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ANC populism v pragmatism on economy

Politics
Durban - Two ANC heavyweights delivered conflicting messages and policy positions on transformation while speaking at the same business breakfast in Pietermaritzburg at the weekend.

The province’s economic development MEC, Sihle Zikalala, warned big business to support the call for radical economic transformation or risk plunging the country into crisis.

Deputy Finance Minister Mcebisi Jonas, however, took a more measured tone cautioning against the cost of implementing new policies and saying that policy needed to be based on research and evidence.

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KZN economic development MEC, Sihle Zikalala, warned big business to support the call for radical economic transformation or risk plunging the country into crisis. File picture: Motshwrai Mofokeng/Independent Media

It’s believed these two positions reflect the contrasting views of two camps in the ANC: one standing firmly behind Nkosazana Dlamini Zuma to be the next ANC president; and the other backing Deputy President Cyril Ramaphosa.

Zikalala said that, if big business did not support the call, there might be an “uprising” by the majority of the country’s marginalised people.

Speaking at chartered accountants’ firm Morar Incorporated Finance’s post-budget breakfast in Pietermaritzburg at the weekend, Zikalala assured business owners that radical economic transformation was about including black people into the mainstream economy, rather than harming existing business.

The event is held every year in the KZN provincial capital to analyse Finance Minister Pravin Gordhan’s Budget speech.

Jonas warned that implementing new policies was expensive, and that policy proposals should not be based on emotions.

The conflicting policy proposals advocated by ANC leaders will be fiercely contested at the ANC national policy conference in June.

In issuing his warning to business owners, Zikalala quoted what former president Thabo Mbeki had said in 2000.

Deputy Finance Minister Mcebisi Jonas cautioned against the cost of implementing new policies and saying that policy needed to be based on research and evidence. File picture: Waldo Swiegers/Bloomberg

“He (Mbeki) said ‘if those of us who are inside the palace close the gate, when those who are the majority in the society continue knocking on the gate, and if we don’t open the gate for them they will break it, and when they get in they will not be getting in in the polite manner’,” Zikalala warned.

He said the KwaZulu-Natal government would move with vigour to implement radical economic transformation, “which is one of the non-negotiables”.

He described as unnecessary the “hype and panic” surrounding President Jacob Zuma’s emphatic call for the implementation of radical economic transformation.

“It is important that we demystify what has been propagated, as it is contrary to what others are saying. This is not about taking from those who are rich to support those who are poor. When we talk about radical economic transformation we talk directly to changing the heart of the economy of our country,” said Zikalala.

He said economic growth was useless when it excluded the majority of the population. He cited 2004 as an example, where 5% growth failed to address poverty and unemployment.

“We are not talking about a few individuals monopolising the economy,” Zikalala said. “But we are talking about opening up the economy for the integration of many people into the mainstream economy.”

Although he did not mention radical economic transformation, Jonas said those who are calling for new policies should think about financial implications.

“We must look at the cost of policies, because ultimately policy is not just talk, ultimately policy must be funded, it must be resourced.

“When we say this is the policy direction we are taking we must answer the second question of how we will finance that policy,” he said.

Jonas later told the media that the call for radical economic transformation would be debated at the ANC policy conference.

Political analyst Daniel Silke said the different views over economic policy that played out between Jonas and Zikalala represent the “pragmatists” and “populists”.

“We are going to see serious differences on how to grow the economy. There will be those, who I call the radicals or populists, versus the pragmatists who understand the realities of creating a positive investment climate within South Africa,” said Silke.

The Mercury

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