19 January 2018

Ramaphosa’s land grab will repeat Zimbabwe’s destructive mistakes


Why do people refuse to learn from other people’s mistakes? That is a surprisingly perplexing question, for no commonly advanced explanation provides a full answer.

Venezuela, for example, is separated from Cuba by the Caribbean Sea and from Chile by the Andean Mountains. Maybe it is that geographical distance that explains why the Venezuelan people never fully appreciated the catastrophic state of socialist Cuba and the extraordinary success of capitalist Chile. By choosing to emulate the former rather than the latter, they signed their own death warrant.

The pitiless and penurious communist prison of North Korea borders a democratic and prosperous market economy of South Korea. The slaves of the Kim dynasty, however, do not possess basic political and economic rights. As such, they cannot choose to abandon the failed policies that were imposed on them by force and that are kept in place by the same.

Neither geographical distance, nor the lack of freedom, can explain the mad dash toward self-destruction in South Africa, however. The new President of the ruling African National Congress, Cyril Ramaphosa, has recently committed his party to “land expropriation without compensation.” That measure, if implemented, is guaranteed to turn a sophisticated economy responsible for generating 20 per cent of sub-Saharan Africa’s output into a basket case, like Zimbabwe.

What’s going on? Here, some historical context is in order.

In 1979, Margaret Thatcher’s first Foreign Secretary, the apparently immortal Lord Carrington, brokered a peace deal between a multi-racial, but internationally unrecognised, government of Zimbabwe-Rhodesia and an assortment of African nationalists led by Robert Mugabe. Under the terms of the Lancaster House agreement, Mugabe was allowed to take power in Zimbabwe in return for agreeing that farmland in the African country would be bought and sold on a “willing buyer, willing seller” basis.

That agreement held until 2000. At the start of the new millennium, however, the government found itself under political pressure from its erstwhile supporters, who claimed that they did not benefit from Mugabe’s rule. True enough, in the first 20 years of his rule, Mugabe’s socialist policies strangled the economy and stagnation set in. Unfortunately, the dictator was allowed successfully to deflect the blame for his failures on to a tiny minority of white farmers, who were, subsequently, deprived of their land and livelihoods.

An epic catastrophe followed. Farms stopped producing crops and hunger ensued. Banks, which loaned money to farmers in exchange for land as collateral, shuttered. The government, which relied on farm export earnings to pay its bills, ran out of money. And so Mugabe started printing money, leading to hyperinflation. The economy ceased to function. Many Zimbabweans, black and white, were murdered by Mugabe’s goons. Many more lost their jobs and Zimbabwe’s educated middle class dispersed around the globe. Some four million victims of Mugabe’s incompetence and venality ended up in exile in South Africa.

Meanwhile, in 1994, South Africa went through its own political transition from a white minority rule to a black majority rule. Under the terms of that country’s internal settlement, known as the Convention for a Democratic South Africa, Nelson Mandela’s African National Congress was allowed to take power in exchange for a set of guarantees, including the right of individuals to private property. The 1996 Constitution did allow for the normal eminent domain takings, but the government was obliged to compensate the losers at market prices.

As was the case in Zimbabwe, the South African settlement largely held for about two decades. In fact, many white farmers willingly sold their land at market prices to the government, which then redistributed the purchased land among the previously landless Africans. From an economic standpoint, the programme was a massive failure, but the government proceeded in a legal and orderly way. That, alas, may not continue for much longer.

Over the last decade, South Africa’s average annual growth rate has hovered around two per cent – far short of the six per cent that the government needs in order to tackle the country’s unemployment rate of 28 per cent. The relatively slow growth rate is a result of a number of factors. South Africa’s taxes are onerously high, regulation increasingly burdensome and quality of government slowly deteriorating.

Partly as a result of slow growth and partly because of growing corruption, the ANC has been losing electoral support. Its coalition partners, the Communist Party and the trade unions, are rebellious. A Maoist group of so-called Economic Freedom Fighters, who are led by a racist demagogue called Julius Malema, has been getting traction in the opinion polls.

Cyril Ramaphosa, who has recently replaced the disgraced Jacob Zuma as leader of the ANC, believes that he can shore up his party’s electoral prospects by adopting some of the EFF’s policies. To that end, Ramaphosa has recently promised to turn South Africa into “the garden of Eden” by expropriating South Africa’s farmers without compensation.

Ramaphosa has also promised that expropriation without compensation will not damage South Africa. That, alas, is not possible. As Zimbabwe shows, when property rights are taken away, other basic human rights also fall by the wayside. Hence the widespread torture, killings and rape of anyone, even children, who dared to stand up to Mugabe’s madness.

South Africa is a democracy that shares a border with Zimbabwe. It is home to millions of Zimbabweans who can attest to the lunacy of the proposed measure. Yet, unless he is stopped by international pressure or the South African Constitutional Court, Ramaphosa may start expropriating his country’s farmers without compensation just the same. Why?

The real reason for the apparent willingness of the South African government to repeat other countries’ mistakes, I suspect, does not rest in ignorance or geographical distance, but in the ANC’s desire for survival.

Having failed to generate economic growth and prosperity, the ANC is turning on a defenseless minority, whose sacrifice, the party reasons, is a price worth paying for another term in office. If Ramaphosa does carry out his threat of expropriation without compensation, he will destroy his country.

If that is what the majority of the population wants, they deserve to get it – good and hard.

Marian L Tupy is senior policy analyst at the Cato Institute's Center for Global Liberty and Prosperity.