Adopting Zimbabwean model won’t advance SA
To understand poverty, unemployment and inequality look at all government departments.
As Zimbabwe plunges deeper into crisis, SA political leaders have been remarkably quiet about the disastrous policies that brought that country to its knees.
The ruling party continues the “softly-softly” approach to our northern neighbour that was initiated by former president Thabo Mbeki.
And while the EFF is gearing up for this year’s election, it continues to hold Zimbabwe up as a blueprint for a future SA.
In one respect, the romance with Zimbabwe is driven by uncritical notions of solidarity.
This is generally the position of the ANC.
In another sense, it is driven by a dogged belief that Zimbabwe’s policy choices and general direction are appropriate, but that once in government, the EFF can do a better job.
Both parties are just glad that white people no longer govern Zimbabwe and that as Africans the need for solidarity trumps anything else.
It is foolish to pull on any loose strands in that position – no matter how frayed it may be.
Like that fellow, Steven Pinker, who has written extensively on how the world has become a better place, I will not suggest that the EFF and ANC go to tell people who are being beaten, imprisoned and shot down in the street, that things are better today than they were yesterday.
The one dangerous trend that is emerging is that the process of mass nationalisation of SA institutions should start with the SA Reserve Bank.
Here the ANC’s secretary general, Ace Magashule, sings from the same sheet music as Julius Malema of the EFF.
One difficulty with the drive to nationalise the Reserve Bank is that it is ideological.
I have no problem with beliefs and values, and how they constitute ideology.
However, intellectual honesty always trumps ideology.
It seems clear that proponents of nationalisation want to nationalise the Reserve Bank only to satisfy their beliefs and values.
They cannot provide, and have not provided, evidence of where nationalisation of a central bank has directly created jobs, reduced inequality, lifted masses of people out of poverty, improved education systems, access to healthcare, established community safety, and generally contributed to greater social cohesion and trust among the population – and kept food prices low.
It is like the EFF’s desire to overthrow capitalism and establish a “dictatorship of the people”, but they cannot provide evidence of where this has worked, over the long term, while producing the results referred to in the previous, somewhat lengthy sentence.
There is also a fair measure of ignorance going around.
Very many EFF members, those ANC members who are still hankering for a return to Soviet-style polities and the feeding trough of the Zuma years, and some of our more learned friends and distinguished professors, don’t seem to understand the role of the Reserve Bank.
They barely understand the role of the treasury.
The primary goal of the Reserve Bank, defined by the constitution, is the achievement and maintenance of price stability.
To do this, the Reserve Bank assumes responsibility for the functions as set out in its mission statement.
Sound monetary policy provides a stable platform for sustainable economic and employment growth.
The Reserve Bank, and the national treasury for that matter, can only do what they were designed to do.
If you want to understand why SA has high unemployment, rampant poverty, inequality and an almost complete breakdown in service delivery it is probably advisable to look to other government departments.
In very simple terms, the treasury keeps disciplined control over the fiscus, the Reserve Bank focuses on stability, and other government departments have to do what they are supposed to – except they have failed in most every case.
The Reserve Bank and national treasury are no more responsible for unemployment, inequality, poverty, and a breakdown in the provision of public goods and services, than it can be held responsible for moving violations by errant taxi drivers in cities, towns and villages around the country.
None of the problems that beset the country can be blamed on inflation targeting – a cornerstone policy objective of the Reserve Bank.
What we have learnt from Zimbabwe is that runaway inflation (and a lack of foreign currency) makes everything more expensive.
From food to cement, Zimbabwean producers and suppliers cannot keep up with demand.
The only satisfaction that Zimbabwean leaders can get is that they have taken the country under their control, redistributed land, nationalised whatever they could and this alone is cause for celebration.
In the meantime, SA politicians are bent on nationalising the Reserve Bank, so that the bank can create jobs, reduce inequality and lift millions of people out of poverty.
In the process, they give other government departments, like economic development, trade and industry, rural development and land reform, agriculture, forestry and fisheries, among others, a free pass.
The Reserve Bank cannot create five million jobs.
That is what SA needs, urgently, and this is not the Reserve Bank’s responsibility.
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