Populists Ride To Power By Dangling False Promises

THE one certain thing about populist policies is that they ultimately fail, and when they do, it is the poor — the very same group these policies are meant to benefit — who suffer the most. Take Zimbabwe.

Its poor have borne the brunt of its socio-economic decline and they will also bear a disproportionate share of the bitter medicine that a new government will have to give to Zimbabwe’s ailing economy.

When Robert Mugabe’s socio-economic policies hit the skids, sending the economy into a tailspin, Zimbabwe’s professional class voted with their feet, seeking greener pastures in South Africa, Europe and the US.

And those who stayed behind did so because they had the financial means to withstand the effects of hyperinflation. Lacking the skills needed to enter the global job marketplace, the poor have either been stuck in Zimbabwe, or hunger drove them to risk life and limb by jumping the fence to work as menial labourers in South Africa.

As Mugabe has demonstrated during his 28-year rule, populists do amuse the poor for a while, but ultimately they not only fail to improve the lives of the poor, they leave them worse off than before.

In their study of populism in Latin America in the 1970s and 1980s, Rudinger Dornbusch and Sebastian Edwards identify a number of conditions under which populism thrives. These include serious economic inequality combined with improved budgetary resources.

Populists also tend to dismiss the risks of relying on borrowed money to finance a country’s budget as “exaggerated or altogether unfounded”. They also push for a redistribution of income, typically through real wage increases. What Dornbusch and Edwards describe are conditions found in South Africa today.

Trevor Manuel, the longest-serving finance minister in the world, has nursed South Africa back to financial health, so much so that the country now has a budget surplus.

But inequality between the two main racial groups remains high, and the income and wealth gap within the black population itself has widened. South Africa’s carefully crafted discipline faces an uncertain future as a result of the rise of Cosatu and SA Communist Party-backed individuals into leadership positions in the ANC.

Central to the economic policies of the two organisations is the belief that SA should not run a budget surplus, but should throw money at the country’s socio-economic ills.

As Zimbabwe’s history, and the outcome of the ANC’s Polokwane conference, show, populists ride to power on the back of poor people’s dreams of a better life. Preaching socio-economic nostrums, populists create an impression to the poor that solutions to their plight are as easy as throwing money at them, including paying the civil servants more.

Zimbabwe isn’t the first country on the continent to go down the populism path.

That mantle belongs to Ghana, the first sub-Saharan nation to gain independence. Buoyed by the high price of cocoa  — Ghana’s main export — Kwame Nkrumah, the independent nation’s first prime minister, threw caution to the wind, ignoring Arthur Lewis, his economic adviser.

Lewis, the first black economist to win a Nobel Prize, warned Nkrumah that if he insisted “on personal baubles”, Ghana would not have money for clean water and cheap electricity, or to build schools and a good health system. Nkrumah’s response? “The advice you have given me, though sound it may be, is essentially from the economic point of view. And I have told you on many occasions I cannot always follow this advice as I am a politician and must gamble on the future.”

Nkrumah did gamble.

By 1966 Ghana was bankrupt, he had been deposed in a coup, and for decades Ghana’s poor bore the brunt of that country’s socio-economic decline. As Ghana and Zimbabwe show, populists ride to power by dangling in front of the poor the false promise of a better future.

There’s nothing crueller than promising them that and then crushing those hopes the way Mugabe has done, or Nkrumah did in the 1960s. —The Star (SA).