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This is obviously a season of reflection for me.
Here is (another) post from the past, this one from November 4 2009.
Remember, when I wrote this, Julius Malema was firmly ensconced as ANC Youth League president. It was a full 11 months before the defining showdown at the National General Council (11-13 October 2010) where Julius Malema was the sharp end of an attempt to force the ANC to adopt a position on the nationalisation of South African mines – read the exhausting, if not exhaustive, details about that here.
From then on Malema’s relationship with the top leadership of the ANC deteriorated until he was suspended from the party in November 2011 and on the 4th of February 2012 the appeal committee of the ANC “announced that it found no reason to “vary” a decision of the disciplinary committee taken in 2011, but did find evidence in aggravation of circumstances, leading them to impose the harsher sentence of expulsion from the ANC” – Wikipedia
I think it is interesting to read 5 years later. Not that it was ‘true’ then or now. It’s just interesting. Given the last few days … also I think it (the article) implicitly relies too much on a ‘big man view of history’, gives too much prominence to the idea that ‘leaders’ make the crucial difference in how things turn out … something I will deal with some time in the future.
I am not endlessly going to repost old blogs. I am busy with a news update that should be out here during the next 24 hours.
Julius Malema is the Coming Man
Take a deep breath, put your shoulders back and look through the frenzy.
Reading the Democratic Alliance’s Diane Kohler Barnard pour scorn on the “rotund” and “Idi Amin-like” Julius Malema I couldn’t help but think that she is leaving herself as few choices as J.M. Coetzee leaves his fictional characters.
Julius Malema is a powerful contender for future ANC leadership – and is already a powerful politician. I think his rise to lead the ANC and possibly the country may be unstoppable. I fear that Barnard’s feisty and admirable rhetoric leaves her, and those she represents, no paths upon which she might ride her high horse back, when this is all over.
Barnard, recounting how Malema allegedly attempted to bully his way through a traffic violation with : “Don’t you know who I am?” arrogance, says:
[Julius Malema is] the man who believes there is one law for South African citizens, yet another law for him. He is the man who will slap a neighbour who has the temerity to ask that the music at his housewarming be turned down at 3 in the morning. He is the man who has turned hate-speech into an art form [...]
Barnard’s anger is palpable as she sneeringly reminds us that Malema has said he would fire Thabo Mbeki and any ANC parliamentarian “should he get the urge”
Malema’s ego and contempt for the law the rest of us must respect, is unparalleled [...] Is this, to quote the President, someone you honestly believe is a ‘leader in the making – worthy of inheriting the ANC”?
Well, is he “a leader in the making”? Is he “worthy of inheriting the ANC?”
The answer to the first question is: “yes” – more about that below.
The answer to the second question is irrelevant. Could we agree what this historical artefact: “the ANC” is; could we agree on what its characteristics and values are? Could anyone make this judgement call?
Frankly, history can give a fig whether you or I think Julius Malema is worthy of inheriting the ANC – or, quite frankly, whether the ANC is worthy of inheriting Julius Malema.
This is not about what you or I think or believe or hope for; it is also not about what Diane Kohler Barnard and the Democratic Alliance and those they represent hope for and hope to accomplish.
This is not, unfortunately, about how things aught to be, or about what is fair and just in the moral universe.
This is about how things are; this is history as a raging torrent.
A de facto leader
Assuming “leader” is neither complimentary nor derogatory – the word can be either or neither – it is clear that Malema more than fits the common sense meaning of the term.
- Malema has been hot-housed as a boy in ANC training institutions and groomed for leadership after joining the organisation at the point of its unbanning in about 1990;
- He has led the two key feeder organisations, the Congress of South African Students and the ANC Youth League;
- He has become the crucial port of call for politicians and individuals hoping to build support for any initiative that requires ANC support;
- He personally played an important role in the rise to dominance of the faction that backed Zuma for president;
- He is the only ANC politician – aside from Jacob Zuma – who has a significant and deliverable mass base; both numerous and militant;
- His rhetoric (in my opinion) is closer to the views of the core constituency of the ANC than the publicly expressed views of any other South African politician;
- His name/face recognition is almost unparalleled.
Julius Malema was born in the Northern Transvaal (Limpopo Province) and raised, like Jacob Zuma, by a single mother who worked as a domestic worker. This is the hard school of South African life and these kinds of credentials are still highly valued in the ANC.
In the last few weeks Julius Malema has come over all statesmanlike:
- He acknowledged Thabo Mbeki’s key leadership role – of the ANC and the country;
- He declared the rector of the University of the Free State “one of our own” – thereby helping to defuse growing racial conflict on that campus.
This is deliberate marketing, evolving the brand [firebrand to Dollar Brand ...] while the news media, opposition politics and certain dinner table discussions remain obsessed with each new Malema gaff or his latest confrontational tirade.
It is striking how similar the Julius Malema story is to the Jacob Zuma story.
The human need is to normalise the inevitable or the inescapable present. Three years ago media and dinner table sentiment about Jacob Zuma was almost identical to the sentiment held by the same groups of people about Julius Malema today.
The central dilemma in J.M. Coetzee’s Disgrace.
Is accepting – and trying to get your head around – the present and future leadership role of Julius Malema the moral equivalent of the choices made by J.M Coetzee’s Lucy, the daughter of main character David Lurie in the 1999 novel Disgrace? Lucy (who is white) is raped and ends up seeking and receiving protection (and more) from Petrus (who is black) who is closely associated with those who raped her in the first place. Even if you have not read Disgrace I think you can understand the dilemma.
Is Julius Malema the Great Defiler – of our constitution, of the bill of rights and of our hopes for non-racialism?
No more than that previous rape accused, Jacob Zuma.
It sometimes feels that Julius Malema is deliberately teasing; upping the ante to cause his opponents to shriek ever louder and sound ever more shrill.
I have no idea whether he has the sense of humour or sense of the absurd to be deliberately inviting the kind of scorn he receives from those Dianne Kholer Barnard represents – and a smattering of those she hopes to represent.
But I have no doubt that it will be Julius Malema who laughs the longest.
Listening to the EFF be the rock against which Zuma’s blithe refusal to account finally dashed itself yesterday I felt briefly elated.
Gangsters! Bashi-bazouks! Yes, PAY BACK THE MONEY! PAY BACK THE MONEY! Billions of Blue Blistering Barnacles!
But after a moment’s reflection I pulled myself, by the ear, back into the vehicle.
“You irresponsible old twit!” I said, my mind drifting back to this blog post from August 24 2010:
Waiting for a saviour to rise from these streets*
Just when all hope flees, as the last good politician still within government leaves his/her post to join the feeding frenzy and as the last decent officials trying to do a public service throw up their hands in disgust; and as the striking workers blockade the last functional HIV/AIDS clinic and trash the streets again; and as the broken bits of the Ruling Alliance go for the kill in their eye gouging, groin stamping gutter fight – just as all hope flees, whose silhouette is it that appears, backlit and heroic, flying in low over the horizon?
Is it a plane?
Is it a bird?
No, it’s … hmm, I’m not really sure.
When things are going as badly wrong as they are going for us, the person to look out for is the one who seems to have been sent by history itself as the solution to all of our problems.
I am not suggesting, as my old Granny used to say: don’t worry, cometh the moment, cometh the man or all’s well that ends well. I am suggesting the very opposite.
This is more of a warning to be careful about decisions we make when we are desperate than it is anything else.
Societies, political parties and whole nations are uniquely vulnerable at times like these. Our desperate need is for someone who can raise an anti-corruption army, is prepared to control the unions, able to fix service delivery and able to make the difficult decisions that will allow job rich economic growth.
The darker and more dire things become – and goodness knows they are as dark and dire as anyone can remember – the stronger our wish fulfilment drive becomes.
Where is the good-looking one, with the strong jaw and the easy, comforting manner, and the very firm but gentle eye and the plan and the promise and the words – and the record, or at least one you can, in your desperation, convince yourself of?
This is the moment in which nice Germans welcomed Adolf Hitler and Spaniards General Franco. King Constantine II of Greece inducted the awful “Regime of the Colonels” in 1967 saying he was “certain they had acted in order to save the country” and there was a (brief) Argentinian sigh of relief when Brigadier-General Jorge Videla overthrew the execrable, incompetent and authoritarian regime of “Evita” – as popular culture has dubbed Isabel Martínez de Perón.
I am not suggesting that a fascist opportunist and criminal is about to present him or herself as the saviour from our woes – or that things are so bad that we risk losing our judgement and welcoming him/her into the stockade. Well, not yet.
But explicitly and implicitly various political factions and individuals have presented themselves as alternatives, and the solution to our current problems.
There’s Zwelinzima Vavi – and whatever kind of workerist paradise he represents – who heroically criticised the media appeals tribunal and has laid about himself with a stout cudgel at all the worst of the cabinet ministers and officials trying to stuff the last tasty bits of the family roast into their distended bellies. And he’s available next year.
Deputy Minister of Police Fikile Mbalula suggested (of criminals) we should “shoot the bastards!” and in so doing presents a kind of law-and-order (and anti-communist) alternative, clearly being supported by the ANC Youth League and tenderpreneurs everywhere.
Lindiwe Sisulu dresses nicely and would be excellent if we ever panicked enough to need a kind of Cleopatra/Boadicea empress to save us.
Tokyo Sexwale is getting the kind of press that suggests he is an effective anti-corruption campaigner and an excellent Minister of Human Settlements i.e. he’s clean and gives good service delivery – and he’s bright, presentable, charming, good-looking and available – very available.
(This added as an afterthought: don’t discount Kgalema Motlanthe as a sort of leftish compromise that we have grown used to and, obviously, Mathews Phosa with his charming Afrikaans poetry and his friendly demeanour and his market friendly comments and his bitter struggle with ANC leader and communist Gwede Mantashe. Also consider a scenario, one I discuss elsewhere, where none of the contending factions achieves dominance and everyone agrees to stick with the burdensome incumbent … all is still possible.)
The National General Council of the African National Congress (to be held in Durban from 20 – 24 September) will reveal the main factions and their key representatives for leadership. The last NGC resulted in a rebellion against Mbeki and foretold his rout at Polokwane. This one is likely to be as instructive.
The point I wish to make here is a simple one. Those who appear to offer solutions must be judged in terms of who they are, what they have done and what they really represent. Just because we are in trouble does not mean we can afford to lose our critical faculties. My long gone Granny would have had two more things to say on the subject: don’t throw the baby out with the bath water, and don’t jump from the frying pan into the fire.
* The title of this post comes from the glorious “Thunder Road” by the inimitable Bruce Springsteen (it doesn’t really fit the story … but I really love the song:
You can hide `neath your covers
And study your pain
Make crosses from your lovers
Throw roses in the rain
Waste your summer praying in vain
For a saviour to rise from these streets
Well now Im no hero
All the redemption I can offer, girl
Is beneath this dirty hood
With a chance to make it good somehow
Hey what else can we do now?
I intend, in the near future, to dust off my Marxist theory.*
I am going to need a framework through which to express my growing conviction that much of our politics can be understood as a function of the collapse of the alliance of classes that underlay the national democratic revolution – and the African National Congress.
The big driver is the strongly emergent black middle class – or perhaps competing versions of that class. In the background is a sort of bad kung fu movie fight scene involving the industrial working class, various parasitic elites within the state and party, a comprador bourgeoisie and a whole mess of tribalists, proto-fascists, landless peasants and lumpen proletarians of various stripe.
(The camera occasionally flicks across the deeper shadow behind, where we almost catch a glimpse of Moeletsi Mbeki’s lurking oligarchs, watching us.)
It’s my job to have some kind of understanding of what is going on … and I will need all the help I can get theory-wise.
In the last week the ANC has given strong hints that the Labour Relations Act amendments are being held up because government wants balloting prior to strikes and a ‘forced mediation’ strike-breaking mechanism. (See here.)
Also we have the astonishing re-emergence of the (excellent) idea that we should break up Eskom and sell off some of the bits and get the private sector to build other bits. (See here … and btw I can’t help but notice how much interesting news is written by Carol Paton of Business Day.)
What’s going on?
Well, one things is government is facing further downgrades because it can’t pay its bills.
The biggest bill of all is public sector wages, which will be renegotiated before the current wage agreement expires in March 2015.
That bill will represent above 35% of non-interest government spending and the wage level the employer and the employee eventually agree upon and the degree of disruption that accompanies the bargaining is extraordinarily important for South Africa and therefore for the stability of the governing party.
Also government is burning due to its apparent inability to get the endlessly promised infrastructure built. At least part of the reason is the constant labour stoppages, for example at Kusile and Medupi.
Having lost much revenue (and political support) during the recent strikes led by Amcu and Numsa, the ANC government is forced to find a way to rewrite the terms of engagement between employer and employee.
Also Eskom is bleeding … or potentially bleeding … government dry.
The case for privatisation is threefold: you get money from the asset sale to pay your debts, you don’t have to keep bailing out the loss-making enterprise and you get the ‘efficiencies’ (the removal of structural impediments to growth) that supposedly come from the private sector running the enterprise.
(As an aside: privatisation seldom works quite like that. This government, and the people of South Africa, have barely recovered from the the drubbing we received from the ‘private sector’ following the partial privatisation of Telkom in the 90’s. But desperate times, desperate measures … and all of that.)
The groups that traditionally oppose these policies are in disarray. Cosatu has essentially collapsed in a heap – and the most energetic sections of organised labour are actively hostile to government/ANC anyway and no longer require wooing … or rather, following Marikana and various statements of outright hostility by the ANC and government leaders, are no longer susceptible to those old sweet lies.
The forces that shaped our labour market are profoundly changed.
A growing mystery to me is where the SACP is in all of this?
So its all: hello 1996-class project, we who threw you out with the bathwater at Polokwane in December 2007 would like to apologise and welcome you back. Don’t worry, the communist are in China learning how to deal with corruption and with the labour force … you can chat to them if they ever come home.
So meanwhile here is a sort of ancestor to my questioning the ‘class character’ of the moment; a column I wrote for the Compliance Institute of South Africa in November last year:
Is this Jacob Zuma’s Maggie Thatcher moment?
I admit that on the face of it the comparison seems something of a stretch.
For example I can’t think of an ‘Nkandla’ equivalent in Baroness Thatcher’s world – although her son seemed to benefit from parental political power in much the same way as Jacob Zuma’s myriad offspring seem to be enjoying.
The point, though, is Thatcher came to power with the reforming mission to roll-back back the influence of organised labour and to make labour markets more flexible– all as part of her attempt to stop an on-going recession, bring summer to the ‘Winter of discontent’ (paralysing wage strikes by public sector unions in Britain in 1978-1979) and increase employment and economic growth.
(‘Thatcherism’ as a political-economic ideology is also considered to include attempts to keep inflation low, shrink the state – by privatising state owned enterprises – and keep a tight rein on money supply … (and is not famously concerned about employment – Ed) … but let’s leave those details aside and stick with the matter of organised labour.)
Much to my surprise there is growing evidence Jacob Zuma is forcing a showdown within the Congress of South African Trade Unions (Cosatu) – and between the members of the ruling alliance (the ANC, the SACP and Cosatu).
Since 1994 it has been a good bet that tensions in the ruling alliance would flare up and then subside – but that the constituent ideological factions and organisations would always back off from a real split.
The ruling alliance has always seemed to me like a vaguely unhappy marriage that none of the parties have the resources or discipline to leave.
I have been covering South African politics and financial markets since 1997 and in 1999 I commissioned this cartoon :
The original caption read: ‘She means nothing to me’, he pleaded unconvincingly. ‘You’re the one I will always love’.
The report that accompanied the cartoon – which I originally published for the then stockbroker Simpson Mckie James Capel – made it clear that the man in the middle represented the ANC and his entreaties were addressed to Cosatu and the SACP … while his real passion (and the furtive fumbling behind his back) was for business, global and domestic. (Cathy Quickfall drew the cartoon and did a better job than I could have hoped for: the Cosatu/SACP figure’s naive and hurt innocence, still wanting to trust Mr ANC; business in a sharp suit, her disdainful look into the distance with just the busy hand behind her back revealing her urgent and furtive intent.)
It has looked for many years as if the dysfunctional relationship would continue for ever – that the parties involved (both the institutions of the ANC, the SACP and Cosatu but also the myriad ideological factions that exist across those organisations) have more to gain from being inside and more to lose from being outside.
But, surprisingly, it appears that the ruling faction within the ANC (the incumbent leadership, represented by Jacob Zuma) appears to have finally drawn some kind of line in the sand with the ‘left’ unions within Cosatu, most obviously the National Union of Metalworkers of South Africa.
The first signs that this was happening appeared when evidence surfaced that Jacob Zuma’s allies within Cosatu were moving against Zwelinzima Vavi, the now suspended secretary general and strident ‘left’ critic of corruption in the ANC and critic of the slightly more business-friendly economic policy (particularly the National Development Plan) of the Zuma government … (remembering that this was written late last year and Vavi has now been reinistated … sort of – Ed).
At first it appeared that Vavi would be got rid of by being accused of corruption or some form of financial mismanagement related to the sale of Cosatu House for a price less than it was worth. While that investigation was still on-going, Vavi handed his enemies a perfect excuse to suspend him by having sex with a junior employee in the Cosatu head-office earlier this year (last year – Ed).
Since the suspension of Vavi his allies in Cosatu, especially the biggest affiliate (the 350 000 member Numsa) has been on a collision course with both Cosatu itself and with the ANC.
The conflict is likely to come to a head at the Numsa special congress to be held on December 13 – 16.
Why do I see this as, partly, Zuma’s Maggie Thatcher moment?
Well, Vavi’s suspension is only the proximate cause of the impending collision. The ‘real’ or ‘underlying’ causes are what are important.
Vavi, Numsa secretary general Irwin Jim, his deputy Karl Cloete – and probably a majority of Numsa leaders and shop stewards … and several other groups and leaders within Cosatu) appear increasingly of the opinion:
- that Cosatu has been bullied by the Zuma leadership into accepting policy positions with which it (generally) disagrees
- that the ANC under Zuma has attempted to turn Cosatu into a ‘labour desk’ of the ANC and the alliance summits have become nothing but a ‘toy telephone’ rather than a real joint decision making forum for the ANC/Cosatu/SACP alliance
- the policy positions with which this group disagrees are, particularly, the National Development Plan, but also e-tolling, the Youth Wage Subsidy and the ANC government’s failure to ban labour brokers. (The reasons why this ‘left’ group opposes these policy measure are crucial: they oppose the NDP because it is seen as ‘neo-liberal’ and anti-socialist; e-tolling because it is seen as covert privatisation of public infrastructure; the youth wage subsidy because it segments the labour market, threatening Cosatu’s monopoly and potentially exposing ‘protected’ Cosatu members to competition from ‘unprotected’ youth workers; and the failure to ban labour brokers because those institutions are also anathema to Cosatu’s monopoly.)
- that the ANC under Zuma has been captured by a crony-capitalist regionally based (possibly ethnic) elite bent on looting the state
- that the gamble to back Zuma against Mbeki has badly misfired
There is widespread press and analyst speculation that the tensions within Cosatu could lead to the federation splitting – and in some way or another the more specifically ‘socialist’ pro-Vavi, Numsa-based group leading Cosatu – or a piece of Cosatu – out of the ruling alliance.
In what way is this ‘Zuma doing a Maggie’?
Well, because the disgruntlements of the Vavi/Numsa group (described above) are real and represent significant shifts against organised labour by the Zuma government.
If we add to the youth wage subsidy, the NDP, the failure to ban labour brokers, e-tolling in Gauteng to the very tight budgeting for public sector wage increases mentioned in my October column I think we have a strong circumstantial case that Zuma’s ANC has moved decisively to roll-back the power of organised labour.
Why Jacob Zuma and his allies might have done this is revealed clearly in the anaemic Q3 GDP growth figures of 0.7 per cent compared to the previous quarter, or 1.8 per cent on a year-on-year basis . Almost across the board analysts and economists have ascribed most of the weakness to labour unrest, particularly in the motor vehicle sector – where the recent strikes were organised by Numsa! (Again, remember that this was written in November last year … just imagine how many exclamation marks he would have used if he had written that sentence today? -Ed)
Numsa has also helped plague Eskom’s flagship Medupi project – and has undoubtedly contributed to government’s infrastructure plans looking shaky.
The ANC’s motivation is not purely an attempt to fix economic growth – and bring to an end our own ‘Winter of Discontent’. Vavi and his allies in Numsa have harried and harassed the ANC leadership over corruption – and particularly the upgrade to Nkandla – and this has clearly helped force the hand of the Zuma ANC to drawn a line in the sand with the left-wing of Cosatu – especially as the ANC enters an election and struggles to cope with this level of internal dissent and criticism.
The resignation earlier this week of Numsa president Cedric Gina (who, unlike the majority of his Numsa colleagues, is close to the current ANC leadership: his wife is an ANC MP and he probably has similar ambitions himself) is probably an indication that the Zuma/ANC allies intend contesting Numsa’s direction in the lead-up to the Numsa special congress in December. The ANC leadership has probably decided to fight it out in Numsa – and Cosatu more generally – making sure that if/when a split occurs the faction that sticks with the ANC/Zuma/SACP is as large as possible and the faction that defects is as small as possible.
The big risk for investors and financial markets associated with a possible split in Cosatu is that Vavi/Jim group is likely to contest with unions within Cosatu that currently support the ANC and Zuma’s leadership – most obviously and most unsettlingly – with the National Union of Mineworkers which has complained repeatedly that Numsa is poaching its membership. This potential for a widespread contestation of each workplace and each economic sector between a new ‘Cosatu’ and an old ‘Cosatu’ is probably the most important threat represented by the unfolding crisis.
Politically the Vavi/Jim group will likely be campaigning against the NDP, the youth wage subsidy, e-tolling and Nkandla-style corruption just as the ANC’s election campaign peaks early next year. I do not think a split in Cosatu will translate automatically into specific electoral declines for the ANC – it is possible and even likely that Numsa members who support a split could still vote for the ANC.
However, one of the big unanswered questions is whether the defecting faction has any possibility of linking up politically with the EFF. Up until now the defecting faction linked to Vavi and Jim have unequivocally rejected the EFF on the grounds that its (the EFF’s) leadership are ‘tenderpreneurs’ (much like the Nkandla faction of the ANC) who just happen to be out in the cold.
However, the EFF’s support for nationalisation of mines and expropriation of white owned farms with or without compensation does dovetail with aspects of the Vavi/Jim faction’s essentially socialist ideology.
My own view is that in the event of a split it is possible that the Vavi/Jim faction forms a ‘labour party’ which could only feasibly contest elections in 2019.
The motivation for Thatcher moving against the unions was as much about weakening the Labour Party as it was about repairing the economy – so we shouldn’t dismiss the Zuma/Thatcher comparison purely because his motivations are mixed.
If Zuma and the ANC succeed in reducing the militancy and power of organised labour it is possible that they will have contributed in a small way to laying the grounds for an improvement in public education, for a period of recovery and even extended economic growth.
It’s a risky – and complicated – business, but it was for Baroness Thatcher as well.
* It was, in our eyes, a fine hat and we cocked it jauntily. And thus attired, and to our very great satisfaction, we successfully answered all the important epistemological questions of the day. We let the cowards flinch and traitors sneer as they boastfully proclaimed the end of history. We were history … or at least, through the complex functioning of the intelligentsia in Marxist Leninist theory … we were history’s engine made flesh. And the race wasn’t over … we were merely getting our breath back.
I often send out commentary before I am satisfied with it.
That usually means typos and misspellings that I have failed to find in a rushed edit, but sometimes it means the analysis is … less in-depth (trite? … shallow? … Ed) than I would have liked.
It’s the price of procrastination when chasing deadlines – and one of those deadlines was two weeks ago when I rushed to get a weekly update out just as the news from the Brics summit was coming in. This is what I wrote (tagged on to a longer report about a number of different matters):
Brics bank (16/07/2014)
Leaders of China, India, Russia, Brazil and South Africa met at the 6th Brics summit in Fortaleza, Brazil yesterday. On the agenda is the establishment of a development bank and monetary reserve – eventually together consisting of as much as $200bn in capital reserves and guarantees.
There are a number of important issues associated with this initiative, but one is that this is a deliberate attempt to institutionalise a shift away from the Western (specifically US) dominated financial system (particularly the IMF, the World Bank and the use the USD$ as the global reserve currency). Such moves are probably historically inevitable and as China, India and Russia – and to a lesser extent Brazil – stutteringly grow in influence (economically, militarily and otherwise) they were always going to gently tug at the leash of US global dominance.
For South Africa – a small regional player, with anaemic economic growth and very moderate political/military influence – to have attached itself to the coattails of a kind of teenage rebellion by the powerful young global bucks is faintly ridiculous. South Africa winds up being drawn into a subservient relationship with China and Russia (over which it has almost no influence) and thereby flirts with the enmity of the real global adult whose judgements, when push-comes-to-shove, can be quite severe. That’s a lose-lose, as far as I can see.
Nothing wrong with the comment, although I wish I had made it clearer that I welcome Brics and I welcome the gradual receding of US power as much as I hope its retreat is orderly.
It would have been a great benefit to my analysis if I had read the first article Andre published on the website: “National Security: China-US-Africa“.
It’s not specifically about the Brics Bank (but it does mention it in context) but it is an excellent high level analysis of the growing contest between the US and China … and it argues that this is a matter of national security and national interest for South Africa.
Read the article … meanwhile, here are a few extracts:
“The emerging geo-political great game between the USA and China is of great importance to Africa and South Africa. How this great power relationship unfolds will have a commanding influence on the 21st century.
“The future cannot be known; but probability and prediction can be improved as well as surprise avoided, if we are assisted by facts – by a proper understanding of what is going on – as well as by quality information, good theory and off course, secrets.”
“In statecraft, the purpose of intelligence is to provide a competent decision-maker with an informational advantage in the context of national security and the pursuit of national goals.”
“The launch of the New Development Bank (NDB) and of the Contingency Reserve Fund (CRF) by the BRICS-countries in July 2014 is a powerful signal that developing countries are no longer willing to play second fiddle on the global stage.”
“The desired post-Bretton Woods era does not only contain different global financial institutions – not controlled by the USA – but some analysts believe, also rests on different values … the need to prioritize physical infrastructure over other priorities (such as education, healthcare, women’s rights, etc.) towards which the World Bank has been drawn in recent decades. From a holistic point of view, all such investments are crucial for equitable national prosperity and well-being, but nothing creates jobs and literally drives ‘state-building’ like infrastructure.”
There is much in the article that is worthwhile and I recommend it to anyone who is interested in the unfolding contest between the USA and China especially from a South African perspective.
Andre’s vantage point is especially interesting. He “is a former senior official in the State Security Agency of the democratic South Africa” and has previously “worked in the underground and intelligence service of the African National Congress during the struggle against apartheid and subsequently, served in the Presidential Support Unit under former President Thabo Mbeki” – those quotes from here.
On my return on Sunday from 10 days relaxing in and around the unparalleled Lake Malawi a friend took me aside and said he had visited my blog and found only cobwebs, spiders and dust.
So putting my shoulders back and girding my loins I logged on to deal with the decay and say something about the Numsa strike and the Brics bank when I noticed that I had had several ‘hits’ on a post from August 2010.
One of the (few) delights in running a WordPress blog is it generates several detailed statistics: the countries from which people have have visited the site, the search terms they followed and which posts they read … amongst other data.
I was intrigued to see what the the August 2010 post was about, so I read it. (It was only read by about 20 people over the last week, all from South Africa … but in my little world that is statistically significant, although of what I cannot say.)
It is interesting to go back to one’s opinions to check if they have shifted – or more interestingly, if they are unchanged or unmodified.
I suspect I am today slightly more bleak about the ANC than I was when I wrote the piece below; that I would say the same thing today, but with more of a grimace and the feeling more than ever that my hope really was a triumph over experience.
So, while I am tinkering around and deciding on whether I dare to borrow a picture from FT Online of Jacob Zuma looking like a lost child at the 6th Brics summit in Fortaleza, Brazil, here, unexpurgated, unedited and unreconstructed is:
It is difficult not to imagine the tearing of some deep and important ligament in our body politic in the tone and content of this debate that starts in The Times, ostensibly between Pallo Jordan and Justice Malala and ostensibly about media freedom. The battle is joined – and complicated – by the ANC in its formal capacity in this unattributed article, by a reader’s reply to Justice Malala (K B Malapela’s article here) and a contribution by the redoubtable Paul Trewhela here.
My mother was taught at a Catholic convent in Johannesburg in the 40′s and part of the curriculum was a subject called “Apologetics”, which essentially means defending the faith and recommending it to outsiders. All of the contributions to this debate, to greater or lesser degrees, have the brittle quality of Apologetics. This is clearly not a debate designed to win over an opponent; it is much more a debate designed to slag off the opponent – to influence perhaps separate audiences.
This does not mean that the opponents are all just political propagandists rolling out set pieces in an archaic ideological struggle. The anger, hurt and perhaps even fear are real and personal. After studying each spit and snipe, each appeal to history and every egregious character assassination (of which there are many) I find myself uncomfortably ambiguous about where my sympathies lie.
When we strip out all of the detail, at issue is the clash of these two broad assertions (this is definitely my formulation – the actual words or even ordering of arguments – will not necessarily be found in this form in any single contribution to the ‘debate)’:
- The one view attacks Malala and defends the ANC – in the general context of supporting legislation to make the print media legally accountable. It goes something like this: ‘The ANC, admittedly imperfect and flawed, is thenational liberation movement that led the struggle against Apartheid; the organisation whose members and supporters paid the overwhelmingly highest price in the struggle against Apartheid and it is currently the political party in which resides the main hope of building a South Africa free of Apartheid and its vestiges (which are still strongly present and primarily injurious to black South Africans). Given this truth, the depth and ferocity of Justice Malala’s attack on the organisation can only be explained by him having made a profession out of attacking the organisation for the benefit of a self-satisfied and confirmedly racist audience – or that he serves some darker and deeper purpose of enemies of South Africa.
- The other view defends Malala and attacks the ANC – in the general context of opposing legislation that seeks to control the media. This argument goes something like this: “The ANC has no claim to an exclusive role in the struggle against Apartheid and in any case the ANC’s contribution to that struggle was always flawed and undermined by deeply anti-democratic (or Stalinist) traditions and brutal repression of internal dissent. Justice Malala is part of a tradition of journalism in South Africa that has fought government censorship and general government abuse of power. Abuse of power, in various forms, characterises the ANC government today and it is right, fitting and brave for Malala to continue to ‘speak truth to power’.
I was going to paraphrase each article and attempt to draw out each essence but it’s probably better that you do that for yourself.
But here, for those who are interested, are my considered opinions on the issues that I think lie at the heart of this debate.
Firstly, regimes can reach a point where the only strategic option is complete non-engagement; where the only way forward is the destruction of that regime and its replacement by an alternative. But it is ludicrous to argue that this is where we are in South Africa with regard to the ANC government. Much of our political commentary and journalism seems to be phrased in these terms – as if we are all revolutionaries now, beyond any hope or care of reforming the system. This view is both implicit and, to a lesser degree, explicit, in the words of Malala and Trewhela. I am all for gung ho evisceration (by written word) of corrupt and pompous politicians, but there is a not-so-subtle line between vigorous – even exuberantly irreverent – criticism and the argument that government per se is the problem and therefore cannot be part of the solution. Many aspects of this government’s performance are deeply disturbing – as is the seeming avalanche of cronyism in our political culture. But I am absolutely clear that a government that continues to command around 70% of national electoral support (primarily because that electorate perceives the government as the main heir to the mantel of national liberation movement) has got to be engaged with, has got to be encouraged to be “the solution” more than it is “the problem”. And anyway the ANC, government, Cabinet and ‘the state’ in all of its manifestations is not some undifferentiated monster that requires slaying. The most important debates that shape our future take placewithin the ANC and the government as much as they do in the national media or in Parliament. Who wins and who loses within the ANC remains a decisive question that we cannot abandon as “irrelevant”.
Secondly, the ANC’s claim to legitimacy based on its historical role as the leading organisation representing black South African’s aspirations for national determination and in opposing Apartheid is a false claim. That the ANC was the main formation thrown up by Apartheid oppression of black South Africans is indisputable and that legions of its supporters, leaders and members fought bravely and suffered deeply is equally indisputable. But how often in the world have we seen claims of historical suffering and historical struggle against oppression justifying present corruption and brutal repression? The ANC needs to hear the claims of some journalists and commentators that the ANC of todayrepresents a radical discontinuity with that ANC of the past. This is a legitimate assertion that can only be answered with specific claims to value based on present activities and achievements.
Too often the ANC’s claim to legend, previous heroism and fortitude, to banners and flags and songs, is the only answer it seems able to give to those who say it has become an unsalvageable cesspool of greed and self-interest.
The ANC needs to be reminded of the words of the great African revolutionary leader, strategist and philosopher, Amilcar Cabral (here I quote the first and last few sentences of this famous statement):
Always bear in mind that the people are not fighting for ideas, for the things in anyone’s head. They are fighting to win material benefits, to live better and in peace, to see their lives go forward, to guarantee the future of their children. . .
Tell no lies. Expose lies whenever they are told. Mask no difficulties, mistakes, failures.
Claim no easy victories…
Three asides from the present:
- I have absolutely no idea how I justified to myself putting that Amilcar Cabral quote in the original … the link to the rest of the story is faintly tenuous. But I suppose I loved it when I first read it in about 1981 and I love it still … and any excuse to get others to read it will do.
- Do I still write such long, unbroken paragraphs?
- I will only be able to check whether all the links in the original article work at some future, unspecified, time … apologies if they (the links) took you to a place even more dusty, cobweb infested and spider-ridden than where you are right now.
Some humble and not so humble opinions on various snippets of recent and not so recent political news.
Platinum strike finally over
Amcu and the platinum producers announced a settlement on Tuesday. The industry reports the strike cost producers R24-billion in lost revenue and the workers R10.6-billion in forsaken wages (see the pro-industry website here for other data.)
It is generally agreed in the financial press that the mineworkers lost more than they gained (see here and here – that second link to Carol Paton in the Business Day … well worth reading as always and way more subtle than a bald statement that workers lost more than they gained).
My own impression is the settlement will be hailed by the vast majority of the returning mineworkers as a victory for Amcu – and, explicitly, as a defeat for Num, the ANC and government.
I expect Amcu to continue strong growth in the gold sector, eventually threatening Num’s dominance there (Amcu is sitting at about 30% representivity at the major gold producers already). The gold sector has a centralised bargaining system (through the Chamber of Mines) and Amcu has been formally prevented by the Labour Court from holding a protected strike at AngloGold Ashanti, Harmony and Sibanye because the agreement struck last year is binding. However an unprotected strike remains a possibility and I expect Amcu to apply constant pressure to the agreement – perhaps embarking on an unprotected strike before year end.
My ‘most likely’ scenario (published in January 2014, see here): cascading labour unrest during 2014 and 2015 stemming from Amcu’s rapid growth in the mining sector, Numsa breakaway from Cosatu and the public sector wage round in 2015 – remains my base case.
Numsa is threatening to bring over 200 000 out on strike in the metal industry (largely the auto industry) from July 1. (Summarised by my friend and colleague at BNP Paribas Cadiz Securities economist Jeff Schultz: “The NUMSA and a number of other unions, meanwhile, are threatening to bring over 200,000 out on strike in the metal industry (largely the auto industry) from 1 July. Employers and unions in the metal and engineering sector have been at loggerheads for three months now. The current three-year wage agreement comes up for renewal at the end of this month. The unions reportedly opened negotiations with a demand for a 15-20% pay rise, while employers are currently offering 6.5-7.0%. This is another key risk to the production side of the economy in H2 and we will be watching developments here extremely closely in the days and weeks to come.”)
Zuma sick and tired
This week’s Sunday Times led with the ‘revelation’ that a heart condition, diabetes, high blood pressure and exhaustion have combined to raise concerns about the President’s health.
The story contains no news whatsoever. It is conceivable that Jacob Zuma could retire early for health reasons and it is conceivable that Cyril Ramaphosa, Nkosazana Dlamini-Zuma or some other ANC leader could become president or acting president. There is no strong evidence that such a transition would be accompanied by a damaging power struggle or be otherwise destabilising. Given how the ANC formulates and implements policy, there is also no strong evidence that a new leader would radically depart from the broad policy thrusts of the current government. The ANC is, in any case, under increasing pressure to deliver on a ‘more radical’ transformation policy and this pressure would apply to any new leader of the ANC and government.
State of the Nation: “like watching someone try to make their granny look bad ass”
This is a bit dated, but every political analyst and his (or her) dog seemed to make huffy and opinionated comments about SONA2014#2 so before I get my FOMO on:
If you expected some meat on the bones of Jacob Zuma’s statement we have to embark on radical socio-economic transformation you would have been disappointed. The speech consisted, as it always does, of a series of signals packed in mind-numbing detail.
I have pulled out the relevant quotes and underlined the relevant part of each quote below, but in short the speech raised some concerns for businesses and/or financial markets:
- He (Jacob Zuma) made the call for a national minimum wage
- We can expect increased costs on mining companies as Charter targets are more vigorously pursued: in effect increasing the wage bill and other costs
- There will be more onerous requirements for BBBEE and EE – in effect increasing costs on the wage bill and lowering rate of return in the short to medium term
- The nuclear programme is definitely on – and there are increased fears of corruption associated with what will be the biggest public tender in South African history.
However, given the powerful pressures acting on the African National Congress, the populist concessions in the speech were relatively mild – and, if you believe an expanding public infrastructure spending programme could drive economic growth, then there was some good news in there for you too.
My first response on Twitter was along the lines of: ‘If you don’t have a plan for transformation, then force the private sector to come up with one #SONA2014.”
But there is not a lot of threatened force in the President’s outline. In truth, Chester Missing, a comedian’s ventriloquist dummy was probably more accurate when he posted: “Talking the ANC’s radical transformation programme. It’s like watching someone try to make their granny look bad ass #SONA2014”. (Which hints at what we think is the greater risk: if the ANC fails to meet the various expectations of the emerging middle classes its political hegemony – and electoral majority – might become marginal, leading to real policy instability.)
QUOTES (with explanatory links):
“Change will not come about without some far-reaching interventions.”
“The social partners will also need to deliberate on wage inequality. On our side as Government we will during this term investigate the possibility of a national minimum wage as one of the key mechanisms to reduce the income inequality.”
“To further promote improved living conditions for mine workers, Government is monitoring the compliance of mining companies with Mining Charter targets, relating to improving the living conditions of workers.”
“This situation calls for a radical transformation of the energy sector, to develop a sustainable energy mix that comprises coal, solar, wind, hydro, gas and nuclear energy … Nuclear has the possibility of generating well over 9000 megawatts, while shale gas is recognised as a game changer for our economy.”
“We will promote local procurement and increase domestic production by having the state buy 75% of goods and services from South African producers.”
“We will sharpen the implementation of the amended Broad-based Black Economic Empowerment Act and the Employment Equity Act, in order to transform the ownership, management and control of the economy.”
“The total assets of our Development Finance Institutions amount to some R230 billion … will be repositioned in the next five years to become real engines of socio-economic development.”
“We have identified agriculture as a key job driver … target is for the agricultural sector to create a million jobs by 2030 .. Government will provide comprehensive support to smallholder farmers by speeding up land reform and providing technical, infrastructural and financial support.”
“We will also re-open the period for the lodgement of claims for the restitution of land for a period of five years’”
SONA debate, Malema response, expulsion and EFF walkout
The fractious debate that followed …
During his maiden speech to parliament, in reaction to Jacob Zuma’s address, EFF leader Julius Malema said: “The ANC government massacred those people in Marikana”. This led to an objection, a refusal by Malema to withdraw the statement, his expulsion from the House and a raucous walkout by the EFF. During the walkout, EFF members “howled and barked several derogatory utterances and made disturbing gestures,” according to Stone Sezani, ANC chief whip, which may lead to further disciplinary action against some EFF parliamentarians.
The State of the Nation address was marginally relevant and pretty tedious, but the colourful and combative follow-up presages a new atmosphere in the hallowed halls of the National Assembly. The EFF runs the risk of being characterised as a gaggle of truculent children, but the important issue here is that the party is articulating views that are probably mainstream in the black middle class.
In the words of widely respected ex-editor of the Sunday Times Mondli Makhanya, the EFF is challenging the “too good to be true” seamless transition from “the apartheid past to the democratic present”.
The main reasons Mr Makhanya welcomes the EFF’s parliamentary challenge, according to City Press, are that “unencumbered by the guilt of being beneficiaries of an evil system, white South Africans carried on with life as normal and did not feel the need to assist in redress. They took advantage of the opportunities democracy created and made full use of the head-start they had on the newly levelled playing fields. The tough conversation about correcting the wrongs of the past was given cosmetic treatment. If truth be told, one of the really good stories of the past 20 years is the fantastic story of guiltless white comfort.”
The point for Mr Makhanya is that the “questions the EFF is asking about the post-1994 dispensation are tough but necessary. The language is rough but it might just be the ice water the nation needs to wake itself. Its conduct is often uncouth, but that might be what we need to keep us alert.”
Land expropriation, South African style
Rural Development and Land Reform Minister Gugile Nkwinti has published a draft proposal that he describes as an “opening gambit” to speed up the redress of black landowners’ apartheid-era dispossession, according to the Sunday Times. (I covered these proposals in some detail ages ago, but the ST treated it as if it was brand new so I thought I better deal with it as if it was.)
The proposal is for commercial farmers to give half their farms to farm workers, “proportional to their contribution to the development of the land based on the number of years they have worked on the land”. The initial proposal (published on 9 April 2014) is that government would pay for the 50%, but that the money would not go to the owner, but to an “investment and development fund to be jointly owned by the parties constituting the new ownership regime,” according to the Sunday Times.
This proposal is similar to the charter process in the mining industry, whereby various transformation targets are linked to the process of renewal of mining rights – although the Mining Charter does not envisage that workers on mines would or should own significant parts of those companies.
I think this should be seen as a ‘bargaining position’ by government, albeit one that is likely to cause significant anxiety in the farming sector.
The ANC is under increasing pressure to deliver on promises to change the patterns of racial ownership and control of all aspects of the economy. Transformation of the agricultural sector is attractive to the ANC, because it satisfies a number of imperatives: redress, creation of small businesses and black economic empowerment. However the ANC has also shown itself to be concerned about food security and property rights. Up until now. the ANC has upheld the idea that while land might be expropriated, this would not be done without a fair price being paid.
Mr Nkwinti’s proposals are virgin territory and probably primarily a warning shot across the bows of commercial agriculture, encouraging them to come up with workable and radical solutions to the racially skewed ownership patterns on the land. April next year has been set as the deadline for responses to the proposal.
Someone asked yesterday what I thought of Julius Malema being appointed to the Judicial Services Commission. Did the ANC not care about the kinds of judges that would be appointed? Does this mean the ANC policy is drifting towards the EFF?
These were my first, instinctive, thoughts:
I reckon the ANC is wisely taking a step back and attempting to formulate a more comprehensive strategy to dealing with Malema and the EFF than it (the ANC) has had up until now. During the election and the State of the Nation debate the ANC gave Malema endless opportunities to grandstand – and kept being forced onto the terrain that Malema chose.
So the question of whether the ANC government murdered workers at Marikana became the focus of the national debate around the SONA, as did the expulsion of Malema from parliament and the subsequent EFF walkout. Malema was – as always – cleverly playing out lessons that could have come from Sun Tzu’s The Art of War: draw the stronger enemy out to the terrain and the timing of your choosing … or something similar. (You made it up; you haven’t even read Art of War – Ed. Well … I bet it says stuff just like that in there – Nic.)
Malema has been on the front foot in almost every confrontation he has had with the ANC; more nimble, media savvy and quick, constantly making the bigger, better resourced, and much more popular party look lumbering, old and out of touch.
I think the ANC has finally hit ‘pause’, stopping itself responding automatically and defensively, suppressing the knee-jerk.
The first thing the ANC did then was go back to its own studies and documents like Strategy and Tactics that constantly exhort the proper revolutionary to deal with a situation as it is and not how one would want it to be (that’s not a quote, it’s a vague memory – Ed). Thus the ANC has decided to accept that, abhorrent as that may be, the EFF is here, in parliament, with over a million votes, and cannot be wished away.
The second step is to draw the EFF into terrain where it is weakest: the real business of governance, especially the tedious, behind the scenes, work … like the work done by the JSC.(that originally read ‘JSE’ … thanks Colin, totally a Freudian slip!) I have no doubt that the ANC feels sure it has enough votes on the JSC (ditto – tks Colin) to influence the real outcomes of the commission, that Malema’s presence there will do little other than absorb Malema’s time and attention (and have him endlessly sparring with better trained minds than his – and mouths almost as skilful.)
So what the ANC is probably attempting to do (also with the appointment of Floyd Shivambu to the Pan African Parliament) is to incorporate the EFF, to drain the energy and time available to its leaders for grandstanding and guerilla theatre.
The ANC can argue to anyone: look these people have been elected to parliament, we are obliged to take them seriously and not side-line them, thus we are appointing them to real committees and giving them real responsibilities.
The EFF cannot refuse, after all it has been demanding to be taken seriously and complaining that the ANC doesn’t take them (or the electorate) seriously etc.
The ANC is probably betting that after 6 months of the EFF exhausting itself in the exhausting business of government it will have little room and energy for the kind of vibrant, youthful anarchy it has exhibited up until now.
Is the ANC risking financial market ire by allowing the EFF near the appointment of judges? Could this imply a new openness to the ideas of the EFF around private property, nationalisation, redistribution etc? I don’t think so – or at least not any more than the ANC is itself raising through, for example, Rural Development and Land Reform Minister Gugile Nkwinti published draft proposal for land reform.
The ANC is appropriately responding to the support the EFF has achieved in the recent election. It (the ANC) must address the concerns of those voters who have, or might still, defect to the EFF – but the ANC must do so on its own terms and not the terms and conditions set by the EFF.
The other bet the ANC is making is that the gradual bureaucratisation of the EFF leadership will make them easier to co-opt, and eventually entice them back, across the floor.
It might not work, but I think this is the right strategy: take Malema, as a member of the National Assembly, seriously and eventually he will be forced to take being part of government seriously (and eventually he’ll just be another porky little guy in a suit in the National Assembly?- Ed. Something like that – Nic).
Who can remember the power of the IFP when it refused to be part of the 1994 election? As soon as it was ‘part of the system’, its power drained away.”
And meanwhile quis custodiet ipsos custodes? Well, Julius Malema of course.
… which I entirely doubt will be made glorious summer by this sun of KZN when he gives his
5th nth State of the Nation Address this evening.
I am not, as my children might have said, very amped for this.
The only ray of light so far (I am watching on eNCA) was a brief interview with Floyd Shivambu who suggested it should be a ‘state of the resignation address’ … that if the President couldn’t make it to the Cabinet Lekgotla ‘then it would be best for him to just come here to explain that he is just too old and tired and to say goodbye’ – or words to that effect.
I thought I would use the time to publish some bits and pieces that I have sent to my clients over the last week.
The winter of our discontent – as the labour relations cycle meets a secular trend
Every year at this time South Africa is engulfed in strikes as annual wage agreements are traditionally renegotiated in several sectors of the economy. Every year analysts and journalists pontificate widely about the dire labour relations conditions – and the gloom deepens because this all takes place in winter.
Three factors this year are probably going to make the outlook more negative and threatening.
Firstly, the post national election winter has, since 1994, been characterised by spikes in service delivery protests. The causes of this phenomenon are not fully understood, but it is likely that:
- voters confronting a hostile winter and declining services levels – so soon after being promised the earth by politicians – are likely to be unsettled;
- local politicians who failed to make party lists begin mobilising factional support, perhaps to stand as candidates in 2016 local government elections, perhaps to discredit those whose positions they covet.
Secondly, the platinum strike is being driven by a number of ‘political’ factors – as discussed previously.
Thirdly Numsa is showing clear signs that its political aspirations are, as we predicted, going to drive deeper and more robust strikes and labour unrest. One sign is the growing violence as Numsa attempts to widen its action at the Ngqura container terminal in the Coega Industrial Development Zone in Port Elizabeth. The South African Transport and Allied Workers Union (a Cosatu union) is opposing the Numsa strike and is calling for its members to stay at work at the Transnet facility. However, both Transnet and Satawu were quoted on radio (SAFM 20h00 news broadcast 08/06/2014) as decrying the burning of houses and cars of the workers who were at work. The SATAWU spokesperson warned that the situation had similar dynamics to those that were present in the platinum sector in 2012 – that this ‘is just like what happened with Amcu (same broadcast).
Additionally, Numsa is preparing to lead 220,000 workers out on strike from the metals and engineering sector next month. “The bargaining negotiations have spectacularly failed to produce the desired outcomes as expected by the thousands of our members in the sector,” spokesman Castro Ngobese said in a statement quoted in The Herald (5/06/2014). Numsa’s core demands includes a 15% pay rise and a one-year bargaining agreement, the Steel and Engineering Industries Federation of SA (Seifsa, which represents 23 employer associations) has offered an inflation-linked increase of 6.1 percent.
This is the cycle meeting the secular trend, with each driving the other deeper than either would have been driven ordinarily. Numsa is in the process of breaking away from Cosatu and is beginning to vigorously compete with other Cosatu unions in overlapping sectors (container terminals, the big electricity generation projects and down and upstream mining and metallurgy operations). This is, at least partly, about Numsa preparing to set up a ‘left’ party to compete for votes in the future. Comparable (but not identical) dynamics are driving the platinum strike. A winter with ‘normally’ increased social and industrial unrest will probably become unusually bleak and unwelcoming in the months ahead. The impact on GDP growth and on the possibility of ratings downgrades are both important considerations.
Both Fitch and Standard & Poor made references on Friday (13/06/2014) to increased political risk when they changed their views on the South African government’s willingness and ability to pay the sovereign debt.
Fitch revised the outlook for South Africa to negative from stable and affirmed the country’s long-term foreign and local currency issuer default ratings at BBB and BBB+ respectively. S&P downgraded both the country’s local and foreign currency ratings by one notch from A- to BBB+ and BBB to BBB- respectively, but moved its outlook negative to stable. None of this is a catastrophe but of interest to us here is the central role of ‘politics’ in the given reasons for both Fitch’s and S&P’s changes.
Fitch says it most baldly in the press release announcing the change in outlook (my emphasis added):
“Following its election victory in May with 62% of the vote, the African National Congress government faces a challenging task to raise the country’s growth rate and improve social conditions, which has been made more difficult by the weaker growth performance and deteriorating trends in governance and corruption. This will require an acceleration of structural reforms, such as those set out in the comprehensive National Development Plan (NDP). In Fitch’s view, the track record of some key ministerial appointments and shortcomings in administrative capacity mean this is subject to downside risks.”
Fitch gives amongst the key drivers of its more negative outlook: “Increased strike activity, high wage demands and electricity constraints represent negative supply side shock.”
Standard and Poor’s downgrade was similarly motivated but adds some additional concerns:
“While we think that President Jacob Zuma’s newly elected administration will continue the policies of his first administration, which controlled fiscal expenditure and fostered broadly stable prices, we do not believe it will manage to undertake major labor or other economic reforms that will significantly boost GDP growth”.
My initial take on the new Cabinet is supportive of these motivations.
In addition both agencies made extensive reference to the negative industrial relations environment – and the negative impacts on GDP growth and government revenues. There is a significant political dimension driving industrial unrest – as I have argued above.
The validity of the actual ratings and ratings outlook of these agencies is much disputed but the issues they use to motivate their views are interesting because they (the agencies) are cautious; clinging to a sort of ‘average view’ of investors. So if political criticism makes its way into the text (as is the case in both these instances) we are obliged to consider that these may represent, or may come to represent, a general view in markets.
South Africa has a small open economy and liquid financial markets and the difference that policy makers can make to economic outcomes is limited. But even within those limitations too many political choices (certain cabinet appointments, corruption controls, delivery performance and the honest brokering of labour contestation) are either not helping or are actively negative.
No-one could have failed to notice the excoriating criticism of the credit rating agencies (CRAs) after their generalised failure to accurately assess the risks associated with the collateralised debt obligations allegedly because they were mostly issued by the CRAs biggest paying clients! However, it is the opposite with sovereigns: “It has also been suggested that the credit agencies are conflicted in assigning sovereign credit ratings since they have a political incentive to show they do not need stricter regulation by being overly critical in their assessment of governments they regulate.” http://en.wikipedia.org/wiki/Credit_rating_agency (accessed 13h56 16/06/2014.
The National Directorate of Public Prosecutions
I dealt with this issue last week, but it is making bigger and more anxiety provoking headlines than ever.
The NDPP was drawn into the fight between Mbeki and Zuma and since that time has limped along to the rhythm of one or other faction aligned to competing interests within the ANC seizing or losing power in the institution. This is not a situation in which one could safely choose one set of ‘good guys’ and back them against another set of ‘bad guys’. The situation is complex but relates primarily to the on-going struggle to either ensure that certain senior political leaders are brought to justice or to ensure that they are not.
The NDPP is one of the most important institutions of the justice system, and without certainty and stability here it is impossible to have certainty about the operating environment for any business in the country. This is a serious problem and it appears to be getting worse under the current administration.
(This is a bit dated, but you might be interested in my rude remarks about the new minister.)
“Government is ready to wash its hands of the protracted wage strike by platinum mineworkers in Rustenburg” according to the Sunday Independent 08/06/2014. Mines minister Ngoako Ramatlhodi threatened to pull out his inter-ministerial task team if a settlement was not reached at the last scheduled government facilitated meeting, which is due to take place today.
In addition, a formal ANC statement delivered by Gwede Mantashe at a press conference in Luthuli House in Johannesburg last night after the ANC weekend lekgotla characterised the strike in a way that seemed to destroy the remote possibility that Ramatlhodi could have made a difference anyway:
“The articulation of AMCU position by white foreign nationals, signalling interest of the foreign forces in the distabilisation (sic) of our economy.
The direct participation of EFF in the negotiations, and thus collaboration with the foreign forces.
These two factors led the lekgotla into cautioning the Ministry of Mineral Resources in handling the facilitation with care. There were questions about the role of the state in workplace disputes where there are clear rules guiding it.”
This statement is interesting precisely because it borders on the bizarre
The ANC statement indicates shows just why the new ANC minister cannot be an honest or effective broker in the negotiation – and it is therefore unsurprising that he is preparing to withdraw his team. The ANC is compelled to believe that this strike is only not ‘negotiable’ in the normal manner because the real issues driving it are political and not about wages at all. The ANC might be correct about the strike being ‘political’ but the party itself is culpable of having politicised the strike by attempting to defend its Num ally against the vigorously growing Amcu, by alienating workers by characterising their union as ‘vigilantes’ and by the ‘Marikana massacre itself.’ s – There was never any real possibility of this government mediating between the parties or influencing the outcome.
Concerns about property rights
The South African Institute of Race Relations and AfriBusiness (AfriSake) have recently released warnings about property rights in South Africa. A proper assessment of these warning would require specialist legal opinions, but our own assumptions have long been that the South African Constitution provides adequate protections for private property (see here) and the ANC government is unlikely to risk fiddling with these principles.
However it seems to be a basic due diligence requirement to keep an eye on the risk – perhaps more so since Jacob Zuma spelled out at his Cabinet announcement (reiterating many recent ANC and SACP statements) that we are entering a “more radical” phase of economic transformation.
With this is mind, we reproduce the basic summary of legal concerns AfriBusiness and the South African Institute of Race Relations have raised in their research (note that below is a direct quote from the AfriBusiness statement linked above):
- The National Development Plan has as its aim the transfer of 20% of the agricultural land in a district to black recipients, at only 50% of the value as determined by the state (in terms of the Property Valuation Bill).
- The verdict of the Constitutional Court in April 2013 in the case of AgriSA v the Minister of Minerals and Energy distinguishes between “deprivation” and “expropriation”. After the verdict the state is able to dispossess and redistribute property, as long as the state does not assume ownership of the property and act (sic) only as custodian.
- The Green Paper on Land Reform aims a radical redesign of property rights, with inter alia a type of freehold on land which will drastically limit the rights of owners. Within this context a Land Management Commission is proposed, which will have discretionary powers regarding disputes over title deeds.
- The policy proposal by the Minister of Land Reform, Gugile Nkwinti, for “Strengthening the rights of workers working the land” aims to transfer 50% of the land to the workers, commensurate with their term of service. No compensation will be paid to the owner.
- The Expropriation Bill poses that expropriation may be used for the public interest and public goal. The Bill is not only applicable to land but will cover all types of property. Public interest and public goal are determined in an ad hoc manner and both have restitution as aim.
- The Promotion and Protection of Investment Bill allows state intervention in investment processes. The Bill explicitly provides for expropriation at less than market value. All in the name of so-called restitution. Any property used for commercial purposes is targeted by the Bill.
- The Infrastructure Development Bill aims to eliminate so-called inequalities in infrastructure. The Presidential Infrastructure Coordinating Commission is granted the authority to expropriate in the public interest and for the public goal.
- The Spatial Planning and Management of Land Use Act aims at centralized planning of land ownership. It proposed so-called spatial justice by integrating low and high cost housing in residential developments.
- The Extension of the Security of Tenure Amendment Bill expands the rights of occupants and their dependents. Evictions are strictly controlled and the Amendment Bill means a significant loss in control over property.
- The Restitution of Land Rights Amendment Bill creates further political and economic uncertainty regarding the future of property rights.
- The Rental Housing Amendment Bill proposes stricter regulation of the rental property market. Rental Tribunals will be established to hear disputes and will be able to determine increases in rent.
- The National Water Amendment Bill and Policy Review prohibits the trading of water rights and proposes a use-it-or-lose-it principle for water rights. Equality (including racial transformation) becomes the criterium (sic) for the allocation and re-allocation of water rights.
Consume that with the requisite amount of salt but keep an eye on the detail.
Sesotho loan word meaning court or community council meeting; used in the South African context a “lekgotla is a meeting called by government, Cabinet or the ANC to discuss strategy planning”. Wikipedia accessed 04h30 09/06/2014.
Below are my comments about Sunday’s cabinet announcement followed by my comments about the elections from a week or so earlier – a sort of trip back in time.
In both cases the originals were written under tight deadlines and in both cases my initial impressions have been moderated by time, drifting towards the insipid end of the spectrum.
But for those who might be interested these were my first, slightly more vivid, impressions …
(Sent out 06h00 Monday 26th May):
Jacob Zuma’s Cabinet 2014 – through a glass darkly
From a narrow ‘financial market’ perspective the Cabinet announcement by Jacob Zuma last night was disappointing and confusing.
(Note: it would be possible to find much good in this Cabinet and the strategy it implies, but because the announcement was so late – about 1900 hours last night – I have decided to focus almost exclusively on the risks and problems, mostly because they dominate. Apologies if this makes me sound whiny.)
The appointment is finally made. It’s largely a good thing from a financial market perspective – given his understanding of how business works. However, the damage done him by his comments before the Marikana massacre should not be underestimated (he called for greater police action against strikers – see here) and his power within the ANC should not be over-estimated (he has, essentially, played hand-maiden to Jacob Zuma from assuming office of the ANC deputy president at Mangaung in December 2013). However, Ramaphosa was a clever and powerful negotiator for the ANC at Codesa I and II. It is likely that Ramaphosa’s authority and influence will gradually increase in the next few years, possibly leading to his ascension to the ANC’s and the country’s presidency.
Nhlanhla Nene – Minister of Finance
Nene became Deputy Minister of Finance in November 2008 and served in that role till May 2014. He is technically competent and liked by the few in the markets and in business who have dealt with him. As chairman of parliament’s finance committee Nene urged in October 2008 that “utmost care should be taken that parliament does not undermine macroeconomic stability” – see here for that reference.
Issues, problems and basis for assessment
Nene is the ‘continuity candidate’ in the absence of Pravin Gordhan – but it is this absence that increases uncertainty. Nene is not well known in the markets and he is particularly ‘lightweight’ politically in terms of his seniority and influence in the ANC (as opposed to his predecessors Trevor Manuel and Pravin Gordhan).
This becomes more of a problem when GDP growth is as sluggish as it is in South Africa and when the President himself summarises his intentions (as he did prefacing his cabinet announcement): “I announced on Saturday that we have entered the second phase of our transition to a national democratic society. I also said this would be a radical phase of socio-economic transformation.”
One must assume such “a radical phase of socio-economic transformation” would put even greater spending pressures on the Finance Minister. Gordhan (and before that Trevor Manuel) had proven levels of toughness and authority in holding the fiscal line – although at least in Manuel’s case the ‘markets’ were nervous for some time after his appointment in 1996 (and Gordhan was not, initially on the ANC NEC when he was appointed).
The problem is made worse by the fact that DTI and EDD are unchanged
One of my early concerns with Zuma’s first Cabinet in 2009 was that it distributed economic policy-making power around government apparently (to me) as a gift to the SACP and Cosatu for having backed Jacob Zuma in his struggle against Mbeki. Thus Rob Davies in DTI and Ebrahim Patel in EDD have been left in place in yesterday’s cabinet announcement. As it turned out after 2009 Pravin Gordhan was eventually able to establish the Department of Finance as the centre of government’s economic policy-making function. Appointing Nhlanhla Nene to head the Treasury while leaving the other (now more experienced) economic Tsars in place rather reawakens the original concern.
If public sector wages and public service productivity are key variables for balancing government books …
The removal of independent and powerful Lindiwe Sisulu to the backwaters of Human Settlements (formally housing) and her replacement with the quiet and self-effacing Collins Chabane, previously of monitoring and evaluation in the Presidency, is another cause for concern. Again, he is admired and liked and should be given the chance to rise to the challenge of this key portfolio, but my first take is this is another weak appointment. The major negotiations for 3-year wage agreements in the public sector come up for renewal this year. I would have preferred someone in this post who had the political weight to stand up to the public sector unions (and various other political interests).
The key idea seems to be to house the NDP in a politically beefed up Presidency
The new ‘centre’ of economic policy making will actually be within the Presidency where Zuma has appointed Jeff Radebe as a sort of Prime Minister of the National Development Plan into which he (Zuma) has collapsed performance and monitoring as well as ‘youth development’.
Radebe swings a lot of weight – and a more general comment is that Jacob Zuma has made weak appointments throughout his cabinet but has very significantly strengthened his own office. There are several problems with this, but I will mention only that Jeff Radebe has never played a role where he has been required to establish or defend (or even understand) macro-economic policy stability, but he has played the role of party fixer, strongman and bully in the ANC. If these talents can be deployed in giving flesh to the NDP bones that will be a good thing.
The Governor of the South African Reserve Bank consistently has expressed concern about various ‘supply side’ constraints (see here for the Monetary Policy Committee statement of May 22nd).
These constraints include energy prices, labour unrest, transport bottlenecks, broadband penetration and regulation and failures in the education system among a host of issues.
So here are just a few of the appointments in this area:
Energy: After a disastrous term in Agriculture, Forestry and Fisheries, Minister Tina Joemat-Peterssen has been appointed Minister of Energy. She has been the subject of several Public Protector Investigations and she has courted a highly confrontational relationship with the fishing industry. However, she is strongly supported by Jacob Zuma. Her new department will be central to the decisions about the biggest public tender in South African history: R1-trillion worth of nuclear power stations.
Telecommunications and Communications: The functions have been split, with the Minister of State Security Siyabonga Cwele moving to Telecommunications and Postal Services. The bigger problem is how many changes have been made here, with the telecommunications industry having expressing the hope that Minister Yunus Carrim would stay in the post and finally move towards stabilising the policy framework under which the local loop would be unbundled and the sector regulated – after a long succession of disastrous appointments. There are no grounds to be confident that Cwele is up to this task. The only grounds that we can see for the appointment is if the sector is conceived of as an extension of the country’s state intelligence function.
Communications: Ms Faith Muthambi has been appointed to head this department which will include the functions of the independent regulator Icasa, the state broadcaster SABC and government information services, the GCIS. It still needs to be assessed whether the structural change and appointments here and in telecommunications will be positive for the industry, but on the face of it is peculiar, to say the least, to group the regulator of the private sector (Icasa) with the ‘marketing’ and ‘promotion’ capacity of the government and state.
(See here for the eviscerating comments on the ‘communications’ decisions in the cabinet from the SOS Coalition (‘trade unions, community media and content producers hoping to support quality public broadcasting’).
Education, transport and labour: It can have escaped no-one concerned with South Africa’s economic development that these functions of government are failing or significantly underperforming. But Jacob Zuma has left education and training with Blade Nzimande, basic education with Angie Motshekga (which, btw, some NGO’s and the DA reckon is a good thing), transport with Dipuo Peters and labour with Mildred Oliphant.
(Because I don’t know him that well, I didn’t discuss Adv Ngoako Ramathlodi as mining minister in that note. But here is the new minister in 2011 essentially arguing that the South African constitution was a compromise from weakness on the ANC’s part and the the courts need to passop stepping on toes of government, the ANC and the Executive’s …. and here is constitutional expert Pierre De Vos apoplectic response to Ramatlhodi’s disturbing views.)
(The Deputy President is Cyril Ramaphosa)
1. The Minister in the Presidency is Mr Jeff Radebe.
2. The Minister of Women in the Presidency is Ms Susan Shabangu.
3. The Minister of Justice and Correctional Services is Mr Michael Masutha.
4. The Minister of Public Service and Administration is Mr Collins Chabane.
5. The Minister of Defence and Military Veterans is Ms Nosiviwe Mapisa-Nqakula.
6. The Minister of Home Affairs is Mr Malusi Gigaba.
7. The Minister of Environmental Affairs is Ms Edna Molewa.
8. The Minister of State Security is Mr David Mahlobo.
9. The Minister of Telecommunications and Postal Services is Dr Siyabonga Cwele.
10. The Minister of Police is Mr Nkosinathi Nhleko.
11. The Minister of Trade and Industry is Dr Rob Davies.
12. The Minister of Finance is Mr Nhlanhla Nene.
13. The Minister of Agriculture, Forestry and Fisheries is Mr Senzeni Zokwana.
14. The Minister of Water and Sanitation is Ms Nomvula Mokonyane.
15. The Minister of Basic Education is Ms Angie Motshekga.
16. The Minister of Health is Dr Aaron Motsoaledi.
17. The Minister of International Relations and Cooperation is Ms Maite Nkoana-Mashabane.
18. The Minister of Rural Development and Land Reform is Mr Gugile Nkwinti.
19. The Minister of Higher Education and Training is Dr Bonginkosi “Blade” Nzimande.
20. The Minister of Economic Development is Mr Ebrahim Patel.
21. The Minister of Transport is Ms Dipuo Peters.
22. The Minister of Mineral Resources is Adv Ngoako Ramathlodi.
23. The Minister of Social Development is Ms Bathabile Dlamini.
24. The Minister of Public Enterprises is Ms Lyn Brown.
25. The Minister of Sport and Recreation is Mr Fikile Mbalula.
26. The Minister of Labour is Ms Mildred Oliphant.
27. The Minister of Arts and Culture is Mr Nathi Mthethwa.
28. The Minister of Public Works is Mr Thulas Nxesi.
29. The Minister of Small Business Development is Ms Lindiwe Zulu.
30. The Minister of Energy is Ms Tina Joemat-Peterssen.
31. The Minister of Science and Technology is Ms Naledi Pandor.
32. The Minister of Cooperative Governance and Traditional Affairs is Mr Pravin Gordhan.
33. The Minister of Communications is Ms Faith Muthambi.
34. The Minister of Human Settlements is Ms Lindiwe Sisulu.
35. The Minister of Tourism is Mr Derek Hanekom.
(And then this, sent out Monday 12 May 06h30)
Election 2014 results
South Africa’s Independent Electoral Commission (IEC) announced the following election results for the country’s National Assembly on Saturday 10 May 2014:
The ANC has 15 fewer National Assembly seats and the DA 22 more than they achieved in the 2009 election.
The provincial results followed a similar pattern, with the ANC winning 8 out of 9 provinces (with the Western Cape remaining in DA control). In three of those provinces the ANC increased its majority (Kwazulu-Natal, Eastern Cape and Northern Cape – and increasing its percentage of the vote in the Western Cape) and in five provinces the ANC majority was reduced.
ANC drop more significant in Gauteng and some other major cities
The most significant reduction in ANC support occurred in Gauteng, the country’s economic and industrial heartland and the province with the highest population and highest population density. In the provincial poll in Gauteng the ANC fell 10.45% to 53.59% from 64.04% in the 2009 election.
In the table below the trend is clearly revealed in the three major Gauteng metropolitan areas and is reproduced to some degree in Nelson Mandela Bay in the Eastern Cape:
(As an aside, News24’s coverage of the election as well as it’s app from which the above is a cut-and-paste was truly excellent – it’s set the new gold standard for election coverage in South Africa. To get a taste of that, visit here.)
‘Racial voting’ patterns persist
A feature of South African voting trends is that, in general, the parties have quite distinct racial or ethnic support bases.
This trend clearly persists (from City Press 11/05/2014)
A close examination of ward data changes between 2009 and today reveals that there is a blurring of the racial voting patterns in Gauteng’s metropolitan areas – but only to a limited degree and only in the most developed urban centres. The persistence of ‘racialised’ voting patterns is unsurprising given the country’s history and the persistence of apartheid’s spacial planning and economic, demographic and cultural disparities in the present. The implication is that party support patterns are as suborn and persistent as other social patterns. From a financial market perspective this can mean both that the political environment is stable and predictable but also that such secure incumbency is likely to gradually increase patronage and complacency.
(You might want to temper these conclusion with the views of Pallo Jordan who wrote in a Business Day column: “Racial interpretations of voter behaviour might be very comforting for analysts who confuse public manifestations of discontent with the rejection of the governing party. Unless the coloured voters of the Northern Cape are being included in the “racial solidarity” African voters are accused of, their political choices can only be explained in terms of attractive policies”. I think Jordan’s argument is taking on something different to the points I make above, but I include them – Jordan’s comments – here in case I am missing something.)
The main implications: government, the ANC, the NDP, the middle ground and the EFF
These are, in my opinion, the main financial market implications of the election:
- The result is generally financial market positive: it leaves the ANC with a secure enough majority to be able continue ‘grasping the nettle’ of macro-economic policy stability, including fiscal consolidation.
- However, there may be just enough voter admonishment implicit in the ANC’s loss of 15 National Assembly seats and the more dizzying drops in the major metropolitan areas to cause the party to attempt a clean-up of the behaviour of some of its top leaders.
- My reading of the relative ANC losses in the main urban centres of Gauteng is that these were only partly driven by the introduction of unpopular e-tolling gantries in that province. A more fundamental divide is the kind of leadership Jacob Zuma has brought to the ANC: with his ‘rural big man’ characteristics, the casual diversion of public funds for the development of his Nkandla home, his backing of patriarchal legislation like the Traditional Courts Bill and his too cosy, mutually beneficial, relationships with business people like the Shaik and the Gupta families (see here and here). The most educated urban voters are the least likely to tolerate this kind of behaviour by the country’s top politician – and this is reflected in voting patterns.
- There is very little disagreement between the ANC and the DA (and most of the smaller opposition parties, except the EFF) as to the broad outlines of economic policy. Thus the National Development Plan and a broadly stable macro-economic policy platform is the consensus of over 90% of the political establishment.
- It has long been a feature of South African politics that ‘the real opposition’ and political contest is not in parliament, but actually within the ANC/SACP/Cosatu alliance itself. This alliance has not, since 1994, been less divided over economic policy. The SACP is firmly backing the Zuma government and Cosatu is in disarray, leaving the ANC/SACP to pursue the NDP and related policies.
- While I do not think the NDP is a panacea for South Africa’s myriad economic problems, the programme’s holistic approach to economic development, it’s emphasis on improving infrastructure and its greater reliance on market mechanisms for the allocation of capital (more so than previous such policies like Asgisa, IPAP 1 & II and the New Growth Path) make it broadly financial market positive.
- The ANC is signalling its intention to ratchet up Black Economic Empowerment and affirmative action in the workplace (through legislative, regulatory, political and state spending mechanisms.) This will get loud – and will become a more central feature of the valuation of companies and economic sectors in South Africa.
- The rise and vibrancy of Julius Malema’s Economic Freedom Fighters has been, perhaps, the most notable feature of this election. Malema faces a final sequestration hearing on May 26 – and if his provisional sequestration is upheld he will be barred from being a member of parliament.
- With or without its leader in parliament the EFF is already vigorously attempting to link up with striking platinum workers and with service delivery protesters. This will become an increasingly noisy feature of South African politics. The upside is the ANC will probably become less ambiguous in its attitude to such strikes and protests. The downside is there will now be a parliamentary pressure group backing the radical populist policies of land seizures and mine nationalisation. My view is this is, on the whole, a healthy development. The radical populist views have been present in the ruling alliance and the society more generally since 1994 anyway. Having those views directly represented by a minority party in parliament formalises the debate and contest within the democratic and constitutional structures of the country. Of course that doesn’t mean the EFF won’t constantly attempt to take its struggle to the streets, but it does mean that the ANC will be clear on where it stands in relation to those issues.
- All attention will now move to Jacob Zuma’s new cabinet (which will be announced soon after his inauguration – which I expect on the 24th of May) and to succession issues within the ANC.
A couple of asides as I tinker away at a framework for assessing Sunday’s Cabinet announcement.
The media noise surrounding Helen Zille’s putative attitude towards Lindiwe Mazibuko is interesting, but largely because it is so loud.
In the last hour I have been asked twice (by journalists) for an opinion on Mmusi Maimane‘s acceptance of nomination to the position of DA Parliamentary Leader.
Not long ago I would have (privately) filed news of DA power-struggles and leadership changes under ‘white mischief’ and forgotten about it – confident that no client or journalist would ask for an opinion.
Real politics, the stuff that actually made a difference to legislative or regulatory outcomes, happened within the Tripartite Alliance or in the interactions between the ANC and business.
I think that was a useful shorthand that saved me time in the past, but clearly I will have to break the habit.
The Alliance no longer contains its own opposition – and is therefore no longer the primary site of politics.
The EFF, Amcu, whatever Numsa finally initiates and the DA all (healthily in my view) strip out a sort of multi-polar disorder from the ANC.
Politics will now (tend to) happen where it is meant to: on the streets and in parliament … and not where it previously tended to happen: in back room deals and as a result of other shenanigans in the ANC-led alliance.
There is an obvious trade-off between clarity of government policy/structure and the broadness of the ANC’s alliances. As those alliances break or simplify or are otherwise transformed I expect some kind of dividend for governance and economic policy.
If I might add …
Another habit of thought I might soon have to break is my instinctive intellectual pessimism about politics.
By ‘pessimism’ I do not mean an automatic assumption that politician are corrupt or incompetent.
What I mean is that I tend to think that politics changes little in the world, but that the world changes the politics.
I think this might make me some kind of market fundamentalist. I am certain that to grow, the DA will have to become more like the ANC – in its policy and in the class and racial character of its leadership.
The assumption (and maybe error) I make is believing that the electorate purely aggregates the interests of broad groups of people and the political parties are compelled to reflect the character and interests of those groups.
So my ‘habit of thought” is that I assume that for a party to grow it will necessarily become more generic and bland.
Why this is ‘pessimistic’ (and I hope incorrect) is I tend to assume that our politics increasingly changes nothing (except to the negative) and parties endlessly drift towards a sort bland and generic centre in response to the ‘market’ of the bland and generic voters.
No wonder I was a secret reader of P J O’Rourke. He once observed in his normal right-wing, smug but hilarious way:
Now majority rule is a precious, sacred thing worth dying for. But like other precious, sacred things …. it’s not only worth dying for; it can make you wish you were dead. Imagine if all life were determined by majority rule. Every meal would be a pizza.
P. J. O’Rourke, Parliament of Whores, 1991
Why this is a bad habit
I worry that my instinctive attitude is a potentially serious error. I can see how this ‘political pessimism’ might be a useful short cut in relatively homogeneous and stable first-world countries.
The main parties in those countries blur into each other.
But recession and unemployment, even in those countries, is inevitably accompanied by a growing divergence in the political arena – a shrinking of the centre and growth of radical nationalists and/or populists.
Surely this is a better permanent model for understanding South Africa?
I suspect our calm transition and the stable predictability of the ANC and it’s comfortable electoral majority might have lulled me into a false sense of security.
Who could not smile at the jaunty red boiler-suits, gumboots and maid’s outfits adorning the mostly young EFF members being sworn in to parliament yesterday?
I am delighted the EFF are there and I think it is healthy for our politics that the ANC will have to contest with the EFF in the minds of voters and in the national and provincial assemblies.
Rather that than the nodding and winking and/or furious factional splits that have gone on up until now in the closed shop of the ANC.
But it should be front of mind that the ANC has to answer the challenge of the DA and of the EFF.
The ANC still has a safety margin and room for manoeuvre, but party leaders will have heard the howls in the night and are unlikely to just sit back staring into the fire hoping for the best.
I am up to my neck in it, trying to tease out the main implications and trends of the election – in a way that might be useful to investors in our financial markets.
As part of the process I read everything I can find that has been written about the elections. I have just read the Sunday Independent to see what the journalists and columnists had to say and I came across something that I felt I needed to share; and social media granted me immediate gratification.
Jeremy Cronin, deputy general secretary of the SACP, wrote a column assessing the election under the title “No room for complacency for ANC and alliance partners”.
Cronin is always good value and worth reading and today he was especially feisty.
Opposition emerging to the left of the ANC/SACP/Cosatu alliance is an important matter for anyone who has an interest in how South African politics will progress. And Cronin deals with this question as part of his election assessment.
Cronin’s tone reminds me of the sectarian and slightly Stalinist tendencies that I was very much part of throughout the 80’s … and I felt almost nostalgic when he characterised the threats from the left thusly:
Will a serious left challenge now come from outside the ANC alliance? It’s possible, but only if we in the ANC alliance are clumsy or arrogant. We need to distinguish the proto-fascist demagogy of Malema from the hybrid neo-Stalinist business unionism of Irvin Jim, from the ethnically-tinged vigilantism of the Amcu leadership, from the preachy capitalist philanthropy of Jay Naidoo and Mamphela Ramphele.
I wanted to follow that with a few exclamation marks. It’s funny and it has a certain poetic rolling cadence that left me smiling … for a few seconds.
Until I realised that the trick Cronin has pulled here is he has created a sort of ideological bestiary and placed within it every conceivable left critic of the ANC and the SACP.
If you are a left critic of the ANC, SACP, Cosatu alliance then you are either a proto-fascist demagogue or a hybrid neo-Stalinist business unionist, or you might be an ethnically-tinged vigilante or even a preachy capitalist philanthropist. You certainly couldn’t be a principled socialist of some kind, because then you would be in the ANC/SACP /Cosatu. Dah!
“Clumsy or arrogant”?
The article is worth reading because it gives a mostly subtle and thoughtful assessment of the election from an insiders view, but is, as you can see from the excerpt, occasionally entertainingly clumsy and arrogant.
After fiddling around a bit, I found it at IOL.com. Read it, it is here.
But anyway … here are the 4 most egregious examples of … of just general political awfulness from the last week’s political news:
1. Chancellor House gets another slice of the Eskom pie – and says: F*%& you, we can do what we like
The Weekend Witness (also City Press 27/04/2014) reports that Chancellor House, an investment arm of the ANC, has begun the purchase of Swiss-owned Pfisterer, a manufacturer of electrification components. Pfisterer is a major Eskom supplier and has a R550 million contract with the state owned power utility. The report alleges that Chancellor House will invest R34 million in a transaction that gives it immediate control of 49% ofPfisterer , and that Chancellor House will buy out the remainder over the next 18 months. Chancellor House’s Mamatho Netsianda told City Press: “If Chancellor House invests, it is not a crime. Why are you bothering me? We didn’t break any law. You don’t have a job to do. I have a job.” Hmm, nice work if you can get it.
2. State nuclear corporation channels public money to the ANC – and is about to adjudicate the biggest public tender in South African history
The Nuclear Energy Corporation of South Africa (Necsa), a wholly state owned entity recently paid R76 000.00 for seats at an ANC fundraising dinner. This quote from an unidentified board member of Necsa from the Sunday Times’s (26/04/2014) story: “We get money from government. How can we use it to fund the ANC?”
The deadly serious point of the article is that Necsa will soon be adjudicating bids for the R1-trillion nuclear build programme, the biggest public sector contract in the country’s history.
The country is still reeling from the corroding effects of the R30-billion Strategic Defence Acquisition finalised in 1999. Then deputy president Jacob Zuma was charged on various counts of racketeering, money laundering, corruption and fraud in the wake of the successful prosecution of his then financial advisor Shabir Shaik for charges that included the soliciting of a R500 000 (per annum) bribe for Jacob Zuma from a leading defence contractor.
3. No parliamentary scrutiny of Nkandla
The African National Congress yesterday quashed the parliamentary committee established to scrutinise President Jacob Zuma’s responses to the Public Protector’s findings on the R246-million upgrade to the Nkandla homestead. Opposition parties were furious, claiming ANC members of the committee were “submitting to the will of the (ANC) headquarters, Luthuli House, rather than following the oath they made to uphold the constitution, part of which was to keep the executive accountable.” Committee chairman Cedric Frolick said the next Parliament could resurrect the issue, a point non-ANC members of the committee felt was unlikely and certainly not guaranteed – Business Day 29/04/2014
This particular story gets worse: a key ANC member of the now disbanded committee said during a march in support of Jacob Zuma over the weekend that Public Protector, Thuli Madonsela, “is not our god”, regardless of being named as one of the world’s top 100 most influential people by Time magazine. “They can praise her good work, which is advancing the political agenda of the DA … We still reserve our right to expose that she is acting more as a politician and that she has brought that office into disrepute.” (City Press 27/04/2014) … which rather explains why the ANC has sunk the committee which was the last opportunity for government and the ruling party to acknowledge mistakes and culpability around the Nkandla upgrade. It is widely reported that the ANC is encountering, along its election trail, significant and harsh criticism from its own electorate about the Nkandla issue in all provinces except Kwazulu-Natal.
4. Sadtu accused of running jobs for cash racket
City Press published an exposé of allegations that the South African Democratic Teachers Union, a key Cosatu affiliate, had run a “promotions and appointments for cash” racket that “led to scores of illegal appointments” across the country – and at least one murder of a principal (City Press 27/04/2014). The article describes several situations in which principals were threatened with death to leave their jobs to make way for someone who has paid the R30 000.00 to occupy the job. The article implicates some Cosatu, Education Department and ANC officials and leaders in the scam. “On Tuesday, Mfundi Sibiya (54) the Kwazulu-Natal education’s department Ugu (lower South Coast) district director, two principals and an ANC ward councillor were granted bail … (after) allegedly ordering the murder of Nyon’emhlope Primary School principal Nkosinathi Zondi (46) … shot five times, allegedly by hitmen Andile Zulu and Lungisani Makhoba …)”.
The failing South African education system is an important constraint to South African economic growth, and a key component of this failure is Sadtu’s success in thwarting attempts by governments to properly assess and grade teachers and to link advancement to performance. The exposé in City Press suggests (but, it needs to be noted, does not prove) how deep and pathological is the impact of Cosatu’s Sadtu union on the failure of the system.
Stories that didn’t make the cut … because this whole exercise was starting to make me nauseous
- Journalist Nickolaus Bauer photographing the handing out of ANC T-shirts from a traffic police vehicle, and then having his pictures forcibly deleted by a member of the SAPS VIP protections services.
- Journalist Max du Preez’s accusation that Jacob Zuma “is using every trick he used while being head of intelligence for the ANC in exile in Angola and Zambia”. That he has “plunged the ANC back into its darkest era when commanders in exile issued the orders and cadres even remotely suspected of being hesitant or questioning were victimised, even jailed, tortured and executed.” Further that “the criminal justice system was perverted and abused and the powerful State Security Agency employed to make sure Zuma and his inner circle stay in power.” Catch the article here.
- The allegation that emergency parcels (food, toiletries and blankets from the SA Social Security Agency) are being dished out at a certain political party’s rallies – no guesses, this is getting ridiculous. The allegations have been made to the Public Protector. Hmm what is it that MP Buti Manemela said? Oh yes: the Public Protector is “advancing the political agenda of the DA”.
This from my 22nd of April 2014 news update:
The Sunday Times 20/04/2014 released a second “fully representative” survey conducted by Ipsos using a sample of 2219 registered voters. Here are the results as published in the Sunday Times tracked against both the 2009 election and the earlier Sunday Times commissioned poll of March 11, 2014 that used the identical methodology:
The City Press the same week led with the claim that bespoke polling data commissioned by the ANC is predicting the ANC will get 48% of the vote in Gauteng and that bespoke polling data commissioned by the DA is predicting that the DA will get 37% of the vote in Gauteng. The City Press claims are untestable and none of the parties has confirmed that these figures are, in fact, their estimates..
The Ipsos survey puts the ANC safe in Gauteng and the DA safe in the Western Cape:
A few comments
Firstly, and most obviously, be cautious of these figures – they are contradictory – and the ones in City Press are undoubtedly leaked by the parties for their own ends.
Secondly, there are few surprises in the latest Ipsos poll. The ANC is trending downwards from its 2009 share of the vote, but not as steeply as I expected. This is probably because damage done by the “Jacob Zuma and Nkandla factor” is balanced against the boon the ruling party has enjoyed from the presence in the public mind of long-time ANC leader Nelson Mandela as well as the “20 Years of Freedom” celebrations this year. The EFF found quick and significant traction but the obvious unworkability of the new party’s economic policy is being quickly – and earlier than I expected – exposed in the cut and thrust of election debate.
Thirdly, the possibility of coalition governments in some provinces, especially Gauteng, raises interesting tactical questions. If alliances with the smallest parties are unable to bring a coalition led by either the DA or the ANC above 50% then both the major parties must consider an alliance with the EFF. Of course an alliance with each other is also conceivable, but from the ANC perspective (in my opinion) an alliance with the EFF would be the better tactical choice. The DA is shaping up to be the main challenger to the ANC by 2019 and the ANC should be loath to give the DA the legitimacy that might come with a governing coalition in an important province. Also a pact with the EFF would allow the ANC to co-opt EFF members and leaders. The point might be moot, because it is myimpression that the ANC is close to the 50% mark in the most populous province.
Fourthly, if the ANC does get above 64% of the vote in this election (which is looking possible) the incumbent leadership of the party will comfortably dismiss the various urgent criticisms of corruption and mismanagement it has faced. The Nkandla scandal is just one of a myriad improprieties that have characterised Jacob Zuma’s leadership of the ANC and it cannot be good for South Africa if the electorate gave him the go ahead to continue in the same vein.
(Note: please read Jonny Steinberg’s comments on my miscasting of the implications of the recent HSRC’s South African National HIV Prevalence, Incidence and Behaviour Survey, 2012. Jonny argues that I have taken “a story of resounding success and twisted it into a tale of alarm”. Jonny Steinberg is correct on all counts and I hope to redress my error at some time in the near future. Catch his brief criticism and my initial mea culpa in the comments section here.)
Before it gets too out of date, herewith my last week’s (Monday 14 April) news update … it’s worth it just for Ronnie Kasrils’s comments about Zuma.
- Employment equity in South Africa is glacially slow and will continue to help drive regulatory and political uncertainty
- A spoilt ballot campaign and some unusually forthright statements from ANC leaders about corruption in their party and government
- Ramapohosa brokers a truce, Vavi’s reinstatement holds and Cosatu totters on
Employment equity – dead slow ahead
Last week the Commission for Employment Equity released its 14th Annual report (available here) indicating glacial progress in making workplaces more representative of the demographic profile of the South African Economically Active Population (EAP).
Below is an indicator of race and gender breakdown of the working population as a whole:
In the report’s ‘Top Management’ category, the trend between 2003 and 2013 is strikingly poor:
(The report uses categories: Top Management, Senior Management, Professionally Qualified and Skilled. The Department of Labour begun collecting data on ‘foreign natlonals’ as a distinct fraction of the EAP from only 2006.)
The performance is best in the government sector, but this only slightly improves the overall picture:
There have been some improvements at the lower end (Skilled Technical):
However, not unsurprisingly, the Employment Equity Commission believes this is not good enough in itself, nor is it adequate compensation for failures elsewhere.
(The Commission is a statutory body that reports to the Department of Labour and operates within the aegis of Employment Equity Act, 1998 – amended by Employment Equity Amendment Act of 2013.)
Poor performance by the private sector in reaching employment equity targets is a constant irritant to government and to the ‘designated groups’ (Africans, Coloureds, Indians, women and people with disabilities). Employers might argue that the administrative burden of the act is counter-productive and that the top employment categories require skills that are relatively scarce amongst the ‘designated groups’. However, the political consequence of the failure gradually adds to the risks in the operating environment.
Employment equity legislation in South Africa has, since 1998, tended not to concentrate on sanctions to enforce compliance. However it is apparent that government is gradually increasing the pressure. The Employment Equity Amendment Act of 2013 increases fines for non-compliance – both with regard to reporting requirements and with regard to targets.
The African National Congress is increasingly challenged by radical populists (e.g., the EFF) and a militant left-wing (e.g., the incipient Numsa breakaway from Cosatu) which together argue that black South Africans have failed to adequately benefit from ‘liberation’. Part of the answer to this challenge from the ruling party is likely to be a rapid escalation of pressure around employment equity and Broad-Based Black Economic Empowerment.
There will be an increasing burden on all companies operating in the country and increased government hostility to defaulters. The ANC will not be tempted towards the nationalisation policy platforms of the emerging populist and leftist groups, but must find an answer that satisfies its constituency in the rapidly growing black middle class.
Spoiled ballot campaign
Ronnie Kasrils, a former intelligence minister, and long-time leader of the African National Congress, has embarked on a campaign with some other disaffected ANC members to call for a spoiled ballot in the May 7 election.
Nothing much, except that this is probably the tip of an iceberg of discontent in the African National Congress. Perhaps what is significant is that despite the emergence of the EFF and Numsa breakaways, and the apparent success of the DA campaign, many dissidents in the ANC still find themselves unable to follow a party other than the ANC.
Kasrils’s main problem with the ANC is what he perceives as a spread of serious corruption and abuse of public funds at a senior level in government and the party.
Obviously the strategic or tactical value of a spoiled ballot will be a matter of deep controversy.
(My own view is that Kasrils and his colleagues are well within their rights to propagate this option – it is, however, not an option I will be pursuing.)
What is most interesting is to read Kasrils’s comments about Jacob Zuma and other ANC leaders in the interview with published in the City Press yesterday. I quote him here in-depth, because of how unusually explicit his mode of expression is and because I believe this view is representative of a significant group of ANC insiders, deeply unhappy with their party, but not yet ready to leave it:
People will tell you and it has been stated from people in exile and I can confirm – (that) he (Zuma) was a pretty simple guy. He wasn’t a person who was looking for fancy clothes and flash cars. He was pretty down to earth … I did see a certain ambition there by acquiring so many feminine relationships and wives and then children … (But Zuma has) changed very dramatically. Here is a man who comes back to South Africa and you can imagine how worried he must have been, how he was going to take care of this kind of menagerie … And then there are the people, capitalists, with money in their back pockets, who were looking at the new political power and pounced like vultures … There were some who were only too happy in the embrace because they did not have to worry about the wolf at the door, how they would have to pay the bills, how they were going to educate their kids, where they find a way to house their women … from then on, what happens to your fine principles of serving the people first and thinking of the key things that are necessary when you are now in league, and in bed, with people who become your sponsors? From that point of view, you change.
My view is that the people who now run the ANC, not every one of them, but there is an elite that has become incredibly corrupt that managed to take over – take power from Mbeki and kick him out and it’s just been downhill ever since with this system just rolling on like a snowball becoming larger and larger.
Ronnie Kasrils, City Press 13/04/2014
(Again, my personal views on whether Mbeki, Zuma or none-of-the-above are the root of all evil might differ somewhat from Kasrils’s but I think his plain speaking here is useful anyway.)
Ramapohosa brokers a truce, Vavi’s reinstatement holds and Cosatu totters briefly on
Cosatu’s Central Executive Committee meeting on Tuesday last week was widely expected to be the close-to-final act in the trade union federation’s unravelling. However an ANC delegation led by Cyril Ramaphosa persuaded the Zuma loyalists as well the Zwelinzima Vavi-led faction to postpone a final showdown till after the elections. (Such a ‘final showdown’ is ostensibly about the suitability and prudence of the Vavi, but is actually about loyalty to Jacob Zuma to the ANC’s policy positions.)
Again, it is interesting to note the interaction between fragmentation and momentum in the ruling alliance. The ideas and history (mythological or otherwise) that bind the members and supporters to the ANC make the split that is happening bizarrely protracted. However, there is no question that several splits in the ruling alliance are, in fact, in process. It is tactically important for Vavi and Numsa to hold on within Cosatu for as long as possible. Cosatu remains terrain which neither contestant feels ready to abandon to the other.
Perhaps you are a journalist covering the May 7 elections or the Oscar Pistorius trial – and will soon be immersed in Shrien Dewani’s adventures in our specialist niche of the honeymoon-tourism market.
You might be a TV continuity announcer-cum-journalist, circling endlessly between serious discussion about bone fragments, Nkandla’s fire retarding swimming pool, Numsa’s endless exit from Cosatu – and then back to Oscar standing up, Oscar sitting down, Oscar making gagging noises, Oscar weeping about how horrible and sad this whole business is for him.
If you’re very lucky you might get to do a colour piece on Zuma’s ‘shorty and the machine gun’ routine:
But after the 10th showing of that, between the traffic, Oscar Pistorius, the sport, Oscar Pistorius and the economy … and Oscar Pistorius, even you must be having to fight to keep your food in your stomach.
I understand the private honour in doing something deeply distasteful and humiliating when this is the price of earning a living. So, in an attempt to provide us all with some light relief, I hereby republish and rework some ‘cynical quotations’ I have posted on a few occasions previously. Apologies to those long time readers who have seen these more than once … but this is a public service I feel compelled to render.
These are from the excellent Cassell Dictionary of Cynical Quotations (John Green – Cassel, 1994) with a few comments from the peanut gallery.
As we listen to politicians as we head towards May 7
People never lie so much as after a hunt, during a war or before an election.
Otto von Bismarck
There are hardly two Creatures of a more differing Species than the same Man, when he is pretending to a Place, and when he is in possession of it.
George Savile, Marquis of Halifax, Political, Moral and Miscellaneous Thoughts and Reflexions, c.1694
An Honest politician will not be tolerated by a democracy unless he is very stupid … because only a very stupid man can honestly share the prejudices of more than half the nation.
Bertrand Russel, Presidential Address to LSE students, 1923
An honest politician is one who when he is bought will stay bought.
Simon Cameron, 1860
In general, we elect men of the type that subscribes to only one principle – to get re-elected.
Terry M. Townsend, speech 1940
That a peasant may become king does not render the kingdom democratic.
Woodrow Wilson, 1917
Anybody that wants the presidency so much that he’ll spend two years organising and campaigning for it is not to be trusted with the office.
David Broder, in the Washington Post, 1973
When buying and selling are controlled by legislation, the first things to be bought and sold are legislators.
- P. J. O’Rourke
Should you bother voting at all?
Bad officials are elected by good citizens who do not vote.
George Jean Nathan
… yes, but (and forgive the emphasis here on the over-cynical … and slightly fascist):
Democracy is the name we give to the people each time we need them.
Robert, Marquis de Flers and Arman de Cavaillet, L’habit vert, 1912
A democracy is a state which recognises the subjection of the minority to the majority, that is, an organisation for the systematic use of violence by one class against another, by one part of the population against another.
V. I. Lenin, The State and Revolution, 1917
Parliaments are the great lie of our times.
Konstantine Pobedonostsev, 1896
Democracy is a device which ensures that we shall be governed no better than we deserve.
George Bernard Shaw
Democracy is a form of religion. It is the worship of jackals by jackasses.
H. L. Mencken, Sententiae, 1916
Now majority rule is a precious, sacred thing worth dying for. But like other precious, sacred things …. it’s not only worth dying for; it can make you wish you were dead. Imagine if all life were determined by majority rule. Every meal would be a pizza.
P. J. O’Rourke, Parliament of Whores, 1991
The democratic disease which expresses its tyranny by reducing everything to the level of the herd.
Henry Miller, The Wisdom of the Heart, 1941
Democracy is the art of running the circus from the monkey cage.
H.L. Mencken, 1916
On the ANC and the (infamous) liberal media
Democracy becomes a government of bullies, tempered by editors.
Ralph Waldo Emerson, Journals, 1909 – 14
It is a general error to suppose the loudest complainer for the public to be the most anxious for its welfare.
Edmund Burke – 1769
What seems to be generosity is often only disguised ambition – which despises small interests to gain great ones.
Francois, Duc de La Rochefoucauld, Maxims 1665
Revolution, n. In politics, an abrupt change in the form of misgovernment.
Ambrose Bierce, The Devil’s Dictionary, 1911
Every revolutionary ends up either by becoming an oppressor or a heretic.
Albert Camus, The Rebel, 1955
Fame is but the breath of the people, that is often unwholesome.
Thomas Fuller 1732
The urge to save humanity is almost always a false front for the urge to rule it.
H.L. Mencken 1956
A judge is a lawyer who once knew a politician.
What a liberal really wants is to bring about change that will not in any way endanger his position.
An arbitrary comment about families
Sacred family! …. The supposed home of all the virtues, where innocent children are tortured into their first falsehoods, where wills are broken by parental tyranny, and self-respect smothered by crowded, jostling egos.
August Strindberg 1886
On love – and the current state of the ruling alliance:
The voyage of love is all the sweeter for an outside stateroom and a seat at the Captain’s table.
Henry Haskins 1940
On the global debt crisis and the Great Recession?
What is robbing a bank compared with founding a bank?
Bertolt Brecht 1928
A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.
Bloggers (as a sort of author-lite) – in an attempt to be even-handed in my sneering
An author, like any other so-called artist, is a man in whom the normal vanity of all men is so vastly exaggerated that he finds it a sheer impossibility to hold it in. His over-powering impulse is to gyrate before his fellow men, flapping his wings and emitting defiant yells. This being forbidden by the police of all civilized nations, he takes it out by putting his yells on paper. Such is the thing called self-expression.
H.L. Mencken, Prejudices 1919-27