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Various commentators, politicians and analysts have attempted to characterise Mangaung, to define the moment’s essential nature. Below are two takes I found interesting with some words from me on why I found them thus. After that I include a more general summary of what happened with the voting results for the Top Six and the National Executive Committee.
M&G: will the scandal prone authoritarian traditionalist and the constitutionalist businessman lick the platter clean together?
Nic Dawes – editor of the doughty Mail & Guardian suggested (on December 21 2012) that Zuma has moved the ANC “dangerously away” from the urban and middle classes and is starting to overtly exhibit rural, patriarchal and authoritarian values inimical to the middle classes. He suggests that Cyril Ramaphosa’s election at Mangaung is (ultimately) an attempt to woo urban and middle class voters back to the ANC – with Zuma having secured traditional and rural support. But, asks Dawes, “can the constitutionalist businessperson avoid contamination by association with a scandal prone, authoritarian traditionalist?”
Good question … except that I am starting to realise that Zuma would never have appointed Ramaphosa if he posed a potential threat in any way at any stage no matter how far they (the Zuma camp) are looking into the future. Ramaphosa is in the house … the Nkandla house … it’s too late for decontamination.
Dawes also makes the useful formulation that Motlanthe’s challenge was a principled attempt to “confront the ANC with the enormity of its Jacob Zuma problem”. I think Dawes is right – or at least that the Motlanthe strategists he spoke to had this conception of what they were up to. However the whole Motlanthe endeavour feels much more like the foolish (but strangely attractive) arrogance of Don Quixote tilting at windmills, or, more tragically, this stupid and noble rush onto heavily defended enemy positions:
Half a league, half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred.
Read the brilliant, awful, manipulative (in my admittedly limited estimation) Tennyson poem and its glorification of cruel and stupid military and administrative incompetence here – ok, glorification of those acting as a result of such incompetence . (You will see from voting patterns at the end of this post that it was closer to 1000 than 600, but aside from that I thought the Tennyson metaphor held up rather well?)
The nationalists, anti-nonracial, populist versus the … who?
If I was on one of those TV or radio programmes that specialise in asking stupid questions right at the end, and I was asked: which South African political analyst do you rate highest? Then “Steven Friedman” is the answer that would most likely trip off my tongue.
With that disclaimer, I am forced to take issue with an aspect of his characterisation of what happened at Mangaung (published in the Business Day – 27/12/12 – here for that link).
Friedman characterises the Anyone But Zuma or Forces For Change (that is the defeated faction at Mangaung) as “the nationalist group, which wants a bigger black share of business … and whose members use radical-sounding language to pursue that goal.” No quibble from me there.
But then Friedman goes on to characterise the group that opposed ‘the nationalists’, that is the group that was victorious at Mangaung, as “a loose alliance stretching from the left to centrist business people who believe the nationalists threaten the ANC’s commitment to nonracialism and are corrupting the movement because they are too close to the wealthy.”
The implicit injunction, one I believe we should resist, is: choose a better devil.
Break it down (and I paraphrase what I imagine the argument would have to entail – and I am taking this much further than is implicit in Friedman’s article, but his argument leads inevitably to this point):
We support both Jacob Zuma (the patriarchal and authoritarian traditionalist with rigid and ruthless control of the security establishment and the ANC – and we support him despite his family and friends having become fabulously wealthy since his winning to high office) and Cyril Ramaphosa (the billionaire ex-unionist who has effectively used the black economic empowerment imperative to accumulate his wealth and will occupy his office with zero power and purely at the beck and call of the Nkandla Crew).
… because …
… they are a whole lot better than the nationalist, anti-nonracial Julius Malema, Tokyo Sexwale, Mathews Phosa, Fikile Mbalula and ANC Youth League?
I think not.
Extract from my summary as of last week
- The leadership and policy results of the African National Congress National Conference was a strongly status quo outcome and a victory for the incumbents (the Zuma camp) and their political and economic policies
- The leadership challenge to Zuma (with Kgalema Motlanthe the unwilling champion of that challenge) was routed, as was the policy platform most closely associated with the challengers (the nationalisation of mines). The extent of the victory is clearly and accurately revealed in the leadership election results detailed in Addendum 1.
- Cyril Ramaphosa’s election as deputy president has been heralded in much of the financial and popular press as a market-friendly outcome and, in some versions, a salvation of the ANC. It should be pointed out, however, that whatever qualities Ramaphosa possesses (and in my experience he possesses many excellent qualities) these will be exercised as the deputy to an extremely confident and powerful (in party and state terms) president, a president at whose behest Ramaphosa will serve and as a result of whose political influence Ramaphosa was elected. To further dampen any untoward enthusiasm it should be pointed out that Ramaphosa has no base in any constituency within the ANC or within the ruling alliance.
- Because the National Conference of the ANC is not the kind of forum in which decisive interventions or radical new directions can be formulated (it takes place over 5 days, has a long and complex agenda, entails many rounds of voting by 4000-plus branch delegates who are often unskilled in policy matters and who are generally organised into large voting blocks by contending factions for leadership) there were no such interventions and (no unexpectedly) new policy directions.
- However, the full policy platform of the incumbents, which does entail significant new state intervention in the economy (described and assessed by me in interminable detail elsewhere) was accepted in full (but in a very broad, vague, poorly attended and poorly discussed commission process at the conference.) The ANC is yet to publish the full policy resolution of the conference and I expect it to be a carefully phrased call for more state intervention, but in a language unlikely to alarm financial markets. The details here are important but I will have to postpone further analysis until the ANC decides it has crafted the resolution carefully enough.
The less expected
- Mangaung did only confirm policy and political trends that were already extant – and widely known. However the extent of the dominance of the Zuma camp and the weakness of the challengers took some commentators by surprise – see Addendum 1 for the details of the election results.
- The total failure of the political factions aligned to the ANC Youth League to make any impact on the conference policy-making process did come as a surprise to me – I would have thought there would be a rear-guard action around the ‘nationalisation of mines’ call, but none appeared (to me, anyway).
- It would have been politic for the Zuma camp to allow some of those who challenged for the top six positions (and their allies) to be represented on the 80 person National Executive Committee. It seems that either the desire to demonstrate total dominance won the day, or the Zuma strategists lost control of the popular mobilisation against the challengers. Either way it leaves a huge internal constituency of the ANC (roughly 25%) without representation at any leadership level within the party – an obviously destabilising outcome. However the Zuma camp is likely to invite some of the excluded individuals back into leadership positions, on terms satisfactory to the victors.
(Post Scrip reminder: outstanding is the ANC National Conference resolution on policy. The resolution that emerged out of the June Policy Conference took several months to formulate and be published. I do not expect the Mangaung Resolution to take things much further than the resolution from the policy conference. Much of the detail will be dealt with in the New Year and largely in Cabinet and government departments, rather than in party structures.)
… the results below are culled from various news sources and people who attended the conference (I found the full NEC results at Politicsweb).
A – Voting and results for the top six
(Interesting things to note: Zuma got the least votes of all contested positions and Gwede Mantashe the most – an observation I borrowed from Steven Friedman’s previously discussed Business Day article.)
- President – Jacob re-elected with 2983 votes to Kgalema Motlanthe’s 991 votes.
- Deputy President – Cyril Ramaphosa elected with 3018 votes to Mathews Phosa’s 470 and Tokyo Sexwale’s 463.
- Secretary General – Gwede Mantashe re-elected with 3058 votes to Fikile Mbalula’s 901.
- Deputy Secretary General – Jessie Duarte elected unopposed.
- Chairperson – Baleka Mbete re-elected with 3010 votes to Thandi Modise’s 939.
- Treasurer General – Zweli Mkhize elected with 2988 votes to Paul M Mashatile’s 961.
B – Voting and results for the National Executive Committee
(Note that no challenger to the Zuma camp in the top six election was elected to the National Executive Committee. Note, as well, that the only prominent member of the anti-Zuma camp, Winnie Mandela, just scraped onto the list, having topped the poll for the NEC election at Polokwane in 2007.)
|1||Dlamini-Zuma, Nkosazana Clarice||F||2921|
|11||Sisulu, Max Vuyisile||M||2442|
|12||Dlamini, Bathabile Olive||F||2423|
|13||Jordan, Zweledinga Pallo||M||2407|
|16||Ndebele, Joel Sibusiso||M||2379|
|24||Cwele, Siyabonga C||M||2245|
|25||Mokonyane, Nomvula Paula||F||2240|
|27||Dlamini, Sidumo Mbongeni||M||2213|
|29||Bhengu, Nozabelo Ruth||F||2195|
|32||Masetlha, Billy Lesedi||M||2161|
|33||Ramatlhodi, Ngoako Abel||M||2156|
|42||Oliphant, Mildred N||F||2019|
|43||van der Merwe, Sue||F||1992|
|44||Capa-Langa, Zoleka Rosemary||F||1984|
|45||Mthembi-Mahanyele, Sankie Dolly||F||1930|
|48||Xasa, Fikile D||M||1881|
|49||Majola, Fikile (Slovo)||M||1872|
|54||Cele, Bhekokwakhe Hamilton (Bheki)||M||1736|
|58||Mmemezi, Humphrey M Z||M||1679|
|59||Dlulane, Beauty N||F||1674|
|65||Yengeni. Tony Sithembiso||M||1570|
|70||Ntwanambi Nosipho, Dorothy||F||1450|
|71||Semenya, Machwene Rosinah||F||1449|
|73||Moloi- Moropa, Joyce C||F||1396|
|75||Ntombela, Sefora Hixsonia (Sisi)||F||1348|
|79||Mandela, Nomzamo Winfred (Winnie)||F||841|
By the way “deep blue” in the headline was not meant to be a riff on IBM’s chess playing supercomputer.
Rereading Part 1 I can see how someone might accuse me of being a little too certain about the shape of the future. I am not running “deep blue” regressions and algorithms, modelling South Africa and the world, generating predictions x of y % accuracy with z % error margins … South … Africa … will … be … peachy … in …2021 … bidledeebidledee beep.
I have no real idea of what is going to happen in the future – and only the bare bones of an idea of the internal processes I go through to develop the views I advance here.
From time to time I investigate how we predict outcomes, and how we asses risks. I am interested in how our evolved systems (honed against sabre-toothed tigers and uncertain rainfall patterns, for example) apply in the kind of technology driven mega-societies we now inhabit – or, specifically, don’t apply i.e. that our ‘instinctive systems’ need to be suppressed or countermanded if we hope to get it right in certain situations. But that is not what I am doing in these quick pre-Mangaung notes.
The “deep blue” of the headline was actually a reference to being bleak, sad, cold and lonely.
Which leads me to:
Who are the demagogic populist, proto-fascists* now?
The ANC will (initially) combat the threat of losing support by becoming more ‘demagogic populist’, rural conservative and based in the lumpen classes – basically, by drifting to the right
In December 2010 I wrote an article in GQ Magazine under the headline: “Can you hear the drums?” with a concluding paragraph that read:
In the year 2010, anger and resentment … bubbled over … The winners still have their stuff, but they are clutching it more tightly to their chests, and for the first time in 16 years they are straining for the hint, a sound or a smell, of what might be coming for them out of the night.
Read the whole story here.
Two ‘crises’ (or warnings) that occured this year are the equivalent of the scary sound of drums in the night for the incumbent ANC elite. The first warning is Marikana and the second, linked, warning is the traction Julius Malema’s manipulative populism was able to achieve amongst some sections of the disenfranchised youth.
I made some of these links in my coverage of Marikana here.
I think the ANC will ride out the gradually escalating social and industrial unrest by becoming the “proto-fascist” and “demogogic populist” movement that Zuma’s SACP ally accuses Malema of representing (here for the context of that). This ANC, under this president is being drawn inexorably, by the logic of its own politics, into the territory of rural patriarchy with its natural links to the fear and hatred of education and any form of gender equality. (I am not going to argue this out here … just take a glance at the saga around The Spear, the Traditional
Leaders Courts Bill and various comments about women and about “clever blacks” and appeals to African ways of doing things over foreign ways of the same – see TrustLaw’s Katy Migiro’s excellent takes here and here.)
Thus (forgive the leap) the ANC begins to lose the urban industrial working class (on the road to becoming much more like a classic middle class and deeply opposed to the looting of the state), the professional classes (already at that destination), the productive and rule based businesses, local and global, and it eventually begins to lose the pirates looking to launder their money and ‘go straight’ (as I argued in Part 1).
This leaves the ANC with the rural poor, the marginalised unemployed, a bureaucratic elite within the state (those last three dependent on state spending through the public sector wage bill and social grants) and global resource privateers who powerfully thrive in countries like this with leaders like these.
Initially the ANC might get even higher turnout at its rallies (especially with free food and t-shirts and sexy young people dancing between the rabble-rousing and the singing of Umshini wami). But eventually the class and demographic changes of the society impact upon the party – reformat it, split it, renew it … change the political ecology in which it moves and feeds.
You will see from my next post that I do not only think the ANC is a useless bubble of foul smelling gas buffeted on the sea of history. The ANC, in my analysis, has become a most significant and material influence for and against my upbeat scenario … a sort of deranged midwife at the happy birth.
* The term “demagogic populists, proto-fascist” is from various SACP documents and was code for Julius Malema (and, I suspect, in slightly early versions, a code for Tokyo Sexwale). This is what the SACP had to say about it:
The “new tendency”
It was the SACP at the 2009 Special National Congress that first identified clearly the ideological and underlying class character of what we called the “new tendency”. We described it as a populist, bourgeois nationalist ideological tendency, with deeply worrying demagogic, proto-fascist features. It was the SACP that pointed out the connections between the public face and pseudo-militant rhetoric of this tendency and its behind-the-scenes class backing. It was a tendency funded and resourced by narrow BEE elements still involved in a rabid primitive accumulation process, based on a parasitic access to state power. It was a bourgeois nationalist tendency that sought to mobilize a populist mass base, particularly amongst a disaffected youth, to act as the shock troops to advance personal accumulation agendas.
The SACP must feel free to pat itself on the back, but the reality is that party took on the straw man of Kebble/Malema/Sexwale and backed – to the hilt – the real demagogic, proto-fascist tendency – the one with real power … and the one with real patronage to dispense. (That last bit explaining why this SACP has backed the Nkandla Crew)
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 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.
I have got to find a way of continuing to populate this website. The reasons posts are becoming infrequent and irregular is that almost every day I produce bespoke and paid for research. I have less time every week to write specifically for nicborain.wordpress.com … except the occasional philosophical musings, which probably have a … very specific? … readership.
I am going to continue the philosophical and theoretical musings. I am finishing the last few chapters of Jared Diamond’s extraordinary “Collapse – How Societies Choose to Fail or Survive” – Penguin 2005. As background reading to my professional work trying to make sense of politics and economics in the sub-continent (or anywhere in the world for that matter) it is seminal … I cannot recommend it highly enough.
So I will review it here. And I will keep raising issues associated with the epistemology of what I do – and other obscure matters of concern to me.
However, I will also start posting summaries of my recent views, interviews and perspectives … the first set of these below:
Iran, MTN and US secret power
The big issue of the week – in a lot of universes, but particularly the financial market’s – was the $4.2-billion lawsuit launched against MTN last week by Turkcell in the United States District Court of Columbia in Washington DC. The Mail & Guardian had way the best coverage – see here for a good backgrounder.
MTN investors took a serious bath on the news. The basic allegation of Turkcell is that MTN’s ‘Project Snooker’, driven by then CEO Phuthuma Nhleko (with some help) was a successful attempt to ‘buy’ (with cash, arms and South African diplomatic support) a preferential operating licence in Iran.
For me the link between this issue, the fact that the South African government had appeared to fold to US sanctions demands on oil imports from Iran (or at least to flip-flop confusingly) and the leaked documentation from close to Kgalema Motlanthe seeming to prove attempts to get government support for Bell Helicopter deliveries to Iran – potentially hurting his (Motlanthe’s) presidential ambitions – was a series of stories that raised the spectre of US secret power working it’s powerful and implacable will.
It looks like the Bell Helicopter with SA government support stuff was established:
Through access to recordings and confidential documents – understood to have also been obtained and analysed by US intelligence agencies
according to the Sunday Times, but the documents that informed the Turkcell case appear to have been leaked by a disgruntled former MTN manager and South Africa’s flip-flop on oil could be based purely on the extreme nature of proposed US punishment for those who break sanctions against Iran.
So the sexy story of US spies fiddling in our politics doesn’t have a good evidential basis (although I have no doubt that US secret power is exercised every day throughout the world … perhaps not always with German-like efficiency and certainly with lots of unintended consequences.)
The MTN story … and South African oil imports … still has a way to run, so watch this space.
Malema summarily suspeded, Top Six unity press conference, Cyril for president and the interminable Mangaung contest.
I don’t know about you, but I am royally gatvol of press reports about ANC internecine struggles … during the course of the week this is what I had to say about various strands of this interminable story:
First I looked at City Press going out on a limb with contending ANC factional lists for Mangaung… most interestingly putting Cyril Ramaphosa on both the pro-Zuma and the pro-Motlanthe lists … to become president of South Africa in 2014!
“You read right. Not ANC president, and not in 2012 … the Mangaung conference looks sewn up in favour of President Zuma, but even his supporters are starting to point to Ramaphosa as president, saying the billionaire businessman will do a better job of running the country” (from City Press).
I can’t assess the probability of a Ramaphosa presidency … but we can only hope.
I also had to comment to journalists over last weekend about a potential run by Mathews Phosa, essentially as a stalking horse and test marketing campaign for Kgalema Motlanthe. He (Phosa) has no prospects of slipping in himself, but both he and Motlanthe have been seen to be standing firm with their ANC Youth League allies over the last week and it is not inconceivable that they will have worked out a tag-team strategy between them.
Later in the week came the summary suspension of Julius Malema about which I said:
Julius Malema was yesterday suspended with immediate effect from the ANC and from participating in any way in the organisation’s activities or the activities of the Youth League. While this particular suspension is temporary, several different strands of disciplinary action against Malema make the implementation of a full suspension (lasting at least 3 years) inevitable.In preparation for the Malema suspension the ‘Top Six’ of the ANC held a joint press conference to present a united front to condemn “bickering and negative lobbying” in the ruling party. Of particular concern was the recent incident in which Deputy President Kgalema Motlanthe was invited to address and ANCYL rally where he found himself “in compromising situations of being implicated in statements where ANC leadership is denigrated and insulted” (that all comes from official ANC press statements.)Behind the show of unity are two broad camps, with President Jacob Zuma, Secretary General Gwede Mantashe and National Chairperson Baleka Mbete broadly backing Zuma’s re-election at Mangaumg in December; and Treasurer General Mathews Phosa, Deputy Secretary General Thandi Modise and Deputy President Kgalema Motlanthe having consistently been much closer to Julius Malema and long assumed to back a leadership slate that would be headed by Kgalema Motlanthe and might include Tokyo Sexwale.I do not expect the noise generated by the internecine struggle to die down until Mangaung itself. At this stage the Zuma camp is in an extremely strong position and this is the light in which the suspension of Malema needs to be seen.
I did a whole lot more radio interviews and bits and pieces about all of this … but I am becoming unspeakably bored with the whole issue. I think the ANC Top Six press conference was an attempt to get the focus onto the policy discussion documents and away from the draining and fracturing internecine squabbles. Can’t help but feel that might be a good idea.
Zimbabwe and Eddie Cross
The most interesting story of my week came about as a result of the consulting work I do for Religare Noah Capital Markets (Pty) Ltd, which is a member of the JSE and an authorised Financial Services Provider. Religare Noah brings Eddie Cross (Zimbabwe member of parliament for Bulawayo South, economist and Movement for Democratic Change Policy Coordinator General) to speak to, especially, mining and metals investors about once a year and I had a chance to listen in on his input.
Basically Eddie Cross reckons that by October this year Zimbabwe will have undergone a fundamental transformation and that our northern neighbour will be well on the path to recovery – politically and economically – by then.
It is a huge story, but obviously the details are bespoke to Noah Religare and its clients. From my perspective I have known Eddie Cross to err on the side of being too positive and upbeat about Zimbabwe (as I have been … consistently calling the bottom for almost ten years … embarrassing, I know) but I was convinced that a combination of SADC unanimity and strong G8 backing … and the fact that Zanu-PF is out of options and fatally riven with factions, means that change is more likely than it has been in years. An endless stalemate is still a possiblity and more catastrophic scenarios, with the continued assasination of central players (like that of General Solomon Majuru) are options … but there are grounds for cautioius optimism.
I hope you have a restful long weekend … and a really good Friday …
Tokyo comes out to defend Julius Malema in the disciplinary hearing?
To be followed by Winnie Madikizela-Mandela and Tony Yengeni?
It is an almost too perfect reversal of Julius Malema’s own metaphor after his victory at the Eastern Cape provincial conference of the ANC Youth League in August 2010:
“We will never surrender to Blade. He has never been a member and has no understanding of … the youth league … Their people have been receiving serious lashings in the youth league conferences. As we said before, we will beat the dog (SACP) until the owner (Nzimande) comes out” … (a copy of The Herald editorial I took that from here.)
The boot, at the moment, seems to be on the other foot (or ” the stick is in the other hand” might have been better – ed.)
The “dog” that is now being beaten at the disciplinary hearing is Julius Malema himself and the owners that are revealing themselves are Tokyo Sexwale, Winnie Madikizela-Mandela, Tony Yengeni and friends.
And who is doing the beating? Why, the South African Communist Party and Blade Nzimande (as well as Jacob Zuma, Gwede Mantashe and many – but by no means all – in the incumbent leadership of the ANC).
Last weekend, almost while the disciplinary hearing was sitting, SACP Secretary General Blade Nzimande said to the SACP provincial congress in Esikhawini, near Richard’s Bay, in northern KwaZulu-Natal, that young people should be discouraged from participating in the ANC Youth League’s Economic Freedom in Our Lifetime marches and protests on the 27th and 28th of this month:
“Do not allow yourselves to be used by people with agendas that are not in your interest … We are not going to be supporting any march whose intention is malicious and to undermine the authority of the ANC and the government.”
Breaking ideological stereotypes and confusing the foreigners
Spare a thought for those of us whose job it is to explain to foreign investors why the communists are leading the fight against a youth movement calling for the nationalisation of mines, the expropriation of land without compensation and “Economic Freedom in Our Lifetime!”
I could, of course, have just sent them a few extracts from Fiona Forde’s An Inconvenient Youth – Julius Malema and the ‘New’ ANC (Picador Africa 2011).
Here she is, sitting outside a hotel in Caracas Venezuela chatting with a sulking Julius Malema on his way back to South Africa (from a conference of the World Federation of Democratic Youth taking place in downtown Caracas in April 2010) to face his previous disciplinary hearing. She has been getting a lesson from Julius on the importance of matching the leather of his watch strap with his belt and his shoes.
Venezuela has never seen so many designer labels as it has these past 48 hours since the arrival of the South African young ones. They descended on the city with their expensive suitcases and travel bags, top-of-the-range baseball caps, flashy T-shirts, snazzy shoes and sneakers, sleek manbags and a string of other expensive accessories hanging out of them – and a bodyguard in tow – all dressed up for a socialist youth conference.
I have been wondering how they must appear in the eyes of the other youth who have flown in from all over the world, and who are also staying at the Avila. The three-star hotel is swarming with casually-dressed, young delegates and among them, to my mind at least, the South Africans seem to stand out a mile.
When we understand that these delegates are the very same people who have formulated the “Economic Freedom In Our Lifetime” slogan, the implacable opposition of the South African Communist Party to the campaign becomes obvious.
The campaign is a classic attempt by a parasitic elite to manipulate those who are really poor and dispossessed so that these disenfranchised citizens become the battering ram and the lever through which that elite can capture even more resources and assets than it has already – through tender abuse and diversion of state resources into their own pockets.
So the dog is being beaten.
But we would be unwise not to think deeply and carefully about the nature and intentions of the owners that rush out to defend their animal.
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.
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.
- 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 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 am back from my travels where I spent much time discussing the ANC Youth League’s “nationalisation of mines” call with investors.
The long and the short of my views are that I don’t think the ANC will decide to nationalise the mines at its December 2012 elective conference in Mangaung. I do, however, think the ANC will attempt to use the populist surge to beat a better deal out of the miners (in terms of the companies’ social obligations, obligations to contribute to infrastructure development as well as the likely imposition as a special tax on windfall profits.)
However I also think that markets will remain anxious about nationalisation and will tend to counter-track the rise and fall of Malema’s personal fortunes.
With this in mind I think the Youth League and its President are in a degree of trouble.
Monday morning one time radio show host, sometime actor and columnist Eric Miyeni was published in the Sowetan saying of Ferial Haffejee, editor of City Press:
Who the devil is she anyway if not a black snake in the grass, deployed by white capital to sow discord among blacks? In the 80s she’d probably have had a burning tyre around her neck.
That evening ANC Youth League spokesman Floyd Shivambu sent out a statement that read:
The ANC Youth League agrees with Eric Miyeni’s column … He should continue to be an honest, fearless activist who speaks his mind and not fall into the trap of those who blindly support interests of apartheid beneficiaries.
On Sunday Julius Malema accused President Ian Khama of Botswana of being “a foot stool of imperialism, a security threat to Africa and always under constant puppetry of the United States” and further that the “ANC Youth League will also establish a Botswana command team, which will work towards uniting all oppositional forces in Botswana to oppose the puppet regime”.
On Tuesday Jackson Mthembu, ANC spokesman, said:
The ANC would like to totally reject and publicly rebuke the ANCYL on its extremely thoughtless and embarrassing pronouncements on ‘regime change’ in Botswana … This insult and disrespect to the President (Honourable Ian Khama), the government and the people of Botswana and a threat to destabilize and effect regime change in Botswana is a clear demonstration that the ANCYL’s ill discipline has clearly crossed the political line.
Surely we are into injury time by now – even the jellyfish Zuma leadership must have reached the end of its tolerance?
Two weeks ago previous key backer Tokyo Sexwale described Malema as a “loud-mouth young man”. Even Malema’s long term defender Mathews Phosa appeared to agree that the nationalisation debate had been handled badly and that the ANC had “dropped the ball” with regard to reconciliation and nation building.
Does this not leave Julius defended by only his organisation and a few wannabe intellectuals of the Miyeni stripe ?
Malema does not head an army of disenfranchised, unemployed and angry black youth. He has courted this crucial fraction of our society – usually as a deployed voice of the ANC itself – but in reality he lives a life of the überflash, so far removed from the unemployed and disenfranchised that his claims to the contrary smack of the worst and most dangerous forms of manipulative populism.
Markets should interpret what is happening as serious headwinds for the “Malema agenda” and that means much of the sound and fury will be removed from the nationalisation debate … a good thing for our politics and our economy.
For a brief time in the late 1980’s I had occasion to spend some time with Chris Hani, then Chief of Staff of the ANC’s uMkhonto we Sizwe and Secretary General of the South African Communist Party.
I was working for the Institute for a Democratic Alternative for South Africa (IDASA) and a meeting between the ANC’s military and the South African Defence Force seemed like a natural extension and deepening of the work IDASA had done in putting the white establishment in contact with the ANC.
I met Chris several times in Lusaka where we prepared the agenda – and then, obviously, at the conference and several times afterwards.
He was an interesting guy – serious, charming and slightly too ready to tell me the story of how he travelled, through the underground, into danger, with Pliny, Virgil and Shakespeare in his knapsack … I’m not perfectly sure of the actual authors and titles of the classics he carried, but the point was that he mentioned, more than once, that he did so.
I was already aware in those days of the depth of murderous gangsterism that had enveloped Joe Modise’s leadership of MK – a trend and tendency he took with him into Mandela’s first cabinet and helped set the ANC’s elite on the course for the destination it has reached.
Chris was the great hope for cleaning up Modise’s mess and he was also seen as an antidote to Thabo Mbeki’s technocratic shuttle-diplomacy.
I became aware while organising the conference that some ANC strategists were using the opportunity to show Chris Hani was just as charming and able to talk to whites as Mbeki.
I asked him, in my naivety, about the rumours that he and Mbeki were competitors. He convincingly, to my ears, pooh-poohed the idea saying that he and Thabo were like a tag team, each with his own strengths, but united in the identical goal – and further, he claimed, they were good friends as well.
I had no special intelligence to validate (or otherwise) this claim. Perhaps they were. Perhaps they would have been the A-Team of the post Mandela administration, balancing each other’s faults, playing to each other’s strengths. I know it’s unlikely, but it is difficult not to dream of how things might have been.
As it happened Chris was almost disturbingly charming and persuasive at the conference.
We only managed to get ex-SADF and Bantustan leaders as well as a whole lot of shady and not so shady military and arms dealer types on the domestic delegation.
I have reason to suspect that I might have brought the running dogs of the global arms trade along with that delegation and I often shudder at the thought that I might have played a role in helping the global arms corporations bury their deadly wasp eggs deep into the ANC, later to hatch and gorge themselves just carefully enough so that the host stays alive … but I comfort myself with the fact that Joe Modise had long since sold his and the ANC’s soul to the worst and most rapacious branch of global capitalism.
I remember watching Chris holding forth late one night; he stood behind two seated and coyly smiling white men with thick rugby players necks – there is a reason stereotypes are stereotypes! Chris had a hand on each of their shoulders and he was rubbing them as he spoke with languid and swelling rhythms, about the future of non-racialism and shared patriotism that awaited us.
The big white guys were in love; it gleamed out of their teary eyes and Chris had his head back and eyes closed like he was conducting an exorcism.
I don’t know if Chris Hani would have made a difference if he had lived.
Only a precious few have managed to resist the seemingly irresistible pull towards corruption and greed. You watch all of your friends and comrades become part of that system (the same system that laid its eggs in the ANC that would later hatch into the Arms Scandal and worse), the memory of the ideals that drove you become vague … everyone else is doing it, what is the point in me hanging on while they are all busy with the business of securing themselves for life?
It was Tokyo Sexwale who wept beside Chris Hani’s body on 10th April 1993 outside the house in Boksburg. There was something about Chris that reminds me of Tokyo Sexwale (who I do not know personally but seems to exude a similar charisma that makes one think of a suspiciously charming pirate).
Reading Mandy Wiener’s Killing Kebble over the weekend and getting the insight provided by Fikile Mbalula flattening a bottle of Johnny Walker Blue in Kebble’s home … Mbalula and his ANC Youth League comrades treating the servants with extreme arrogance, trashing the house like spoiled children … it is difficult not to be filled with a sense of loss and longing.
9 18 (oops) years old when I sat with Chris Hani in Lusaka planning how best to drive wedges into Apartheid’s army and win any potential enemies to our side.
I don’t know for sure what he would have thought of this thrust to catapult the “new generation” of leadership into power in 2012 – including, horrifyingly, Fikile Mbalula for Secretary General.
But I suspect he would have drawn the line here. The ANC is not yet in the hands of Mbalula and his cronies – who are so reminiscent of Joe Modise, only slightly more refined.
There have always been heroes in the liberation movement who fought the tendency towards cronyism and rent-seeking abuse. I thought Chris Hani was in the process of becoming one of those when I worked with him in the late 80’s.
Like James Dean and Jesus Christ, Chris Hani’s virtues are frozen as an historical artefact.
There is a part of me that is relieved he will never be tried and found wanting.
(Note: my friend the fabulous artist Isabel Thompson helped organise that conference and my fellow Bruce Springsteen fan and mentor to so many of us Gavin Evans took the pics and posted them on facebook which is where I found them.)
I occasionally publish slides that I have used for clients as part of my attempt to examine political and investment risks to them.
Below are 3 from a presentation I delivered soon after the ANC NGC.
See if you can identify all the people concerned – a sort of politics general knowledge test ( you know the ones: if you score 10 you are probably a CIA/MI5 agent; if you score 9, then get a life and stop obsessing about politics …. if you score 2 you are living in a special care facility etc.)
As an aid here is a link to Stalking horses at the NGC – the blog I posted at the time. To help refresh your memory ‘the NOM’ was meant to describe the group that had coalesced around the ANC Youth League’s call for the nationalisation of mines.
It’s been a difficult week, and I started the following post on Monday soon after hearing the general tone of the press and analysts response to the cabinet reshuffle.
I wanted to publish while the accolades for Jacob Zuma were still glowing and, unfortunately for both the President and me, the corrective doubts and scepticism are starting to be discernible in the analysis that up until now has been characterised by the “a change is as good as a holiday” school of political commentary.
Anyway, this is what I wanted to say:
- outwits some enemies at the ANC NGC,
- announces (again) a process towards a (not very) New Growth Path,
- (his Minister of Finance releases) the Medium Term Expenditure Framework which emphasises continuity, and
- he shuffles his cabinet
and suddenly he’s a visionary, man of action, seizing the nettle of corruption and there’s a new spirit of optimism skipping through the land.
It’s obviously exhausting to have to read the same old strands in our news media day in and day out: incompetence, lack of vision, cronyism and inability to overcome endemic conflict in the ruling alliance.
So I understand the need to seize on a sign, any sign, as the first swallow of summer, but I think a little restraint is called for.
What leads the official opposition to conclude that the cabinet reshuffle is first and foremost “a positive indication of renewed focus on accountability’, when the far more obvious explanation is Jacob Zuma is using the reshuffle as part of his own agenda to stay in office beyond 2014?
Jacob Zuma is no fool and those who forget that he has played inner-ring ANC politics as head of Mbokodo, the ANC internal intelligence organisation, will constantly be led to make mistakes of analysis. He did, after all, defeat the acknowledged master of palace politics, Thabo Mbeki – and if this was a swords and sorcery story we would understand that he now has the previous master’s powers at his disposal.
A whole range of benefits and protections accrue to Jacob Zuma and his backers from him remaining president of the country. But to remain president, he needs to use a cabinet reshuffle to do four things:
- He must ensure that his cabinet is seen to be busy with the job of optimising delivery to the poorest South Africans (the constituencies he is talking to here are made up of the voting poor themselves and the various elites who feel threatened by those poor South Africans and who pay their taxes and various formal and informal levies towards the upliftment of the poor – and who cannot countenance that protection money being stolen or squandered by the political middle-man);
- Linked but separate is the need to be seen to be fighting against government corruption and cronyism. This is slightly difficult when one of the features of his presidency is the degree to which his own family is making oodles of money out of his good name, but a major cabinet reshuffle gives him an excellent opportunity to sacrifice the biggest and fattest offenders and offer them up to the uncritical daily media as grist to the mill of their learned analysis.
- Forming the cabinet allows him to woo individuals who belong to camps which oppose him. This is either in preparation for alligning with those camps around particular issues in future or it is part of an attempt to weaken the coeherency of the opposition.
- Finally cabinet posts and and especially the more amorphous post of deputy minister are excellent ways of building a corps of supporters to back him during future transitions.
Thus some of the major aspects of the reshuffle could be undertood as follows (and I quote myself from a recent research report);
The firing of General Nyanda
Zuma and the ANC has been under the cosh of public opinion – and negative opinion of Alliance leaders, particularly Cosatu’s Zwelinzima Vavi – for the tender abuse and rampant corruption of senior politicians. No-one represents this better (along with a very in-your-face approach to the ministerial car fleet) than the good General. Nyanda is powerful and wily, but his usefulness as an ally has gradually been outweighed by his usefulness as a sacrifice to prove that the President is serious about corruption. The fact that telecommunications policy has been a consistent political failure for the ANC (right back to the days of the awful but sweet Ivy Matsepe-Casaburri) makes it easier to throw Nyanda to the wolves.
Barbara Hogan has been a growing problem for the ANC. Liked and respected by business and the media and largely regarded as competent, her incipient ideological rebellion has been deeply threatening to the ANC and since her criticisms of the refusal to grant a visa to the Dalai Lama the party has been looking for strategy to getting her out of the way before she does something really embarrassing. Also, the position of Minister of Public Enterprises is a real plumb. Hogan represents no power constituency in the ANC and therefore the ‘patronage resource’ of the position is wasted on her. Public Enterprises is a massive area of political oversight. Hogan was a gifted and thorough minister, but moving her out of this portfolio is not going to make much difference to government performance in this arena. Finally, she has conflicted with Nyanda (and Zuma) and removing Hogan and Nyanda at the same time allows Zuma to sell the act as ‘even-handed’. She will be missed.
Malusi Gigaba, Fikile Mbalula and Paul Mashitile
This is slightly more Byzantine, but the promotion of Malusi Gigaba to public enterprises and Fikile Mbalula to sports and recreation and Paul Mashitile to arts and culture (and to a lesser extent Ngoako Ramathlodi to deputy in correctional services) is both an attempt to keep in with a key and potentially competing faction and also to place those competitors in positions that will be demanding and time consuming, but will not be a base from which to launch attacks. The leading figure in this faction is probably Tokyo Sexwale. Now all the key members are up to their necks in Cabinet jobs that will keep them out of trouble. At the same time Zuma may benefit by drawing them all into the heart of government, bound by its discipline and codes and directly under his authority. It is now only Julius Malema who is still outside the tent, with an independent base, able to make a noise and engage and challenge Zuma publically.
One of the ways to ensure power and influence is to woo particular and defined constituencies. ANC Women’s League stalwart Bathabile Dlamini to social development is an obvious example of wooing the voting block of the League. Also, the South African Democratic Teachers Union has already expressed its delight at the appointment of its previous General Secretary Thulas Nxesi as deputy in rural developement.
The slew of deputy ministers
In general the pushing up of cabinet numbers works to the benefit of Zuma. The more largesse he can dispense the more power he will have when it comes to the lead-up to the ANC’s centenary conference. Each deputy appointment provides the opportunity to reward some, make promises of future greatness to others and bring potential enemies closer.
I am sure it would be possible to run a similar analysis on every appointment or shift and the guiding analysitical principles would prove fruitful.
An interesting point to note is that President Zuma has left untouched the key economic departments which are part of a broader alliance process and the security departments, which were the first areas he put firmly under his own control.
In conclusion let me reiterate: Zuma is great on tactics and strategy – it is the arena of principles that he leaves something to be desired. His presidency has not been a great advance on Thabo Mbeki’s, but, in general, his priorities have led him to appoint people better equipped for the tasks set for them.
The cabinet reshuffle has not significantly changed the overall capacity of this government , but it does leave the Nkandla team stronger than at any time since Polokwane and a second term for Jacob Gedleyihlekisa Zuma is looking more likely than ever.
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.
… 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,
- 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:
- 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.
- 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.
- 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.
- 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?
- 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.
- 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.
- 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.
- 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.
- 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?
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.
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.
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.
Just when all hope flees, as the last good politician still within government leaves his/her post to join the feeding frenzy and as the last decent officials trying to do a public service throw up their hands in disgust; and as the striking workers blockade the last functional HIV/AIDS clinic and trash the streets again; and as the broken bits of the Ruling Alliance go for the kill in their eye gouging, groin stamping gutter fight – just as all hope flees, whose silhouette is it that appears, backlit and heroic, flying in low over the horizon?
Is it a plane?
Is it a bird?
No, it’s … hmm, I’m not really sure.
When things are going as badly wrong as they are going for us, the person to look out for is the one who seems to have been sent by history itself as the solution to all of our problems.
I am not suggesting, as my old Granny used to say: don’t worry, cometh the moment, cometh the man or all’s well that ends well. I am suggesting the very opposite.
This is more of a warning to be careful about decisions we make when we are desperate than it is anything else.
Societies, political parties and whole nations are uniquely vulnerable at times like these. Our desperate need is for someone who can raise an anti-corruption army, is prepared to control the unions, able to fix service delivery and able to make the difficult decisions that will allow job rich economic growth.
The darker and more dire things become – and goodness knows they are as dark and dire as anyone can remember – the stronger our wish fulfilment drive becomes.
Where is the good-looking one, with the strong jaw and the easy, comforting manner, and the very firm but gentle eye and the plan and the promise and the words – and the record, or at least one you can, in your desperation, convince yourself of?
This is the moment in which nice Germans welcomed Adolf Hitler and Spaniards General Franco. King Constantine II of Greece inducted the awful “Regime of the Colonels” in 1967 saying he was “certain they had acted in order to save the country” and there was a (brief) Argentinian sigh of relief when Brigadier-General Jorge Videla overthrew the execrable, incompetent and authoritarian regime of “Evita” – as popular culture has dubbed Isabel Martínez de Perón.
I am not suggesting that a fascist opportunist and criminal is about to present him or herself as the saviour from our woes – or that things are so bad that we risk losing our judgement and welcoming him/her into the stockade. Well, not yet.
But explicitly and implicitly various political factions and individuals have presented themselves as alternatives, and the solution to our current problems.
There’s Zwelinzima Vavi – and whatever kind of workerist paradise he represents – who heroically criticised the media appeals tribunal and has laid about himself with a stout cudgel at all the worst of the cabinet ministers and officials trying to stuff the last tasty bits of the family roast into their distended bellies. And he’s available next year.
Deputy Minister of Police Fikile Mbalula suggested (of criminals) we should “shoot the bastards!” and in so doing presents a kind of law-and-order (and anti-communist) alternative, clearly being supported by the ANC Youth League and tenderpreneurs everywhere.
Lindiwe Sisulu dresses nicely and would be excellent if we ever panicked enough to need a kind of Cleopatra/Boadicea empress to save us.
Tokyo Sexwale is getting the kind of press that suggests he is an effective anti-corruption campaigner and an excellent Minister of Human Settlements i.e. he’s clean and gives good service delivery – and he’s bright, presentable, charming, good-looking and available – very available.
(This added as an afterthought: don’t discount Kgalema Motlanthe as a sort of leftish compromise that we have grown used to and, obviously, Mathews Phosa with his charming Afrikaans poetry and his friendly demeanour and his market friendly comments and his bitter struggle with ANC leader and communist Gwede Mantashe. Also consider a scenario, one I discuss elsewhere, where none of the contending factions achieves dominance and everyone agrees to stick with the burdensome incumbent … all is still possible.)
The National General Council of the African National Congress (to be held in Durban from 20 – 24 September) will reveal the main factions and their key representatives for leadership. The last NGC resulted in a rebellion against Mbeki and foretold his rout at Polokwane. This one is likely to be as instructive.
The point I wish to make here is a simple one. Those who appear to offer solutions must be judged in terms of who they are, what they have done and what they really represent. Just because we are in trouble does not mean we can afford to lose our critical faculties. My long gone Granny would have had two more things to say on the subject: don’t throw the baby out with the bath water, and don’t jump from the frying pan into the fire.
* The title of this post comes from the glorious “Thunder Road” by the inimitable Bruce Springsteen (it doesn’t really fit the story … but I really love the song:
You can hide `neath your covers
And study your pain
Make crosses from your lovers
Throw roses in the rain
Waste your summer praying in vain
For a saviour to rise from these streets
Well now Im no hero
All the redemption I can offer, girl
Is beneath this dirty hood
With a chance to make it good somehow
Hey what else can we do now?
Why setting back Julius Malema is important
Julius Malema has received a body blow and is reeling about the ring.
I mostly want to discuss why this is important – beyond the obvious reasons that drive the obsessive media focus on the grandiose little ANC Youth League President.
But first a bit of context:
As I write Julius Malema is in the process of being disciplined in the ANC. He has sailed closer and closer to the wind in the last few weeks and, it seems, a dunking is now inevitable.
There are three main charges:
- On a Zanu PF platform in Zimbabwe last week he attacked the MDC and praised the Zimbabwe “land reform” programme and used the opportunity to promise economy wide nationalisation in South Africa – this a few days after President Jacob Zuma had returned from trying to broker an agreement between the MDC and Zanu PF;
- He sung – in defiance of a court ruling and of specific orders from Jacob Zuma – the old “struggle” song that includes the words “kill the boer, kill the farmer” – this transgression became more serious when Eugene TerreBlanche was brutally murdered by young black workers on his farm;
- Each of these incidents received specific sanction from the ANC, but the straw that broke the proverbial camel’s back came when Malema was (quite bombastically) giving an interview at ANC headquarters on his triumphal return from Zimbabwe. For a variety of reasons Malema seemed to lose his temper and, in a bullying and autocratic fashion, threw out a BBC journalist. Catch that unsettling episode here. For the ANC, where form remains important, this rudeness was a step too far.
Julius Malema and the policy he represents is on the back foot. His behaviour has finally caused those who have backed and protected him within the ANC (particularly Tokyo Sexwale) to start to put distance between themselves and the Youth League leader.
His relative isolation is reinforced by a growing rebellion against him within the ANC Youth League – which he appears to be only just managing to control through bullying and barnstorming tactics.
So why do we so minutely follow the two steps forward, one step backward advance and retreat of Julius Malema and his cronies?
For me – as a ‘professional political analyst’ (someone whose non-evidential claim is that his political views are subjected to more rigorous intellectual testing than those of your average Joe or Sipho in the comments pages of timeslive.co.za before their airing … hmmm) – there is a real and legitimate reason. The Malema grouping is fighting to control the African National Congress and, in my opinion, the African National Congress remains, for better or for worse, the institution most able to affect South Africa’s future.
South African politics is overwhelmingly dominated by the ANC and nothing indicates that we are in a process of moving away from this domination. Our politics is racialised and people tend to vote their ethnic identity. The ANC has a de facto monopoly on the banners and flags and songs and dead heroes of the liberation struggle; and it has unprecedented capacity to spread goodies around its supporters and potential supporters. This combination – being the party of liberation and being able dispense the national largesse – kept the Mexican Partido Revolucionario Institucional or PRI (the Institutional Revolutionary Party) in power for over 70 years (sometimes with a different name) and it is not inconceivable that the ANC could rule for as long or longer – especially given the additional dimension of racial solidarity.
So, the setback suffered by Julius Malema and his cronies is important because this is the most dangerous wing of the most voracious faction within the ANC. It is not for nothing that Malema has been singled out by the hysterical and monomaniacal mass media in South Africa. His skill at taking rents out of an economy trying to transform itself is by no means unique within this or previous versions of the ANC, but it is his astute use of racial appeals to the poorest black South Africans to cover, disguise and justify his tenderpreneurial flare that makes him formidable.
I do not think it is all over for Julius Malema. A person of this political skill and focus is not going to be wiped off the face of the political realm because of a setback like this one. I expect him to be disciplined by the ANC and I expect that this will set him back a few years.
It is, of course, important to point out that Julius Malema is just an extreme version of something that has taken hold of the ANC at a very deep level. I am under the impression that the first thing the Zuma faction did when it came to power after Polokwane was change tender boards throughout the country. Do you think that was to clean them up after Mbeki’s depredations? I think not.
So closing down Malema is a necessary, but by no means sufficient, condition for cleaning up the ruling party and government. That would entail handing over to the ten or so people in the SACP and Cosatu leadership who are not themselves armpits deep on the take – and, unfortunately, they would begin paving the road to hell almost immediately.
So is Juju, as he is not very affectionately known by the aforementioned media, gone?
He is 29 years old which will make him 36 at the ANC’s elective conference in 2017 and 41 at the elective conference in 2022. He has got a lot of time.
I can almost hear, echoing the words of Arnold Schwarzenegger’s 1994 The Terminator, the battered Julius Malema growling: “I’ll be back”.
I, for one, am not holding thumbs that the next manifestation is going to be any better. In fact a Julius Malema, older and wiser, tempered in the fires of adversity – goodness, now there is a scary thought.
Herewith a note I wrote a week ago for a South African client concerning a recent whip around the London fund management industry
Foreign fund managers perceptions of South African political risk
I recently had an opportunity to interact with a few London-based global emerging market fund managers. These were generally from long-only equity funds, but included a smattering of everything else.
The main lessons I learned were
- not to be overwhelmed by the negative news flow;
- always think in relative terms – a negative and obsessive focus on South Africa is meaningless without realistic peer comparisons.
This was brought home to me again as the weekend news of the brutal killing of Eugene Terre’Blanche hit the local and international press. The media focus alone seemed to suggest that this was a potentially destabilising event. However the story has quickly descended into the squalid domestic tale it really is, and the over-the-top alarmism should be faintly embarrassing to those who trumpeted it over the holiday weekend.
Here are the main questions I raised in London and the main responses I received*:
The news explosion around Jacob Zuma’s latest romantic and similar engagements does not drive capital flows
This point did not need emphasising with the fund managers I saw. If anything they were faintly puzzled as to why I would bother to raise it. For them the emerging market universe has much colourful (and sometimes ugly) personal behaviour by the political leadership and other powerful members of society. Zuma’s polygamy and latest love child are way down the list of “transgressions” in that universe.
Conflict over economic policy making the investment and operating environment difficult
The point I was making was that Pravin Gordhan’s budget speech differed in important ways from both the DTI’s Rob Davies’ Industrial Policy Action Plan II and Ebrahim Patel’s Two Year Strategic Plan. My issue with this was that Jacob Zuma had not settled important policy conflicts within his cabinet.
The different emphases could be summarised as follows:
- Pravin Gordhan supported fiscal restraint, inflation targeting, a segmented labour market and a competitive and unprotected manufacturing sector – and for this he was heavily criticised by Cosatu.
- The policies espoused in IPAP 2 and the Two Year Strategic Plan from the Department of Economic Development implicitly called for monetary easing, a weaker currency and a vigorous programme of interventions into the domestic economy through the use of tariffs and taxes – policies strongly supported by Cosatu.
Several of the fund managers that I interacted with had recently (within the last few months) met with all the ministers concerned either as part of a marketing tour led by Jacob Zuma or while in South Africa themselves. The detailed interactions with all these departments had convinced them that the policies of government were the policies as espoused by Pravin Gordhan and further that the more activist policies from Patel and Davies were not uncommon in emerging markets and at least did not include new capital controls.
I am not convinced the policy confusion is ‘investment neutral’ – although I do not think is catastrophic. Cosatu and the SACP clearly believe they have a chance to set policy – including monetary and industrial policy – through the DTI and the new Department of Economic Development. Thus Jacob Zuma seems to be clearer and more decisive about these issues in front of foreign fund managers than he ever is in front of a domestic audience. He will reap high resistance and anger from Cosatu and “the left” when they realise they have been lied to again. I think it is clear we are seeing the first signs of this realisation – in, for example, the threatened strikes during the World Cup against Eskom increases.
Julius Malema and the Nationalisation of the Mines
Julius Malema provokes a lot of reaction wherever he is discussed. Not many fund managers take him seriously and again it is because they have met and dealt with senior government and party officials who have spoken of Malema with patronising indulgence and a touch of exasperation.
Susan Shabangu, Minister of Mining, has done good work in assuring fund managers throughout the world that there is no possibility that the South African government will consider the nationalisation of mines as a serious policy option; and I came across several people who had met her and been convinced by her assurances.
Cronyism and tenderpreneurial flair – the threat to service delivery, stability, the functioning of the parastatals
Continuing on the theme of Jacob Zuma’s inability to solve the big conflicts in his government I argued that cronyism, nepotism and tender abuse are:
- important contributing reasons for the poor functioning of the State Owned Enterprises – the Eskom example reveals that enrichment agendas in tendering and the appointment of senior personnel damages the utility’s ability to do the job;
- key to understanding the failures of local government and hence the ongoing violence of the service delivery protests.
There were few fund managers I met who disagreed with this assessment, although some, yet again, argued that in the universe that includes Russia, the Middle East and Brazil, South Africa stands out less than we would imagine.
The World Cup and the waiting Hangover
It is perverse to argue that the downside of the World Cup includes:
- it could become the focus terrorist attacks;
- it could be targeted by organised labour and taxi operators to strengthen their hand against government or employers;
- it will inevitably entail a let-down or ‘hangover” period.
This would be a little like arguing that the downside of life is death and that it should therefore be avoided.
I never met a fund manager in London, or elsewhere for that matter, who disagreed.
*Please note that this is a subjective process, over determined by my own interpretation and by a selection processes out of my control. Any real collation of “the views” of fund managers must theoretically translate into their holdings and the prices at which they buy and sell.