How Will Radical Economic Transformation Benefit South Africa?

By Mntumni Nosicelo posted 12-14-2017 02:32

  

Every nation has its own demography, GDP (Gross Domestic Product), development ratio, social and political factors, and own problems as well. And, unfortunately, if the nation is underdeveloped or in developing phase, these factors are very crucial in deciding the overall well-being of the nation. If one of these factors is in a distorted position, then it will impact negatively on overall economic growth.

In this write-up, we gonna specifically discuss the whole economic, social, and political factors in South Africa and how badly it needed a quintessential turnaround in their policies to back the nation on the growth track. Though, the incumbent regime of ANC (African National Conference) headed the president Jacob Zuma is trying hard to bring transformation through their coined phenomenon, RET (Radical Economic Transformation),  but still, a road ahead for the real implementation of these policies.

Here are the objectives of RET which ANC has been trying to achieve to boost their economy and to stabilize their social fabric —

Re-industrializing South Africa's economy

South Africa is still relying on its old conventions of development, thus, failed in achieving something substantial. So the government has to relinquish its old growth path, which is heavily relying on exporting raw materials. RET will create a friendly milieu which paves the way for manufacturing economy, which further boosts to the mass employment. Providing incentives to the manufacturer could also help in this cause.

Emphasis on black ownership (of land and the economy)

The most important concerns that RET will address is to pave the way for the inclusion of the native blacks in the mainstream economy. It has many clauses which push black ownership in all the major sectors of the economy like, Mining, Power, and Manufacturing. RET backed by ANC will also have norms in which entrepreneurs from black community will be supported financially and loans would be provided at cheaper rates. The policy framework of RET is also supporting land reform and returning the lands to the black citizen to nurture the farming sector and to give them an opportunity to earn.

Dismantling monopoly structures and practices

Eliminating monopoly in the economy is one the core principles of RET and it will be enforced by the Strict enforcement of competition legislation, including bringing legislation to Cabinet to strengthen the Competition Act. Deconcentration of ownership of the economy will demand to eliminate price-fixing and anti-competitive behavior of both private and public companies. The act will look into all the existing monopolistic and oligopolistic structures in an economy and vanish them one by one. Most importantly, state-owned banks will get introduced to change the way banking industry has been functioning.

State in the driving seat of development

RET will ensure the ANC’s vision to establish 'democratic developmental state' in which government guides the economy and harnesses the strengths of the private sector. And they have brought Zwane’s Mining Charter is the first step regarding radical economic transformation by the government to do it more effectively. More state-owned companies will be promoted and they will generate employment every year. Promoting state-owned companies doesn’t imply that RET stands against the privatization. It supports privatization, until and unless it can’t lead to establish a kind of monopoly and hurt the nation’s economy. And the good thing is, the incumbent regime has decided to allot a heavy sum every year to ensure this.

Conclusion—One thing is pretty much certain, if RET gets implemented in its real form, then it will be a transformational change for the social and economic structure of South Africa. Yes, it is hard to implement, as many capitalist have been in the spree to destroy it, but going by the commitments and efforts of the incumbent regime of ANC it seems possible as well. Again, time will tell what will happen to RET, but it is a much-required reform for the South African natives.

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