TCS Daily

Christmas Wishes for President Mbeki

By Richard Tren - December 23, 2003 12:00 AM

As we approach the end of another year, it seems as though South Africa is suffering from some sort of policy schizophrenia. President Mbeki assures the country and the world that South Africa is committed to following free market policies, and yet his government undermines the free market almost at every turn. As Mbeki sells his New Partnership for Africa's Development (NEPAD), which is founded on good governance, he fights tooth and nail to defend one of Africa's most despotic leaders, Robert Mugabe. Amidst these activities, South Africa's economic policies need serious attention. Just in case President Mbeki is listening, here is my Christmas wish list for the government.


Wish 1. Government should give businesses a break.


The World Bank recently confirmed what a number of economists and researchers, to say little of business people, have known for decades. Excessive legislation harms economic growth and leads to unemployment. South Africa's unemployment rate is an unacceptable 40%. Yet the government's response is to hold workshops and conferences on unemployment, while blindly adopting labour laws that force the private sector to comply with ever more onerous requirements that discourage firms from employing people. It is no wonder that annual per capita growth is negative when the government punishes the private sector with a never-ending avalanche of regulations. In South Africa it is easier to get a divorce than it is to fire someone. Please Mr President -- enough already -- tear up the legislation that creates unemployment and poverty.


Wish 2. Government should realise that government job-creation schemes don't create jobs.


When addressing South Africa's national council of provinces (South Africa's upper house), President Mbeki promised that he would create 1 million new jobs by expanding the government's public works programme. "The centrepiece of the expanded public-works programme is a large-scale programme using labour intensive methods to upgrade rural and municipal roads, pipelines ..." the president explained. Thousands of people in rural areas will be given shovels and picks and will be hammering out roads. But if the goal is to create lots of jobs, why not give them all teaspoons and toothpicks to work with? That way, government could create tens of thousands more of jobs.


Taking money away from taxpayers and spending it on government does not create jobs. It destroys jobs by making the private sector (the real creator of jobs and wealth) poorer while enriching unproductive bureaucrats.


Wish 3. Government should get serious about privatisation.


The privatisation process has lost any momentum that it had. Our telecommunications industry desperately needs competition; the state-owned Telkom, the only supplier of fixed lines, is expensive and inefficient. In the health care arena the government passed punitive healthcare legislation that effectively nationalises the healthcare system by driving out the private sector. It has also nationalised mineral rights and water resources, which does not bode well for privatisation.


Wish 4. Government should stop harassing the emerging small entrepreneurs.


During Apartheid, the Nationalist government prohibited blacks from owning property or businesses, condemning them to be labourers and destroying any chance of a black middle class. The current government, while supposedly representing the poor black majority, is doing no better than its Apartheid predecessors. A web of legislation arms the police with discretionary powers to abuse these entrepreneurs and provides them with enormous scope to exact bribes. Thus, the police routinely harass and arrest small entrepreneurs, such as street hawkers, liquor traders and taxi owners, and frequently confiscate their property. Please, Mr. President, immediately scrap the petty legislation and bylaws that punish traders and small businesses.


Wish 5. Government should forget its racist policy of black economic empowerment


In 1948, the Apartheid government began a programme of Afrikaner empowerment and passed legislation that favoured white Afrikaans speakers. The legislation did nothing to improve the lot of Afrikaners who remain the poorest of the white population groups in South Africa. The current government is attempting to do the same thing, not by prohibiting whites from owning businesses, but by compelling owners to take in black partners and employ a greater proportion of black workers. These laws impose enormous costs on business, benefit a tiny politically influential elite and slow economic growth. The irony is that now, 10 years after democratic government, South African businesses are far more aware of race and racial quotas than they ever were under Apartheid. The government must realise that economic growth on its own is all that is needed to create wealth and is in and of itself empowering, most importantly for the poorest.


Wish 6. Government should treat Mugabe as the vicious dictator that he is


South Africa's 'quiet diplomacy' approach to the Zimbabwean crisis is disastrous for that country and the whole of southern Africa. President Mbeki's defence of one of Africa's most tyrannical and brutal leaders is a national disgrace. Mugabe is a violent criminal, and President Mbeki should treat him as such for the good of Zimbabweans and all Southern Africans. A tough stance against Mugabe will show South Africans and the world that Mbeki considers murder, torture, theft, violence, rape and genocide to be wrong. Anything less amounts to tacit support and undermines our own nascent democracy.


Wish 7. Government should focus on protecting the rule of law


The most important thing that any government can do is strengthen and protect the institutions of a free society, such as private property, individual rights and the rule of law. Unfortunately in South Africa, the police and legal system are in a pretty shoddy state, and in practice the rule of law is regularly undermined. Instead of seriously addressing the problems, the government busies itself with all manner of legislation; passing the most draconian anti-smoking legislation imaginable, banning the use of plastic bags and imposing costly regulations on taxi owners and the liquor industry. Please Mr President -- stop undermining individual and commercial rights and start protecting them with an effective legal system.


Wish 8. Perhaps most fundamentally, I wish government would realise that it can achieve more by doing less.


Lastly, I wish President Mbeki and the government a very happy and healthy Christmas and a good 2004.


Richard Tren is a regular contributor to TechCentralStation and is based in South Africa where he works for the health advocacy group, Africa Fighting Malaria.

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