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Significant effort is made to relay solutions for the deficiencies currently plaguing the country, writes Azar Jammine
The DA’s election manifesto seems to have received significantly less publicity in the media than the manifestos of the ANC and the EFF.
This could in part be attributed to the fact that DA leader Mmusi Maimane seemed to gloss over the details of the manifesto at its launch and instead focused on delivering a political speech to try to attract voters.
It could also be a function of the fact that the Manifesto for Change: One South Africa for All is a lengthy document with a tremendous amount of detail.
It is challenging to do justice to the manifesto in a brief article such as this.
The media might have perceived the manifesto as a “neoliberal” construct, which is unlikely to attract support from many in South African society.
Nevertheless, examination of the manifesto reveals a fairly comprehensive attempt at delivering a programme of action that hits at many of the weaknesses inherent in the current state of the economy and society, with significant efforts being made to relay solutions for these deficiencies.
From a general perspective, there is a tremendous focus on rooting out corruption as a means of creating space and resources for the upliftment of the masses of unemployed or low-paid workers.
There are plans to end the largess of state spending on luxury vehicles, expensive dinners and the like, together with the imperative to rein in the expenditure on public sector remuneration, which forms part of an initiative to adhere to tight fiscal metrics and a legally enshrined public debt ceiling of 60% of GDP.
To attract investment as a means of promoting economic growth and creating employment, the manifesto focuses on providing policy certainty.
In this regard, the manifesto emphasises the need to guarantee private property rights and rejects the notion of expropriation of land without compensation.
Instead, it offers a series of alternative solutions to land reform, emphasising the need to provide title deeds to those who do not possess such a privilege.
It urges speed in the settlement of land claims, asserting that corruption has held back this process.
It urges that government land be redistributed as a first port of call rather than taking land away from existing owners to redistribute to the poor.
The manifesto calls for the repeal of the Protection of Investment Act to ensure that foreign investors have certainty that their property will be protected.
Other issues disturbing policy certainty that the manifesto attempts to overcome include:
. The reintroduction of bilateral investment treaties;
. Scrap the national security clause in the Competition Amendment Bill, which the DA claims is dissuading investment;
. Develop legislation to break down the concentration of power and barriers to entry in the public and private sectors;
. Oppose attempts to allow state-owned enterprises (SOEs) to have their own banking licences, which the manifesto sees as increasing risks in the financial sector;
. Oppose the SA Reserve Bank Amendment Bill – which was introduced by the EFF, which aims to nationalise the bank – as it recognises the damage that uncertainty in this regard may be inflicting on investment;
. Protect the bank’s mandate as enshrined in the Constitution with regard to its freedom to conduct monetary policy with an inflation target in mind, knowing full well that government interference in monetary policy can do a lot of damage to confidence in monetary stability among investors;
. Do away with the Mining Charter in totality on the grounds that investment in the sector is being driven to other countries because of investor antagonism towards it; and
. Try to improve investor certainty in the minerals and petroleum industries by revising the Minerals and Petroleum Resources Development Act.
Another big thrust of the manifesto is the rejection of broad-based BEE on the grounds that, as instituted thus far, it has merely served to enrich a few privileged people and has failed to benefit the broader black community.
It recommends an alternative empowerment scheme incorporating time frames through which to enable scorecards to be achieved.
It recommends the introduction of employee share ownership schemes forming part of a “bottom-up” approach to empowerment rather than the “top-down” exercise.
Rewards for companies creating jobs are recommended as a means to mitigate against increased mechanisation. These rewards can include development of black entrepreneurs.
The manifesto also calls for a visa regime overhaul – the imperative for which was alluded to by President Cyril Ramaphosa in his state of the nation address last month.
It is a sad tale to report that the latest tourism figures reveal a growth in arrivals last year of a meagre 0.2% if one excludes arrivals from Zimbabwe.
One of the reasons to revisit the visa regulations is to facilitate an influx of vital skills into the country.
This brings us to one of the most important areas of focus of the manifesto – the need to improve the quality of education and skills development to enhance productivity.
Having identified the multitude of contributors towards the underperforming educational system and recommending ways to overcome the shortcomings in basic education, the manifesto proposes a series of initiatives aimed at enhancing the ability of poorer sections of society to access tertiary education, enabling them to find jobs or become entrepreneurs.
Included in these initiatives are the modernisation of Technical and Vocational Education and Training colleges, as well as the support for well-functioning Services Sector Education and Training Authorities, while doing away with dysfunctional ones.
The need to improve access and innovation in information and communications technology attracts much attention, particularly regarding the importance of making access to the internet easier and cheaper.
The manifesto places an emphasis on unleashing small business activity by improving the ease of doing business through the introduction of a Red Tape Impact Assessment Bill, and measures to amend the Labour Relations Act to simplify the hiring and firing of workers.
It also calls for a review of tax and business registration systems for small businesses, and recommends the introduction of a “one-stop shop” through which small businesses can register companies, lodge documents with the Companies Commission and register for tax purposes.
As a means of easing the cash flow constraints of such entities, it calls for penalties for government and big businesses that delay paying small business suppliers for more than 21 days.
Tax incentives as well as funding to support small businesses and the creation of incubators form part of the drive to improve this jobs-intensive area of the economy.
The final important economic area of focus is the unbundling of SOE monopolies to relieve the country of some major debt constraints.
The idea of partial privatisation is brought up as a means of enhancing governance and transparency, as well as competitiveness.
Unfortunately, this, together with many of the other recommendations, would elicit huge opposition from the trade union movement.
Although the manifesto talks about calling for negotiations between the key parties within government, the solutions in the manifesto are likely to be seen as unfriendly to workers, even if they appeal greatly to investors.
In many ways, this highlights the economic dilemma that South Africa faces.
Its historical legacy does not seem to be able to afford solutions that would be seen to be investor friendly and conducive towards significantly higher economic growth.
In so doing, failure to implement recommendations such as those contained in the DA’s manifesto will most likely leave the economy languishing in an ever-diminishing growth phase with the associated implication of rising unemployment and poverty.
Jammine is director and chief economist of Econometrix
