The Grand Finale of the 2010 Rhodes Investec Business School (RIBS) Forums this week was an enlightening and thought-provoking address by an intellectual colossus who, over the years, has contributed to the liberation struggle, leadership, journalism, entrepreneurship and economics.
Moeletsi Mbeki is also the author of the 2009 bestseller Architects of Poverty which demystifies complex economic forces and explains the origins of South Africa’s position in the global economy.
Mbeki plotted the course of the two historic currents of Nationalism that have shaped South Africa. The first, Afrikaaner Nationalism, held sway for 84 years, 70 of which were dominated by the National Party. While Afrikaaner Nationalism attempted to industrialise the country, develop agriculture and attract foreign investment it did so at the expense of the majority population, and was therefore wholly unsustainable.
Mbeki argues that modern African Nationalism has focused on consumption rather than production and is therefore fuelling deindustrialisation as well as a negative import / export balance. The lion’s share of state budget goes to social welfare grants when it should be invested into job creation, entrepreneurial development, education and infrastructure. Therefore neither of these historical currents have proved sustainable. Ironically these twin nationalisms have revealed themselves as successive engines of poverty.
South African history has always been characterised by vast eras of single party dominance. The English Imperialists, the NP and the ANC have each held an insurmountable monopoly over political power in their relative epochs. The current political system of uncompetitive democracy progressively undermines our economy, reasons Mbeki.
Mbeki, who was one of his brother’s government’s most scathing critics, and who continues to provoke the ire of the ruling party with his tendency to publicly broadcast searching questions and controversial opinions, also believes that key crises in education need to be addressed if we are to transcend the current economic quagmire.
The actual school curricula require an urgent and radical overhaul which should reconcile realistic expectations with international standards. Our contemporary system of loaned bursaries is also totally inappropriate to our economic goals and a shift towards free bursaries would encourage entrepreneurship and growth.
Mbeki cited worrying statistics which reveal that South Africans are consuming more and working less, which induces the illusion of a healthy, improving economy. He reminded us that one need only gaze northwards at Zimbabwe to know the devastation that deindustrialisation can wreak.
Mbeki is also a fierce opponent of Black Economic Empowerment, which he provocatively refers to as a “social grant for ANC politicians” and Affirmative Action which disincentives entrepreneurship, especially within the black population.
China is South Africa’s primary trading partner and its ability to flood the market with cheap commodities meshes well with the ANC’s quest for a consumer revolution. Contrary to popular conception, the productivity of Chinese labourers is not greater than that of African labourers. Nor does it come at a lower price. One key factor which allows China to produce and sell so cheaply is its massive investment into infrastructure, which equates to lower transport and logistics costs, which in South Africa are exorbitant.
Another reason for the vigorous growth of this tiger economy is its prodigious pumping of resources into Science and Mathematics education which drives productivity-enhancing innovations.
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