The Curse of South Africa: The Nation's Mineral Wealth Has Distorted the Economy for Generations and Continues to Do So. Moeletsi Mbeki, Brother of President Thabo Mbeki, on Why People Want Jobs Not Handouts

Article excerpt

The conference of the African National Congress that was held last month was billed as a heavyweight contest between the party's president, Thabo Mbeki, and its deputy president, Jacob Zuma. The conference turned out to be much more than that. It was a complete rout, not only of the president, but also of his cabinet, the sitting national executive committee, and of Mbeki's economy team.

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The December conference saw the ANC swing from the centre towards the left, if one believes the rhetoric. Jacob Zuma, the new president of the ANC, mobilised the support of the Congress of South African Trade Unions (Cosatu) and the South African Communist Party (SACP) in order to fight for leadership of the ANC.

The ANC is caught in a quandary. On the one hand, its members and leaders want to preserve the economic system inherited from the apartheid era so that they, too, can benefit from it through, for example, Black Economic Empowerment (an affirmative-action programme, initially designed by South Africa's big corporations, that favours the new black elite) and social grants from the government aimed at alleviating poverty. On the other hand, they hanker for change that will ameliorate the growing inequalities and pauperisation among black South Africans. They blame individuals within the organisation for not bringing about the socio-economic changes they would like to see, but do not dare to initiate themselves.

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Much of the impetus behind the emerging instability in the ANC, however, is financial rather than ideological. The only solution would be for a leadership to emerge, from either within or outside the ANC, that has meaningful policies for building a more inclusive society in South Africa. Black Economic Empowerment and social welfare programmes do not fundamentally lead to such social inclusiveness. If anything, they entrench the inequalities inherited from the past and exacerbate new inequalities among the blacks.

The undoing of President Mbeki and his cabinet was that they failed to understand that, with Zuma's rise, a new phenomenon of populism had entered the ANC. They also failed to understand the potential of populism to appeal to the black working class, the black poor in general, and a wide array of disgruntled people associated with the ANC who felt excluded from the inside track.

Their mistake was to see Zuma as a paranoiac who didn't deserve to be taken seriously. Mbeki compounded this error by standing against the populist Zuma but refusing to engage with him in public debate. He thereby appeared to be afraid of Zuma. This encouraged Zuma and his supporters to press ahead with their campaign and, paradoxically, Mbeki's silence persuaded many ANC members that Zuma's claim of persecution was valid.

Placating the poor

South Africa is able to undertake both Black Economic Empowerment and large social welfare expenditures because of its vast natural resources, which are now selling at a premium due to the rapid industrialisation of the large countries of Asia. South Africa's fabulous mineral wealth has been seen as a blessing since the discovery of diamonds and gold in the 19th century. What gets overlooked is the curse that goes with vast natural-resource endowment.

Since the current commodities boom started in the late 1990s, the ANC government has been ratcheting up public spending on the welfare of the poor. Why? Out of the goodness of its heart, reply ANC leaders. Not so, say doubters: rather to placate the poor so that they do not rebel, but most importantly to buy their vote.

In his address to the ANC conference, President Mbeki went to great lengths to explain the good things the ANC government has done for South Africa's poor. He noted that the number of South Africans living below the poverty line fell from 51.4 per cent in 2001 to 43.2 per cent in 2006 and that the number of people receiving social grants increased from 2. …