Political economist Moeletsi Mbeki at the Hilton Hotel in Durban. Picture: African News Agency (ANA)

Durban – South Africa needed to break from the “nationalist paradigm” that had ruled the country for over a century in order to develop and modernise, political economist Moeletsi Mbeki said on Wednesday.  

“Since 1910, South Africa has been dominated by two nationalisms – Afrikaner Nationalism, which dominated the country’s politics between 1910 and 1994, and African Nationalism, which has controlled the government for 25 years since 1994,” Mbeki said.

Both had failed the country, he said.

Mbeki was speaking to African News Agency (ANA) at the Hilton Hotel in Durban before joining a panel discussion on “A tale of two nationalisms and how they failed South Africa” hosted by the Xubera Institute for Research and Development.

It was necessary to break out of the nationalist paradigm to industrialise and modernise, he said, while electoral reforms were needed to introduce mixed constituency and proportional representation at national and provincial levels.

A complete overhaul and redesign of the country’s education, health, transport and electric power supply systems were also needed.

“Public services, including the traditional leaders’ sector – must be reconfigured to serve the people,” he said.

Economic relations with the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) would have to be renegotiated or restructured.

“The South African economy must be restructured to be more investment driven rather than consumption and finance-driven and Black Economic Empowerment’s demands on foreign investors should be phased out.”

There also needed to be a business development plan to grow employment and phase out the export of mineral ores.

Mbeki said South Africa comprised five social classes: The business elite, political elite, blue-collar workers, the underclass/unemployed and the independent professionals/non-profit organisations/new entrepreneurs.

There was an “enormous mutual suspicion” between the business and political elite, he said, which created gridlock in society.

The business elite was not prepared to invest in the country past “ticking over” because their assets could be seized by the political elite. They also had to contend with onerous taxation, mismanagement of the economy and exposure to the corruption of the political elite.

Similarly, the political elite was suspicious of the business elite because they had the ability to change the political allegiance of the underclass, could become politically active and could encourage capital flight.

“People think South Africa has low investment because the blue-collar workers are too powerful, while the real reason for low investment is the conflict between the business and political elites,” he said. 

The risks were not yet enough for the business elite to publicly denounce government, he said, as had happened in the 70s and 80s when the likes of Anton Rupert, Harry Oppenheimer and other corporate owners worked through the Urban Foundation.

The day the country had to approach the International Monetary Fund (IMF) for a bailout was the day South Africa would – in the eyes of the business elite – have reached a stage when the risk to their interests would be greatest, said Mbeki.

“The government will have to go to the IMF sooner or later. Public debt is ballooning. Then business will realise they have to look for an alternative,” he said.

African News Agency/ANA