fast little loans
It is quite incomprehensible that in a world of nations mostly battling to avoid being drowned by massive debt, the ANC secretary-general, Gwede Mantashe, should actually discourage investment.
Mantashe did this in a recent interview with Reuters in which he effectively told Western investors SA does not need their money because it can turn increasingly to fellow Brics members India and China to fund its economic development.
“There is a dynamic that Western investors must wake up to,” he was reported as saying.
“If they are still sulking regularly, there is a growing ‘look East’ tendency that is emerging throughout the continent, the developing world.”
Mantashe went on to berate the conditions which the IMF and World Bank place on their loans, suggesting this was driving developing countries further East.
It’s never been a secret that at its ideological core, the ANC is suspicious of the West.
For 18 years it has accommodated itself to a world dominated by free-market Western powers and the market itself.
Now it’s evident that the ANC regards the relative economic decline of the West – dramatised by the debt crises – and the relative rise of the emerging nations, particularly the Brics, as a turning of the tide, back towards the statist model it felt it was prematurely weaned off.
And so, in his opening speech at the ANC national policy conference this week, President Jacob Zuma threw his full weight behind the party’s “second transition”, which calls for a significantly greater role of the state in driving the economy.
Perhaps this is just rhetoric to fool the ANC’s masses, who are growing increasingly restless at the government’s failure to deliver them from poverty – rather than an alarm bell warning us of the growing Zanufication of the ANC.
History will no doubt tell.
Zuma has got himself into a genuine pickle on the home front, needing a rabbit in a hat, a “look East” policy like the second transition both to keep his own job and to keep the ANC in power.
But that still does not explain why a senior party official like Mantashe felt the urge to tell Western investors they weren’t really welcome in SA.
His remarks provoked the EU’s ambassador to SA, Roeland van de Geer, to a rare public disagreement with his host government, something diplomats do their utmost to avoid.
“Don’t say that in this economic period we don’t need each other because that undermines the relationship,” Van de Geer said.
“The world is in an economic crisis. Do not give up on any of your investors.”
So you don’t like Western countries for whatever ideological or historical reason? Fine.
At the very least suppress your distaste and take their money.
The EU remains SA’s largest overall trading partner.
It has been implementing, implicitly if not explicitly, the very industrial policy which the ANC is now espousing so vocally as a cornerstone of its engagement with the other Brics nations.
It is helping to balance trade with SA by buying more manufactured goods – which create more jobs in SA – rather than raw materials.
The bulk of SA’s exports to the EU are manufactured goods, while China is still importing mostly unprocessed minerals.
The EU is also the source of nearly all foreign direct investment (FDI) in SA, with Britain alone accounting for 49 percent of FDI stock at the end of 2010 compared with just 4 percent for China, Reuters said.
Likewise, the US buys far more manufactured goods from our country than China or the other Brics nations do.
Van de Geer, ironically, suggested SA follow the example of the other Brics nations it so much admires, which rely heavily on trading with the West even as they try to boost commerce between themselves.
SA’s long-suffering diplomats must have blanched at Mantashe’s completely unnecessary remarks, which surely undid much of their hard work to attract investment.
Is it beyond the ANC’s dexterity to look both East and West?