problem, the NPC argues, relate among others to the structure of the economy, the quality of education, poorly located and inadequate infrastructure, a resource-intensive path dependency, and spatial economic and settlement patterns.

A growth story line

South Africa needs a growth storyline that addresses these issues and clearly describes:

* how we can use the infrastructure programme not only to crowd in the private sector, but also to build supplier industries that will absorb more labour;
* the competitive advantages that we need to forge, to be able to manufacture many of the mass market goods that we currently import;
* a strategy fully to take advantage of our massive mineral endowments to exploit the commodities super-cycle and more critically to build a mature industrial cluster around these endowments;
* how we can take advantage of these and other endowments and potential to build a green economy that is more than just cost-neutral; and
* a clear strategy to take advantage of the high economic growth rates on the continent through regional integration and the pooling of sovereignty.

We should build "an economy in which cutting edge technology, labour-absorbing industrial development, a thriving small business and co-operative sector, utilisation of information and communication technologies and efficient forms of production and management all combine to ensure national prosperity" (2007 ANC Strategy and Tactics document). This will ensure that we escape the middle income country syndrome - where countries reach a level of development and then stagnate, unable to break out because of path dependency and sheer inertia.

However, the immediate challenge of unemployment, particularly among the youth, cannot wait until high growth over some 5 years starts to have qualitative impact. By then, the ticking time-bomb may have gone off. As such, specific programmes to address this deficit need to be pursued. Besides the public works programme, this should include measures such as massive artisanship training, learnerships, a school-to-work transition programme, job transition through the state and so on.

At the same time, programmes to address asset poverty including housing and land reform need to be intensified. And the approach to BEE should also focus on community trusts for youth and women as well as employee share ownership schemes. With regard to land, policy and planning should take account of the reasons why measures such as the audit of state land, the Communal Land Rights Act, the Land Use Management Bill, revival of collapsed agricultural schemes and other support programmes in rural areas are taking so long fully to materialise.
It is this kind of methodology, firstly, to identify the objective, and then the processes and mechanisms required to achieve it, that should inform the approach of the 'economic freedom movement'.

Source: ANC Umrabulo