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Business Day this morning published an article suggesting that Nhlanhla Nene was on the verge of being shuffled out of his Minister of Finance position to some face-saving backwater.
I wrote early last week in a client note: “It is widely held that the National Treasury and Minister Nhlanhla Nene have come under hostile pressure for investigating close Zuma allies and an axe in the form a threatened Cabinet shuffle hangs over Nene’s head to keep him compliant with Zuma’s own spending priorities and plans for SOE’s and nuclear power roll-out (to which Nene is widely believed to be opposed in its current ZAR1-trillion form).”
However I have repeated to several of my clients that I believe that while Zuma might axe Nene is might be a step too far, the moment the great leader overestimates his greatness and fails to understand his Ozymandian limitations.
Nene is the first black African Minister of Finance and he is at least as steely and technically competent as any of his post 1994 predecessors. Last week be brought the meat-clever down on the plan of SAA board chair Dudu Myeni (widely suggested to be an intimate of Jacob Zuma) to place a mock-up company in an already done leasing deal between the national carrier and Airbus. The company would have been nothing other than a rent extraction tool – and added hugely to the costs of the deal. Myeni’s reprehensible argument was that it was all for the purpose of transformation – proving that the political elite uses the practice to loot the SOE budgets as much as it ever does to promote real BEE.
Nene has also been going after the SABC’s Motsoeneng (another person who brags widely about his relationship with the President and his untouchable status) and he (Nene) has been widely assessed to be dragging his heals on Jacob Zuma’s pet nuclear deal that in its current form would beggar the country and state finance for many years to come.
So Nene has apparently got in Zuma’s face and he is facing the axe – according to various stories including the one linked above.
When Nene was first appointed on May 24 2014 I expressed concern about his seniority in the party and questioned whether he would be able to stand up to the fiscal pressures that would be placed on him – especially in relation to his predecessors in the position and especially in our declining growth environment.
I was wrong – if anything Nene has been both stronger and more tactical in his attempts to meet the increasingly difficult targets of fiscal consolidation – given the endlessly lower levels of growth. The rating agencies, those who grade South African government debt and have recently moved us closer to non-investment grade (i.e., junk) have come to rely on the dependability of the head of the National Treasury. We have a tradition of putting some of our best ministers in the position and Nene has risen to the challenge.
The Business Day story quoted above (which might be rubbish, but chimes with several of our initial views) suggests that some “malleable” nobody by the name of Des van Rooyen from the Parliament’s finance committee could replace Nene (the closest information I could find on a web search for this character was this smarmy speech on the ANC website).
I have no idea if this is true, but have concluded elsewhere for a range of reasons and from a range of sources that Nene is vulnerable and that ‘an axe hovers over his neck’ because he has stood up to Zuma.
If Zuma gets rid of Nene, because the head of the NT has offended Zuma’s friends and he is showing opposition to Zuma’s nuclear retirement plan or legacy project he (Zuma) would be making a grave mistake – a mistake leaders who have come to overestimate their power often make.
Axing Nene will be read by the capital markets and rating agencies in exactly the terms I have described above – Nene has been exemplary in his job except when forced to concede to political pressure from the top – and even then he has skilfully manoeuvred to lessen the damage.
If Nene is axed I will be unsurprised to see us downgraded to junk by the end of 2016.
I will also be unsurprised to see political shifts against the leader (Zuma) who has finally overstepped the mark, who has heaped damage upon damage on the South African political economy, especially as regards to its reputation for probity, but who has especially damaged the reputation of the ANC.
I see from the Business Day story that the rumour is the Guptas “let the cat out of the bag” (read “announced”) the impending Cabinet reshuffle. Excuse me! This more than anything suggests (if it is true), not for the first time, that Zuma has sold our sovereignty to these shady interlopers for something a lot more than a mess of pottage.
My underlying point is that Zuma’s power is becoming more brittle and his lines of support stretched thinner and thinner. He is engaging in actions that parts of his party find repulsive and there is a point beyond which a system under stress can quickly unravel as the connections snap and the nodes pop.
Occasionally I publish slides from a current presentation series and here are a few from something I am busy with called: “The Second Transition – SA politics and policy somewhere twixt hither and yon”.
The general idea is the ANC government is determined to move beyond the ‘transitional’ arrangements that it agreed to in 1994 and strike out boldly towards some undefined, but more profoundly transformed future.
Then, taking some liberties, I summarise what the ANC is “really” (in my humble opinion) saying in motivating the documents:
I then set out on the difficult task of attempting to assess whether the ANC documents actually propose anything as thoroughgoing as the initial motivation implies.
Frankly, the answer is “no”; although the proposals are both worrying in tone and in how contradictory and “bitty” they are.
The best formulated document is the “Maximizing the Developmental Impact of the People’s Mineral Asset: State Intervention in the Minerals Sector (SIMS) – document (get a link to that here). It contains a thoroughgoing set of proposals that change the tax system for mining and propose a complicated set of upstream, downstream and sideways linkages for the industry that will create a new set of burdens and obligations (not all bad) for the mine owners. (My own feeling about mineral resources is that these are “non-renewables” and government is obliged to get the maximum developmental benefit out of them before they are lost forever – but that is just by the way.)
Almost every other document – and there are 12 in all – meanders between
- being meaningless wish-lists,
- statist and authoritarian blueprints to bully and control and
- well researched and argued guides to fixing key aspects of what is wrong with our society
Almost all the good stuff is lifted body and soul from the meticulously researched National Development Plan with its focus on the 9 challenges of
- widespread unemployment
- ailing infrastructure
- low standards of education
- exclusion of the poor from mainstream development
- a resource dependent economy
- a failing public health system with a large disease burden
- inept public service provision
- widespread corruption and
- societal divisions.
My presentation itself does not make strong predictions on how far the ANC will get with its deliberations … although what is clear is that policy discussion this whole year will be drowned out by the Mangaung election noise. It is is going to be difficult to ascertain any real direction through the clamour of the struggle to re-elect Jacob Zuma.
Leaving aside all the slides that deal with the actual documents, I do, however conclude by asking some questions of our key players … and I include those slides here for your interest:
As the months go by, I will hopefully have time to flesh out some of those question.
But for now I am in the final days of the road show trying to make sense of the mess of proposals and hints in the documents, which span issues as diverse as fracking the Karoo, IDZ’s to SEZ’s, the Treasury versus EDD versus DTI, local procurement fantasies, some excellent fixes of BEE from Rob Davies, the lonely excellence of the Gordhan and Marcus and infrastructure looking more and more like the ANC’s one-trick-pony.
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.
Two brief thoughts – on a rainy Cape Town Sunday:
Firstly – a by-product of Malema’s (possible) retreat
I have a feeling that debates ranging from mine nationalisation, land distribution and continued white economic dominance in the South African economy have just been saved from the gangsters in the ANC Youth League who have been using these as a cover for looting.
It has been difficult not to lump every statement about ongoing race based inequality with the smokescreen slogans used by the ANC Youth League leadership – and many equally corrupt politicians.
The latest Commission of Employment Equity Annual Report says whites still occupy 73.1 percent of top management positions – and blacks 12.7, Indians 6.8 and coloureds 4.6? Yeah, well they would say that wouldn’t they – after all, that is (one of) Jimmy Manyi’s old outfits and he is the grandmaster of running racial interference for pillaging resources destined for development!
Willing-seller, willing buyer policy of land distribution responsible for only 5 percent of redistribution targets met? Yeah, well, guess who are trying to get themselves a portfolio of farms a la Zanu-PF?
Nationalise the mines? Yeah, so you can rescue your BEE backers and get a piece of the action yourself?
But that was last week.
Those issues are back on the agenda, but this time the discussion might be led by people genuinely looking to harness the country’s resources for development and transformation – not looters, corrupt tenderpreneurs and “demagogic populists” disguising their true intentions.
If anyone thought we could go on with the levels of unemployment, inequality, poverty and racially skewed distribution of ownership and control of this economy I suspect they will find they have been very much mistaken.
One of the consequences of the retreat of the Malema agenda is that we will all have to deal with the issues we have, up until now, been able to dismiss or deflect because they were ‘owned” and propagated by thugs.
Itumeleng Mahabane says it like it is
In a similar vein – and my favourite read of the week – was Itumeleng Mahabane’s column in Friday’s Business Day.
He deals with a variety of aspects of the country’s debates about development and transformation.
In tones that have been tightly stripped – of anger, I suspect – Mahabane appeals for the debate to lose the “prejudicial invectives” and that participants should “desist from creating cardboard villains”.
He makes 4 main points (actually he makes a whole lot more, and it is not impossible that I misinterpret him here – and he is certainly more subtle and nuanced than my summary below – so read the original column – the link again.)
Firstly he suggests (although in the form of a question, not the statement as I have it here) that we have to acknowledge the damage our Apartheid past has done our country, leaving “the inequity of our income distribution and the historic systematic destruction of black capability”.
Secondly he hints that the state cannot assume more economic responsibility before we have fixed accountability – and thereby arrested corruption.
Thirdly he appeals for a sophistication of our views on the labour market – I think by suggesting that a degree of duality is crucial.
But, he warns:
I do not subscribe to the simplistic and questionable idea that the inability to hire and fire people is the core cause of structural unemployment. The balanced high growth would create demand for labour, regardless of labour rigidity.
Fourthly he asked us analysts why:
we casually, without considering the social implications, vilify workers and the working class, making them useful villains for complex economic challenges? We almost never give view to the body of evidence that shows that market rigidity and anticompetitive behaviour is a significant factor in deterring investment and output and that, in fact, it contributes to SA’s excessive business and skilled-labour rents.
Those are important views – and an important corrective to aspects of our debate about development.
Following a previous post: The Limits of Politics I want to argue that what the ANC is becoming is less a function of the failings of its leadership and more a consequence of the titanic forces of social change.
The past and present history of the African National Congress could be characterised (in shorthand) like this:
National Liberation Movement
The ANC arose out of the fact of the prolatarianisation of an African peasantry and the deepening national oppression of all black South Africans – only codified in Grand Apartheid in 1948 but stretching back much further.
What the ANC was was a natural expression of the changing pattern of the oppression of Africans (and other black South Africans) between 1912 and 1994. One way of understanding the shape, raison d’être, policies and leadership of the ANC during this period is to trace the history of the strategy and tactics of the pre-Apartheid and Apartheid states.
Each phase of ANC resistance to colonisation and apartheid – from the initial polite depositions of the early years, to the militancy in the 50’s, the banning in 1960, the crushing of the organisation’s internal structures, the launch of the ‘armed struggle’, the imprisonment and exile of its leadership, the playing catch-up after the 1976 explosion, the United Democratic Front as an internal wing to prevent Coloured and Indians being won over to a National Party strategy leading up to mass protests, negotiation – was mirrored in the changing structure of the society.
This is not to say the ANC was a perfect expression of all aspects of African resistance or that, in turn, such resistance was a perfect response to national oppression. The shape that all things assume is always a complicated expression of subjective and objective factors and this is true too for the African National Congress.
The forces that ended Apartheid
Of course the struggle for freedom of South African people and their organisations (and their allies around the world) is one way of understanding what brought about the end of Apartheid.
But another is to ask: what was Apartheid trying to control, for what end – and why did it fail?
Apartheid was ultimately a system of law, repression and inducements designed to deflect African’s economic and political aspirations away from white owned and controlled South Africa – for the purpose of securing white economic power and security.
It ultimately failed because Africans “voted with their feet”. The National Party was trying to legislate (and police) against the collective desires and actions of millions of people. But Africans would not have their aspirations diverted to the geographical or the political Bantustans. In the face of fines and brute force Africans kept coming back to the cities, the bright lights, the markets, the chance of work and the chance to do business.
To avoid complicating this further, let me say my own shorthand understanding of what was happening (and the timing of what was happening) is the South African and global economy were growing in ways that required an educated and settled workforce and this in turn raised for African South Africans the realistic possibility of being ‘settled’, ‘educated’ and, ultimately, of achieving a better life.
Apartheid and National Party rule constituted a barrier to the swelling aspiration of African South Africans – particularly for property, assets, homes and the right to work and live where they pleased.
The ending of Apartheid and National Party rule was the bursting of the dam.
1994 and beyond – the time of the flood
The African National Congress had always been forced to root itself in a marginalised African population and this meant it faced most forms of power in the society as the challenger and the outsider.
The ANC was able to ride the wave of rising African aspirations in the 70’s and 80’s – but there was no expectation that it meet those aspirations.
Everything changed of 1994.
The government’s of Nelson Mandela and Thabo Mbeki had a mandate and responsibility to use the winning of the ‘political kingdom’ to seek the economic one. What followed was a two-pronged approached to empowering the ‘previously disadvantaged”:
- take the state bureaucracy out of white hands and put it into black ones;
- encourage transformation of ownership and control of the private sector through employment equity laws and regulations and through the development of a black economic empowerment regime.
The process very quickly assumed its own momentum and the first stratum of individuals who were sucked into the maelstrom was the political class … the senior members of the ANC and government.
Once you have begun to use the state as a lever to gain economic power it is difficult to stop.
But by the time Thabo Mbeki’s government attempted to formalise, control and broaden the process with the Broad-Based Black Economic Empowerment Act of 2003 it was out of control – and engulfing large sections of the ruling party and the senior levels of the state bureaucracy.
… and the point?
The point is not to exonerate the ANC or government or individual leaders who have become tenderpreneurs or crony capitalists. It is not even to excuse government (particularly Thabo Mbeki’s) for making specific errors in structuring the process … there were others paths that could have been taken that might have made a difference.
But the reason I suggest this vantage point or approach is because I think the hope that this process could ever have been calm or orderly is based on misunderstanding the deep, structural and historical nature of what is happening.
A flood of wealth and power is moving from the old order to the new and has blurred the boundaries between the public and private sector and is threatening to overwhelm government and the ruling party. Once the waters have achieved a new equilibrium it may be possible to re-establish a separation and rebuild the laws.
But it is going to be close.
What happens when we define ‘the enemy’ in terms that would justify shooting them down like mad dogs in the street?
I have often felt that the terms of our political debate are too extreme – from all sides of the political spectrum.
The idea or assertion that the government, the state and the ruling party is made up of an undifferentiated herd, squealing and grunting at the trough, might be rhetorically satisfying, but it’s wrong and not designed to foster our democracy.
But a more serious problem is emerging as the a Ruling Alliance, feeling threatened and burdened, has started characterising all forms of opposition as driven by white capitalists full of nostalgia for Apartheid.
The best example I can find is contained in Blade Nzimande’s Chris Hani Memorial Lecture.
Nzimande makes explicit something that is being articulated from every part of the Ruling Alliance – and it is important not to dismiss his words as part of a “loony left” view.
Nzimande defines two enemies of freedom, democracy, national liberation and “our revolution and its objectives”. These enemies are:
- The new tendency including tenderpreneurship and the general danger of business interests within our broad movement overrunning and defeating the revolution
- The anti-majoritarian liberal tendency
The first one is clearly ‘the enemy within’ – tenderpreneurs and similar – and in this he might be supported by the DA.
But in the lead-up to the municipal election, it is the second enemy and how “it” is defined that is of interest to me.
This is the essence of it pulled out as quotes and paraphrasing from the lecture:
Firstly, the Democratic Alliance and the print media are the organised representatives of the enemy.
Thus: … there is a “liberal offensive against the majoritarian character of our democracy” that with “growing arrogance and strident nature” is “pushed by the likes of the DA” but mainly conducted by its “principal ideological platform and mouthpiece … South Africa’s mainstream print media”.
Secondly, the enemy consists largely of previous beneficiaries of Apartheid:
In fact the (anti-majoritarian) liberal agenda seeks to defend, protect and advance the interests of the white capitalist class and the petty bourgeoisie, without explicitly saying so like during the era of the racist apartheid regime; and yet in a manner not different from white minority rule, but in conditions of black majority rule!
Finally, the main strategy of this enemy is to get the state to stop supporting the poor and instead make it (the state) an instrument for making capitalists richer still.
At the heart of the liberal offensive is the objective of weakening the capacity of the state to act in the interests of the overwhelming majority of the workers and the poor … In addition such state intervention in favor of the capitalist or local ruling elites … undertake(s) further measures (like repression and destruction of the trade union movement, especially its progressive components) in order to ensure that the conditions for the reproduction of capitalist relations of production are strengthened.
Believing your own propaganda
Like all effective propaganda these characterisations by the Ruling Alliance – here expressed in the mostly pseudo-intellectual terms of Marxist Leninism – rely on packaging elements of truth with confirmations of people’s lived experience – at the same time confirming their prejudices and fears.
In this universe a Media Appeals Tribunal or the disruption of a DA rally in Mamelodi are minor acts of resistance against an evil and dangerous invader.
The lie that the DA only represents Apartheid nostalgia equals the lie that the ANC is only a platform for pillaging the state.
Both characterisations leave the protagonists stranded on their high horses beyond the frontiers, with no roads back and no options but to push forward into the night.
- The business of government becomes the business of enriching the governors … rather than the business of governing and thereby serving the electorate’s overarching interests?
- The extremely rich rewards to be gained from holding political office cause the party list process – especially in the ANC – to become one of mayhem and murder, endlessly chaotic and contested?
- All classes of South Africans whose interests are inimical to the looting of the state, political patronage, ransacking the parastatals, incompetent government and tenderpreneurial activity of all kinds (the black and white middle classes, the industrial working class and the urban poor who are dependent on service delivery as well as big and small business, which both need a functional state, stable rules and the rule of law) begin to shift their support to opposition parties, social movements and trade unions?
- In turn this puts pressure on the Ruling Alliance as Cosatu and ANC democrats start pushing against the tide.
- The ANC withdraws into governing through systems of patronage and razzmatazz populism as its class base shifts to the rural poor, unemployed urban youth, the state sector and the political/economic elite and fast-and- loose forms of international capital and organised criminals (the last two categories are experts in dealing with this kind of politics)?
I think this is the way the cookie crumbles. With the proviso that no-one knows the future – and it is always more unexpected than not – and I think the cookie crumbling in the way that I have described means:
- The Democratic Alliance continues to transform its racial profile (in electoral support as well as leadership) and strengthens its support in urban constituencies throughout the country in the May18 national municipal election.
- There is a significant showing in that election by other opposition parties and independents.
- Cosatu begins to plan for the inevitability of either ‘a coup’ within the ANC or a withdrawal from the Ruling Alliance and the establishment of a viable alternative political home.
- The backlash within the ANC after the election will be severe leading to very high levels of contestation before and during the 2012 elective centenary conference.
That’s the way I see it, although I might be wrong.
If I am right, the next few months is the last chance for the ANC to be saved from the future its current leaders are securing for it.
A rescue job will have to reject the Nkandla style patronage networks as well as the ANC YL style technocratic tenderpreneurialism and those who back it. That doesn’t leave much political room for a challenge or much of an internal constituency in which to nestle it – other than on the left.
Just thought I would mention that in passing … I am now so busy with paid work (hurrah!) that “in passing” is the only time I will have for a while.
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 love that scene in the Bucket List where the poor but proud Morgan Freeman character quietly points out to the rich and arrogant Jack Nicholson that the coffee he brews in a silver pot and savours from Dresden china is made from beans shat out by a lemur in South America – well that’s how I remember it, anyway.
You shouldn’t sneer at Kenny, Julius, Noleen, Hlelo, Ntando, Gayton and their 4000 best friends at the opening of the ZAR in cape town on Saturday night – after the Met, of course Darling.
Previously, under Apartheid, many of them were disadvantaged. Looking at them now, a more miraculous transformation seems impossible to imagine.
The nouveau riche always feels it has something to prove; always embarrasses itself in the eyes of its better educated children. But South Africa’s new elite seems … almost Russian … in its consumption of the tasteless and conspicuous.
Picture the model dressed in a black S&M bikini. She is lying, anxious under the blazing lights and sweating under the make-up. Kenny Kunene’s peculiarly round head is leaning over her, his moist lips pouting in an “oh” reaching down to her belly and the rice and raw fish that is lying there, slimy as the evening drags on …
And the morally disadvantaged new elite roars its satisfied approval at this witty, sexy exercise of power – take back the night, we didn’t struggle to be poor …
Thank heavens for the increasingly twinkly and cantankerous – in equal measures – Gwede Mantashe (and, it must be said, his ‘desperately-clinging-to-the-high-ground’ organisation).
This is what they had to say:
The ANC distances itself from owning a nightclub
31 January 2011
The African National Congress (ANC) distances itself from sentiments allegedly attributed to the ANC Youth League President, Cde Julius Malema that, “Helen Zille is trying to close all the clubs in Cape Town, but this one belongs to the ANC”, as contained in today’s (31 January 2011), media reports.
The ANC would like to state it categorically clear that it has no interest in running a nightclub or in endorsing its owners. The ANC is not into nightclubs or partying, but it is a revolutionary movement.
We furthermore reiterate our condemnation to the act of serving sushi on a woman`s body, as this act is anti-ANC and anti-revolutionary. This act is defamatory, insensitive and undermining of woman`s integrity.
We therefore appeal to all those involved in this act to immediately disengage from it.
ANC Secretary General
African National Congress
You go Gwede Mantashe, may your voice ever be raised above the grunting and bellowing around you.
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 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?
The news media is full of toyi-toying fat people in red T-shirts blockading hospital gates interspersed with pictures of dead and dying babies.
Alternatively the coverage is of other fat people in red T-shirts clutching sticks and whips trundling around, with their fat bottoms swaying, looking for pupils (bravely trying to uplift themselves by continuing their studies during the public sector wide strike) to beat and otherwise disrupt.
There is a degree of truth in the story… I mean, turn on your television, they’re everywhere, with their megaphones and coffee flasks (and clearly a lot of biscuits and sandwiches), belligerent and unattractive as it is possible to be.
But I suspect that we should treat the picture and the solutions that seem obvious (and are being offered by every newspaper and television station in the country – with unusual unanimity) with more than a degree of caution.
It’s impossible to realistically analyse the strike here – and anyway that is work I have to try to sell to a paying client – but there are some questions I would urge us all to bear in mind.
I lay some of them out here as bullet points:
- Government has offered 7% with a R700 housing allowance (an offer that amounts, according to the employer, to between 9.4 percent and 8.5 percent, depending on grade) and unions are demanding 8.6 percent wage increase across the board and housing allowance of R1 000. This seems closer than it is – the difference between the offer and counter offer, when aggregated across the public sector, makes a huge difference to the fiscus and to the actual take home value of the workers’ pay packages. Both parties have something to fight for.
- Workers strike at great cost to themselves – generally, by-and-large and when all the exceptions are smoothed out. Try for a moment and to imagine risking your job and deliberately deciding to take on being portrayed as greedy, callous and on a kind of stolen holiday. This is especially true in the public sector, where the customers you are involved in servicing are your neighbours, their children and the sick of your community.
- We have the highest levels of inequality (measured by something called the Gini coefficient) of any country that keeps realistic figures in the world – and if not ‘in the world’ then we are in the company of only one or two others. In a public sector wage conflict the employer is government (with politicians representing the owners and the senior bureaucrats the managers). The differential between the earnings of public sector workers and their employers – both of whom take their pay package from the public purse – is a factor many times higher than in most countries in the world. When you add to this the public perception (and the strikers are part of that public) that the politicians are engaged in a nasty, sharp-toothed feeding frenzy at the aching teat of the public purse, ransacking the long built up assets of the public sector and using every mechanism possible to extort money from the private sector, is their any wonder that public sector workers see their lot as unfair?
- Cosatu and its various member unions and the worker leadership “on the ground”, so to speak, is getting the kind of press it deserves. The behaviour of too many striking workers is so unacceptable that the unions are inviting a Maggie Thatcher to emerge from these battered streets to crush them and reformulate the South African economy to be a growth machine that will benefit merchant bankers and the rich … and no-one else. And the public will cheer that politician on, because the unions have not bothered to see the middle-ground as worth fighting for.
- This strike – as a culmination of other things but also in and of itself – is the death knell for the ruling alliance. It imposes upon the vague conflict between Nationalists and “Tenderpreneurs” on the one hand, and trade unions and communists on the other, a clear organisational character and a clear set of objectives and costs over which the contenders deeply disagree. Government might find more money. The unions might shift an inch to meet government’s next offer but I suspect this is the moment that South African politics has been circling ever since Mbeki slapped the unions and “the left” into a subservient position over ten years ago. I am not awaiting a formal announcement by Vavi that he is leading his cohorts into the wilderness. But I expect that in practice the unions and the communists will be out of government within the next few years (Perhaps even more than they were “out of government” under Mbeki … and I use “the next few years” to give myself a margin).
This week is going to be full of the strike and its consequences. It is, ultimately, not a hugely profound point, but now, more than ever, we need to urge caution in seeing the world as a simple representation between good guys and bad. This impulse, to see things as if they were simple and easy to understand, is increasingly the direction of public discourse on radio, newspaper and television. We need a kind of private media tribunal in our heads.
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.
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.