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

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

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

Thus, the EFF  and DA manifesto launches:

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

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

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

Yeah, right.

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

So what?

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

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

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

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

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

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

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

The Democratic Alliance

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

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

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

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

So what

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

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

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

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

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This is a quick  aside before getting onto the more riveting topics of the May 7 elections, service delivery protests (and their search for a Gene Sharp handbook as well as the predictions of the Davies J-curve), the platinum strike, Julius Malema’s sequestration hearing in the North Gauteng High Court this morning (and the pressing matter of whether this could bar him from becoming a member of parliament in terms of section 47c of the Constitution) and the truly interesting Ipsos comparisons of the demographic characteristics of supporters of the ANC, the DA and the EFF.

Out of the mouths of babes and sucklings**

Over the weekend a young, close relative of mine wondered aloud why South Africans continued to vote for the ANC.

The child explained to me late on Saturday night that the ruling party was an institution so obviously bereft of redeeming features that only a person on drugs could possibly continue to vote for it.

“Why don’t they vote for another party?” asked the child in exasperation.

I have to admit that while I recognised the opportunity was begging for a cautious and loving Socratic exchange, I couldn’t raise the enthusiasm to give more than an exhausted ‘who’s they‘, followed by a quick retreat and request a continuation in the morning.

The next day, having completed the obligatory 52 hours (I think that’s about how long it takes?) of newspaper reading, I found myself sitting beside the same child watching Adventure Time on television.

When the charming, nuanced, off-beat and deeply intelligent (in comparison to other media I had been consuming that morning) cartoon was over, the child switched off the television, turned his angelic face towards me and asked: “so, about the ANC …?”

I cleared my throat and gathered my thoughts.

“White settlers from Holland” I began, gazing into the middle distance with a faintly sad expression on my face, as if watching the mournful parade of our history playing out in my mind, “first came to South Africa in 1652 and many bitter struggles were fought over land and cattle.”

Jumping ahead somewhat I went straight to the nub: “On January 8th 1912, chiefs, representatives of people`s and church organisations, and other prominent individuals gathered in Bloemfontein and formed the African National Congress. The ANC declared its aim to bring all Africans together as one people to defend their rights and freedoms.”

Okay, I’m messing with you … that’s a cut-and-paste from ‘a brief history of the ANC’ on the organisation’s website.

However, I find it significant that I had to open the web page and read some of the highlights from there. Somehow the essential story, the glorious history of the glorious struggle for freedom and democracy, the dead heroes, the banners, the flags and the songs, sounded tired and clichéd and faintly hackneyed as I ran through it without much real enthusiasm.

But I still argued the toss. It was not surprising that most black South Africans who were registered to vote would still be voting for the ANC (and, btw, ‘most black South Africans registered to vote’ was still probably ‘most South Africans of voting age’ given both our demographics and our 77% voter registration). The ANC led the fight against Apartheid. The ANC has presided over massive and ongoing redress in favour of black South Africans since 1994! A few bad eggs in the leadership do not change that.

The child raised a litany of objections: ‘Zuma’, ‘Nkandla’, ‘the arms deal’, ‘police violence’, ‘judicial – and other – appointments’, ‘the diversion of billions of rand into the coffers of fat cats and the party itself’, ‘governance failures’, ‘the Traditional Courts Bill’, ‘borderline homophobia’, ‘the impending Zuma/Putin nuclear caper’, ‘growing intra-ANC violence in contestation for increasingly lucrative political jobs’ and ‘increasing state sanctioned violence’ – duh! 

(I suspect the ‘child’ is imaginary, a clunky rhetorical device … also, ‘duh’ means ‘give me a break’, or ‘don’t waste my time with the stupid and obvious’ – Ed)

 The child’s arguments asserting the extremely putrid state of the ruling party became louder as did my insistence that the majority of voters were not brain-dead zombies acting out a destructive and unconscious impulse.

From the vantage point of this Monday afternoon I worry that I sounded a little like a master of ANC Apologetics ; but the child, delightfully, sounded like a shorter, skinnier, cleverer and more charming Wilmot James

I obviously didn’t answer the question why do the majority of South Africans still vote for the ANC? to the satisfaction of he who asked it – although I am equally satisfied that I can understand why a majority of normal, sane black South Africans, acting in their enlightened self-interest, might vote for the ANC.

However what I didn’t say in the argument with the child is that I am also sure that along the path down which the ANC is currently travelling, with Nkandla (the political/economic/security faction rather than the homestead) leading the way, awaits a place or a moment at which the ANC will lose the support of the majority of free thinking, free voting* South Africans. Of this I am convinced. I think that moment is some distance ahead – only conceivably first appearing in 2019.

But who walks blindly towards catastrophe, when it is visible, predicted by one’s own forecasting, evident in every stumble along the deteriorating path?

Think about the ANC as having a brand value. Think about the forces that operate within the ANC as a kind of political market. I am hopefully expectant that that market will automatically self-correct … that the  brand is so valuable that the threat of its loss will trigger a protective impulse, will mobilise the many who have much to lose if their asset continues to be led and used in the manner it is being led and used by its incumbent central leadership.

Obviously the incumbent leaders of the ANC will not willingly lose control. The consequences for this particular crew would be more negative and profound than, for example, a similar loss of control was for Thabo Mbeki. Also the incumbent leadership has a security/intelligence/street-fighter thing going that could make it a vicious and dangerous opponent of any serious movement for renewal within the party.

Finally, I imagine that the fewer votes the ANC receives in the May 7 election (which I don’t see being fewer than 60% of the total) the more likely and vigorous will be an attempt to change the organisation’s current trajectory and leadership.

(I am not going to run all of that passed the aforementioned child – he will, with some justification, roll his eyes and say whatever.)

* I use the “free thinking, free voting” qualification because it is not an eternal given that we will remain, as we have been (only briefly, since 1994) free, or relatively so, to think and vote as we please.

**’Out of the mouths of babes and sucklings’ comes from Matthew (21:16) recalling the words of Jesus, who was in turn referring to Psalm 8 –  from the King James Version, a widely admired (for its literary value) English translation of the Christian Bible … that’s for any readers in a geographical, cultural and/or technological location so remote that even Google cannot help them as it has helped me fake that I knew the full origin of the phrase before I sat down to write this morning.

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

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