Redistributive policy

ANC policy papers wishlist may still change…

While the ANC’s policy conference at the end of June this year is officially about the battle of political ideas, there are already strong indications that the competition or competitions for power will eclipse debates around ideology and achievement. And yet, the policy documents released by the party ahead of its conference are important, as they give an indication of what the party’s future direction might officially be.

The documents have now been released and they suggest that major policy changes may be coming, that electricity supply may change, that the current public enterprise (EP) model is ‘dead’, that there should be having less red tape for businesses, and even a possible move away from the current model of black economic empowerment.

It should be remembered, however, that these documents are not the end of the process, but rather the beginning of the discussions.

At the ANC conference in 2017, the issue that most nearly derailed the whole event was not the battle for leadership, but the political proposal to amend the Constitution to allow the government to expropriate land without compensation for land reform purposes.

In the end, the resolution passed with important caveats.

However, this time around, in its policy papers, the ANC seems to simply note:

“We have not received sufficient support to amend the Constitution to allow expropriation of land without compensation in certain circumstances, although progress has been made with the passage of legislation on expropriation and strengthening land redistribution processes”.

The Nasrec resolution calling for the nationalization of the SA Reserve Bank receives similar treatment, saying the “historical anomaly” that it has private shareholders has not been corrected. He goes on to say that this is due to the possible “undue enrichment of private speculators who have pushed for such intervention as they hope to derive massive financial gains from the process at the expense of South Africa and at the cost of the tax authorities”. .

This is a major shift in the debate, as it suggests a reason why this “nationalization” should not take place.

Of course, given the pressing need to inject more electricity into the grid, the paper discusses this in depth.

The paper suggests that with regard to embedded generation (to allow companies to generate and sell their own electricity), “registration requirements for such projects should be streamlined and red tape reduced”.

For those concerned about our urgent electricity needs, this may be welcome, suggesting that the ANC will launch the debate as fully behind the private sector generating its own electricity.

In fact, the document goes further, saying, “Such projects should be designated as Strategic Infrastructure Projects (SIPS) so that DFFE-regulated environmental clearance can be expedited.” (DFFE is presumably the Department of Forestry, Fisheries and Environment).

This would suggest that it would be easier and faster to build and operate solar and wind power plants.

However, if this policy proposal is adopted, as it is formulated, it would also facilitate the construction of a gas-fired power plant or even, for example, the use of a barge operated by Karpowership.

There is also evidence that those who drafted the document do not want to enter the era of renewable energy directly, but want to go through what is called the “gas transition”.

They write:

“The growing opposition to oil and gas exploration must be confronted politically as it is clear that South Africa’s oil and gas endowments could be a source of wealth and increase our options for energy security, noting also the role of gas in the energy passage.”

On the face of it, this resonates very strongly with some of Energy Minister Gwede Mantashe’s comments.

It also goes against a recent warning from the International Institute for Sustainable Development, which said that for South Africa to pursue a gas industry could be a costly “mistake”.

Time to rethink the ‘mistake’ of South Africa’s natural gas dreams – global report

Certainly, this suggests that the ANC is considering and wants to move forward with these plans.

The documents spend some time talking about social compaction, an idea that business, labor and government representatives can make big deals to kickstart the economy. While that matches President Cyril Ramaphosa’s promise to enact a social pact, the deadline he set for himself came and went last week.

Ramaphosa’s 100 (working) days of social compaction have passed, but who’s counting?

He may also miss a much more important point. The people who are really suffering from our current economic situation are the 12 million unemployed. By the very definitions the ANC uses in this social compaction plan, they would be excluded from the process. And yet they are surely the largest constituency in South Africa.

Deep within the documents is a carefully worded question that could open the door to broader and still highly contentious discussions about the future of black economic empowerment and our employment equity laws.

The point is formulated as follows:

“Given the employment crisis in the country, if the choice is between a transformed entity which does not have production capacities locally and an untransformed company which can develop its capacities and its jobs, then the latter should be the appropriate choice. Do existing frameworks support such a decision? »

This seems like a serious suggestion that it is more important for a South African company to employ people than to be properly transformed in terms of ownership. This job may be more important than transformation for the future ANC.

Although delegates have obviously not yet discussed this issue, if passed, it could be the start of a major shift in the ANC’s current economic policies. The discussion at the policy conference is bound to be heated.

Long before the release of the final discussion papers, there had been constant reports that they would say the current public company model is “dying”. This report was confirmed in the final documents. He says that “the era of bailouts for SOCs [state-owned corporations] is finished. It’s not sustainable. Workers whose jobs are threatened must be reskilled and redeployed to where there are vacancies.

This is perhaps the strongest indication yet that the process of downsizing the SABC went through 18 months ago could become the norm for state-owned enterprises – and that major changes are in store. coming.

Of course, this was promised before.

Also promised previously, is a commitment to cut red tape for small businesses. However, it seems the party may go further than in the past when it says the government should “remove the micro-enterprises that work best in the informal sector from the small business regime”.[n] eliminate bureaucracy”. It also says municipalities should “remove permit payment requirements by informal traders and provide the necessary support…”

This may be the beginning of a better understanding of small business needs by the ruling party.

ANC discussion papers are often an interesting mix of honesty, imagination and, at times, hubris. It is quite possible that other issues will take precedence over what is mentioned in this economic document. However, it is also possible that what the party has published here will form an important basis for the conference discussions and perhaps for our future. DM