South Africa’s Lockdown is a good Opportunity for Real Structural Reforms

“Central planners don’t think in terms of the long-term consequences of their interventions,” warned Advocate Mark Oppenheimer in a recent discussion with the Free Market Foundation’s Head of Legal Policy Martin van Staden and Project Manager Chris Hattingh. Given the recent extension of the current lockdown in place in South Africa, his warning could not have come at a more appropriate time.

Read more: There is no uncertainty about the economic disaster caused by the lockdown

Essential services “require other services so that they can operate – there is a sort of pyramid.” Economies are highly interconnected, explained Oppenheimer, and it is not a simple matter of turning off just some ‘parts’ of the economy. The economy is a complex organism, which means any plans to curtail or restrict economic activity must be handled with an exceedingly high level of caution. Van Staden and Hattingh noted how the so-called essential/non-essential goods and services distinction might be legally arbitrary and therefore irrational.

Highlighting the ever-present danger that we can lose our hard-won civil liberties, Van Staden also stressed that a great deal of responsibility rests with all South African citizens, to hold public officials accountable. The Constitution only works on the strength of the vigilance of the people to whom it applies.

Read more: New report: Constitutional validity of coronavirus lockdown regulations is disputable

Looking to the future, Oppenheimer pointed out that the economy will be highly fragile once the lockdown is lifted, but that it is will also be an unexpected opportunity. Solutions to South Africa’s problems, that have long been ignored, may now be taken seriously in the place of government’s longstanding interventionist orthodoxy. The economy cannot afford the further undermining of South Africans’ property rights through expropriation without compensation, and this policy would need to be abandoned. Calls to nationalise property and healthcare must be firmly resisted. Oppenheimer’s advice to South Africans included, “We must go through Minister Tito Mboweni’s previous Budget with a red pen, and eliminate all the government projects SA simply cannot afford.”

Van Staden argued that if government is serious about structural reform, after the lockdown is lifted “the economy must be given room to breathe. We need labour laws to be significantly relaxed.” Onerous labour legislation makes it exceedingly difficult for both employers to confidently hire employees and workers to find employment. South Africa went into the lockdown with over 10 million jobless people, and this number will likely be significantly higher because of the lockdown. South Africans have to be put to work again, and that cannot happen with the present labour law regime.

Hattingh emphasised that South Africa needs the right kind of structural reform going forward – structural reform that simply entrenches the power of the state will not be the kind of reform the country needs.

If the South African economy is to have any chance of recovery after the lockdown, the country needs to follow the path of common sense, pro-free market structural reform, and not simply follow the path that did so much damage to the economy before the lockdown.

The FMF is an independent, non-profit, public benefit organisation, created in 1975 by pro-free market business and civil society national bodies to work for a non-racial, free and prosperous South Africa. As a policy organisation it promotes sound economic policies and the principles of good law.