LEFT-LEANING economist Chris Malikane has made a spectacular comeback into South Africa’s economic policy debate. Malikane, who advocates state ownership of mines and financial institutions, has been roped in as economic advisor by newly appointed finance minister Malusi Gigaba, to assist the National Treasury in driving radical transformation of the economy.
Malikane has already rattled investors after he penned an 8-page essay proposing a “new economic plan” that is based on the nationalisation of mines, banks and insurance companies. Malikane also urged the state to use its ownership of these sectors to re-industrialise the economy.
In the hard-hitting article, Malikane also called for the expropriation of land by the state without compensation and the establishment of a state-owned bank to provide affordable credit to the poor and black-owned businesses.
The Finance Ministry immediately distanced itself from Malikane’s essay, fearing that the economics professor’s radical proposals could spark a further downgrade of government debt by global rating agencies.
“The Ministry of Finance would like to place on record that the opinion piece by advisor to the Minister of Finance Professor Chris Malikane was written in his personal capacity as an academic and activist. The views expressed in the opinion piece are not necessarily government policy. “Professor Malikane is within his rights as an academic and an activist to contribute ideas to national discourse on any subject. Minister Malusi Gigaba wishes to place on record that the work of the Ministry of Finance will continue to be guided by policies of the ANC, as articulated in conference resolutions and in the 2014 election manifesto. The nationalisation of banks is not government policy,” said Gigaba’s spokesperson Mayihlome Tshwete in a statement.
Malikane, who taught economics at Wits University and a former advisor to labour federation Cosatu, drafted a research paper that formed the backbone of ANC Youth League’s calls for nationalisation of mines when Julius Malema was the president of the youth organisation before he was expelled by the ANC in 2011.
Malikane argues in his essay that the axing of Pravin Gordhan by President Jacob Zuma on 31 March was a signal that the government was asserting itself in defiance of the so-called while monopoly capital (large JSE-listed companies and foreign multinationals), which he says had captured the National Treasury, its associated agencies and the Reserve Bank.
“The ruling party (ANC) has never exercised political autonomy in relation to appointments to strategic positions in the financial cluster of the state. For the first time, the removal of the Finance Minister, without approval of white monopoly capital, has signalled the end of the phase of unfettered white monopoly capitalist domination, at least within the state and the ruling party,” Malikane wrote.
Malikane also wrote that South Africa has entered a phase of intense rivalry between capitalist groupings, where the white monopoly capital is being challenged by black business capitalists, who are benefiting from lucrative tenders issued by state-owned companies.
“The tender-based black capitalist class is not likely to win this battle without the support of the mass of the black and African working class. Unlike its white counterpart, the tender-based black capitalist class has no coherent historical international backing. Its relationship with the organised working class, which is the only force that is capable of disrupting white monopoly capitalist power at the point of production, is very weak,” he points out.
David Maynier, the Democratic Alliance’s shadow finance minister, said Malikane will be used as Gigaba’s battering ram against orthodox economists at National Treasury.
“The appointment of Professor Chris Malikane, who appears to have been trained at the ‘Hugo Chavez School of Economics’, is entirely understandable and a logical consequence of the minister’s political agenda, to implement ‘radical economic transformation’ and to take on orthodox economists at National Treasury. “The fact is that Professor Chris Malikane has been appointed precisely because he is an unorthodox economist and he will be used as a ministerial battering ram in coming battles with orthodox economists at National Treasury,” Maynier said. – www.getbiz.co.za