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How to explain the decision to start a review of the parastatals by a presidential committee just as Public Enterprises minister Barbara Hogan was busy with that job?

When anything in our country seems confusing it is always useful to abide by the famous injunction from Watergate’s ‘Deep Throat‘: follow the money.

The raison d’être of the new political/economic elite – the thing that brought it into being and the thing that sustains and grows it – is the opportunity to take rents out of the economy. The overwhelming bulk of the low-hanging fruit in this endeavour is in the public sector – specifically in senior management positions and the multi billion dollar expenditure of the Parastatals.

Now if what you are/what you do is sheep stealing you don’t want an independent and famously incorruptible shepherd tending the flock. Far easier to give the job to a few of your wolf mates.

Understanding history

There are times and places when history feels like it is just meandering along minding its own business.

South Africa today is not one of those places or times. Here history is being driven and whipped along by an evil monkey on its back.

This particular evil monkey is none other than the squabble to harness the state to the task of personal accumulation.

Karl Marx and Frederick Engels, writing in The Communist Manifesto in 1848 said:

The history of all hitherto existing society is the history of class struggle.

The “class struggle” shaping our course would have seemed a little eccentric to Karl Marx. There is no simple division into proletariat, bourgeoisie, petit-bourgeoisie – with the aristocracy fading into oblivion and the lumpen-proletariat skulking along the edges.

Here you have an elite that has emerged through leveraging political power – in exactly the same way as the local representatives of the previous political oppressors (the Afrikaner Nationalists) did from 1948.

The Afrikaner nationalists began to lose young Afrikaners (at a greater rate than before) from the early 80’s. The reasons are complex but using the state to advance the economic interests of a political/ethnic group deadens creativity, grows authoritarianism and the stultifying effects of patronage drowns cultural growth.

I suspect exactly the same thing is happening in the ruling party.

For an excellent review of the shenanigans in Public Enterprises read Christelle Terreblanche’s article from the Sunday Independent here. For a brilliant – and quite moving – overview of the growth of what I elsewhere call Vampire Capitalism, read Moeletsi Mbeki’s Architects of Poverty – which I review here.

In a rush on my way from Namibia to the Garden Route – it’s a hard life, but someone has to live it.

The big stories are:

  • the continuing decline in employment numbers;
  • the National Working Committee’s decision not to charge Zwelinzima Vavi but to criticise him for alleging that Minister of Telecommunications Siphiwe Nyanda is corrupt.

StatsSA’s Quarterly Employment Survey released on Monday showed that the formal sector had lost 79 000 jobs between December and March – or that the number of people employed in the first quarter of this year dropped 1% from the previous quarter. The point is simple: unemployment is a deep systemic threat to long term stability in this country and – to some degree – we are experiencing the removal of the short term stimulus associated with World Cup infrastructure build. That doesn’t make the World Cup a bad thing, but it does mean we need to moderate our expectations.

Vavi’s “let off” comes as no surprise. The core of Tenderpreneurs that have risen in the balance of power through clever play post the Polokwane Putsch would dearly love to shaft their irritatingly principled previous allies on the left but the time is not yet right. The ANC and government is not yet purely a device for extracting rent out of the economy. A luta continua.

And then, just because this Reuters picture lends itself so well to a previous line from these posts:

Sepp Blatter and Jacob Zuma were like twinkly old non-English speaking train robbers still dashingly on the run all these years later. They can’t speak English – or any kind of sense – but their delight at how much money they have managed to stash away is infectious.

I tag it on here – with my own caption:

For those who remember the gangster penguins in the wonderful "Madagascar": "Smile and wave boys, just smile and wave."

Last night, I felt the pull of warring emotions.

The occasion was the watching of the World Cup welcoming concert on TV from the comfort of my own lounge. The general effects seemed to be intensified by the fact that I could see (the fireworks, lasers and helicopters anyway) and hear the one taking place in Cape Town’s Grand Parade about a kilometer away.

A couple of things:

  1. Sepp Blatter and Jacob Zuma were like twinkly old non-English speaking train robbers still dashingly on the run all these years later. They can’t speak English – or any kind of sense – but their delight at how much money they have managed to stash away is infectious. They both came onto the stage together and Sepp Blatter spoke first and Jacob Zuma stood meekly beside him – just in case there was any doubt as to who will be running the country over the next month and a half.
  2. Bishop Desmond Tutu’s warmth and sweetness is undiminished and his eccentricity is coming along nicely.
  3. The delights of Shakira are numerous and cross generations and genders.

The truth is I felt my critical faculties slipping away, sandwiched as I was between the celebration in Johannesburg and Cape Town.

The official opening is later today and after that Bafana Bafana will play Mexico. Perhaps the bubble will break if The Boys lose to El Tri (The Three Coloured … ok, it doesn’t appear to translate very well). But for now there are not many South Africans who can put aside their crack-fizzed enthusiasm and take a long hard look at what is going down.

So one last time: have we diverted resources that should have been used to build houses and create jobs for the poor? Is this not just a ridiculous and over-the-top bit of flim-flam? I mean the children that lead the guests and players around have got a McDonalds sign on their shirts!

I don’t think South Africa hosting the World Cup is a waste of resources and this is a sketch of the reasons:

  • Since 1994 resources have poured into the task of upliftment and, aside from the hugely effective social grants that have grown exponentially from 2000 to now, much of the social expenditure has been skimmed by successive layers of government cronies and tenderpreneurs (the fronted and the fronters) and the vampire capitalists who take rents out of almost every transaction in our economy. World Cup spending has provided a focus for infrastructure. Perhaps we did not need this emphasis on stadiums, airports, hotels and associated transport networks, but much of this “stuff” is multi-purpose. The Mail and Guardian might find some significant dirt in the tender documents of Fifa’s local organising committee which they successfully forced into the public domain (thankfully our courts have ruled that South Africa’s constitution is not suspended by our craven delight at hosting the Fifa superpower.)  So the advantages of this infrastructure are locked in – this will be here after Fifa has packed up and gone.
  • Most economists seem to agree that the World Cup associated tourist spending will boost GDP  by between 0.5 percent and 0.7 percent. That is not earth shattering but a thousand little businesses – from flag sellers on street corners to guest houses – are booming. That must count for something.
  • To some unquantifiable degree and in ways that are only becoming apparent now, this World Cup is going to re-brand South Africa . Perhaps it will not go as far as Thabo Mbeki’s hoped for proof that South Africa is as efficient as Germany, slick as Hollywood and clearly an emerging African superpower.   Part of that re-branding will be: “oh yes, they can also do the sentimental and gross commercial sell-off of their national assets” but part of it is more complex. The crowds are multi-racial and the South African fans are projecting a shared excitement and togetherness that is already proving confusing, particularly to English and US media and fans. The Rainbow Nation still has some force and effect as an idea. The evident success of the build programme around the stadiums, hotels, airports and transport networks goes some way to proving a degree of technical prowess and capacity. This combination (non-racialism and a competitive logistical, infrastructural and technological capacity) does provide a platform upon which to rebrand the country.

I have to publish before 5 am … so I am going leave it there (that is how my wordpress account is set up and I don’t know how to change it). The lowbrow media – particularly in the UK – are clinging tenaciously to the machete-wielding- tribesman-in-leopard-skins-raping-and-chopping-up-tourists idea but this is going to conflict with the positives most of the 325000 (official figure) to 250000 (my figure) visitors who have arrived for the spectacular spectacle will experience.

They are going to have a good time … I can feel it.

You hear it bruted about that Cosatu provided the organisational structure and person-power to wrestle the ANC from Thabo Mbeki and his Xhosa-Nostra. You also might be told that the same strengths of Cosatu has won the ANC successive national elections.

However, if you listen closely and to another set of people, you will hear that it was, in fact, the ANCYL that provided the infrastructure and capacity to undertake the Polokwane Putsch and that the architect of the 2009 general election victory was Fikile Mbalula, the ANCYL president prior to Julius Malema and clearly the candidate of the Youth League for higher office come 2012 (in the realm of the ANC) and 2014 (in the realm itself).

I think what happened at Polokwane required slightly different organisational capacities from those required in a national election, but common to both is: large amounts of money, a strategic centre that can plan and execute a national campaign that comfortably moves between the big picture and local, door-to-door type work and, finally,  a large group of deployable activists or cadres.

Cosatu cannot dream of competing with the ANC’s cash reserves. We have all heard that this might be the richest political party in the world. Chancellor House aside, I would be hugely surprised if the ANC had not put itself first in the economy wide asset transfer that is taking place in the name of transformation.

That much money automatically provides for a strategic centre and local and provincial machinery – and, to some degree, deployable party workers (paid rather than volunteers). You can hire the Saatchi and Saatchi to be a proxy for the strategic centre, you can buy in logistics from a host of service providers.

Cosatu structures are quite specifically related to the job of being a trade union federation and each individual union has even more specific structures and functions related to the business of organising workers around wages, working conditions and bargaining processes.

These structures and functions are not easily “deployed” either into national elections or take-over bids in the ANC – and nor are individual worker members who, by definition, have a day job. Cosatu has always recognised a practical tension between work place issues and national politics – as well as the fact that many of its members follow diverse politics or no politics at all.

When you are running an election every resource and edge feels important but Cosatu in not the prime driver of success in ANC politics – focused inwards or outwards – and many of the real advantages it brings can, in modern electoral and party politics, be paid for.

Perhaps the original question should have been:

What would Cosatu do without the ANC?

Cosatu has – by design and accident – put more emphasis on its political relationship with the ANC. In part this is because: globalisation of the labour processes market, mechanisation of the labour process, the Great Recession (following on the global debt crisis) and the rigidities of the South African labour market have combined to keep employment levels low and falling in this country.

Cosatu membership has, as a consequence, been stagnant or declining from a high of 1.869 million in 2000 and has shifted from productive sectors of the economy towards the public sector.

Cosatu have been tempted into politics because of the difficulties it experienced in the economy. Having chosen or being pushed in this direction, more and more organisational resources have been put at the disposal of the political strategy, further weakening the ability to organise on the shop floor around shop floor issues.

When the union backs the ANC publicly and uses union resources to fight ANC campaigns (or campaigns in the ANC) it is courting a weakening of its organisation, a loss of members and a polarising effect that can leave its leaders isolated. In turn its commitment to the political realm increases as more organisational eggs are put in that basket.

This is where Cosatu is. Even in the late 80’s, at the hight of anti-apartheid resistance, Cosatu was more cautious about ‘playing politics’ than its leadership is now.

In essence the Cosatu leadership is committing more and more irretrievable resources to a strategy that must ‘win’ the centre (the power to direct the state and government policy) if it is to hold on to its members.

Cosatu cannot ‘win’, ‘take over’ or dominate a multi-class organisation like the ANC. If I am right about this and right that this is the strategy that Cosatu has committed to then the trade union federation is destined to become little more than a competing faction in the already fractious ruling party.

I suspect that at some point Cosatu will have its own moral equivalent of Polokwane which will allow a workerist trade union federation to go back to basics and a more politicised Left group to link up with the SACP as a powerful faction within the ANC competing for power and direction with all comers.

Short of an angry and vindictive divorce you don’t really get a more serious breakdown between previous partners than described by the amazingly revealing Cosatu’s press statement yesterday threatening the end of the ruling alliance because ANC has laid disciplinary charges against Cosatu secretary general Zwelinzima Vavi.

This is what the statement reveals:

  1. The powerful National Working Committee (here‘s a list of members of that august body) of the African National Congress has decided to lay disciplinary charges against Vavi;
  2. Cosatu suspects (or knows) that the charges relate to a Cosatu statement, delivered by Vavi, in which the trade union federation criticises, amongst other things the fact that “newspapers continue to carry stories of allegations of corruption against Ministers and we are still to hear the President or Cabinet announcing that these allegations will be subjected to investigation ….” and further:  “Perceptions … runs deep in our communities, that government is soft on corruption, in particular if it is committed by members of the cabinet and/or senior party leaders or officials.”
  3. The original Cosatu statement is a devastating critique of the Jacob Zuma led ANC and it was just a matter of time before those who believed they were the “members of the cabinet and/or senior party leaders or officials” singled out hit back;
  4. The Cosatu statement (catch it here) accuses these “cabinet and/or senior party leaders or officials” of sneaking the attack on Vavi into the NWC meeting by waiting until those who would have stopped left.
  5. The statement strongly implies that Zwelinzima Vavi is entering the leadership race for 2012 and that this somehow must be read together with the ANCYL push to get rid of Gwede Mantashe and promote Fikile Mbalula.

Business Day has a quote from Malesela Maleka of the SACP that perfectly summarised what is actually going on:

There is a small grouping in the ANC that is in a hurry to gain power, and alliance leaders stand in the way of their get-rich-quick scheme.

It cannot be such a small group if only “alliance leaders” are standing in the way, but this is succinctly put and reeks of the ugly truth.

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

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