ANC wants the state to be ‘more active in guiding the economy’ post Covid-19
The Covid-19 pandemic is disrupting all aspects of human life and is forcing a rethink in the way things have been done. However, it also provides an opportunity to push for transformation and a more inclusive economy, the ANC’s Economic Transformation Committee said in a recent proposal document.
“In responding to the Covid-19 pandemic, redistribution in the allocation of resources, opportunities and basic services has been brought forcefully onto the agenda,” the party said.
“Progressive forces must contest the economic space to ensure alternative outcomes that truly benefit the poor, the black majority and the working class.
“The ANC should lead these motive forces, working with alliance partners and society more broadly, in order to fulfil the historic mission of socio-economic transformation.”
The committee said that the pandemic has also shown that there is a role for government in helping guide the economy.
“As a result of the pandemic, the contested relationship between the public and private sectors has shifted.
“The Covid-19 pandemic has reinforced the legitimacy of public investment in health care. It has legitimised a greater and more active role of the state in guiding the economy.
“It has forced a rethink on public services that are now seen as a necessary investment rather than a liability. Central banks are increasingly being called upon to assume a more active and direct role in supporting the real economy.”
Equally, as many economies are forced to look inward, this presents opportunities to rebuild local industry, strengthen local manufacturing and drive import substitution, the group said.
“While these developments will impact negatively on South Africa’s growth prospects, they also present opportunities, as a greater focus will be required on the domestic drivers of economic growth and development, such as local manufacturing, local content and local procurement as well as import substitution.”
Noting that the protectionism and populism are on the rise globally, the ANC said that the Covid-19 pandemic has thrust on to the state a greater responsibility and role in the economy and society.
“In addition, trust in public institutions and governments is on the rise. This, however, may be short-lived. It will depend on how well governments are able to manage and resolve the crisis going forward.”
“Due to subjective errors, the capacity of South Africa’s democratic state has been weakened. Poor cadreship has resulted in the weakening of state capacity which has been compounded by corruption. There has been a lack of honesty about what can and cannot be achieved at particular points.”
The party said that ‘subjective weaknesses’ need to be overcome so that the ANC-led alliance can reassert itself as the most powerful and coherent political force, capable of providing leadership to wider South African society, and guiding the economy onto a transformed inclusive growth path.
“This moment presents an important opportunity to reset and begin to more effectively build a capable, ethical and entrepreneurial developmental state that is able to direct development for the benefit of all, especially those who have been left behind.”