ANC Economic Plan Draws Fire From South African Businesses
At its last conference before the April ballot, the ANC issues an economic plan that reveals tensions among its various factions
A comprehensive plan for development proposed by the African National Congress (ANC) for adoption after South Africa's first all-race elections scheduled for April 27 has drawn criticism over its socialist-leaning proposals.
The document reflects tension between socialists in the trade union and communist wings of the alliance and social democrats in the leadership of the ANC. The draft plan - known as the Reconstruction and Development Programme - was debated at an ANC conference near Soweto over the weekend, and will be included as a major component of the ANC's election manifesto.
It is the ANC's last major conference before the ballot, but will be followed next month by a meeting with business executives and industrialists in a bid to win their support for the development plan. The 61-page document - the sixth draft - has met with mixed reaction from business and has been strongly criticized by politicians of the ruling National Party and liberal Democratic Party as too socialist.
Although much of the socialist rhetoric and thinking of the earlier drafts has been amended, the document still retains some references to nationalization and financial controls, an anathema to the business community.
Business executives and industrialists have been reluctant to publicly criticize the program. But some of its proposals - like the one that ownership of minerals should be transferred to the state - have led to simmering anger in business and mining circles.
A proposed reconstruction fund will be financed partly by reconstruction bonds and will maintain government borrowing at its present level of around 6 percent of the Gross Domestic Product.
But the populist language in the document contrasts with the increasingly pragmatic approach of ANC President Nelson Mandela. Mr. Mandela assured international investors at the World Economic Forum in Davos, Switzerland two years ago of creating a strong free-market component that would foster economic growth in South Africa. Since the assurance, the international community has come to accept that an ANC government's economic policy would comply with Western norms. But some of the language in the draft program has again raised doubts about ANC economic policy. Draft still needs work
In opening the ANC's Reconstruction and Development Conference, Mandela warned that the draft program still requires ``a substantial amount of additional work to be anywhere near what we want it to be.''
But he said the document laid the basis for far-reaching change in the country. ``Our election victory in April will allow us to take a great leap forward,'' Mandela said. ``But this will be a dangerous leap unless we have the vision, the framework, the strength, and the will to bring about fundamental change.''
The document, which attempts to address black expectations for socioeconomic upliftment, will form a central part of the ANC's election manifesto for the April ballot.
There has been sharp criticism of a proposed reconstruction levy on land, capital transfers, and luxury goods to help finance development.
But some business leaders appear to be confident that there is still room to negotiate a social contract between business, government, and organized labor that would be based on voluntary contributions by business - through the purchase of reconstruction bonds.
The program has been praised for its goal of tackling the vast problems of the apartheid era: massive unemployment and racial backlogs in the provision of education, housing, health care, and social welfare.
But the plan has been criticized by economists, diplomats, and politicians for some of the methods it proposes for achieving development and reconstruction.
``This is the ANC's evolving effort to balance black expectations of a better life with the rigorous demands of local and foreign investors,'' says a Western diplomat. ``If one looks back four years at what the ANC was saying then, they have come a long way on economic policy. But they still have a way to go.'' Under heavy fire
One proposal in the program - that banks should be compelled to give reasons for refusing loans - has come under heavy fire from bankers and economists.
The plan has also been criticized for using vague and populist language to gloss over some vital details of macroeconomic policy and for making promises that might be impossible to keep.
The program sets as its targets the creation of 2.5 million jobs through public works programs over the next decade, the building of 300,000 houses a year, provisions for clean drinking water for the 12 million people who do not have it, and electricity for all.
``The problem with the document is that it attempts to be all things to all people,'' says Democratic Party financial spokesman Ken Andrew. ``It reflects the diversity of the ANC rather than a coherent economic policy.''
The program is the result of intense bargaining between the ANC,
the powerful Congress of the South African Trade Unions, and the South African Communist Party. SACP seeks to implement its socialist policies once the goal of national liberation has been achieved.