You are currently browsing the category archive for the ‘National Devlopment Plan’ category.

Zwelinzima Vavi’s suspension from Cosatu and the ANC/SACP/Num decision not to attend the Marikana commemoration, both on Friday last week, are, to my mind, indicative of a significant retreat of ANC hegemony.

Hegemony’,  as I imbibed the concept from probably slightly fevered readings of Antonio Gramsci’s sublime Prison Notebooks while I was a student activist (and from endless discussions in those semi-mythological ‘smoke filled rooms’) has proved, for me personally, a useful and adaptable tool for conceiving of the ebb and flow of political power.

The concept comes from the Greek word ἡγεμονία (look at me … I can cut-and-paste from Wikipedia) which means both ‘rule’ and ‘leadership’ but especially implied and indirect power or rule.

Hegemony (in my own lexicon) is used to describe the myriad ways in which the dominant group extends its direct power (let’s say, for argument’s sake, that direct power is that exercised through party discipline, or through the state, especially apparatuses of implicit or actual coercion). The extension of the reach of the dominant group beyond the immediate terrain that it obviously controls and into the middle ground or the rest of society (usually conceived of as civil society) is what I think of as hegemony. It is direct power extended as influence and leadership and as a result of occupying the high ground and by in some way representing the national as opposed to sectional interests and, ultimately, effective through persuasion rather than control – forgive all the awkward italicising.

The ANC that won to power in South Africa during the end of the 80’s and early 90’s was, to my mind, the exemplary example of the exercise of hegemony. The only power available to the ANC during this period was so called  ‘soft power that derived from its occupation of the moral high-ground and came about as a result of its (the ANC’s) careful building of broad fronts and tighter, more disciplined formations, like the ANC/SACP/Cosatu alliance itself.

This is the context in which I assess both Vavi’s suspension from Cosatu and the fact that the Marikana commemoration appears to have been a ‘no-go area’ for the Ruling Alliance. Obviously both news items can be understood as important for other reasons, but this is the prism through which I have chosen to view them.

(Note: ‘retreating power or hegemony” is not the same as having  ‘lost power or hegemony’. I am not saying in raising the points below that the ANC has lost its ability to ‘influence’ and ‘lead’ … rather I am saying that there are signs that it is significantly weakened in this regard. Not explored in this article is the consequences – which I believe are extremely serious and threatening – of any such potential loss of ANC hegemony. I have previously discussed this in an article entitled Beware the thing that might pick up power lying in the street and I have made similar points in Zuma’s brittle grip tightens.)

Cosatu suspends Vavi – and the Ruling Alliance shudders

Zwelinzima Vavi, suspended after a special meeting of Cosatu’s central executive committee on Wednesday last week, has indicated that he will challenge the decision in court.  During his press conference on Friday announcing this, Vavi released a document containing what purports to be a series of intelligence reports claiming that he (Vavi) is part of a US ‘soft-power’ plot to undermine Cosatu and the ANC.

Vavi’s strategy, and that of his supporters, appears to be to mobilise ordinary workers, notably in the National Union of Metalworkers of South Africa (Numsa), the Food and Allied Workers Union (Fawu), the South African Municipal Workers’ Union (Samwu) as well as in those branches, regions and local areas of otherwise anti-Vavi unions where Vavi remains popular with the rank and file – including, for example, the Kokstad region of the SA Democratic Teachers’ Union (Sadtu).  The ‘fight back’ strategy will culminate in a special Numsa congress to be held in December.

So what?

Vavi’s refusal to accept his suspension and his publically announcing that he will contest in court the Cosatu CEC decision suspending him is more serious than it first appears – and may well lead to his expulsion. (To get a sense of why this may be the case, here is what Gwede Mantashe, ANC secretary general, said of Vavi’s decision to challenge his suspension: “This is unprecedented. It is the worst case of organisational ill-discipline. If the ANC takes me through a disciplinary process, the worst thing I can ever do is to go out and attack the ANC. That is unheard of” – Sunday Times.)

The so-called ‘intelligence document’ that Vavi released on Friday (available as a pdf at the Mail and Guardian website here) appears to be a clumsy attempt to discredit Vavi by linking him (and various other Zuma opponents) to comical ‘imperialist plots’ to spread coups and chaos in Africa. The contents of the document are not worthy of consideration. However, if it is true, as Vavi claims, that his opponents in Cosatu and the ANC distributed the document, it is legitimate to consider the possibility that it was produced in a ‘dirty tricks’ department somewhere within the state security apparatus and/or somewhere close to the leadership of the ruling party.

The outstanding question is whether Vavi’s suspension or expulsion could lead to a defection of Numsa and other unions or parts of unions from Cosatu. The labour environment could be catastrophically impacted upon by this kind of collapse of Cosatu – especially if Numsa, already the largest, best organised and, perhaps, most militant Cosatu union, decides to contest with other Cosatu unions (especially Num) for membership.

The difficulty in making an assessment of whether Numsa could split from Cosatu is rooted in the fact that there is no template for the consequences of the factional driven axing of such a senior, respected and popular alliance leader such as is Vavi.

Up until now it was always a good bet that while ‘left’ and other ‘militant’ factions of the Alliance might fight against various positions and policies with which they disagree, the benefits of being within the Alliance always outweighed the loss of access to the policy-making/leadership-election processes that would go along with being outside the Alliance.  However, Vavi represents, more than any other single individual, the ‘left’ critique of ANC/government corruption (particularly allegations around Jacob Zuma’s Nkandla residence) and of government economic policy (particularly the National Development Plan) and it is distinctly possible that ‘left’ factions of Cosatu could conclude that the space for them to operate within the alliance would be closed down if Vavi is forced out.

Marikana – ANC and Num refuse to participate in commemorations

The African National Congress, the SACP and the National Union of Mineworkers boycotted the first anniversary commemoration of the Marikana killings, saying the event was “hijacked” (Num), that Amcu was  “a vigilante grouping” (SACP, quoted in Business Day 16.08.13) and that the “commemoration is organised by an illegitimate team called ‘Marikana support group’” (ANC, quoted in Business Day 16.08.13).

Thousands gathered on Friday at the hillside in Marikana where 34 mineworkers were shot a year earlier. During the commemoration, Lonmin CEO Ben Magara “apologised for last year’s deaths, the first and only company or government official to do so” – Business Day 19.08.13.  Ben Magara said at the commemoration: “I heard about your request to employ a relative of each of the deceased. I heard about the request for R12,500. I am here today to say: let us sit down and talk”. Joseph Mathunjwa, president of Amcu said this apology “was overwhelming” … he is the only person who came and gave an apology and he was not (at the time of the massacre) even part of the management … not even government has done that …his gestures show that he is a man who is willing to engage” – Business Day 19.08.13.

During the commemoration Dali Mpofu, legal representative of injured and arrested miners at the Farlam Commission, acted as the master of ceremonies, Julius Malema was among the speakers and Agang SA leader, Dr Mamphela Ramphele, “deposed” PAC leader Letlapa Mphahlele, NFP leader Zanele kaMagwaza-Msibi, IFP president Mangosuthu Buthelezi, Cope leader Mosiuoa Lekota, African People’s Convention leader Themba Godi, EFF leaders Kenny Kunene and Floyd Shivambu and UDM leader Bantu Holomisa also attended (City Press).

So what?

The complete retreat of the ANC and its allies (the SACP and Cosatu) in Marikana represents a highly significant loss of political terrain. The commemoration gathering was widely accepted and legitimate, Lonmin was represented as was a broad cross-section of the Nkaneng community as well as church, political and worker organisations. The fact that this was a ‘no-go area’ for the ANC and its allies is, in my opinion, the most significant evidence of loss of ANC hegemony since the 1994 election. The political loss for the ANC is reproduced throughout the platinum sector and tracks the relative gain of Amcu and the losses of Num. The opposition political parties are hovering around the platinum sector hoping to pick up the votes the ANC loses … but it is not yet evident which parties, if any, will benefit from the ANC’s apparent loss of support and legitimacy amongst platinum mineworkers. However, the existence of ‘no-go areas’ in national election campaigns is a recipe for violence.

Here are some bits and pieces of my latest commentary:

Vavi and Numsa – the underlying risks

Zwelinzima Vavi faces a special central executive committee of Cosatu meeting today to decide his fate following his admission that he had sex with a junior Cosatu employee in her office in the Cosatu headquarters. Numsa, the National Union of Metalworkers of South Africa (perhaps Cosatu’s largest union after the collapse of Num in the face of Amcu competition) characterises the attempt to discipline, and possibly shaft, Vavi as  “a  real rupture in the Alliance, and therefore in Cosatu, the ANC and the SACP between the forces of socialism and the forces of neoliberal capitalism”. There is widespread speculation that Numsa might exit Cosatu if Vavi is axed.

So what?

It would be a mistake  to dismiss Numsa’s position as just so much socialist babble and dissembling (although I did I see a  recent Numsa paper defending Vavi with this quote from the Communist Manifesto: “The proletarian is without property; his relation to his wife and children has no longer anything in common with the bourgeois family relations … law, morality, religion, are to him so many bourgeois prejudices” – tee hee ).

Numsa reads the pressure being placed on Vavi as rooted in Vavi’s criticism of the ANC leadership with regard to corruption and with regard to the ANC’s adoption of the National Development Plan. For Numsa and ‘the left’ in Cosatu/ANC/SACP,  Vavi’s sexual practices are irrelevant, the ‘real’ issue is that the Zuma-led ANC and its allies in Cosatu and the SACP are attempting to rid themselves of a strident critic before the 2014 election. The left is, implicitly, saying: ‘you are trying to get rid of Vavi so that you can continue stealing from state coffers and selling us to the global corporations in whose pockets you now reside.’

The strategic planners around Zuma probably did want to get rid of Vavi and saw the sexual misconduct as an opportunity to do so with the least cost to Alliance strength and unity. However a result that leads to Numsa splitting from Cosatu might end up being catastrophic for Zuma and his allies. Numsa is the best organised and most militant union in Cosatu. It already effectively competes with Num (at Medupi for example) and if it were to set itself up in competition to other Cosatu unions the platinum sector circa-2012 could, conceivably, end up looking like a labour-relations picnic. Such a split could also cause unforeseeable disruptions in the ANC’s electoral support, conceivably leading to a political realignment and possibly to the formation of a ‘left’ or ‘workers’ party.

However, the Zuma administration and the central ANC leadership is desperately trying to unite the constituent elements of the Alliance behind the National Development Plan – partly in an attempt to prove to global capital markets and other investors that the ANC is serious about creating a settled environment for investment, and partly because it appears to believe that plan is the right path to ensure increased levels of economic growth and employment. Numsa sees the NDP as a direct extension of the ‘neoliberal’ Growth, Employment and Redistribution macroeconomic policy.

To understand more fully what is at stake here it is interesting to examine how Numsa, in its own words, understands the NDP and GEAR and how it interprets the ‘real’ reasons the Zuma leadership is attempting to get rid of Vavi:

“The capitalist neoliberal trajectory which the ANC leadership had  adopted”, designed to “ deepened and entrenched South African capitalism” and “ it also laid the grounds for deepening imperialist domination in South Africa” … “allowed monopoly capitalism to evade expropriation“  … “thus in fact GEAR negated one of the fundamental objectives of any liberation struggle – the elimination of imperialism”.  Finally: “Inevitably, the rupture in Cosatu is between those who want to see a thoroughgoing implementation of the Freedom Charter …  and those who are consciously or unconsciously defending South African capitalism and imperialism by defending the NDP and not openly supporting the implementation of the Freedom Charter, especially its nationalisation demands.”

The stakes are high. The Zuma administration needs to prove to investors that these political positions are not represented in ANC policy making AND it has to keep the Ruling Alliance intact. The disciplining of Vavi today brings this to a head. The Zuma aligned faction probably wants to achieve a disciplining of Vavi with regard to his public utterances but to a degree that keeps Numsa in the tent. It’s a delicate balance and fraught with risk.

 

The Democratic Alliance – much talk of the possibility of taking Gauteng

The DA Electoral College decided late last week that Mmusi Maimane will head its campaign to take Gauteng from the ANC is 2014. Maimane stood against Jack Bloom for the position of ‘premier candidate’ for the DA in Gauteng. The election comes amidst increased media speculation that the Official Opposition could realistically pursue victory against the ANC in the economic heartland of the country.

So what?

The peculiarly South African ‘coded’ relevance of this story, is that Maimane is black and Bloom is white – and therefore the DA electoral college’s choice of Maimane over the more experienced Bloom is seen as indicative of the DA’s decision to ‘go all out’ to win a greater share of the black vote, especially in the region where it is assumed that ‘urban African professionals’ are both most abundant and most likely to be disaffected with corruption and ANC failures of governance.

At this distance out from a national election any definite prediction about results should be taken with a mountain of salt. Parties are either trying to talk up their chances or are predicting dire results to scare their members and supporters into campaigning mode. In the 2009 election the Democratic Alliance won 16.6% of the vote in Gauteng and it is vanishingly unlikely that the party will win a majority in the province in 2014. It is conceivable that the DA could find itself in a position to lead an alliance of parties to victory over the ANC in the province next year. However the parties themselves and their expensive private polling consultants possess the only real ‘scientific‘ (probably ’empirical’ is better) – ed) data. Any hints that emerge into the public domain that come from those party contracted polling agencies are probably designed to serve specific party objectives, rather than the truth – and should be treated with maximum scepticism.

 

Zuma expected to tell SADC ‘our work in Zimbabwe is done’

It is unlikely that the 15 member SADC Heads of State meeting scheduled to take place on August 17 will call for a coalition government in Zimbabwe – as the body did after the disputed 2008 elections. City Press reported on Sunday that a source close to the South African mediation effort has said: “As far as South Africa is concerned, we have ended mediation in Zimbabwe”. It is likely that the regional body will vote to accept the election result (although not unequivocally and not without polite reservations) and further, that the body will call for the UK and the US to drop sanctions against Zimbabwe as part of an economic recovery plan.

So what?

The SADC is likely to err on the side of order if the trade-off is between political/economic stability and electoral fairness in the region. In 2008 the body assessed that the election was so unfair that accepting Mugabe’s refusal to acknowledge an MDC victory would be an unstable result. Thus the body forced Mugabe and his party into a coalition government. The estimation appears, this time around, to be that accepting a Zanu-PF victory is the more stable of the possible outcomes – and that stability is rooted in Zanu-PF having performed better and the MDC having performed worse this time around.

There is an interesting account in the Mail & Guardian of how Zanu-PF won Harare from the MDC that bears testimony to a real shift in voter sympathies in Zimbabwe – as opposed to purely cheating and skullduggery on Zanu-PF’s part (catch that story here). It is impossible to make a serious estimation of how much Zanu-PF’s victory was legitimate and how much a result of the aforementioned skullduggery. However, it is my opinion that the SADC will conclude that enough of the victory is ‘legitimate’ to declare it so, and thereby help make it so.

The outstanding questions, it seems to me, are:

• Will the party implement the indigenisation programme in a way that further drives foreign investment out of the economy?
• Will the party implement catastrophic monetary and fiscal policy?

It is probably a correct response to be ‘optimally cautious’ rather than ‘cautiously optimistic, given Zanu-PF’s serious mismanagement of the economy post-1999. However, it is also important to think of Zanu-PF and Mugabe as conscious and politically aware players in their game. Zanu-PF is likely to be cautious about policy – it is no longer necessary to implement ‘panic’ measures and any incumbent administration is likely to want to seek a degree of economic stability. This does not mean Zanu-PF will back-off ‘indigenisation’ – it appears to have worked for the party up to a point. But it does mean that Mugabe and his party are unlikely to implement indigenisation that further (i.e. any worse than it already has) breaks international norms and standards about property or in a manner that causes a stampede out of the economy. (Important qualification: One of my colleagues who specialises in analysing platinum companies has suggested that the indigenisation ‘deals’ that were struck prior to the election are actually coming ‘unstuck’ because Zanu-PF appears to believe it can get more favourable terms now that it has won such a divisive victory in the election. If that is, in fact, the case then it would be appropriate to be less confident of my formulation that  “Zanu-PF is likely to be cautious about policy”.)

Additionally, a serious and high-risk ‘unknown’ is what might happen if and when Mugabe (finally) dies. My own assumptions about how history works is that individuals rarely make a huge difference to outcomes. However, through careful manipulation and a clever ruthlessness Mugabe has become the lynchpin of Zanu-PF power and I am uncertain as to what might happen if a vacuum suddenly appears in the space he currently occupies, but I think it is unlikely to be pretty.

 

Pravin Gordhan – mutters at The Treasury

“Finance Minister Pravin Gordhan’s leadership style has been called into question as treasury employees accuse him of taking a unilateral decision to cut performance bonuses by more than half, while failing to condemn publicly the expenditure on the multimillion-rand upgrade of President Jacob Zuma’s compound in Nkandla” – Mail & Guardian.

So what?

Aggrieved staff members are not necessarily the most reliable critics of the bosses for whom they toil. However, successive ANC governments have relied on the Department of Finance being a centre of excellence that consistently trains and/or attracts top, highly motivated and effective officials – so any signs of serious stress in the organisation is worthy of consideration. The article, from the ‘quality weekly’, quotes a ‘senior official’ in the following manner: “Since he [Gordhan] was appointed as minister, things have never been the same in the national treasury. He brought a management style that is foreign to the team of the national treasury. He sometimes speaks to the management team like they are kids. His leadership style has seen many of the senior treasury employees, including former director general Lesetja Kganyago, leaving … All he is focusing on is making sure that he is reappointed as the minister of finance after next year’s election. People here say that this is one of the reasons he does not condemn the enormous amount of taxpayers’ money that was spent on the president’s residence”

In the same story, the Democratic Alliance finance spokesman Tim Harris claims that recent replies by the Treasury to the party’s parliamentary questions revealed a ‘significant’ vacancy rate at senior levels within the department, “in particular, 25 senior employees have left the department in the past year,” he said.

We have to take this from whence it comes (aggrieved employees and the official parliamentary opposition) but the status and functioning of the previously above reproach Treasury is important enough to consider even the fruit of this tainted tree.

 

Julius Malema seeks spiritual guidance

City Press reported on Sunday that Julius Malema and his colleagues in the Economic Freedom Fighters left South Africa on Friday for a week’s visit to a massively popular Nigerian preacher in Lagos who has ‘prophesied’ a huge and bloody revolt in South Africa – presumably one led by Malema. The EFF said in a statement that this is a “spiritual visit to meet and create friendship with this son of Africa and his congregation, and ask for blessings on the journey ahead”.

So what?

Nothing really … it’s just that Malema’s antics are endlessly entertaining. Of course this lighthearted approach is based purely on the belief that Julius and cronies are never going to get anywhere in their political party endeavours. If the EFF ever looked like it was a real threat I would probably not be sniggering up my sleeve at their tormenting of the ANC …

Herewith my news commentary as of yesterday morning. I thought I would republish it here because it includes my brief assessments of how to think about the Zimbabwe election, Vavi and the EFF. I also, politely, imply that the Seriti commission might be a cover-up and that Amcu’s underlying objectives in the gold sector are potentially quite scary.

Zimbabwe – grin and bear it

Robert Mugabe has won 61% of the votes (2.11 million votes) in the presidential poll, against Prime Minister Morgan Tsvangirai’s 34% (1.17 million votes). Zanu-PF won 158 parliamentary seats against the MDC’s 49.

The head of the SADC facilitation process, South African President Jacob Zuma’s office yesterday released a statement that began:

H.E President Jacob Zuma extends his profound congratulations to HE President Robert G Mugabe on his re-election as President of the Republic of Zimbabwe following the successful harmonised elections held on 31 July 2013. President Zuma urges all political parties in Zimbabwe to accept the outcome of the elections as election observers reported it to be an expression of the will of the people.

The opposition MDC has called the result “fraudulent” and has threatened not to take up its 49 seats and to boycott government institutions and “pursue peaceful, legal, political, constitutional and diplomatic remedies” (several online news sources, including BBC Africa).

The Mail & Guardian points out that monitors from the African Union and the Southern African Development Community (SADC) have stressed that the elections were peaceful and have endorsed them as ‘broadly free’. In contrast, the United States and European governments, which have sanctions in place against Mugabe over past election-rigging, “listed a litany of alleged flaws in the vote, from lack of availability of the voters’ roll to pro-Mugabe bias in the media and security services that skewed the election run-up” – M&G.

So what?
Even allowing for the myriad ways in which the MDC was (deliberately – and probably illegally) disadvantaged in this election it appears there has been a real shift away from the opposition. Perhaps this is because just by entering the unity government in 2008 the MDC both saved the economy from collapsing (and thereby saved Zanu-PF) and suffered some of the sins of incumbency. Perhaps it was how mediocre Morgan Tsvangirai has turned out and how endless have been his romantic and sexual travails. Whichever. I am not certain that the MDC will follow through and actually not take up it seats – this will only be revealed in the next few weeks.

To repeat comments I made on Friday:

  • It is deeply unfair. The election was brutally stolen in 2008 and every state resource that could be deployed against the MDC has been so deployed in the last 5 years. Slight economic upticks post 2008, the deepening indigenisation programme (or at least the promise of the goodies from the programme) combined with a host of tactical and strategic errors by the MDC appear to have allowed Zanu-PF to ‘pull off’ a victory at the edge of acceptability … and the edge of the law, but just within it. Even if that is not the opinion of the MDC or Western observers, it is going to be the formal assessment.
  • Thus, I am not suggesting that this result reflects the “will of the Zimbabwean people” … but it reflects it adequately to avoid the crisis that would result from an outright declaration that voters’ roll irregularities … and inadequate other preparations … and the historical legacy of repression and cheating … and misuse of security agencies and state media … constitute enough impact to declare the result not reflective of the will of the people.
  • Does this mean Zanu-PF’s deeply investor unfriendly, GDP growth unfriendly, economic policies will continue? Not entirely. I think Zanu-PF has, miraculously, won back a chance to control the post-Mugabe succession period. They very nearly lost it as a result of their catastrophic policies. I expect Zanu-PF to be more cautious and embracing of investors in future … including with regard to the indigenisation programme. 
  • I am less sure  of that final bullet than I was when I wrote it on Friday, but it appears to me that, at very least, Zanu-PF, will have learned a lesson from nearly losing its hold on the country and is likely to give more emphasis to ensuring that the benefits of its economic policies flow to ordinary Zimbabweans (and less to buying off Zanu-PF cronies, which has been the emphasis up until now.)

Arms probe in tatters

Last week Judge Francis Legodi resigned from the The Seriti Commission into the arms deal scandal and evidence leader, advocate Tayob Aboobaker, announced his resignation citing ‘nepotism, unprofessionalism and infighting’ (he may since have withdrawn his resignation). These ructions follow the earlier resignations of senior researcher Mokgale Norman Moabi and the law researcher, Kate Painting.
So what?
The elephant in this room is the Jacob Zuma himself is one of the individual ANC leaders whose reputation has been most tarnished by the scandal (corruption charges against him in this regard were only – controversially – withdrawn in 2009). At the same time, it is Jacob Zuma himself, in his capacity as President, that has instituted this commission, possibly in the hope that he can put the threat of the return of those charges permanently behind him. At this stage the commission is meant to begin hearings today, and among those who will be called are former President Thabo Mbeki, head of Cope and former Minister of Defence Mosiuoa Lekota, former Minister of Intelligence, Ronnie Kasrils, former Trade and Industry Minister Alec Erwin and former Minister of Finance Trevor Manuel. I think it extremely unlikely that this commission will ever pronounce on why the bizarre decisions were taken to purchase the singularly inappropriate (for the country’s defence needs) set of expensive weapons systems (including 48 Saab Gripen fighters and trainers, 4 Daphne class submarines and 4 frigates). I also think it vanishingly unlikely that the commission will find out where the kickbacks went.

I will not be surprised if it emerges that the resignations from the commission are motivated by the belief that the process will achieve the exact opposite to its apparent purpose.

Zwelinzima Vavi

Several of the weeklies speculate as to whether Zwelinzima Vavi will survive the scandal in which he had unprotected sex in Cosatu’s headquarters with a junior employee whose employment in Cosatu he had irregularly organised – and who accused him of rape and later withdrew the charge in an internal Cosatu procedure.

So what
I covered this in some detail last week, but there is an implication to what is happening here that needs emphasising.

The ANC is facing an election next year and much of the pressure Vavi has been under up until now (from ANC/Zuma loyalists in Cosatu) has been directed at pulling him (Vavi) into line, to stop him constantly accusing government leaders of corruption, to stop him criticising macro-economic policy. The ANC needs to establish a united front so that it can take on the various challenges it faces in the national election next year. 

But there is a difference between placing pressure on Vavi and forcing him out of Cosatu. If Vavi is forced to resign because of his actions in relation to the junior employee it is not inconceivable that Cosatu’s biggest union Numsa might go with him.

It is as if the ANC has been pushing a board – that it thought was solid – to get it into a better position. But the board was rotten all along and it suddenly collapses as it is being pressed. An actual split in Cosatu that drove the most left-wing elements together and out of the ruling alliance would be negative for the ANC in a number of ways. It would further weaken the credibility of the trade union ally, it could raise the spectre of a viable ‘left’ party, it could force the ANC into having to contest on too many fronts in the 2014 election, it could increasingly lead to policy paralysis in government and it could cause serious labour unrest as Cosatu member unions reconstitute and split in a number of different industries. None of this is certain (or even likely) but it is a threat or a series of threats we need to bear in mind.

Economic Freedom Fighters – taxing times … but behind the theatre there are credible risks

Along the same lines as the above, the latest round in the colourful pageant of Julius Malema’s attempts to re-establish himself at the centre of South African politics came yesterday when he mounted a fierce attack on the South African Revenue Service (the full text published at politcsweb.co.za) after SARS made public the details of his tax record. (Here for the SARS statement and here for Malema’s response.)
So what?
SARS is defending itself from Julius Malema’s accusation that it is being used as a tool by what Malema calls the ZANC (the Zuma ANC). The truth or otherwise of this particular matter cannot be established, but I wanted to use the opportunity to raise what I see as the main risk associated with the Economic Freedom Fighters. The risks are not dissimilar to those associated with a potential ‘left’ split in Cosatu. It is increasingly likely that the ANC will be contesting the 2014 elections with significant threats both to its ‘left’ and its ‘right’.

The Democratic Alliance, perhaps in a formal alliance with other opposition parties and independent candidates is starting to seriously consider the possibility that it could win the Western Northern and Northern Cape and come achingly close in the, Eastern Cape and Gauteng. While I am unable to assess whether these are realistic objectives, I think it is important to consider how the ANC might behave if it faces this threat at exactly the point as its own members, allies and the Economic Freedom Fighters, place it (the ANC) under pressure.

I have no grounds to argue that the EFF and any ‘workers’ party’ that could conceivably emerge from a split in Cosatu could win enough votes to become a viable parliamentary opposition, but I do think that the operation of these forces place the ANC in an awkward, even untenable, ‘policy’ and ‘message’ position.

In adopting the investor friendly National Development Plan at Mangaung and in the presidency’s concerted attempts to stabilise the platinum mining sector, the Zuma administration has made it clear that it is extremely worried that investor sentiment towards South African policy and policy risk has turned negative. An ANC fighting a populist wildfire from the EFF (perhaps more heat than light … but anyway), an incipient ‘ left’ split from Cosatu and an ascendant DA is hemmed-in, constrained, unable to formulate viable national policies and increasingly tempted to engage in dirty tricks against its enemies.

 

Amcu and the gold negotiations – some tentative speculation

Following Amcu’s apparent walkout from the Commission for Conciliation and Mediation of the gold sector wage negotiation that had become stuck at the Chamber of Mines last week, I made the following comments (note that Amcu has since said it intends participating in the process, although as you will see from the below, I would be cautious of accepting that at face value):

I think that it is directly in Amcu’s rational best interest to:

  •  ensure that collective bargaining through the Chamber of Mines breaks down (i.e. that the central bargaining chamber is destroyed) and that companies are forced to seek agreements on a mine by mine basis; and
  • to provoke crises similar to those that took place at Impala in January last year and Lonmin in August on gold mines where it is not yet recognised as the majority union.

Firstly, why is this “rational”?
Because any of the anger, hot-headedness and youthful passions rooted in the history of Amcu leadership’s conflict with Num would have been burnt out of them last year.

Now it is probably more accurate to conceive of Amcu as rational competitors in a game where the objectives can be stacked in a very similar way to how one would stack objectives of a company with three or four major competitors in a set market.

Amcu can certainly get things wrong – and engage in activities that are counterproductive to the likelihood of it achieving its objectives – but this is less likely to be because Amcu is led by anarchist lunatics, and more likely to be because its leaders have made tactical and strategic errors.

Thus, while it is possible to argue that Amcu’s members and potential members are “tired of strikes” or “unable to bear the burden of further strikes” this should be conceived of as a constraint to Amcu pursuing its objective rather than an absolute barrier.
So what are Amcu’s objectives in the gold sector?
Firstly, to destroy the National Union of Mineworkers.

The Num, the loyalty of its (declining) membership, and its abuse of its prior dominance, is the most important obstacle to Amcu achieving its main objective which, unsurprisingly, is to be the only significant union in the resources sector. That is, Amcu’s primary objective is to occupy the eco-niche that Num has occupied up until now.

Trade unionism is a business … it’s about money and power. So yes, Amcu grows by more effectively representing (or portraying itself as more effectively representing) the collective interests of its members or potential members … and thereby actually getting greater numbers of signed up, due-paying members.

However, it cannot be effective in this task, even where it has already got more members than Num … because Num occupies an institutional and regulatory “space” that it is using to maintain its dominance.

Thus, in a central bargaining chamber system where the representivity of the participating members is outdated (as it clearly is in this case) the union that is actually dominant (or in the process of becoming dominant) must destroy the process and force employers to deal directly with it … and not with the old dinosaur that is taking up all the space by trading purely on the institutional lag effect.

So forcing employers to deal with Amcu, on a mine-by-mine basis, seems to be a no-brainer for the upstart union and explains perfectly Amcu’s actions up until now in the gold negotiation process that started 2 weeks ago.

The next step is that Amcu has to establish dominance at each mine … it has to “force” the employer to deal with Amcu rather than Num … even if the outdated books still show Num as the dominant union at each mine.

Thus Amcu will attempt to destroy Num’s negotiating position … it will work to ensure that workers do not feel that whatever Num and management settle for is an adequate settlement. Amcu only wins if that settlement fails; therefore it has an absolute imperative to cause those settlements between Num and management to fail (by proposing levels that are more difficult for management to meet and by mobilising workers against whatever settlement Num reaches).This is a competition that Amcu can lose. Num and management might strike a workable deal that the majority of mineworkers back … but it (Amcu) has got to fight it.

If this is correctly reasoned, there is a strong pressure on the central bargaining system in the gold sector and for possible mine level negotiations to be traumatic – in a very similar way to the trauma associated with strikes in the platinum sector last year and with an almost identical ‘architecture’.

Once (and if) Amcu has crushed Num and established its dominance across the industry its motivational hierarchy changes; it will then want to lock itself into the monopolistic position that Num now occupies. But that is a long way ahead, so long that it is not yet worthy of serious consideration. For now, it (Amcu) is trying to free up space so that it can go head-to-head with Num, which in turn is hiding behind bureaucracy. Thus Amcu is trying to increase competition because it believes in a straight fight it will win.

Finally, Amcu does not have a free hand in pursuing these objectives. Management and Num are going to fight back in all the ways (positive and negative) open to them. Also, workers are tired, indebted, the industry is shrinking and management is looking for excuses to downsize workforces – but within these constraints, I would argue that Amcu is forced by its own nature, to pursue the objectives here set out, as effectively as it can within those constraints.

Herewith my latest news update as of 06h30 this morning.

  • NDP – defections to the left and right
  • Collusion scandal in the construction industry gathers momentum
  • Tax Review Committee – some welcome caution
  • Proposed legislative changes in the mining industry shows SA government’s deep ambivalence towards the sector
  • Ramaphosa – rumours that Zuma faction is planning his side-lining
  • Zimbabwe election chaos looms
  • Zanu-PF funding Julius Malema? Good story, but impossible to prove
  • ICT takes its ‘R150-billion’  iron-ore claim to the Constitutional Court

National Development Plan – under attack from left and right

Trade union Solidarity has added its voice to growing (but varied) criticism of the National Development Plan (NDP), calling it “self-contradictory, heavily race-based, deeply interventionist … largely unworkable … downright intrusive and harmful and … likely to require substantial funding”. [1]

Solidarity joins John Kane-Berman (Chief Executive of the South African Institute of Race Relations) who recently said “half-baked solutions suggested by the National Development Plan would do little to address the multiple challenges facing South Africa” and, further, that the plan “is a hotch-potch of contradictory ideas that have not been properly costed and are bound to fail” – Business Day 03/07/13.  Kane-Berman added that the lack of future scenarios for tax revenues, budget deficits or the public debt means that an endorsement of the NDP amounts to giving the government “a blank cheque for more taxation and more borrowing and probably for both” – ibid.

The NDP was adopted by the ANC at its Mangaung conference In December 2012 and has since been repeatedly endorsed as the cornerstone of the government’s medium and long-term planning by Jacob Zuma and members of his cabinet.

Since then the policy has been welcomed by organised business (for being generally market friendly) but strongly criticised by Cosatu for prioritising growth over inequality, employment over ‘quality work’ and for its reliance on markets and the private sector.

So what?

Jacob Zuma’s government has used the NDP to lend an appearance of coherence and co-ordination to policies as diverse as infrastructure development, labour market reform, tax policy, mining regulatory shifts and anti-corruption campaigns. Our own view is (unusually) closer to that articulated in a recent position paper by the South African Communist Party which said that the NDP is “a broad vision open to necessary criticism and engagement. It is NOT really a PLAN, still less a fit-for-implementation plan.”

Government should not be judged on its broad statements of intent – which is essentially what the NDP is. Government should be judged by what it actually does (or fails to do), what legislation it brings to parliament, what structural reforms it affects, the degree to which it improves the public service, how it manages the public purse … and by a host of other performance indicators.


The collusion scandal in the construction sector

Murray and Roberts CEO Henry Lass’s public apology for the company’s involvement in the widespread collusion scandal made the main headline on the front page of the Business Times yesterday. “I know that the Competition Commission’s findings of collusion in the construction sector has angered and disappointed you, just as it has our board, executives, employees, shareholders and other stakeholders,” Lass bemoans. He then goes on to explain that much of the wrongdoing took place in the dim and distant past. “None of the current executives at Murray & Roberts were found to be at fault for any form of collusive conduct through the Fast Track Settlement”.

So what?

It appears that public outrage at the scandal is growing. The lead editorial in the Sunday Times is particularly scathing. Headed: “Jail the price-fixers in the construction sector”, the editorial argues “when the private sector is caught out cheating and inflating costs for everyone who pays tax, we should judge them by the same standards we apply to the likes of Bheki Cele, Dina Pule or Menzi Simelane. Apologists argue that construction companies did this to make the deadline for the World Cup — but it’s a poor argument. It wasn’t just the soccer stadiums that South Africa’s iconic blue-chip companies with suitably self-righteous corporate governance manifests, such as Aveng, Group 5, WBHO and Murray & Roberts, colluded on. There were many others, including the Coega harbour nearly a decade ago, the Nelson Mandela bridge and any number of other construction projects.”

Expect civil claims from various angry customers (including metropolitan governments) … and it is not inconceivable that criminal prosecutions of some executives who didn’t “come clean” in the Competition authority process could still be on the cards.

 

Tax Commission – some welcome caution

Pravin Gordhan has named members of the long promised Tax Review Committee charged with inquiring ‘into the role of the tax system in the promotion of inclusive economic growth, employment creation, development and fiscal sustainability’. Judge Dennis Davis will chair the committee. Other members are Annet Wanyana Oguttu, prof Matthew Lester, prof Ingrid Woolard, Nara Monkam, Tania Ajam, prof Nirupa Padia, and Vuyo Jack – with Cecil Morden, an official from National Treasury and Kosie Louw, an official from the South African Revenue Service as ex-officio members who will provide technical support and advice.)

So what?

It’s an adequate committee staffed and led by people respected across society and (mostly) with the necessary technical expertise. After the ANC adopted policies at its Mangaung national conference in December last year that specifically called for increased taxes in mining (the State Involvement in the Mining Sector document) it is a minor relief that the Treasury has qualified the terms of reference by specifying (amongst other limitations) that the any changes to the mining tax regime must take account of “the challenges facing the mining sector, including low commodity prices, rising costs, falling outputs and declining margins, as well as to its current contribution to tax revenues.”

 

Mining industry legislative changes show ANC ambivalence about the resources sector

The Mail & Guardian published an interesting piece raising important concerns about proposed changes to legislation contained in the Mineral and Petroleum Resources Development Amendment Bill that was tabled in parliament on June 21. According to the author of the article (Peter Leon a partner and head of the ‘mining sector group’ at Johannesburg law firm Webber Wentzel) the bill “perpetuates and, in some respects, exacerbates” excessive administrative discretion in the issuing of mining licences.

In the article, Leon says that the proposed legislation “inexplicably deletes all the Act’s statutorily prescribed timelines and leaves this to ministerial regulation … second, it introduces an export licensing system for ‘designated minerals’, which are vaguely defined as: ‘Such minerals as the minister may designate for beneficiation purposes as and when the need arises in the [Government] Gazette.’ All ‘designated’ minerals will require the written consent of the minerals minister prior to their export.”

Leon points out that under the proposed legislative changes “the minister becomes the pricing tsar for ‘designated’ minerals” and “the department will effectively control all exports of such minerals”.

So what?

Many of the proposed legislative changes Peter Leon discusses in this article are precisely those that were originally contained in the State Involvement in the Mineral Sector document adopted as policy by the African National Congress at it December 2012 National Conference. So, despite various attempts to mollify investors after a torrid 2012 (through, for example, Kgalema Motlanthe’s framework agreement for a sustainable mining and the ‘sensitive’ tax commission terms of reference discussed above) the ANC and its government is still following its contradictory impulses with regards to the resources sector. Expect confusion and contradictory signals to continue to undermine sentiment in the sector.

 

“Fierce ANC Ramaphosa succession battle brews” – Sunday Independent

The Sunday Independent quotes several unnamed sources claiming that there is a campaign in the ANC to prevent the party’s deputy president, Cyril Ramaphosa, from becoming the country’s deputy president after the national election next year. The weekly newspaper claims the fight is “pitting President Jacob Zuma and Ramaphosa’s supporters against each other.” The story suggests that either ANC chairwoman Baleka Mbete or Public Services Minister Lindiwe Sisulu are likely to replace Kgalema Motlanthe in 2014.

So what?

This story is based on the idea that the long term imperative of Jacob Zuma and his lieutenants  is to control the succession in 2017 (in the ANC National Conference which will elect the next ANC president ) and in 2019 (in the national election which will elect the next country president). Why? Because an independently minded candidate (which, in this narrative, Cyril Ramaphosa is imagined to be) might fail to protect Zuma from the consequences of the corruption allegations that still hang over his head. A careful reading of this and similar stories indicates that the “unnamed sources” in favour of ensuring that Ramaphosa becomes deputy president next year are from Gauteng and the “unnamed sourced” plotting against him are from Kwazulu-Natal. Such stories in the popular press are inevitably based on factional leaks out of sections of the party pursuing some or other agenda of their own. This doesn’t mean there isn’t a plot against Cyril Ramaphosa, it just means we need a healthy sense of scepticism about these kind of leaks into the media.

 

Zimbabwe election chaos looms

Zimbabwe is due to host national elections on July 31 – having endured a chaotic ‘special vote’ on July 14 and 15 for approximately 80 000 uniformed personal.

SO what?

The Mail & Guardian put it well:  “every indication is of a poll that will be not only shambolic but also intrinsically unfair. The outcome of the past two elections in Zimbabwe were fiercely disputed and it would be tragic if the result once again left the country in limbo. Equally unacceptable would be a façade of legitimacy over another stolen election.”

(Tony Hawkins, “professor at the University of Zimbabwe’s Clinical Research Centre” gives a useful analysis of the “dismal economic past and the failed policies of President Robert Mugabe and his Zanu-PF party” on the leader page of the Sunday Times. After his analysis – which I recommend here  – Hawkins says “given these statistics and Zimbabwe’s ranking near the top of the list of failed states, it is difficult to understand why South Africa’s chattering classes are so convinced Mugabe will win again next week. His track record of economic failure is unparalleled in any developing country that has not experienced civil war or military adventurism.” While this ‘member of the South African chattering classes’ has no real idea whether Mugabe will win –by hook or by crook – next week’s election, I have to agree with both the Mail and Guardian and Professor Hawkins that it is a foregone conclusion that it will be ‘shambolic’ and ‘intrinsically unfair’.)

 

Bits and pieces

  • Facebook profile, Baba Jukwa, purporting to be a kind of ‘deep throat’ in Zanu-PF has claimed (according to  City Press) that Julius Malema’s Economic Freedom Fighters are funded by key members of Robert Mugabe’s cabinet. “This is ostensibly in revenge against President Jacob Zuma and his international relations adviser, Lindiwe Zulu, who have been heading the Southern African Development Community mediation process in Zimbabwe following the violent 2008 polls” – City Press 21/07/13.
  • Business Times said “rumours are swirling that Cell C has been trying to put together a landmark, cross-sector deal to partner with First National bank (FNB)”.  The story repeats speculation that “(e)ssentially, this would see FNB start its own cellphone business using Cell C’s network as its backbone” with the intention of rolling out integrated cellphone banking to the customer base of both companies  – Business Times.
  •   Imperial Crown Trading and Mineral Resources Minister Susan Shabangu have filed papers at the Constitutional Court, asking it to set aside Pretoria High Court and Supreme Court of Appeal judgments giving Kumba Iron Ore subsidiary Sishen Iron Ore Company (SIOC) full rights to one of the largest iron ore mines in the world. ICT is co-owned by Deputy President Kgalema Motlanthe’s long-time partner, Gugu Mtshali. “At stake for ICT is a 21.4 percent share of the mining right, which is conservatively expected to produce a net profit of R150bn over the next 30 years for its owner” – Sunday Independent.
  • Pali Lehohla, Statistician General and head of StatsSA used some unusual language to describe his feeling about his now retired deputy director general Jairo Arrow as well as now fired chief of Methodology, Evaluation and Standards, Marlize Pistorius – who together identified an 18.1% undercount in Census 2011. Aside from expressing his temptation to “physically manhandle” Arrow, Lehohla also said “we will rid this organisation of those kinds of plotters … you have to act with integrity and flesh, flesh, no blood, no drop of blood must come from the neck … It must be a sword that cuts clean. That’s how we deal with people like these … when you attack you must attack as aggressively to eliminate it completely” (Sunday Independent). Is this what happens when statisticians become generals

[1] Solidarity is a (largely white) South African trade union that mostly organises skilled and semi-professional workers. The criticism of the NDP appear in Solidarity’s latest Labour Market Journal (that can be accessed here.)

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

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 6,322 other followers

My twitter tweets