The sins of Manuel, Mbeki et al …

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The sins of Manuel, Mbeki et al …

Relieved that a new era has dawned and SA is finally rid of former President Jacob Zuma, Ziyad Motala, professor of law at ‎Howard University School of Law, draws attention to what he considers ‘the biggest and most mendacious state capture’ under the misinformed policies of Thabo Mbeki and Trevor Manuel, which, he argues, are worse in their long term consequences than the Zuma effect. In a brief covering note on his article for the American University Business Law Review, he says the effects of that early state capture, some of which was done in secret, has lasting and profound negative consequences for our unemployment, GDP, tax revenue and the creation of economic opportunities for the historically disadvantaged. In the article on the Legalbrief Today site, he accuses Manuel, the first Minister of Trade and Industry after the 1994 elections, and the bureaucrats that negotiated the Bilateral Investment Treaties (BITS), of a profound lack of knowledge of the legal and technical expertise of international trade law. He says an informed analysis of these treaties would show that many of their provisions were inimical to the constitutional imperative – they were indulgent to the privileged and detrimental to the interests of the majority – and represented a surrender of the state’s law and policy control. He notes that in blindly following the Washington Consensus – a set of 10 economic policy prescriptions considered to constitute the ‘standard’ reform package promoted for crisis-wracked developing countries – SA assumed largely First World free trade obligations despite its large unemployment and poverty. The pursuit of free trade obligations, not contextual to the realities of SA, resulted in the decimation of key sectors of the economy. Many went from employment to dependants of state welfare. The monetary policies allowed major corporate head offices and vast amounts of money to leave the country. Motala argues there was not a single benefit to the SA economy by allowing the crown jewels of SA corporations to move their head offices abroad. Instead, these policies undermined the tax base, job creation and development of the economy. The starting point to fix it, he suggests, is to realise that free trade and foreign direct investment by multinationals has not delivered African countries from poverty. The Asian models exemplified in the lessons of South Korea demonstrate that the primary engine for development comes from within the country and its population. Fortunately, African nations are beginning to recognise the benefits of trade protection, public development banks and more expansionary monetary policies. These countries are beginning to take back the initiative in setting their own policies to address their own unique problems, including that there is more to gain through trade from regional integration through the continent or with similarly placed economies than integration with the developed world.

Full article on the Legalbrief Today site

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