SA’s precarious 2024 opportunity - Politicsweb

John Endres

The following is an address to the Institute of Economic Affairs in London on 13 June 2024:

South Africa’s precarious 2024 opportunity

Ladies and gentlemen,

Welcome. I've been asked to speak to you about the state of free markets and liberalism in South Africa.

Two weeks ago, on 29 May 2024, South Africa concluded its 7th democratic elections since the end of white rule in 1994. The African National Congress, liberation movement and unassailable leader of the country for the first 30 years of democracy, lost its parliamentary majority. With this, a prediction was fulfilled which Dr Frans Cronje, my predecessor at the Institute of Race Relations, had made in 2012 - to widespread derision at the time.

I will explore the ramifications of the election a little later, but first I will talk about the history of liberal thought in South Africa, as well as the role the IRR has played in this history.

As RW Johnson, author and retired Oxford don, noted in his 2011 Hoernlé lecture, liberalism is "by some way South Africa's oldest political tradition, reaching back long before either Afrikaner or African nationalism or Communism existed". In fact, its origins can be traced back to the first half of the 19th century, when a young Charles Darwin visited the Cape Colony and met Sir John Herschel, the astronomer, who was there mapping the southern skies. Herschel introduced Darwin to the Rev. John Philip, who was said to promote an "ungodly equality between the races". At the time, the three were viewed as "racial extremists and outcasts because of their egalitarian views" in Johnson's words.

This was to be a reputation that liberals maintained for over 150 years, in the face of much hostility. The South African Institute of Race Relations was founded in 1929 in much the same liberal spirit. It was the first national multiracial organisation dedicated to pursuing peace, goodwill, and practical co-operation between the various sections and races of South Africa.

It did this through meticulous research, expressed in the annual South Africa Survey, a compendium of facts and statistics about South Africa, as well as through reports, research papers and public talks and engagements. Although liberals were by far in the minority in South Africa, it was understood that their ideas had to be drip fed into the bloodstream of the body politic - there to lie ready to be taken up at a later time, potentially decades later.

The moment came in the early 1990s, beginning with President FW de Klerk's unbanning of the ANC and announcement of the release of political prisoners including Nelson Mandela on 2 February 1990. Over the next four years, the ANC and the Afrikaner nationalist National Party of de Klerk were the principal partners negotiating the transition and a new constitution.

Surprisingly, the constitution they wrote was a liberal constitution. This came about because of the influence of the liberals in shaping the environment of ideas during the negotiations - but also during the decades that had led up to this moment.

In the 30 years of one-party dominant rule under the ANC, South Africa's fortunes have been mixed.

Liberation meant that many South Africans could taste freedom for the first time. The freedom to vote, the freedom to live where they chose, the freedom to exercise any profession, the freedom to marry whomever they fancied, the freedom to associate with anyone, the freedom to express themselves freely.

These hard-won freedoms are highly valued and South Africans won't give them up without a fight. In this sense, thanks to many decades of patient work, liberalism won a great victory in 1994, even though the liberal party at the time, the Democratic Party, received only 1.7% of the votes. It grew from those modest beginnings and its successor, the Democratic Alliance or DA, is now voted for by over a fifth of the electorate - a remarkable level of support for a liberal, non-racial party in a country with South Africa's history.

However, on the economic front results have been far more mixed. After some decent growth averaging 3.6% p.a. between 1994 and 2007, the economy has become moribund since 2008. Its growth rate averaged only 1.2% over this period, on a declining trajectory. Real incomes have stagnated while unemployment is at over 40%. Economic freedom scores have declined over the same time.

This brings us to the elections. In round numbers, the ANC received 40% of the vote, down from 57% in the previous election. The DA got 22%, former president Jacob Zuma's incursionist MK party got 14.5%, and the Marxist Economic Freedom Fighters (EFF) - ironically named - got 10%. The ANC won't be able to form a government without the support of other parties, either through a coalition agreement or under a more limited arrangement such as confidence and supply.

At this point South Africans do not know for certain what they're going to get. The parties are running against the clock to come to an agreement: the South African constitution allows just two weeks after the election before the National Assembly must convene to elect its speaker, the deputy president and the president of the country. That first sitting will take place tomorrow, Friday, at 11am. The main potential hurdle in the way of an agreement is the National Executive Committee of the ANC, which meets this afternoon in Cape Town.

The ideal outcome would be a government that protects the existing liberties, returns the country to an economic growth track, and is stable enough to last a full term. For liberalism, this would mean building on the achievements of 1994 and strengthening liberal thought in South Africa.

As things stand, it appears that we will avoid the scenarios that would move us the furthest away from those goals. The MK party has tripped itself up since its phenomenal electoral debut and appears to have sidelined itself. The EFF misread the mood when it tried to play hardball and is likely to be excluded from the deal. If this holds, the parties most likely to undermine property rights, weaken democratic institutions and curtail economic growth will be kept out. That is an important achievement.

Instead, the preference in the ANC appears to be for a broad coalition with the liberal DA as its anchor tenant and the Inkatha Freedom Party (IFP) as a representative of Zulu interests. The DA and the IFP have worked together successfully in the province of KwaZulu-Natal. Some other, smaller parties might still be invited in to reflect other particular interests.

What might we expect from such a government? Initially it will bask in the glow of goodwill from voters, the business sector and the international community, relieved that the decline of the ANC below 50% did not produce an authoritarian turn or instability.

The ANC has responded to its loss of the majority with a high level of maturity and in a responsible fashion, allaying fears that it might hold on to power by illegitimate means. The DA has also conducted itself with circumspection and decorum, avoiding exorbitant demands and taking some of the strain out of its often tense relationship with the ANC. Moderation and reconciliation appear to be winning out over polarisation and conflict.

If maintained, this will release some pent-up investment, encourage private sector involvement in addressing the country's many challenges, and produce a modest level of economic growth, perhaps around 2%. This is a victory of sorts, but it is a dangerous victory.

The danger lies in the complacency these initial successes will breed. If this historic opportunity is not decisively seized to produce sustained much higher levels of growth; if it is instead allowed to fizzle out, the consequences will be dramatic. At a 2% growth rate, unemployment will continue to rise. If forward momentum is not maintained, the growth rate will drop back down to 1% before the 2029 elections.

If this happens, the attempt at national reconciliation and reform will be perceived as a failure. The partners involved − the ANC and the DA primarily − will be discredited. Waiting in the wings there will be the radical EFF and the populist MK or is successors, poised to take over and try real socialism in South Africa. This will place South Africa firmly on the trajectory of Venezuela and Zimbabwe − and the unique opportunity of 2024 will have been squandered.

This is why South Africa's incoming government, if it is constituted as now seems likely, cannot afford to rest on its meagre laurels. It will have to work with speed, intelligence and determination to produce fast growth.

Liberals must keep up the pressure to vanquish the illiberal ideas that still hold sway in South Africa’s politics – such as treating property rights as a negotiable luxury, believing that more government interference in the economy will produce prosperity, or continuing to view society through a collectivist mindset that ignores individual differences.

Instead, the incoming government should draw on South Africa’s proud liberal tradition and its pro-growth civil society organisations, think tanks like the IRR, for research and policies on how to get the economy growing while protecting freedom. This must be done for the good of the people of South Africa, as well as the government’s own survival.

John Endres is chief executive of the Institute of Race Relations

https://www.politicsweb.co.za/opinion/south-africas-precarious-2024-opportunity