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South Africa’s spark for clean governance

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When the African National Congress (ANC) became South Africa’s first democratically elected ruling party in 1994, it promised that state-owned enterprises like utilities and the national airline would reflect “a public consciousness.” That meant that the companies would model the country’s diversity and be engines of shared prosperity.

Three decades later – with the ANC still in power – many of those enterprises are in shambles. One recent report found that public entities are hobbled by “crumbling infrastructure, poor and ever-changing leadership, corruption, wasteful expenditure and mismanagement of funds” and owe roughly $42 billion in debt.

The most conspicuous example is Eskom, the state electricity company. Its aging power plants and financial troubles have resulted in rolling blackouts – or “load shedding” – that put customers in the dark for up to 12 hours at a time. Yet that dysfunction may now have a silver lining: a corrective impulse toward honest government after years of unbridled graft.

At its midsummer party conference last weekend, the ANC backed a plan by President Cyril Ramaphosa allowing new private energy production. That signaled a shift away from the party’s conviction that only the state can fairly protect the public good – a belief shaped by the inequalities of the apartheid era, when the Black majority was largely excluded from the formal economy.

It also reflected a rare admission of failure and need for greater transparency in government. “Our weaknesses are evident in the distrust, the disillusionment, the frustration that is expressed by many toward [the ANC] movement and government,” Mr. Ramaphosa told the party gathering. “The people of South Africa will never forgive us if we abandon ... confronting wrongdoing within our ranks.”

That contrition may provide a model for other societies like Sri Lanka and Pakistan that are grappling with the economic damage caused by corruption and mismanagement. According to the Organization for Economic Cooperation and Development, 1 in 5 of the world’s largest enterprises are state-owned. That marks an upward trend. At their best, public entities can seed the development of new industries and ensure the provision of essential public services. But they can undermine competition and are prone to abuse.

Mr. Ramaphosa is attempting to uproot a culture of corruption in the ANC that cost the state an estimated $17 billion during the nine-year presidency of his predecessor, Jacob Zuma. A government inquiry found that state entities like Eskom were portals for graft and abuse.

As it turns out, an acute energy emergency and its economic consequences may be the spark for needed reform. “The crisis that we are facing ... is a call for all South Africans to be part of the solution,” Mr. Ramaphosa said in a national address last month.

An entrenched ruling party that opinion polls show has lost the public’s faith may be starting to restore the public good above its own. That reset starts with the humility to see that societies build through honest and shared enterprise.

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