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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.

Maggie1

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 :

Maggie2

 

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.

Maggie3

 

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.

“How seriously to take the EFF is becoming the question of the year for a view on South African political risk”

As I listened to Pravin Gordhan’s budget speech I thought I would share with you an extract of my news commentary from Monday morning.

But I forgot to hit ‘publish’ as I was being torn between being slightly underwhelmed and moderately admiring that Gordhan could make so few populist concessions this close to May 7.

Thus, the EFF  and DA manifesto launches:

  • The Economic Freedom Fighters and The Democratic Alliance both launched their manifestos this weekend
  • The EFF will likely out-perform and its policies are the ‘sum of all fears’ for investors in emerging markets
  • In the longer term, however, the ANC is set free to pursue more growth orientated, investor friendly policies – and success or failure in this regard is the key question about South Africa’s future
  • The Democratic Alliance also launched its manifesto and is rapidly shifting its demographic appeal
  • By 2019 we could have a Goldilocks scenario where the ANC and the DA comfortably occupy the middle ground of South African politics, keeping at bay both the left and right-wing, and pursuing economic growth. Other scenarios are both possible and plausible, but I thought I would, just this once, hope for the best

EFF – radical left-wing populism of old (and marketing genius)

The EFF packed out the Mehlareng Stadium in Tembisa in Gauteng and launched a radical populist manifesto with great aplomb. Ambitious plans announced included free education up to tertiary level for all and double social grants paid for with the proceeds from nationalising 60% of the mines and banks. The party will build a state pharmaceutical company to produce medicines, scrap the tender system, ban the use of consultants while increasing civil servant salaries by 50% and it will subsidise the taxi industry and provide housing finance for middle-income earners. Mineworkers will take home a minimum wage of R12500.00 a month (undoubtedly designed to chime with current Amcu platinum sector strike) and other minimum wages would vary from R4500.00 for waiters and waitresses to R7500.00 for private security guards.

Yeah, right.

To get a sense of the scripting and impact of the launch here is Ranjeni Munusamy of The Daily Maverick describing the Marikana widows on the platform: “To make the point about the treachery of the ANC government, Malema had invited as his special guests the widows of the Marikana massacre, all clad in EFF t-shirts. They sang and spoke of the hardship, their heartbreak and the betrayal they feel at the ANC government killing their husbands on behalf of capital.”

So what?

The EFF is becoming the big story of this election. Previously in SA politics the ANC managed to encompass within itself the full spectrum of liberation ideologies including this radical populism. The expulsion of Julius Malema (paralleled by the pushing of Numsa out of the ruling alliance) has left the radical populists on the outside and unconstrained by previous alliances and loyalties.

The ANC ran a counter rally/concert aimed at a youthful audience not far from the EFF manifesto launch. While that concert/rally was well attended and festive, it didn’t appear to detract from the EFF launch. All it really indicated was that the ANC is taking the EFF threat seriously.

How seriously to take the EFF is becoming the question of the year for a view on South African political risk. The EFF is articulating the set of demands and occupying the political space that has always been of concern to investors in South Africa – characterised as it is by chronic unemployment, poverty and inequality with the racial underpinnings of apartheid. Previously markets had become convinced that the ANC by its size and reach and general authority, was able to mediate between the different and competing demands of the transition.

However, it is now clear that the ANC has either been forced to abandon the terrain of the radical populists and ultra-left and expel those factions – or it has chosen to do so for its own strategic objectives.

On the one hand this sets the ANC and government free to develop policy without the straitjacket that came from clinging to the populists and leftists. On the other, those groups are now free to compete for votes and the ANC is vulnerable to electoral shrinkage.

The EFF will undoubtedly grow, but the question for me is: ‘can the ANC, in the longer-term, now find policies to grow the economy that will allow it to regain ground in the 2019 election that it is likely to lose in the 2014 election?’

Meanwhile I think the EFF will do better in this election than expected …. and I am moving my expectation for its electoral performance up from 8% to 10% (a thumb suck, rough guide, purely for me to keep track) of the total vote on May 7th. I do, however, think that once the EFF gets to parliament the unworkability of its policies and the manipulations inherent in its campaigning will inevitably be exposed. Over the longer term it could be under pressure to hold onto its parliamentarians and its voters, especially if the ANC is pushed by the pressures from left and right into a process of internal renewal … and especially if the Cosatu unravelling results in a real labour/left party.

The Democratic Alliance

The Democratic Alliance also launched its manifesto this weekend – on Sunday in Polokwane in Limpopo Province. The launch was well attended – with an almost exclusively black audience, a feature which puzzled many commentators (but not you?- ed)

The party was at pains not to attack the pre-Zuma led ANC with Helen Zille saying of the ANC’s 2007 Polokwane conference ‘(t)hat was the moment when a great political movement lost its sense of direction. It was hijacked by leaders who care more about themselves than the people they are meant to serve … (the) good story ended in 2007.’

The economic aspects of the election platform emphasised job creation: ‘The manifesto we release today is a ‘manifesto for jobs’… Job creation is only possible if we cut corruption’.

The manifesto is worth reading and pushes all the right buttons balancing state encouraged redress with laying the conditions for private sector led growth. Catch Helen Zille’s speech, which is a useful summary of the manifesto, here.

So what

The DA appears to be on top of its game and performing optimally, given the limitations imposed by its origins as a largely white party. The ‘ethnic’ or ‘racial’ character of the DA is clearly in transition, with Helen Zille the only white person who took the stage and the cameras covering the launch having to search long and hard for the few white faces in the audience. These contortions are going to be difficult.

The DA has clearly decided to appeal directly to defecting ANC voters and much of the tone and approach was structured with this in mind – including being respectful of the pre-Zuma ANC history. However it is my impression that defecting ANC voters are (mostly) going to abstain from voting or will vote EFF (and maybe UDM/COPE leftovers). I think that while the DA might get a portion of these votes the ‘racialisation’ of our politics means it is too early for the DA to capture enough black votes to shake the ANC.

However, I think the political realignment’s now taking place could mean that it will be the ANC and the DA that occupy the middle ground of South African politics by 2019, a scenario that has many more positive than negative features. (I wrote that line on Monday morning. I am not sure I agree with it still. Nothing has changed except my mind.)

In passing I should note the strong convergence of two features of both the DA and the EFF. They have both identified Jacob Zuma as the key individual responsible for the ANC’s and the country’s failures. True or not, fair or unfair, the ANC must be under pressure to find ways of shifting this president into the side-lines – which is, in my opinion, one of the features necessary for the emergence of a process of renewal in the ANC.

Annus horribilis

This has undoubtedly been the worst year for South Africa – at too many levels to name – since 1994. There is much I have wanted to say here but couldn’t find the time.  So I am going to rapidly fire off a series of posts, as my professional duties tail off towards the end of the year.

That probably means potential readers will soon be on holiday and lounging on a beach somewhere.

So let me be cheery to start:

I am positive about South Africa in the medium to long-term … but it’s complicated

My first-case long-term view on South Africa is somewhere between hopeful and good. I don’t think societal outcomes are primarily about the choices made by politicians and their parties – if they (societal outcomes) were (dependent on the choices made by politicians), my view would be significantly more negative.

Instead I think societies change in response to shifts of deep structural features – in themselves and in the ‘global world’ within which the society and country exists. South  Africa – its institutions, politics and economy – is being buffeted by the flood emanating from the unwinding of the distortions of the past, interacting with the ‘flooding-in’ of elements of the global society and economy previously locked out … or previously just less ‘globalised’  as was the case in the world of the 80’s and before.

The most obvious domestic feature of this is the rapid growth of a class of South Africans who have ‘emerged’, settled and accumulated assets. They have done this because they can i.e. as a result of the removal of political and legislative obstacles created by Apartheid. Alternatively they have emerged because such settled and skilled groups are a requirement of newly globally integrated labour and consumer goods’ markets. It works both ways – one as a push the other as a pull. Either way the black middle class is growing and on the move to become the prime determinant of much of what lies ahead for South Africa.

The overwhelming numeric majority of this class is a normal middle-class (public and private sector workers, teachers, artisans, skilled workers and other professionals) previously denied by law and repression the chance of improving their lot (to accumulate assets and get ahead). But along with this classic middle-class has come a slurry of individuals and groups who have more specifically seized the opportunities to extract a rent, opportunities created by the legal and political imperative to transform patterns of ownership and control.  Again, most of these are rational individuals who have seized the legal opportunities that the imperatives for transition have presented them with. However, and this is the important bit, a very large (in terms of accumulated assets and power) part of this group includes those who have successfully harnessed political power with the specific intentions of diverting public resources and/or other resources available for redistribution (the assets of private companies, for example) into their own hands.

The point of all of this is that once through the door, once securely established, that elite, its children, its family networks will attempt to re-establish the basic economic rules that allow for the formal and ordered regulation of property, the appropriate separation between the public and the private and the establishment of the rule of law – an imperative that already characterises the ‘classic middle-class’ that has emerged alongside this elite. In short, once inside the enclosure, the new elite will attempt to lock the door and secure the perimeters. It’s part of normal capitalist development and we will get through it in about 10 – 20 years. Meanwhile we are going through what Karl Marx would have called a form of “primitive accumulation” – with all the attendant threat and chaos.

Once this class has formed, emerged and assumed its central place in South African society – and Census 2012 suggests this is in process – our politics, parties, structures of governance will be forced to adapt to the imperatives of the new underlying configuration. This is the kind of tectonic force that effortlessly shuffles and cuts and pastes our politics and our parties to suit itself.

In 12 years’ time we are going to look around and remark at how surprising it is that South Africa has settled down and become such a productive and cooking hub, that corruption and nepotism has retreated so far and so quickly, that the political certainties of the past have so quickly and radically changed for the better.

Or that’s the outcome I have bet my meager resources on …. and before you follow my lead, remember; there is a reason those resources are as meager as they are.

I am positive about South Africa (or at least about reduced volatility) in the immediate post-Mangaung period

Once the political contest for the presidency is resolved and once the platinum sector strikes settle, the deep uncertainties driven by these interacting cycles will recede.

But that is enough sunshine for now  … because what has driven the intensity of those cycles is still very much present and will feature prominently in the South African investment and operating environment in the next 5 – 10 years, revealing itself in crises at least as serious and awful as the Marikana Massacre and the Mangaung contest. (Much of this will be the subject of the next few “deep blue thoughts” posts.)

Motlanthe or Ramaphosa?

At Mangaung the presidency issue is settled and the only interesting bit (as far as the electoral process is concerned) is the election of the deputy presidency and in the general balance that is achieved within the NEC.

I will leave the NEC for a later discussion.

I think the Zuma camp is entirely in control of the president/deputy choice, so when we analyse what might happen we have to ask: what is the imperative of the Zuma camp?

Well, that’s an easy one: stay out of prison after you have left office and keep your loot forever. That’s the thing and the whole of the thing.

So which deputy choice could better ensure this outcome?

Would a President Ramaphosa eventually, following the logic of the Constitution and the law, and impelled by some hope for his own legacy, end up allowing Zuma to be sent to prison?

Would Motlanthe?

I think Ramaphosa might. I would have trusted the younger version to do the right thing a lot more than I do this older one. This man has done a lot of complex dealing with “the cold realities”, he has supped with with a Dark Lord or two along the way  … and I would not feel entirely confident that the Zuma camp could not construct a deal that keeps him (Ramaphosa) beholden until long after Nkandla Incorporated has broken free of the threat of justice and been laundered till it shines like a blue chip.

And Motlanthe?  I am grinding my way through “Kgalema Motlanthe: A Political Biography” by Ebrahim Harvey (there’s more than one medicine measure of hagiography in there, but despite that I am starting to believe that KM might just be a seriously good person). However, I don’t think that means he would send Zuma to jail. He seems like a man who hates having to take decisions that “divide the house”. Taking down Nkandla is going to require something even more invasive and destructive than Polokwane. I cannot see Motlanthe as the author of such a story.

It would be a relatively easy matter for the Zuma camp to claim the imperative of unity, and decide to accept Motlanthe back into the fold – instead of Ramaphosa – and therefore as the successor president in 2017.

Enough for now.

I am sometimes tempted to think of myself as a company analyst, with South Africa as my company,  government as management and the currency and bonds as the share price

Company analysts make sell, hold or buy recommendations. Obviously a buy means the analyst believes the shares are cheap – in some difficult to determine absolute terms, but more likely in relation to appropriate peer or category comparisons.

If I was a company analyst, then what I might have been doing over the last while would have been writing a report changing my recommendation on South Africa from a hold to a sell.

Here is a bare-bones summary and ordering of that argument:

  • There are two major cycles driving negative sentiment which are coinciding now (which they do every five years):  the “strike season” and the lead up to the  ANC’s National Conference ;
  • Both these cycles are deeper and more traumatic that usual;
  • The reasons the strikes are worse than usual is excellently addressed by Gavin Hartford of Esop Shop –  here for a link to his paper at polity.org;
  • Mangaung is “deeper” and more traumatic than Polokwane because there is more at stake (some ANC members realise that another seven years of Zuma could hurt the ANC and the country; and Zuma and his backers cannot afford to lose office, because their dealing is not yet wrapped up and because their man remains legally vulnerable to the original corruption allegations against him);

But the main reason these cycles are deeper than previously is they are meeting a structural or secular trend, which consists of (and this is very stripped down):

  • Uncertain political stewardship from the top;
  • Institutional weaknesses in political (and labour) organisation characterised by systemic cronyism, corruption and nepotism (which leads to violent competition for control), managerial incoherence, narrowing support base and falsely inflated membership figures;
  • A significantly negative economic policy environment which might lower investment levels – e.g. fiscal uncertainty (because there is no way the ANC cannot keep increasing social grants and the public sector wage bill, which together are already more than half annual non-interest government spending) and a highly interventionist industrial policy (best exemplified in the SIMS document) which is one step away from ‘nationalisation by stealth” i.e. the effective deployment of private assets for public – or more narrowly governmental or even party – ends.
  • Incompetent infrastructure build, disruptive labour relations and failed educations systems are constant, apparently irresolvable and narrowing bottlenecks in the economy;
  • Institutional and administrative failures of government (in specific geographies and at specific levels of government) – with similar features to the second bullet referring to parties and labour unions;
  • Failures of the collective bargaining system – and other institutions designed to manage and mediate conflicting interests in society;
  • Growing social stresses around levels of inequality, unemployment, indebtedness and poverty – and unresolved racial overlays of the same.

Just listing that is faintly distressing … and you can imagine writing about it for weeks is not very uplifting.

But, I have, mid-stream, decided that I am not at all certain it is appropriate to take this relentlessly negative view.

Let’s go back to the political analyst/company analyst metaphor. Company analysts often suggest investors sell a share in a top quality, well  managed and highly profitable company if it is too expensive.

They might also recommend a buy on a company in all kinds of trouble – but one that is cheap and has upside that the herd of sellers hasn’t spotted.

I cannot remember an SA political shock or flood of negative sentiment that did not represent a buying opportunity in our financial markets. Remember the sell-off of  R54bn of SA resources companies after the leaking of a draft mining charter in 2002? It proposed forcing mining companies to immediately sell half their equity to black South Africans and spooked the market. The next few months was the chance of a life-time to buy excellent value company shares on the cheap.

Whether financial analysis adds real value to the investment process (or is just another bleed-off) is a matter of endless dispute. But here is why I would hesitate to call a sell on SA:

  • I cannot honestly say we have more political risk than Russia and Turkey, for example;
  • Where are the safe havens for investors, given the complex risks and problems in the global economy?
  • I cannot be sure that the negative news flow is not already in the price – it would be a very financial-market-analyst-type error to rush around shouting sell, sell, sell just after the last savvy investor had finished selling and begun buying;
  • My ‘negative secular trend’ is described as if it is inevitable – whereas there is much that can be decided and turned around by citizens, government and the ANC (despite my bleak outlook as to the likelihood of that happening, it must be in the mix as a possibility);
  • The country has a number of inherent advantages: its natural resources, its growing domestic market, its proximity to the last great frontier market (Africa), its sophisticated financial system and complex infrastructure, its constitutional framework, judicial independence and stable democracy – to name just a few.

Now obviously that does not counter the negative “secular” or structural trend I describe above. But there is something of a “baking a cake” strategy about how I have motivated for the big underlying negative trend. What I mean by that is I have marshaled all (or as many as I can come up with) of  the negative arguments in one place to bolster a particular conclusion: sell!

To make a cake one follows certain steps – mix ingredients, add energy and voilà: a nasty, stodgy, too sweet lump.

And that is a relatively simple object, with only a few requisite variables for its construction.

When we think about the future – especially when we write about it and propose to people how they should position themselves – the very first thing we should be is extremely tentative.

So I can’t, in good conscience, say sell South Africa.

I am unmistakably bleak about our politics and governance, but don’t take that as a signal to sell. I am quite likely being tossed on the waves of sentiment  – following financial market indicators, rather than leading them.

My very negativity could as easily be the indicator to start buying; that all the bad news is already in the price.

First off, let me admit, that I have no choice but to believe that the answer to the question in the title is: yes.

It’s an article of faith.

Who can live in a world where the bullies and thugs, the greedy and manipulative, the powerful and the arrogant have won so decisively that it is pointless to hope – and perhaps work – for an alternative?

Who would dare raise children in such a world?

Or bother to get up in the morning?

In a post titled “A church so broad belief is optional” I two years ago argued that the ANC’s huge electoral support and attempt to straddle every social divide had an upside (as well as several downsides).

Here’s a (slightly edited) quote from that post:

Our society has a number of real and urgent fault-lines along which clashing currents are difficult to manage:

  • White versus black (versus Indian versus Coloured)
  • poor versus rich;
  • the employed versus the unemployed;
  • Zulu versus Xhosa versus Pedi versus Ndebele versus Sotho versus Tswana versus Venda;
  • Western versus African;
  • Urban, modern and fast versus rural, traditional and conservative.

The fact of the matter is that these divisions are not adequately represented in the formal political processes of parliament and government. There is no one party on one side of any of these divisions and mostly no one party on the other.

We are a society in which the formal institutions of democracy are new and tentative – and the divisions are threatening and profound. As many groups and interests as possible need to find expression in the national political debate – and the formal institutions do not yet adequately represent them.

As a second prize, an overwhelmingly dominant ruling party that attempts to play the role of a parliament of all the people, that attempts to speak with the cacophony of the thousand arguing tongues, is not all bad.

It’s just loud, noisy, confusing and unsettling.

This argument came to mind as I picked through the weekly English language press (Mail & Guardian, City Press, Sunday Independent and the Sunday Times) this morning.

I do an exhaustive/exhausting reading of the English language weeklies every Sunday afternoon/night to produce a summary analysis for my main clients by Monday morning. It is an extremely painful task and I am always tempted to quote that famous Punch magazine cartoon from November 9 1895 by George du Maurier to describe what I really think of these newspapers. A bishop is dining, in a formal setting, with a junior curate:

Bishop: “I’m afraid you’ve got a bad egg, Mr Jones”;

Curate: “Oh, no, my Lord, I assure you that parts of it are excellent!”  

But I never actually say that, because there are always a few articles, features and editorials in all four of these newspapers that are truly excellent: well researched, well written and insightful; and it would be untrue and unjust – and a little arrogant – for me to suggest they all stink by virtue of being surrounded, as they are,  by rotten, ill-informed and sensationalist rubbish.

So back to the title question.*

The Sunday Times has Motlanthe rejecting Zuma’s deal of the deputy presidency in exchange for him (Motlanthe) not standing in the presidential race.

It’s a particularly poorly structured story (trying to get away with suggesting a whole range of things without actually saying any of them) although it is full of tantalising tidbits.

So lets take the hints (from all four of the mentioned newspapers) as real possibilities:

  • Motlanthe stands against Zuma;
  • Unraveling patronage networks, especially in eThikwine, open(s?) the possibility of driving a wedge in Zuma’s Kwazulu-Natal support base;
  • To strengthen his ticket against Motlanthe, Zuma offers Cyril Ramaphosa the deputy presidency;
  • Gauteng suggests Joel Netshitenzhe as part of the Motlanthe challenge – essentially to stand against Gwede Mantashe (who’s a cornerstone of the SACP support for Zuma);
  • Winnie Madikizela-Mandela comes out more explicitly anti-Zuma (especially of his handling of Julius Malema) and supportive of  the putative Motlanthe challenge.

So what do we have there?

A Zuma, Ramaphosa, SACP ticket versus a Motlanthe, Netshitenzhe, Winnie, Malema ticket?

Oh Lord, give me strength.

Can’t we have a Joel Neshitenzhe, Cyril Ramaphosa ticket supported by Motlanthe and opposed by the ANC Youth League, Winnie Mandela and an unholy alliance of the Kwazulu-Natal and Mpumalanga patronage networks? (I have written previously about Joel on this website here,  here and here.)

That desire is the moral and intellectual equivalent of arm-chair sports selecting. It would be nice … as would a leadership consisting of a young and vigorous Nelson Mandela, Oliver Tambo, Walter Sisulu …

So quickly, before I go back to picking my way through the odorous wreckage of the four weeklies spread out on my table and floor (the soul-crushing banality of etv’s Sunday afternoon offering in the background and the Cape Town winter sun finally beckoning outside):

What happens at Mangaung will not decisively determine the character of the ANC.

Polokwane was billed as a major rescue attempt – saving the ANC from the dead hand of Mbeki and rolling back the power of the narrow BEE elite which was allied to the most predatory forms of global monopoly capitalism.

Polokwane was going to reinstill the movement with idealism, energy and enthusiasm and channel it into ‘a pro-poor strategy’.

Well, we know how that played out.

Mangaung, like Polokwane, was a result of a complex interplay of forces and contests that go deep into South Africa’s past.

I cannot honestly argue that Jacob Zuma is a better or worse candidate for the ANC or the South African presidency than Kgalema Motlanthe – although I accept that some people can and do (with a lot of enthusiasm).

However, politics is a matter of contingency. It really is the art of the possible … in this sense it is full of difficult compromises.

Any individual who finds him or her self in an ANC branch or region or leadership position, will be faced with choices that, when aggregated, will shape the future of the ANC and, quite possibly, the country. (The same is, of course, true for any South African, inside or outside the ANC.)

Those choices might be circumscribed – by history, by existing power structures and alliances, by the momentum invested by those who control the patronage networks and by wherever it is that the individual finds him or her self.

But if you are not going to throw up your hands in despair and retreat to your bed forever, if you are unable to cut and run, then you have an obligation to make some kind of decision and choice.

I do believe that what the ANC becomes matters – although what it becomes is not going to be determined at Mangaung or as a result of it being led by Kgalema Motlanthe or by Jacob Zuma.

(Note added a few hours later. On reflection, I might have empasised that the cartoon is even more apt for the ANC than it is for the English language SA weeklies … it was meant to be suggested, almost by my omission … but on reflection, I think I will spell it out … which I have now done.)

Remember kaleidoscopes?

Basically a tube that you held up towards a light and peered through as if it was a telescope?

But unlike kid’s telescopes –  which, like kid’s microscopes, were blurry and disappointing and stupid – the kaleidoscope was a device of astonishing power and beauty.

The point for my six-year-old self who received his first kaleidoscope for a birthday, probably, was the power that little tube put in my hands.

The simple expedient of  twisting one end caused visions of astonishing, luminous, grandeur to pour out the other.

I can still feel that tingling as if I was balanced on a precipice, reaching out to shape a whole universe; causing tectonic shifts in the intrinsic structure of reality … okay, maybe not that last bit … but you get the point.

Such power … and I had absolutely no idea how it worked.

My “device of power and beauty” was a semi-rigid cardboard tube with loose coloured translucent beads or pebbles in the end and two mirrors running lengthways up the inside, duplicating images of the transparent junk that tumbled as the tube was rotated.

My first kaleidoscope wilted in my sweaty, meglomeniacal hands a few hours after I had torn it from its pretty wrapping – and I cut myself on a broken piece of mirror as I desperately pounded it to make it continue producing those wondrous images.

Which brings me to my worries about ANC policy making.

I am slightly more worried today than I was when I wrote the piece below (July 2) just after the conference.

That is partly because I have thought further about some of the issues and partly because the consensus points within the ANC seems to be slippery – and therefore uncertainty is rising.

In short my worry is that the ANC is approaching more vigorous economic intervention with the enthusiasm and growing expectations of my six-year-old self after he first looked through his pretty new cardboard tube.

I think the likelihood of this all ending in tears in increasing exponentially – and the reasons are not very different from those that caused the ruin of my first kaleidoscope and my cut finger.

I will pursue this theme (the threats involved with increasingly desperate state interventions – especially those that worsen the problems they promise to fix) in future posts, but first my initial take on the conference; written just after having read the particularly awful English language Sunday newspapers of July 1:

Much ado – and confusion – about the ANC policy conference

The teams of journalists from the political desks at the Mail & Guardian, the City Press, the Sunday Times and the Sunday Independent could have been covering different conferences given the divergence of their understanding of what went down at Gallagher Estates in the Midrand from Tuesday to Friday last week.

This is my first attempt at a distillation of the main points – partly of the coverage, partly of what was supposedly being covered:

  • Debates about policy and the struggle over who will be elected to the top positions in the ANC at the National Conference in December became blurred, to the detriment of both.
  • The “Second Transition” concept became associated with Jacob Zuma (even though it was penned by his factional enemy, Tony Yengeni) and its rejection by most commissions at the conference was interpreted as a set-back to Zuma’s re-election campaign.
  • The power struggle obscured the fact that there was general consensus that transformation is “stuck” and radical and urgent action to hurry the process along needs to be taken if the ANC is to keep the trust and support of its majority poor and black constituency.
  • The report-back to plenary of the key breakaway commission on mining became the most blurred moment, when Enoch Godongwana presented a summary of the views on the state’s proposed involvement in the mining sector – with pro-Zuma provinces KwaZulu-Natal, Mpumalanga and Free State tending to go with the SIMS compromise and the other six provinces tending to support the ANC Youth League in a strengthened nationalisation position.
  • When consensus is finally reached, it is likely to include an even stronger role for the state-owned mining company – perhaps giving it the right to take significant stakes in all future mining licenses issued. Absolute taxation levels might be an area of compromise between the state and the mining sector in negotiations about this matter in the final lead-up to Mangaung where policy will be formally decided.
  • There was broad consensus that the state could and should force the sale of farmland for redistribution purposes and that an ombudsman be appointed to determine ‘a fair price’ – to prevent the process being frozen by white farmers holding out for better terms. It is not clear whether this would require a constitutional amendment.
  • There was general consensus that the Media Appeals Tribunal is no longer necessary, that the number of provinces needs to be reduced, that the proposed Traditional Courts Bill is reactionary and against the constitutionally guaranteed rights of women and children in rural areas, and that the youth wage subsidy (as a tax break to employers) had to be sweetened, or replaced, with a grant directly to young job seekers.
  • The push for “organisational renewal” will require a number of changes: a probation period of 6 months for new members, a 10 year membership requirement before such members can be elected to the NEC, a reduction of the size of the NEC from 80 to 60 members and a downgrading of the status of the Leagues (women, veterans and youth) so they more directly serve the interests of the mother body.

So if this was a soccer tournament, what is the score?

The City Press led with “Tide Turns Against Zuma”, but frankly I think this is more about that newspaper’s preferences than anything else. The ideological disputes in the ANC are complicated but broadly follow an Africanist/nationalist group versus a SACP/Cosatu/anti-nationalist group. Neither Jacob Zuma nor Kgalema Motlanthe are clearly in either camp (but Zuma tends towards the former and Motlanthe towards the latter). Only one potential challenger, Tokyo Sexwale, is firmly in one group (the nationalists, which is the ideological home of the ANC Youth League) and he has more chance of passing through the eye of a needle than winning this competition.

Only Motlanthe could seriously challenge Zuma in a succession race and despite all the rumours and leaks it is by no means clear whether he has any intention of running – or, if he did, whether he would have a significantly different policy agenda than that being pursued by Zuma and his backers.

Well it is certainly not Julius.

Last night his expulsion from the ANC and the ANC Youth League was confirmed by the ruling party’s national disciplinary committee.

His ‘fixer’, secretary-general Sindiso Magaqa, was suspended for a year – making any attempt to ‘rule-by-wire’ difficult. The appeals committee chaired by Cyril Ramaphosa also confirmed the three-year suspension of the other key Malema ally,  Floyd Shivambu.

Malema is out of the game and I don’t expect to hear much from his traditional defenders, Tokyo Sexwale, Thandi Modise, Mathews Phosa, Fikile Mbalula, Winnie Madikizela-Mandela and Tony Yengeni. They are going to be exploring other strategies … more about that below.

Malema has been sunk by a combination of his own hubris and of bad luck. He might still be greeted like a rock star by striking Numsa workers, but he just doesn’t have the gravitas to coalesce a radical alternative to the ANC around himself.

I expect he is going to be busy trying to keep himself out of prison on tax evasion and corruption charges for the next several years. It’s a stitch-up, but he has made so many mistakes that it has been a relatively easy one.

The strategy of his core group is going to have to be to make as much noise in the lead-up to Mangaung as possible. They are good at this, earning their colours in the trashing of Mbeki in the lead-up to Polokwane. But that time around they were coached and backed by Zuma and his cronies and by the SACP and Cosatu … which makes the Nkandla Crew’s huffy outrage at his conduct a little difficult to swallow … this time Malema and friends are on their own and their backs are to the wall. I cannot see them achieving a momentum that could realistically effect the outcome of the Mangaung contest.

So what could threaten Zuma?

The word on the street is that with KZN and the Eastern Cape wrapped up Zuma is unassailable going into Mangaung.

But Mangaung is a long way away and the street is not always right. Our TV screens have been resplendent with the big-boned ladies cutting Zuma cakes and singing Zuma songs – but in our parochial soap opera version of Götterdämmerung the chubbier maiden hasn’t even started singing.  (Here is a discussion of  “it aint over till the fat lady sings”.)

I have assumed that the main threat to Zuma’s relection at Mangaung is the unlikely possibility of the National Prosecuting Authority reinstituting fraud and corruption charges against him.

This remains a threat, but a more serious and immediate one seems to be emerging around what appears to have been a widespread sacking by Zuma’s security chiefs of at least one secret fund allocated for clandestine anti-crime operations.

The tip of this iceberg is the accusation that crime intelligence boss and apparent Zuma ally Richard Mdluli had his children, wife and girl-friends listed as agents to be paid out of the fund.

The next layer of the iceberg sloshing at sea level is the accusation that police minister Nathi Mthethwa used the fund to pay for aspects of the renovation of his country home.

Below the surface is a looming mass of allegations that many, perhaps most, of the ANC security commissars – the closest of Zuma’s allies –  have been using this and similar funds as automatic teller machines.

It is the fact that Richard Mdluli has been reinstated – despite these serious corruption allegations and even more serious allegations that he murdered a love rival – that rings the really big red alarm bells. I think Jeremy Gordin hinted the loudest and the most eloquently that it is definitely worth considering that the protection is coming from the very top and must be motivated by the possibility that Mdluli has the goods on Zuma  … catch that story here.

There is no successful drawing of a link from this scandal directly to Zuma, but if I look at the renovation of his house and the character of the empire he is building in Nkandla I must wonder whether the proceeds of the looting of this intelligence fund – and of a host of other stores of cash dotted about the security establishment –  have flowed upwards and if they have, how high?

If Zuma is derailed – and I have this as a “Black Swan” possibility only* –  Kgalema Motlanthe is waiting in the wings. I am under the impression that the Motlanthe alternative is being deliberately kept alive and viable because of the real risks of the main candidate drowning in his own sleaze.

Of course there have been consistent attempts to flick dirt in the general direction of Motlanthe – and some of it has stuck … and some of that for good reason. He was central to efforts to secure oil allocations from Saddam Hussein for ANC donor Sandi Majali and ‘has never fully answered questions about his role in the Iraq/UN oil-for-food scandal as well as the Pamodzi loans,  hoax emails and Bell Helicopter parts for Iran scandals/disputes’. There is a useful ‘dusting off the alternative’ article on Motlanthe in last week’s Mail and Guardian … catch that here.

(Note: I realise from the comments section below that it is possible to think that I am suggesting that the transmission mechanism by which such a corruption crisis could bring down Zuma is via a court case. That is not what I meant .. anyway that would take too long to play out to impact upon the process. Such a crisis could bring Zuma down by motivating a broad coalition of groups and individuals within the ANC – specifically those who have been backing Motlanthe, but with new anti-corruption allies … and ANC patriots desperate to save their organisation  – to choose the alternative. I think there is much militating against this outcome, but I discuss that below.)

Julius ahead?

A Motlanthe alternative would be unlikely to risk its own credibility by treating Malema any differently from how he has been treated by the ANC disciplinary process.

The final line of appeal is to the National Executive Committee of the ANC – but there Malema’s potential allies need to concentrate on battles they can win … not on hopeless causes.

Looking towards a further horizon, perhaps 10 or 20 years on, no-one should be surprised to see Julius Malema – older, wiser and more dangerous – back in the game. His instinctive feel for the tactics of political mobilisation are unparalleled – it is his grasp of strategy and principle that have let him down this time around.

But for now the game moves on and our attention needs to shift away from the activities of those who wish the President harm and onto the harm he might do/have done to himself.

* A “Black Swan Event” is a metaphor developed by Nassim Nicholas Taleb in his 2007 book The Black Swan and refers to events with a disproportionately high-impact which are both hard-to-predict and rare.

This is a screenshot from the front page of the ANC’s website accessed early this morning:

It’s those latest press statements I am interested in.

That’s the last five major releases from the Ruling Party, every one of which is exclusively concerned with the vicious battle taking place within the organisation.

Working backwards:

April 4 – Comrade Julius Malema’s immediate suspension pending Disciplinary Proceedings

This statement records the National Disciplinary Committee’s decision to suspend Malema immediately after he said “….It is under President Zuma that we have seen the youth of the ANC being traumatised, being expelled from their own home. It is under President Zuma we have seen a critical voice being suppressed We have seen under President Zuma, democracy being replaced with dictatorship.”

The statement further spells out in detail Malema’s exclusion from any and all structure related to the ANC and forbids him to make statements pertaining to the organisation.

April 5 – ANC statement on The Star newspaper article

This is a slightly confusing (partly because I don’t have access to the report it is criticising) attack on The Star for publishing an article alleging tension among members of the ANC top six over appropriate action to take against Malema and the Youth League. It concerns who met who, when and with what intention – and the statement is a disavowal of the allegation that Thandi Modise and Mathews Phosa were at odds with Gwede Mantashe over severity of action to take against the ANC Youth League.

April 12 – NDCA statement on appeal hearing

This one is purely an announcement by Cyril Ramaphosa in his capacity as head of the National Disciplinary Committee of Appeal that the application to postpone the appeal hearing of Julius Malema, Sindiso Magaqa and Floyd Shivambu had been turned down.

April 15 – ANC statement on the decision of the ANCYL NEC

This one is a strongly worded attack on the NEC of the ANCYL which that morning had decided to ignore the suspension of Julius Malema. “We would like to advise the ANCYL NEC that regrettably their decision to undermine and defy the decision of the NDC effectively defines the organisation outside of the ANC Constitutional parameters.”

April 16 – The ANC statement on Floyd Shivambu Article

Which brings us to yesterday: “The African National Congress is appalled at the crude, uncouth, disrespectful and insulting attack on Comrade Cyril Ramaphosa by Floyd Shivambu in the weekend newspapers” said Jackson Mthembu.

***

This is the moment that a parent attempting to make sense of a group of angry children crying well he started it!well he threw my dolly over the wall! … screams: ENOUGH – GO TO YOUR ROOM – ALL OF YOU – RIGHT NOW!

I suppose many citizens have been begging the ANC to clean its shop .. and in particular to close down the threatening thuggery in the ANCYL.

But I can’t help worrying that the only reason the leadership has acted is factional, and concerned with the power struggle leading up to Mangaung … and if its motivations are suspect, how it actually deals with the problem might leave things worse off than they were previously.

I, for one, will be watching with interest whether the ANC Youth League will attempt some form of mass mobilisation to put pressure on the processes of regional conferences mandating delegates towards Mangaung … and perhaps earlier at the June policy conference.

I am unsure of the League’s capacity. I suspect they are all wind and bluster … and that the central leadership of the mother body will keep them divided by offering inducements to elements less strongly tied to Malema and his cronies.

But they (the leaders of ANCYL) are clearly going to give it a whirl – which will make the next few months more interesting than they were going to be already.

There is a part of me that is delighted this ANC leadership is getting its comeuppance – through harvesting what it sowed in the lead-up to Polokwane.

But there is another part that is sickened by the spectacle of the crazed old dog madly chasing its tail and occasionally yelping in pain as it manages to get in a nip and tear out tufts of fur and bits of skin from its bleeding body.

Doesn’t the Julius Malema saga feel so familiar?

Remember how the Jacob Zuma campaign seemed to transform each new obstacle placed in his path into fuel for his political train that eventually steamed triumphant into Polokwane in December 2007?

The fact that he was known far and wide as hopelessly incapable of moderating his sexual behaviour and as being on the take from, at least, Shabir Shaik, seemed to make almost no difference to the eventual outcome … unless the legal and other processes to charge him actually strengthened his claim to the presidency.

He was the victim of Mbeki’s shenanigans and he was heading a column of pro-poor ANC alliance cadres that were coming to take the ANC back from the pro-monopoly capital “1996 class project” – and every deed or word against that was coming from the privileged few defending their privilege. The marching column was irresistible and Polokwane was its destiny. Or at least that was the narrative that seemed to win out.

With the benefit of hindsight it is clear that Zuma’s success was all about momentum – and its inevitability is a post hoc construction.

I remember a movie from my childhood where the hero escapes almost certain death (it was either Indiana Jones or one of the Bonds ) by running across about fifty metres of crocodile infested waters by … yes, you guessed it: stepping on the back of each starving crocodile but with such speed that he was on his way to the next one before they snapped at him or sunk.*

That is probably a better metaphor for Zuma’s perilous progress towards Polokwane than the one that has him steaming towards that conference as if it was his manifest destiny. The second post of this blog was called The Accidental President and in it I argued that Zuma’s presidency was a result of an unlikely set of circumstances and he was not a character that many could have previously imagined in the role.

On closer examination it becomes clear that Zuma, on several occasions, almost crashed and burned – and came close to going to prison. Ultimately it was only the forward momentum of his campaign that allowed him to escape the snapping crocodiles at his heals.

In fact, I would put it even more strongly: for Jacob Zuma the only way to avoid ignominy and prison was to win the presidency.

And that is where the comparison with Julius Malema becomes so compelling – especially in his weekend attempt to boost the Economic Freedom in Our Lifetime campaign into the mouths and minds of the genuinely marginalised and poverty-stricken in places like Diepsloot and Bantu Bonke.

Just as his disciplinary hearing comes to a head.

Just as his questionable personal finances start to be ‘put to the question’ by various authorities.

Just as he prepares to lead the marches on the Chamber of Mines and the Johannesburg Stock Exchange.

He told those audiences: “They [the whites] found us here. They did not bring any land nor did they bring any minerals.”

And: “”We are here for every one of you. We will not rest until you stop worrying about where your next meal will come from.”

Woven into every word and phrase is the argument that the incumbent leadership of the ANC has failed the poor. That Julius Malema’s fight against Jacob Zuma is actually a fight to have the needs of the poor and dispossessed met.

Can Julius Malema, engorged as he and his comrades apparently are from sucking the marrow from the bones of Limpopo’s  (amongst others) public purse skeletal public finances (some bad metaphors are impossible to fix – ed)  hope to pull off this audacious argument?

Clearly he can.

Clearly he is betting on himself to be sitting up in the cab of a triumphant train steaming into Mangaung; to have turned all obstacles aside and spun the narrative of the little guy standing up against the incumbents, standing up for the poor and dispossessed.

The parallels are not perfect. Julius Malema is not the apex of a push for the presidency of the ANC – he is too young, untested and controversial to aspire to those lofty heights this time around. He is rather part of the campaign of other powerful contenders – although he hopes to be nested near the centre of a new ruling configuration of the ANC.

Finally, Zuma had the backing of the SACP, Cosatu and a host of ANC democrats exhausted by Mbeki’s stale centralism – as well as a swathe of aspirant BEE wannabes who felt excluded from the previous gravy train.

Julius Malema (and those who hope to benefit from his campaigning) have nothing like the mighty alliance of those disaffected by Mbeki’s presidency.

After yesterday’s radical cabinet reshuffle and Zuma’s apparent ability to reinvent himself as an anti-corruption and responsive president I would have to bet on the incumbents and against the invaders at the castle gate.

This is the week, however, when Malema’s gamble will either pay off or fail.  On Wednesday his disciplinary hearing resumes. On Thursday and Friday the marches on the JSE and the Chamber of Mines will take place.

This is not an accident of timing.

This is about planning, planning by individuals and groups with large appetites for risk – especially when the prize is so rich and the price of failure so high.

*I have a terrible feeling that someone has used that metaphor for Zuma’s march to Polokwane before … so let me apologise in advance if I stole it … and while on the textual commentary – I found this in Wikipedia while trying to check if the image had, in fact, been used for Polokwane before:

“Ross Kanaga as James Bond used four crocodiles as stepping stones to reach safety on the other side. Kananga, who owned the crocodile farm seen in the film, and after whom the main villain is named, did the stunt five times wearing the same crocodile skin shoes as his character had chosen to wear. During the fourth attempt, the last crocodile bit through the shoe and into his foot.The fifth attempt is one seen on film, with the tied-down crocodiles snapping at his feet as he passed over them.”

A good friend of mine in New York* recently put me on to “A Song of Ice and Fire” – a seemingly endless series of swords and sorcery novels by George R R Martin.

This is the crack cocaine of fantasy fiction but it is also a surprisingly brilliant study of politics and power vacuums.

The fictional edifice of the “Song of Ice and Fire” is built around the consequences of the death of a powerful king. In the aftermath the kingdom collapses into factional chaos, pretenders to the throne contest for power and war rages across the land.

Scheming power-brokers manipulate and assassinate their way through the dysfunctional court as provincial lords and petty “hedge nights” ransack, pillage and rape “the small folk” all across the Seven Kingdoms.

What an excellent metaphor.

The demise of Thabo Mbeki at Polokwane in December 2007 and the political cycle towards Mangaung in December 2012 is our own Song of Ice and Fire and the intrigue and viciousness in the ANC’s internal struggle feels like it is being run by the Lady of Casterly Rock, Cersei Lannister – but you will have to read the books to fully understand how apt and awful that comparison is.

Two weeks ago the increasingly excellent City Press published the following schematic of what it sees as the individuals in the main factions contesting for power at Mangaung (using Malema as the proxy for the broader conflict):

(see at the end of the story for my optional key to that graphic)

One of the problems with factional battles like this one is that it is not always possible for the participants to choose which side they are on – or, in fact, whether to be on any side at all.

As the powerful interests clash in the Ruling Alliance there can be no ‘innocent bystanders’ or anyone above the fray. A factional dispute like this one is a bit like the Cold War used to be. It imposes itself upon the whole structure; every forum, every election and every policy debate gets forced into the dominant paradigm  of the overall contest for power.

One of the dangers – with this analysis and with the more general struggle – is that it is increasingly difficult to work out what each side stands for and how they might differ from each other.

When we use Julius Malema’s friends and foes as the proxy for the broader struggle it is easy to portray the challengers as the most voracious faction, fighting for the right to loot the state and dominate patronage networks. The problem is that the incumbents, certainly Jacob Zuma himself, can hardly be portrayed as the good and brave king to Malema’s dastardly evil knight.

There are shades of grey here that we are going to need to have a more subtle sense of as we get closer to whatever compromises might emerge at Mangaung.

It’s best not to act as a cheerleader for any one faction or part of a faction in a struggle as complex as the one unfolding within the Ruling Alliance. And while today’s heroes can be tomorrows villains and vice versa I would still use Julius Malema’s friends and foes as a rough guide to who the most dangerous enemies of our democracy are. Malema himself is a bit player, just the most visible aspect of a fight that is much deeper and more involved than his personal future. But he’s a useful proxy, nonetheless.

One of the pay-off line from A Song of Ice and Fire is a phrase that is the perfect warning to give the players in the ANC’s internal conflict:

‘In this Game of Thrones you win or you die.”

But George RR Martin has another device that he keeps repeating, threateningly, as the lords and knights struggle and murder each other for the throne.

“Winter is coming”, he keeps warning, constantly reminding the reader and his characters that there are much greater threats than the outcome of their brutal squabbles.

Winter is coming.

* That’s Tony Karon, editor at Time Online and expert on all things Middle East. He tells me he has also, several times, used metaphors from A Song of Ice and Fire, including: “Goldman-Sachs are like the Lannisters — no matter who’s on the throne, they’re always on the Small Council.”)

(My schematic key to the graphic – not required reading, and a little bit cobbled together: the friends are Mathews Phosa,  ANC treasurer general and  previous premier of Mpumalanga, one of the ANC’s top six, National Working Committee (NWC) member and a member of the 81 person National Executive Committee (NEC); Fikile Mbalula, previous ANC Youth League president, currently a head of campaigns in the ANC as well as minister of sport in government – highly effective in both positions he is being pushed by this faction to replace Gwede Mantashe as ANC secretary general – on the NWC and NEC;  Tony Yengeni, fraud convict and ex-ANC speaker of parliament (during which time he was caught defrauding parliament by accepting a discount on a luxury car during the tendering process for the arms deal while he was the member of a parliamentary committee reporting on the same deal), ex-member of the ANC underground, tortured by Apartheid police agents in the late 80’s. He is on the ANC National Executive Committee and on the National Working Committee; Winnie Madikizela-Mandela convicted fraudster, wicked step-mother of the nation, she who famously said “with our boxes of matches and necklaces we will free our country”, prime ANC populist who was married to Nelson Mandela and struggled bravely while he was imprisoned, but later accused of several human rights abuses …. and has taken every opportunity to identify herself with Julius Malema and his various calls for nationalisation and expropriation of “white owned” property. On the NEC and generally still influential and symbolically powerful as any member of the ruling party; Siphiwe Nyanda chief of staff of ANC’s armed wing Umkhonto we Sizwe and later head of South African National Defence Force (in which capacity he was regularly accused of being a significant recipient of some of the billions paid in arms deal bribes) and lately minister of telecommunications from which he was fired by Jacob Zuma during an avalanche of accusations that he had illegally enriched himself by getting R55m tenders from Transnet for his security company (GNS or General Nyanda Security) – also eviscerated by the media for his extremely expensive habits and choice of vehicles as a minister – on ANC NEC and NWC; Tokyo Sexwale, has long been thought to be the power behind the Malema challenge, although little evidence had been presented to prove this – and he was recently reported as referring to Malema as “that loud mouthed young man” – he was a popular premier of Gauteng when the fell foul of Thabo Mbeki machinations in the late 90’s, he withdrew from politics and became a successful business man – now reported to be extremely wealthy (through the company he founded, Mvelaphanda Holdings) – he has returned to politics and threw his hat into the ring in the lead-up to Polokwane in 2007 indicating that he would be prepared to take the ANC presidency if he was so nominated and elected. Instead Jacob Zuma became president and ended up appointing Tokyo as Minister of Human Settlements – a difficult position in which he has appeared to perform adequately – his wealth makes his election to the ANC top spot a difficult road …. but his determination and deep pockets make him a serious challenger; Cassel Mathale, premier of Limpopo and the closest of close allies (business and politics) to Julius Malema – the Limpopo province is beset by very high levels of cronyism and tender abuse by senior ANC politicians …..; Nomvula Mokonyane – surprised to see her on the list, premier of Gauteng and former housing minister – she has conflicted with another very powerful player Paul Mashetile (ANC Chair in Gauteng) who I would have thought was closer to Malema that she – she is on the NEC (ex-officio, which means she wasn’t elected there);  Baleka Mbete, ANC Chairperson, NEC and NWC – powerful … conflicted with Zuma and Motlanthe over whether she could keep the Deputy President post she help under Kgalema Mothlathe’s caretaker presidency – which put her in conflict with the Zuma camp at the start of his government in 2008; Sindiso Magaqa Secretary General of ANC YL and powerful Malema henchman.

And foes: Jeremy Cronin; key ANC intellectual and deputy secretary general of South African Communist Party (SACP) – as well as effective deputy minister of Transport – he has been the main intellectual opposition to Malema taking him on around mine nationalisation (accusing him of dishonestly fronting BEE interests and being interested in plunder) and on his general populist politics which Cronin and the SACP characterise as racially chauvinistic and even “proto-Fascist” comparing Malema arc explicitly to Germany in the 1930’s on the ANC NEC; Gwede Mantashe powerful ANC secretary general who also holds the position of SACP Chairman – he is one of the main targets of the Malema fronted faction as a leading voice against cronyism in the ANC – the push from the right is to replace him with Fikile Mbalula who is probably the best organiser of the opposition – Mantashe is gruff and famously speaks his mind, a characteristic that has put him in conflict with the most voracious cronies – in the ANC and the trade union movement – NEC and NWC …; Malusi Gigaba – ex-President of the ANC Youth League, but now adequate minister of Public Enterprises (but not about to shoot the lights out) in Zuma’s cabinet – gradually assumed to role of being a key defender of Zuma and the incumbents against the Malema battering-ram on the NEC; Blade Nzimande – top Secretary General of SACP and (adequate minister of higher education) – came in for a lot of flack from Cosatu for not focussing on building the SACP as well as for his expensive choice of cars as  Minister,  NEC and NWC; Collins Chabane – key intellectual and minister in the presidency (monitoring and evaluation) – respected ally of Zuma, opposed mine nationalisation – ANC NEC and NWC; Angie Motshekga - minister of basic education (shaping up well) and ANC Women’s League president … denies she recently suggested that one of the solutions to current crisis was dissolution of the ANC Youth League – NEC and NWC; Mathole Motshekga – ANC Chief Whip in parliament (always a powerful position) and law lecturer at Unisa in his spare time. ANC NEC … maybe opposition to Malema thrust is a family affair?; David Mabuza; Mpumalanga premier and ANC chairperson recently accused by ANC Youth League of “interfering” in the Youth League politics i.e. backing Lebogang Maile to replace Malema and the recent ANCYL national conference … a challenge that fizzled – he is on the ANC NEC;  Lindiwe Zulu, senior foreign affairs official previous Ambassador to Brazil, close Zuma confidant and powerful behind the scenes player building his image abroad …. she ran into flak from the ANC YL for appearing to back the MDC in Zimbabwe against ZanuPF. She is also close link with Angola for Zuma. ANC NEC.)

In case anyone was wondering if I had disappeared into the ether: I have been seriously busy and have had no time to post on the blog.

If you were paying extra attention, you may have noticed that a post reviewing the nationalisation of mines debate appeared and disappeared a few weeks ago.

My mistake – it was bespoke for a month, and I jumped the gun. I am now able to publish it and you will find it below.

Meanwhile I am into my second reading of An Inconvenient Youth – Julius Malema and the ‘New” ANC by Fiona Forde. It is exceptionally good and I strongly recommend you go out and buy yourself a copy. I have begun a review which I will publish here during the course of the week.

But meanwhile, here is the month-old nationalisation update/review. My views haven’t changed much since I wrote it … and it is good to get it on the record … even if it is a little turgid and written in an overly formal tone.

Nationalisation update/review

The nationalisation of mines debate in South Africa is, as predicted, reaching new heights of sound and fury. Yesterday it appeared that Cosatu was officially supporting the Youth League call. This is a situation fraught with danger although I do not change my assessment that the ANC is unlikely to decide on mine nationalisation along anything like the lines proposed by its youth wing.

Summary bullets

  • Yesterday Cosatu economist Christopher Malikane argued that the ANC has accepted as fact that the mines would be nationalised and that it was only a question of “how” not “if”.
  • This does not imply significant new risk although the markets are likely to interpret it as such.
  • In reality Cosatu is significantly divided on the call and current shifts in Cosatu policy have more to do with (important) internal conflicts.
  • Cosatu does not have the final or even main say over ANC economic policy and its current flirtation with the Youth League is actually about frustration with not achieving its policy aims with the ANC.
  • The ANC and its left wing allies have been consistent and steadfast in their criticism of the call and I outline the history both of the Youth League call and of the critique of the call in this report.
  • The nationalisation call has consistently been deployed in political battles for power within the ANC and in government which both gives the call unrealistic political energy and makes the threat difficult to interpret or assess.
  • The ANC has set its Economic Transformation Committee the task of assessing the call and making proposals. I expect clarity to emerge in November this year but a final decision will only be made at the centenary national conference in December next year.
  • Cost, international agreement, the Bill of Rights and the constitution make it inconceivable that the ANC attempt to nationalise the mines.
  • However I think the party and government will use the threat as a stick to get a better deal out of the mining houses.
  • Between now and the final decision the “sound and fury” will keep the issue alive and the threat present.

Cosatu shifts towards the ANC Youth League

Yesterday  Congress of South African trade Unions economist Professor Christopher Malikane was reported to have said at a South African Chamber of Commerce and Industry forum that the group charged with discussing the nationalisation of mines in the ANC had moved beyond the issue of whether the mines should be nationalised and is now purely considering modalities to achieve this aim. “Investors are looking for certainty around the issue of nationalisation, well this is the certainty they need,” he said.

The ANC Youth League managed to place formally on the agenda of the ruling African National Congress (at the party’s National General Council in September 2010) the proposal that government consider nationalising a majority share of the mining industry – for report back and a decision at the party’s Mangaung elective centenary conference in December 2012.

The general noise gets louder

With the ANC and government leadership mired in controversy relating to poor service delivery, poor government performance and accusation of corruption – and the Zuma presidency as weak as it has ever been – the ANC Youth League and its supporters in government appear to have seized the initiative and are making all the running at a public level. Investors and other observers would be forgiven for thinking that the slogan “Economic Freedom in our lifetime!” and the calls to nationalise the mines, banks and the land (that last explicitly without compensation) were not government policy. I am of the view that owners of mining equity and other property in South Africa are starting to feel the heat.

My view

My view has been that the ANC is highly unlikely to decide to nationalise the mines – although uncertainty in this regard will persist right up until December 2012 (although some clarity is expected to emerge after the ANC committee examining this issue reports back some time in November this year).

I think that the party and government will attempt to use the populist surge to discipline the mining companies to fulfil their social and Black Economic Empowerment obligations under the Mining Charter (which arises out of the 2002 Mineral and Petroleum Resources Development Act).

Additionally government and the party are likely to use the opportunity to change the tax and royalty regime to extract more revenue from the sector – particularly with the imposition of a tax on windfall profits.

Finally I think it likely that new obligations will be placed on the mining companies – especially with regard to some form of obligatory contribution to the building and maintenance of transport and power infrastructure near where the mining operations are located.

Brief History of the nationalisation call

The ANC Youth League on nationalisation of mines

Soon after the current leadership of the ANC came to power at the landmark Polokwane conference in December 2007 the ANC Youth League elected Julius Malema as its president (in April 2008).

By the end of that year Julius Malema and the Youth League began proposing that the mining industry be nationalised. This was the essential elements of that proposal:

* an immediate suspension of the issuing of mineral rights and permits;

* the establishment of a state owned mining company;

* the nationalisation – with or without compensation – of fifty percent of all mining operations;

* that licenses only be issued in future on the basis of a 60 percent equity stake being held by the state owned company.

The Youth League drew authority from the historic Freedom Charter document. The document, drawn up in a national consultative process led by the African National Congress in 1955 and adopted at the Congress of the People in Kliptown says of the economy:

“The national wealth of our country, the heritage of South Africans, shall be restored to the people; the mineral wealth beneath the soil, the Banks and monopoly industry shall be transferred to the ownership of the people as a whole”.

Criticism from the Left of the ANC Youth League call

The major critique of the ANC Youth League call was formulated by Jeremy Cronin, Deputy Minister of Transport and Deputy Secretary General of the South African Communist Party (and major ANC intellectual and ideologue).

It is my guess that Jeremy Cronin was deployed by the incumbent leadership of the ANC in the belief that a criticism of the nationalisation call articulated by leading communists would defuse the Youth Leagues claim of militancy and radicalism – and I therefore cover these arguments in detail here.

Cronin argued that the Freedom Charter passage supports the idea that “the people” get the full benefit of the economic resources “not that there be a narrow bureaucratic take-over by the state apparatus and the ruling party’s deployees” (all Cronin quotes in italics in this section from SACP’s Umsebenzi Online Volume 8, No. 20, 18 November 2009).

The state owning important aspects of the economy says nothing, for Cronin, about whose interests are being served:

“Hitler’s Nazi Germany, Mussolini’s fascist Italy, and Verwoerd’s apartheid South Africa all had extensive state ownership of key sectors of the economy.”

So for Cronin the 2002 Mineral and Petroleum Resources Development Act had already gone some way to fulfilling the Freedom Charter’s objectives by explicitly stating:

“… that South Africa’s mineral and petroleum resources belong to the nation and that the State is the custodian thereof ….  In other words, it is the “nation” (with the state as custodian) and not the mining companies that have legal ownership of the mineral resources beneath our soil”.

Cronin argues that the Youth Leagues proposal of nationalising

“mining houses in the current global and national recession might have the unintended consequence of simply bailing out indebted private capital, especially BEE mining interests”.

And further that:

“Many of our gold mines in particular are increasingly depleted and unviable. Some reach costly depths of four kilometres below the surface. Recently the global gold price has bounced back, but it is telling that, unlike in the past, our gold output actually dropped by some 9% in the same period. Our gold mines are simply no longer able to respond dynamically to gold price rises.”

Cronin (while making it clear he thinks “the people owe the mining houses absolutely nothing”) points out that South Africa’s Bill of Rights sanctions expropriation but requires compensation at a price agreed by both parties or determined by the courts.

The bottom-line for Cronin is that nationalisation would do nothing to further the “national democratic struggle”. Rather it;

“would land the state with the burden of managing down many mining sectors in decline … burden the state with the responsibility for dealing with the massive (and historically ignored) cost of “externalities” – the grievous destruction that a century of robber-baron mining has inflicted on our environment. In the current conjuncture, nationalising the mining sector at this point would also probably unintentionally bail-out private capital, in a sector that is facing many challenges of sustainability. The problems of liquidity and indebtedness for BEE mining share-holders are particularly acute.”

Opposition to and support of Youth League call

President Jacob Zuma, ANC Secretary General Gwede Mantashe (who is also SACP Chairman), and Minister of Mineral Resources Susan Shabangu have all explicitly rejected the ANC Youth League’s call – with Shabangu having famously said that the mines would only be nationalised “over my dead body”.

However despite this being the overwhelming position of the ANC and government, the Youth League scored a significant victory by having its proposal placed formally on the ANC’s policy agenda – achieved at the National General Council meeting in September last year.

At that conference Tokyo Sexwale (Mvelapanda Resources and Human Settlements minister) and Bridget Radebe (Mmakau Mining, wife of minister of Justice and Constitutional Development Jeff Radebe and sister of Patrice Motsepe) both came out in support of the ANC Youth League’s call – giving some weight to the now widespread allegation that the Youth League is operating with a hidden and funded agenda to have failing Black Economic Empowerment deals bailed out by government.

Arguing against the call were leading ANC intellectuals Joel Netshitenzhe, Jeremy Cronin and Trevor Manuel. However the ANC incumbent leadership failed to block the Youth League proposal and it is now formal policy of the ANC to investigate the matter and report back for a decision to be made at the centenary National Conference of the ANC which will be held at Mangaung (Bloem) in December 2012.

The ANC’s Economic Transformation Committee

The committee tasked with formulating the ANC’s position on the nationalisation of mines is the Economic Transformation Committee – which has the general brief of investigating the role of the state in economic development and is the natural forum in the ANC to develop a position on nationalisation.

There is not much in the public domain about the proceedings of the committee, but it is my information that Gwede Mantashe is overseeing the work of the committee which is formally headed by Enoch Godongwana (deputy minister of Economic Development and ANC NEC member).

The contributors thus far include those from the ANC Youth League, Joel Netshitenzhe, MZ Ngungunyane, Cosatu, Floyd Shivambu, Paul Jordaan and the National Union of Mineworkers. The full text of the initial contributions can be found in the last five issues of ANC’s internal discussion publication “Umrabulo” (find those on the ANC website at http://www.anc.org.za/list.php?t=Umrabulo).

It is my understanding that those opposed to the nationalisation call – for the reasons that have already been summarised in this report – are attempting to craft a compromise that will allow everyone to save face while allowing government to wrestle a better deal out of the mining companies – as stated in the “My view” section at the start of this report.

It is my understanding that the committee will report back in November this year and I expect the markets to get an indication of how the debate will pan out then. However, it should be borne in mind that the formal conclusion of this debate will only be reached at Mangaung in December 2012 and the noise is likely to continue right up until the last minute.

Cosatu’s shifting sands

The major change of external inputs into my assessment has been a struggle within the Congress of South African Trade Unions that has resulted in a shift away from the federation’s original position which was closely aligned with the view of the SACP and the incumbent leadership of the ANC – as articulated by Jeremy Cronin above.

The last unambiguous statement from Cosatu on this general issue came in the form of a joint communiqué with the SACP on the 24th of June 2011- I quote it here in full:

“… periods of capitalist crisis are also typically characterized by various forms of right-wing demagogic populist mobilization acting on behalf of various capitalist strata in crisis, but often masked behind a pseudo-left rhetoric. We believe that the same phenomenon is apparent in SA, finding a potential mass base amongst tens of thousands of unemployed and alienated youth in particular. However, behind this populism are often well-resourced business-people and politicians seeking to plunder public resources. We resolved as the SACP and COSATU to close ranks and to expose the true agenda of these tendencies and their connections to corruption and predatory behaviour in the state.”

However, at the Cosatu National Executive Committee meeting a week later a split appeared in Cosatu that has impacted on this debate.

The conflict is complicated but in a nutshell, it is between a faction led by powerful Cosatu Secretary General Zwelenzima Vavi and Irvin Jim of the National Union of Metal Workers (Numsa) of South Africa and a faction headed by leaders grouped around the National Union of Mineworkers (NUM) under Frans Baleni. Broadly the NUM/Baleni faction is supportive of the SACP and the Zuma leadership of the ANC while the Vavi/Jim/Numsa axis has become frustrated with broken promises (concerning both corruption and economic policy) of the Zuma/ANC leadership and would generally seek a more radical socialist or workerist political solution than is being offered by the ANC.

The Vavi/Jim/Numsa faction has over the last month begun courting the ANC Youth League, and attempting to harness the energy coming from this sector for its own ends. This is highly opportunistic as Vavi and Numsa have consistently characterized the Youth League leadership as “right-wing demagogic populist” and the League’s nationalisation call as fronting a corrupt BEE agenda looking to take a double bite out of resources available for transformation.

Rank opportunism or not, the crack in the Cosatu position is adding a new element to nationalisation debate. It is my understanding that the National Union of Mineworkers remains opposed to the ANC Youth League call, but the new element will undoubtedly add some confusion.

The point to remember about Cosatu – a point reiterated by the ANC and government leadership time and again – is that the federation represents a sectional interest. There are obvious reasons why some elements in Cosatu would want the mines nationalised – who wouldn’t want a guaranteed job for life as a Greek style (up until recently) government employee?

It is to NUM’s credit that its president Senzani Zokwana said in November last year that the Youth League was being reckless with the industry and that the League’s call was inspired by rich Black Economic Empowerment recipients looking to get failing deals bailed out by the state and Frans Baleni a month ago reiterated: “It is not only the private sector that has invested (in mines), but the workers with their pension and provident funds have also invested. We should have maturity and the debate should not have political undertones.”

It’s the law!

A key motivator of my view has been that South Africa is bound both formally and informally to agreements – including in the Constitution – that make it impossible to nationalise the mines without full compensation. Nationalising 50 percent of the mines would cost in the region of $130bn. There is no conceivable advantage – and an almost endless downside – for the government to nationalise the mines. Therefore it is not going to happen – although the end result might look like a compromise and might entail the establishment of a state owned mining company, although one with a much smaller asset base and agenda than conceived in the Youth League’s call.

Nothing material has changed that would allow me to change the view – although my confident smile has assumed a slightly brittle quality. Cosatu was never going to be the determining factor in this debate but the weakness of the ANC leadership – in particular the weakness of Jacob Zuma’s presidency – means that I am no longer certain that the centre of the Ruling Alliance can hold.

From the start the nationalisation of mines call has, in part, been a stalking horse for leadership challenges within the ANC and government. I have argued elsewhere that the call has been central to Tokyo Sexwale’s political ambitions and that he has covertly supported the Youth League in this regard for some time.

Now we have an element of Cosatu attempting to forge some form of alliance with the Youth League around the call clearly as part of a strategy to shift the leadership balance within the ANC.

The Youth League itself is using the call for its popular mobilization potential to help push its own candidates (particularly Fikile Mbalula – currently minister of sport) for higher office.

In this environment it would be foolhardy to be overconfident about the call. However it is my opinion that predicting the success of the Youth League call would be the same as predicting the imminent failure of the South African democratic project and state – a view I believe is too extreme and alarmist.

In many ways what is happening now is very much as predicted: the situation will be full of sound and fury right up until a decision is made at the end of 2012.

I came across a long research note that I wrote in early 2007 exploring the impending succession process in the ANC to culminate at the Polokwane conference 7 months later.

So I was writing before the June 2007  National General Council during which Jacob Zuma’s resignation/suspension as ANC deputy president was overturned from the floor and it became clear that change was inevitable.

I thought I should upload the document onto this web log so that one day when some student decides to examine the accuracy or otherwise of the predictions of political analysts they’ve got some publicly available data to work with.

Also, it’s an interesting read – both because of how wrong and how right it was, but also because how defensive I was about Mbeki and how suspicious I was of Zuma. I regret the former but not the latter.

Click here for the whole document, but below are some highlights and lowlights:

Why I thought markets were nervous about a change in ANC leadership

All change is unsettling, but a South Africa without these  illustrious, high-minded leaders of global eminence and distinction (Mandela and Mbeki) might feel less of a sure thing and the fears that waned from 1994 may wax again with their departure and replacement by people’s whose names cannot be pronounced in London and New York.

My learned views on why the global context made the transition even scarier for investors

New and untested leadership of the ruling party and the country will enter the stage of history in a context of unexpected and growing global uncertainty. The inherently unsettling nature of the domestic political succession is amplified as an apparently natural and stable global order has revealed itself to be increasingly tricky, unstable and unpredictable.

The ending of the Cold War did not end history and the US did not come to represent a unipolarity around which democracy and stability could spread. Instead, the Washington Consensus has crumbled and the rise of China, Russia and India is in the process of rewriting the rules of global trade, economic governance and the structure of capital markets. The world’s major economic and military power extends itself and commits ever more of its myriad apparatuses, fashioned to achieve its national goals, to perplexing military campaigns. And while the cat’s away: the emerging world is experimenting with different forms of governance, including economic governance, that would have been unthinkable only ten years ago.

Leadership exceptionalism

… this country has developed a habit, possibly a mythology, of what I term “leadership exceptionalism”. In short this refers to the belief, erroneous or otherwise, that South Africa has achieved an unlikely stability primarily through the exceptional quality of leaders throughout the society – including on both sides of the Apartheid fence and in the churches, trade unions and business.

(It helps that I already thought this idea was rubbish.)

Getting it wrong about Polokwane (and one might ask: who’s the “our” in “our first case scenario”?)

Throughout the early stages of the transition contest it appeared that Zuma was the main contender and the person most likely to get the job – an outcome we will dispute below … It’s foolish to predict such a close run race so long in advance, but our first case scenario is one in which Zuma fails to become president of the ANC in 2007. If this is the case, the 2009 successor to Mbeki will not be known until the ANC goes through a specific nomination and election process for this position – probably starting in 2008.”

Why corruption was making the process so much worse (and, goodness, look how uncomfortable I was about criticising Mbeki)

‘True or false and for better or for worse;

  • the allegations of corruption against Jacob Zuma
  • the multiple and uncontested economic transactions and favours that passed between the ANC Deputy President and Shabir Shaik – now convicted of two counts of corruption and one of fraud
  • the widespread, but entirely untested, charge that President Mbeki has allowed the courts and prosecution authority to be used less to stop Zuma’s alleged corruption and more to prevent him ascending to the presidency in 2009

has stamped the succession process with the twin burdens of being a proxy for the fight against corruption and being tainted by the alleged misuse of state resources by the highest power in the land.

and I could’t hide what I thought of the challenger

Aside from the actual corruption allegations mentioned in 4.2, to put the icing on the  anxiety cookie, Zuma’s various statements and legal tribulations have portrayed a man who is:

  • a polygamist;
  • poorly educated,
  • apparently ready to play into ethnic divisions for political advantage,
  • undisciplined in his sexual behaviour,
  • homophobic
  • under the guise of “ Zulu traditionalism” unsettlingly cavalier towards women.
There’s lots about the left backing Zuma, but his own position was clear

This is not to suggest that Zuma is a leftist, worker friendly or naturally close to the SACP and Cosatu – in fact the very opposite might be true. The left backing of Zuma, which has caused bitter internal debates in the trade union movement and amongst the communists, must be understood as primarily an attempt to wield any likely candidate against those who represents the rightward drift of policy, namely Thabo Mbeki and his anointed successor.

The left was already taking a clear stand against corruption

Organisations of the left, but particularly the South African Communist Party, have been the most consistent moral watchdog in the Ruling Alliance. They have held government to account for tendencies of “cronyism” and the “compradorist and parasitic” nature of much of the emerging “bourgeois” elite which they argue is characterised by “primitive consumption”; they have insisted government focus on HIV/AIDS and expunge any denialism in its ranks, they have fought for a principled approach to the Zimbabwe situation, and, most importantly, they have presented themselves as the bastion against corruption within the state, government and business.

which made their backing of Zuma so difficult for me to swallow …

The decision (implicit or explicit) to back Zuma’s candidacy has deeply divided the left and soundly removed them from the moral high ground they had come to occupy. Those who won the debate to back Zuma – with the uncontested facts of his unhealthy relationship with the corrupt and fraudulent Shabir Shaik and his distasteful statements about HIV/AIDS, women and Zulu traditionalism already out there in the world – have cast the individuals and organisations of the left as opportunistic and willing to back any candidate from whom they can expect improved political access and influence. Given the idealism of much of the membership of the SACP and like minded groups, the opportunism of some of the left’s current leadership’s will probably prove to be their undoing.

Hmm, the sweet idealism of my youth …

That’s enough … there is lots more revealing stuff in there, including comments on every possible candidate. I will just add the comments I made then about Tokyo (because I believe they are true today) and then leave it up to you to read or dip into when it suits you.

On Tokyo Sexwale

Popular, ex-Robben Islander and exile; flamboyant – soldier adventurer type, trained in USSR for the ANC before his capture. After 1994 turned to business with a lot of flair (Mvelaphanda Holdings) and undoubtedly made the system work for him in a very successful way. He is probably the most charismatic character with the broadest appeal amongst this lot. He also has the ability to build a strong and loyal group around himself – hints of “cult of the personality”.. He is rich and flash enough for this to count against him. He has constantly denied that he may run but there are constant rumours that he is assembling a team to make a run for the top job.

I have been sickly and trying to pay the bills.

All my ‘paid for’ commentary on the NGC is done and I can finally get back to home ground where I feel more comfortable to make some wild accusations – and I will, finally, be more explicit in this post about who I think the bad guys are and who I think the less bad guys are.

At the outset, forgive me; this is long and requires a degree of effort to plough through. I believe your efforts will be rewarded in the end – but I would think that, wouldn’t I?

The NGC, just like the world itself,  becomes a cacophony, impossible to follow and impossible to interpret, without a guiding theory or a framing shape to look through.

The “theory” I am going to use here is that the NGC was the terrain on which two broad factions in the ruling alliance clashed. How you slice-and-dice a thing, conceptually, is always important for what you conclude, so much of what appears below is an attempt to unpick what and who those ‘factions’ consist of.

To think that what was happening at the NGC was “about” the nationalisation of mines call will lead to ‘error’ (you can see Lenin in my heritage when I use terms like that). Instead the NGC was “about” a more fundamental and complex power struggle.

The picture is additionally complicated when we consider that there were over 2000 delegates at the NGC (1500 from branches, 500 from the leagues/Cosatu/SACP/SANCO/PECs and 800 deployees/non-NEC ministers/DGs/premiers/CEO’s of SOE’s) and the interplay was vast and varied.

So instead of trying to cover everything I am going to look through the prism of an alleged power struggle between two broad factions or groups of interest.  This will ultimately be another attempt to “follow the money”.

Here then is the prism through which I believe it is most useful to look:

  1. The ‘nationalisation of mines’ (NOM) call was always a “stalking horse”. The term “stalking horse”  refers originally to  “a horse behind which a hunter hides while stalking game” (WordNet) and is defined in Wikipedia as “a person who tests a concept with someone or mounts a challenge against them on behalf of an anonymous third-party … if the idea proves viable and/or popular, the anonymous figure can then declare their interest and advance the concept with little risk of failure … if the concept fails, the anonymous party will not be tainted by association and can either drop the idea completely or bide their time and wait until a better moment for launching an attack.”  Oh yes, I love the language.
  2. The ‘nationalisation of mines’ call (hereafter called NOM because in fact, it has less do with policy and more to do with power) is best understood as the political platform of a particular alliance of groups and individuals and interests that has as its objective the winning  to power in the commanding heights of the ANC and the South African State. The NOM is therefore something more (and less) than a policy proposal. It is a contingent strategy for winning power – and getting the ANC to nationalise the mines would be a desirable side-affect for some of the participants.
  3. The first part of the NOM is the Youth League’s own specific ambitions, which have most obviously been expressed as a campaign to elevate Fikile Mbalula to the position of Secretary General of the ANC – the position currently occupied by Gwede Mantashe. Mantashe is despised by the League for a number of reasons, but mainly because he is part of those who believe the ANC Youth League is part of an ambitious rent seeking agenda. The League considers itself to be a “king maker” in ANC electoral processes and the organisation has energy and mobility and time to move quickly around the country to influence decisions at a branch and provincial level – a feature it demonstrated successfully at and in the lead-up to Polokwane.
  4. The second part of the NOM are those mining tycoons who want their BEE deals bailed out by the taxpayer. Who could have failed to notice the unified voices of those gleaming billionaire siblings Patrice Motsepe and Bridget Radebe as well as Minister of Housing Tokyo Sexwale backing the NOM in the lead-up to the NGC or at the conference itself?
  5. The third part of the NOM is the election campaign of Tokyo Sexwale to succeed Jacob Zuma. Has he specifically funded and backed the ANC Youth League so that it can be deployed in its traditional role of “king-maker” on his behalf – or because he wants his BEE deals bailed out … or both? It is impossible to prove – either that he has passed money/business/tenders the way of the League or why he might have done so – but that he has done so – with the intention of becoming president – is clearly the view of most of “the left” in the tripartite alliance.
  6. The clearest unifying principle behind the NOM and the most distinct characteristics of its participants is that they are first in the queue to gouge a rent out of the ANC’s economic transformation agenda. The nationalisation of mines call is tailor-made for the broader agenda of the NOM:  there are real material benefits for the backers, it allows the policy bereft Youth League to appear radical and pro-poor – and anti-white capitalist – to its potential supporters; it forces the current top leadership under Zuma (for the sake of investment and economic stability) to deploy itself to defend against something that would naturally appeal to the rank-and- file’s populist instincts.
  7. So who is the NOM challenging? Essentially “the incumbents”, which at one level just means Jacob Zuma, but at another level means everyone who has assumed a leadership role in government, party and the Tripartite Alliance as a consequence of Jacob Zuma’s elevation as well as the ideas and policies that have come to be crafted by that incumbent group.
  8. The “incumbents” should also be conceived of as including all those tenderprenuers, Nkandla hangers-on and Zuma family members whose fortunes are linked to the fortunes of the incumbent leadership.
  9. Do the members of the NOM even know who they are or what they are part of? Mostly they do – because there is an increasingly bitter conflict, for example, between the ANC Youth League and the SACP. When powerful factions clash, they strengthen themselves, make themselves more defined; they force anyone and any issue into the framework of their clash. We saw this in the Cold War, but more recently and specific to the groups here, we saw this in the struggle to stop Mbeki and elevate Zuma. eventually everyone knew whether they were “for” or “against” the motion. Attempts to stay sane, principled and above the fray are inevitably MIA in this kind of overblown factional dispute.

Given that framework, what actually happened?

NOM preparation

Firstly, the NOM did extensive (but insufficient) spade work around the policy that fronts their agenda. Julius Malema and Floyd Shivambu have been on an extended road trip, selling the idea for over a year. They have written for newspapers and addressed conferences. Malema threatened to withdraw Youth League support from any leader who did not support the call. The Youth League attended all provincial preparation conferences for the NGC and was successful in getting its view represented in every delegation from every part of the country. There are extensive reports that members were instructed to infiltrate ANC branches and emerge later as NGC delegates. The style associated with “winning” this view at various conferences was a combination of exclusive focus on the issue and heckling, booing and threatening any opposition – in the now time-honoured traditions of the League and its members.

What the financial backers of the NOM and members of the broader NOM agenda were doing in the lead-up to the NGC should not be underestimated. Individual backers of the NOM have extremely extensive resources. Such wealth and power gives individuals the ability to reach people and process far from themselves – and snap them like a twig.

Incumbent preparation

It is difficult to say how much work the incumbents did. I have made the assumption that securing the Tripartite Alliance was key to the incumbents preparing for the onslaught they knew was coming at the NGC. In this context the brokering of the ending of the public sector strike and the carefully worded apology from Cosatu to the Zuma/government for the language workers and their leaders had used during the strike was, in part, an attempt to establish the ground for a united front against the NOM agenda at the NGC. Comprises and certain concession were probably made to “the left” – but I will discuss this in the conclusion.

The NGC opening – political and organisational reports

Jacob Zuma’s Political Report and Gwede Mantashe’s organisational report were interesting for a number of important reasons but what is relevant for this post is both reports were correctly interpreted as a significant shot across the bows of the NOM. We can all delight in the fact that Winnie Mandela had to physically comfort the distraught Julius Malema after the dressing down he received during Jacob Zuma’s opening Political Report and take to heart her now immortal words ” … every parent is allowed to talk to their children … Every organisation is like a parent.”

Commission 5 victory and then plenary defeat

The sighs of relief ‘the incumbents’ might have breathed after the NOM’s early humiliation were soon replaced by anxiety when the NOM decided to put all of its eggs in one basket (this is one time that cliché is justified) by sending 45 of the Youth League’s 66 delegates to the Wednesday economic transformation commission. It appears that all supporters of the NOM including Tokyo Sexwale and several other BEE mining tycoons flooded the commission to ensure a particular outcome. The best article in the public domain I have seen about the commission is by Moipone Malefane and Caiphus Kgosana in The Sunday Times of September 26 – catch it here.

Joel Netshitezhe , Lesetja Kganyago  (DG in the Treasury),Trevor Manuel, Enoch Godongwana (Deputy Minister Public Enterprises) and old stalwart on this issue, Jeremy Cronin, were amongst the key ANC intellectual and economic thinkers who tried to hold the line at the meeting. Their appeal for thoughtfulness and care around an issue likely to costs government hundreds of billions of Rand were reportedly overwhelmed with bullying, heckling and unthinking repetition of the demand: adopt the call, as we have defined it, as policy!

Without having seen the exact statement that emerged from this commission it is clear that the Youth League (and everyone else present) was under the impression that they had scored a clear victory and the inner cabal reportedly headed off to the Hilton Hotel to celebrate victory in the style to which they had become accustomed.

The ANC Youth League’s (and the NOM’s) celebration was premature. The next day at the plenary session of the NGC Minister Geoff Radebe (husband of Patrice Motsepe’s sister, Bridget, and someone who had expressed support for the basic premise of NOM earlier) delivered a watered down version of the results of Commission 5 – and the ANC Youth League leaders exploded, ultimately sealing their fate by appearing to storm the stage in an aggressive manner.

Conclusion

Ultimately, through the support of delegates from across the alliance at the plenary, a watered down version of Commission 5 carried – essentially calling for thorough cross-country comparison and analysis of nationalisation as part of government’s ability to influence economic growth patterns in favour of the poor and unemployed. This study was mandated to report back to the 2012 Bloemfontein/Mangaung 100th centenary elective National Conference.

In the end it was not ‘the incumbents’ that were overwhelmed by the “shock and awe” campaign of the NOM. In the end it was the NOM that lost the skirmish – they overestimated the efficacy of their own preparation and they underestimated the coherency of the opposition – as well as degree of anger that is now widespread towards the ANC YL and its leaders.

The paucity of facts in the public domain does not relieve us of the obligation to think about what may be going on and develop a view as to the potential risks involved in any situation. Wile E Coyote might have said ‘what we don’t know can’t hurt us’, as he wandered over another cliff, but in the real world what we don’t know can sometimes be deeply threatening. So the explanations I have given here are my best attempts to muster an explanation for as much of the story as possible. I am sure that at some point in the future some of the guesswork and necessary assumptions might prove misguided – but that is life in the threat analysis business.

Three final points;

Firstly, it is okay to delight in the set-back of a particularly voracious self-enrichment agenda at the ANC NGC. But it is important not forget that the conference left unscathed similar agendas in many other places in ANC and affiliated ranks, including in the Zuma family itself.

Secondly, the defeat of the NOM is a tactical, tangential issue. Like the Governator, they’ll be back.

Finally, the victory was bought at the expense of some kind of compromise with “the left”. I expect the upcoming Cabinet review of a New Growth Path to be more sympathetic to a host of issues traditionally seen as part of an SACP or Cosatu platform (including Rand policy, inflation targeting, downward pressure on interest rates, nationalisation of the SARB, tax on short-term capital flows, industrial policy, National Health Insurance and the establishment of a state-owned bank.) The consensus within “the incumbents” is inexorably moving towards a rejection of some of the basic tenants of the Growth, Employment and Redistribution Macro-Economic Policy as defined by Mbeki and Manuel.

Our future is full of as yet undefined state intervention. I wouldn’t feel so bad about this if I didn’t agree with Cosatu that this state, in this place and time, is rapidly becoming a predator.

I want to discuss this business of commentators predicting that Zuma will be recalled before he has finished his initial term – but first a brief advertisement.

This blog was set up, in part, to generate paid work for myself. One of the things that I do for a living is talk to (or write for) employees, customers, agents, managers, governments and/or boards of directors about various aspects of politics and political risk. If you want me to address your conference, talk to your book-club or write in your newsletter, please feel free to contact me at nic.borain@gmail.com.

There … that wasn’t too difficult.

So back to the recalling of Jacob Zuma.

(I write the following with a degree of trepidation; I have just heard that there is a big emergency get-together at Luthuli house – ANC headquarters – and there are swirling rumours about newer and worse sexual indiscretions – all of which might make what I say below look silly and wrong.)

But anyway, onwards:

I am sometimes astonished at the levels of confidence with which “some among us” pronounce on the details of the future. It’s as if they are already living there, but have popped back to share a few choice bits of certainty with us.

I am referring specifically to the swath of commentary that seems to be predicting the recall of Jacob Zuma ahead of the 2012 elective conference and 100th anniversary.

I fully accept there may be major plays on the go of which I am blissfully unaware; but I just cannot see any of the disaffected alliance factions dare to put the ANC through what it went through with the recall of Thabo Mbeki.

That little episode broke the hearts of  many of the staunchest ANC cadres who had stood firm through storms so fierce and bitter they are impossible to describe.

The manner of the recall of Mbeki created Cope, for goodness sake, and has laid seeds of conflict and factionalism that will still be plaguing the ANC in 50 years time.

Recalling Mbeki ripped the ANC’s intellectual capacity to shreds and it has lost the coherent involvement of the standard bearers of its intellectual traditions – you only need to look at the quality of the NGC discussion document to know this is true.

The best of those involved in the Polokwane Putsch – and the later recall of Mbeki –  understood the seriousness of what they were doing. But these individuals (who were always the minority within the Alliance of the Disaffected – thank you Stephen Friedman) believed that radical invasive surgery was required to save the ANC and the country from the various predations of Thabo Mbeki.

Anyone who reads this blog will know that I tend to think that those few ‘good people’ profoundly miscalculated and that they have unleashed something decisively more disastrous than (the moderately awful) Mbeki presidency.

But this is not the time to have that argument out in full.  What I wanted to do here is remind readers that the upcoming ANC NGC is unlikely to be about recalling Zuma. The NGC is a policy and review conference. It’s important because it is likely to reveal the hands of many of those who are contending behind the scenes for leadership in 2012 (in the party) and 2014 (in the country).

Further, all of the jostling for 2012 is actually about the position of Deputy President of the ANC. The precedent for appointing the Deputy as the president is powerfully entrenched post-Polokwane. So if they don’t go for Zuma for a second term – which is an increasingly strong likelihood – it is almost certain that Kgalema Motlanthe would be the candidate.

Much can go wrong with that view – and I hate sticking my neck out this early and leaving myself open to having to eat my hat or humble pie as the case may be. But this must be the first case scenario. Unless I am missing a trick or two.

If we hear tonight that Zuma is stepping down because of another sex scandal – well, I’ll just have to face that humiliation when it comes.

On Zuma’s own future, I have discussed it before (here) and I hereby reproduce a slimmed down version below:

Who can say what the future holds for Zuma?

Will Zuma serve a second term?

Will he serve out his first term?

Who dares give an answer to these questions? Oh, alight I will.

I have burned myself before by being a little too sure and a lot too wrong about what the future holds.

Analysts like myself are constantly encouraged to take a firm view of what is going to be going down down the road. The client – usually a fund manager – is the person who has to take a bet on a number of future trends and it usually helps him or her to hear strongly stated predictions with the various arguments that support these from various analysts. If these analysts disagree, all the better. Hence outlier positions are often useful.

With those qualifiers, my ‘professional expectation’ is that Zuma will survive the first term of his presidency.

Both the ANC itself and the interplay of the Alliance partners are a real mess, but it took a Polokwane to throw out Mbeki and anyone involved in that process is probably still counting the costs of that exercise. In other words, doing it again, and this time without the kind of unanimity that surrounded the Mbeki ousting, would have to be overwhelmingly urgent as the costs in division and discontinuity would be overwhelming. And I don’t think there is any consensus in the alliance of forces (clearly no longer an alliance) that backed Zuma against Mbeki that there is the requisite urgency around the person and performance of the President.

I am less confident (although strictly speaking I am not confident – in the sense of being certain – about any ordering or outcome of events in the future) about the second term. Up until a few weeks ago I would have said: it is always easier to allow the sitting president to stay in his job when the big contending forces are still involved in the war of position; that no side’s victory is yet in sight. But even if the big power plays are not yet completed by the ANC centenary conference in 2012 there might be a consensus that a safer pair of hands (Motlanthe?) may be in order.

Zuma’s term as president is, unfortunately, proving itself to be that bad.

Ruling alliance in happier times

Commentators and politicians are outdoing themselves announcing either the end or the permanence of the ANC/SACP/Cosatu alliance.

This is Jacob Zuma on the subject – at the Kwazulu-Natal ANC General Council on Friday:

I have read so many alliance obituaries. If leaders express their views, people think that we are fighting … The alliance will be with us for a very long time. (Catch that here)

And this is my (humble) opinion on the subject:

This strike –  as a culmination of other things but also in and of itself – is the death knell for the ruling alliance. (Catch that here)

This business about claiming that the alliance is about to break or will last until the Second Coming is something of a secret code for insiders in the political analysis business. “Insiders” are smugly convinced that the tripartite alliance benefits its constituent elements and these constituents will therefore never leave – and we love to use the analogy of a marriage where the couple fights endlessly but is bound by children, finances and habit so tightly that the partners will be together until death parts them.* I discuss some of the ties that bind here.

“Outsiders” – including those who have never belonged to any of the organisations concerned, as well as foreigners and supporters of parliamentary opposition parties – listen to the noise coming out of  ‘the alliance’ and they take the noise-makers at their word: the alliance is heading for the rocks; it is obvious to anyone with eyes and ears.

The “outsiders” have it.

Philosophically, I am one of those who believes we are what we do. Thus, it is not what Zuma, or Malema or Nzimande or Vavi claim, it is what they, and their organisations, do that counts.

The ruling alliance is not, primarily, a name. It is a description of a shared history, set of values and, most importantly, an accepted set of policies and an agreed upon process for deciding about such policies; and is also the formal forums and organisational structures through which such decisions are taken and implemented.

The only thing of significance that “the ruling alliance” did was throw Mbeki out of office and replace him with Jacob Zuma. Everything that has happened since needs to be seen through the “you are what you do” prism. The constituent organisations have done nothing together except violently disagree, actively try to undermine each other (and each other’s leadership ) – and they have agreed upon nothing and done nothing in concert.

Except for the media appeals tribunal (catch my criticism of Jeremy Cronin’s defence of that here) which, bizarrely, is the single thing that the ANC, the SACP and Cosatu have agreed upon – although Cosatu is wavering even on this as the damage done by the public sector wage strike to their relationship with the ANC deepens and intensifies.

It is as if they are saying: “We (as ‘the alliance’) have nothing to offer – but we have a plan to slap anyone down who point that out.” Frankly, I am not surprised.

* (note) What the “Insiders” are actually referring to is a sense of identity invested in the struggle against Apartheid under the broad leadership of the ANC and, crucially,  that traces its ideological lineage through to the “Congress Movement” – from the United Democratic Front, the Natal Indian Congress, South African Congress of Trade Unions, the South African Communist Party, the Congress of Democrats, the Transvaal Indian Congress and the African National Congress.

(Hmm, I am adding this half an hour after posting the above, just to make myself as clear as I am able, and in case anyone missed the point: If the structures don’t exist, if the decisions are not taken or implemented, if there is real and intense conflict over policy then ‘the alliance’ has already ended – and it makes no difference what the various leaders and commentators say. This is the de facto situation, even if it is still possible to argue that, de jure, the alliance continues on and on.)

I am an independent political analyst focusing on Southern Africa and I specialise in examining political and policy risks for financial markets.

A significant portion of my income is currently derived from BNP Paribas Cadiz Securities (Pty) Ltd.

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