Friday, December 19, 2008

The Power of Addiction and The Addiction to Power

The scandals are flying so thick and fast around here that it is all a little reminiscent of the final act of Macbeth. The corpses have piled up so high and the murders so widespread, that you eventually loose count of the number and the motives behind each assassination. All you are left with is the primal force of the destruction: addiction to power.

On the political front, the arrest of Illinois Governor, Rod Blagojevich for allegedly trying to sell President-elect Barack Obama’s former Senate seat to the highest bidder is currently centre-stage. The FBI affidavit underlying the criminal complaint against Blagojevich, whose state motto is “The Land of Lincoln” (an American avatar of political honesty and ethical probity), revealed wiretaps of conversations where Blagojevich and his associates schemed up various illegal ways in which he could profit from his authority to appoint Obama’s successor. In Chicago, which long-time resident Saul Bellow once indicted as a city representing “the overlap between politics and crime” this is known as “pay to play”. I actually thought that the seat-buying which characterised South Africa’s recently-euthanised floor-crossing was an extreme feature of our corroded culture. It appears, however, to have international application. The Illinois Governor is currently suspended in a sort of political-zombie zone – he remains in office but everyone from the President-elect to his own Lieutenant- Governor have called for his removal and he is now subject to impeachment petitions in the state legislature. But what differentiates the mop-haired Governor of easy virtue is that he hasn’t yet claimed that his “innocence until proven guilty” is a sufficient political defence to stave off the clamour for his departure. He is also likely to be hounded from office and certainly will not become the president of his country. In South Africa, of course, this basic right of the criminal defendant has become the political weapon-of-choice for the politically mighty, including our wannabe President, whose criminal charges are far more serious than those facing the sleazy US Governor.

The loss of faith in a local political personality here is nothing compared to the incredulity which has greeted the self-confessed mega-fraud of Wall Street titan Bernard L. Madoff. If it is possible to tarnish capitalism’s high street brand even further, then the 70 year-old with the once-Midas touch has done it. In what might be the largest financial swindle in history, he stands accused of orchestrating a $50-billion “Ponzi” con, on the good old pyramid scheme concept in which early investors are paid off with money from later investors, until no more money can be raised, and the scheme collapses.

In South Africa we would associate such a charming device (indeed, as Michael Lewis recently wrote, “something for nothing - it never loses its charm”) with a Nigerian criminal scam or with the founders of the ill-gotten 1980s Kubus get-rich-quick plot. However, Madoff’s alleged pyramid scheme was far broader than anything dreamed up by a Nigerian or South Africa crook. He drew in prominent billionaires, European banks and major American philanthropies, and he did so largely on the basis of the trust which his swanky Manhattan address, his Palm Beach Country Club membership and huge charitable giving engendered. His reliability was so great, that he was referred to, with affection, as the Jewish Treasury Bill. Madoff’s exposure is symptomatic of a much wider malaise, and one which goes far beyond personal embezzlement and corporate culpability. It is only slightly worse than the “legal scheme” which caused the wider collapse of America’s financial architecture, and many of Wall Street’s most famous houses.

Writing in the New York Times this week, Thomas L. Friedman pinpointed the parallel between Madoff’s Ponzi scheme and Wall Street’s “cheap credit, low standards and high greed.” On the one hand, you have Madoff cooking the books and providing consistently high returns regardless of market conditions. On the other hand, subprime lenders gave a worker who made just over $1000 a month a “nothing down and nothing-to-pay for two years” mortgage to buy a $750 000 home. They then bundled that mortgage with hundreds of others into bonds – which Moody’s or Standard and Poor rated AAA and sold them to banks and pension funds all over the world. A veritable pyramid scheme -writ hideously large.

But, of course, the link between the greedy Illinois Governor, the scheming Wall Street traders and the universal band of corrupt political brothers, appears to be addiction of one form or another – either to power, or greed or some combination. Just like Shakespeare gave forth Macbeth, Southern Africa’s local neighbourhood tyrant, Robert Mugabe, continues with his policies of national destruction. And South Africa, like a powerful yet indulgent relative, continues to coddle him from international sanction.

Last week I discussed Mugabe’s behaviour with my Durban boyhood friend, Jeremy Schmahmann. He now lives in Boston and has risen to great heights as Professor of Neurology at Harvard University Medical School. He has an interesting hypothesis, not yet proven, but one which has big implications for dealing with both national tyrants, and even the more common and garden financial fraudsters. It boils down to transposing “the tyranny of addiction” to the addiction to tyranny. As Jeremy put it the other night, society acknowledges “the tyranny of addiction” – the craving for drugs, alcohol or gambling that grabs hold of a person’s body and soul. Neurobiologists now have a fairly detailed understanding of the hard-wiring and chemistry of the brain that leads to this personal disintegration. With Mugabe, who cannot relinquish power even in the midst of a mass cholera epidemic symptomatic of the country he has now so comprehensively broken, “his brain reward system is in over-drive, addicted to power.” And like any addict, he cannot just be persuaded to stop. He needs to be removed from the addicting substance, and from the environment which supports it. Since our local politicians’ lack of political imagination and courage has led to consistently misdiagnosing Mugabe and his cravings, perhaps they should take a page from this eminent neurologist.

We are surprised and saddened when the oppression of Ian Smith metastasises into the brutality of Robert Mugabe. We are equally amazed that the frauds of Enron and WorldCom are repeated again in the form of Madoff. But, of course, they stem from the same impulses, and the same lack of internal or external correctives. The first step to healing, both the economic and political systems, is to recognise the addictions and to apply the corrective measures early on.

This being the last Washington column in the last Weekender edition of the year, allow me, with a touch of American ecumenicalism, to wish all readers “Happy Holidays”.

*Written for "The Weekender" in South Africa; publshing date: Saturday, 20 December 2008.

Friday, December 12, 2008

Best Wishes, and a Warning, to COPE

Last week, en route to a speech at New York University, I chanced upon a mural in Greenwich Village. It depicted Barack Obama as a white man and John McCain as a black. Underneath this arresting transposition was the legend:”Let the issues be the issue”.

The artist got his wish in the United States on November 4 when the Tsunami of economic woes and popular discontent with the presidency of George W Bush swept Barack Obama to power, and drowned any lingering attachments in the United States to racial politics.
South Africa’s sclerotic race-based politics, where every election since democracy could in various ways be predetermined on the basis of an ethnic census, is set for a shake-up with the formalisation of the Congress of the People (COPE) next Tuesday in Bloemfontein. Might South Africans hope that this most significant breakaway from the ruling ANC since the formation of the PAC nearly 50 years ago, leads to a localised version of “letting the issues be the issue”?
Having enjoyed (the verb endured might be more apt) the title of longest-serving leader of the official opposition in Parliament since 1994, perhaps I can offer some (unsolicited) advice to the late-joiners to the opposition patch.

First, in a mechanical sense at least, any worthwhile democrat in South Africa will welcome an addition to the scattered ranks of the country’s opposition forces. One of the reasons why our democracy has not fulfilled its early promise and the high expectations so many of us had for it ,is reflected in the last general election results. More than 50-points separated the ANC and the principal opposition that I then led. This allowed the governing party to ignore dissenting voices, sideline alternative views, however meritorious, and suck most of the oxygen out of the democratic space which the constitution, in theory, created for a multiplicity of players. Any reduction in that gap must be welcomed.

Second, it is commendable that COPE has clothed its somewhat threadbare policies in a robust defence of the constitution – our founding democratic settlement. Recent polls suggest that South Africans, retain an overwhelming faith in it, despite their misgivings about current politics and failing institutions. At this time of deep political uncertainty in South Africa and huge economic upheaval around the world, it is worth recalling the words of America’s investor sage, and its wealthiest man, Warren Buffett. He is fond of remarking in business, “it’s only when the tide goes out that you discover who’s swimming naked.” The same yardstick should measure political leaders.

It is therefore perfectly fair, to ask whether the leadership of COPE are the best guardians of our constitution and worthy stewards for its future protection. This inquiry yields a far from reassuring answer, despite the excitement at the prospect of a new challenger to ANC hegemony.

Brian Pottinger, in his excellent new work “The Mbeki Legacy” got it exactly right. He described the difference between the ascendant forces aligned to Jacob Zuma and the vanquished acolytes of Thabo Mbeki as being the difference between “ANC Classic” and “ANC Lite”. One should never underestimate the potency of the politics of resentment: that heady cocktail of hurt egos, withering resentments and loss of power. Indeed, it is difficult to discern any gulf of principle which separates the ANC from COPE. They both claim to be fighting for the real core, and the lost soul, of the governing party.

Ostensibly, the formation of COPE is not about getting even or bringing back the spirit of Thabo Mbeki through the back door. It is about the creation of an alternative based on principle. When I delivered my lecture at New York University, Breyten Breytenbach was in the audience. He gave me a copy of his recently published excoriation of the current South Africa in the latest edition of Harper’s magazine. It is subtitled “Notes of South Africa’s Failed Revolution”. As exhibit A of his deconstruction he presents the Marie Antoinette quote of Smuts Ngonyama “I didn’t struggle to be poor”. The words are entirely accurate, being the risible defence which Mr. Ngonyama [provided when asked to justify the R50 million he pocketed for his membership of a consortium that received a huge payola from the Telkom listing – in his case a result of “know-who” rather than “know how”. Breytenbach, however, inaccurately cites Ngonyama as “spokesman for the African National C0ongress”. Today, of course, he is Head of Policy for COPE. It is not his undeserved millions which concerns me. But in his new incarnation, is he still the staunch defender that he once was of the cadre policy and deployment strategy of the ANC? In 1999 when I revealed this document which stated that the accountability of all ANC cadres lay to the Party high command and not to the institutions in which they were serving, Ngonyama described me as “a childish but confused individual”. In fact, as events over the past decade have made manifest, the ANC’s decision to place its officials in every key post in every institution, especially those requiring robust independence, has led to the corrosion of the constitution which COPE has now vowed to protect.

Last week ,the New York Times highlighted on its front page a recent Harvard University study which pinned the needless death of more than 300000 South Africans on then President Mbeki’s refusal to accept the scientific consensus on AIDS and his promotion of crank remedies drawn from AIDS dissidents. When in 2000, the Democratic Alliance rolled out the provision of antiretrovirals in the Western Cape, and offered to extend the treatment in its municipalities, Ngonyama accused us of peddling “apartheid-era biological warfare”. His other colleague in COPE, Mbhazima Shilowa was at the time Premier of Gauteng. But that province resisted and fought the constitutional court case in July 2002 which the TAC launched to force birthing facilities to provide antiretrovirals to HIV-positive mothers and babies.

Thirdly, nothing has divided South Africa’s opposition forces more than questions of unity. It is therefore reassuring to note that COPE leader Mosiuoa Lekota has pledged to work with other opposition parties, including my own, on the question of creating provincial governments where the opposition commands a majority. I have warm regard for Lekota, not least because of the very kind remarks he made when I stood down as leader of the opposition. But I also remember the entirely destructive role he played in 2001, in decimating opposition forces by luring Marthinus van Skalkvyk into the ANC in an attempt to monopolise all power in the hands of the ruling party. At one level, that’s politics. At another, it brings to mind the rueful remark of a famous British politician who said, “When you want to protect a principle, don’t look for protection from among the tramplers.”

My enduring hope for the new opposition party is that it will be staunch and resolute in its attachment to constitutional principles and practice: the very ideals its key leaders undermined when they occupied the seats of power.

* Written for Independent Newspapers in South Africa- publishing date: Sunday, 14 December 2008.

Saturday, December 6, 2008

The New Secretary of State

Washington’s worst-kept secret was made official on Monday. President-elect Barack Obama announced – from Chicago, that his one-time deadly rival, Senator Hillary Clinton would be the next US Secretary of State. The furious flurry of chatter and swirl of speculation which preceded the announcement gave way, after momentary pause, to a renewed flurry and swirl: was this a master-stroke of inclusivity? A case of inspanning of a “team of rivals” to borrow the title of a much-touted new book on the cabinet of Obama’s distinguished predecessor, Abraham Lincoln. Coincidentally, he also hailed from Illinois and like Obama, was a little-known Senator until his presidency, and the American Civil War which defined it, marked him out as an all-time great.
Or would the apparent enmity and distrust between Obama and Clinton, and the unfulfilled presidential ambitions of “Madam Secretary-elect” as we must now call her, doom the relationship?
The betting, at the moment, inclines to the masterstroke explanation. But the media immediately noted the apparent incongruity of this pick of the ultimate Washington insider by the man who promised to be the tribune of change. The simultaneous announcement of former NATO Commander and Marine Corps Commandant, General James L Jones, as Obama’s Security Adviser and his retention of President Bush’s Defence Secretary, the Republican Robert M Gates, means the untested President-Elect has surrounded himself with “two Cold War warriors” plus Clinton, all of whose records are far more hawkish than the liberal, change-oriented Obama.
Obama batted away the apparent contradiction (and his record of campaign disagreements with Clinton) by advising, “I’m a strong believer in strong debate and strong opinions”. Indeed to most, the selection signalled a president who is self-confident enough to surround himself with smart and capable people: a study in contrast to the incumbent Bush, whose moral certitude and the blind faith of his key advisers landed America (and the world) in many of its current travails.
Although Obama mocked Clinton during the campaign for a foreign policy resume obtained by osmosis through her presidential husband while First Lady, and chastised her judgement as a Senator for supporting Bush to go to war in Iraq, foreign opinion apparently reacted with optimism to her selection. In some circles this was not because of her record: during the primaries she warned that Iran risked “obliteration” in the event of nuclear attack in Israel – and also dismissed as “reckless and naive” her new boss’s plan to engage in talks with the dread Iranian leadership. She announced herself in favour of “coercive diplomacy” – whatever that might mean or entail.
But the global welcome to her appointment is attributable in part to her star power: “she’s a global brand”, gushed the New York Times. Even its waspish columnist, Maureen Dowd – a well-chronicled Hillary-hater – who had previously warned Obama not to pick Clinton as Vice President. (“She’ll put poison in your tea”, she wrote back in August) recanted. Last week she approvingly quoted another Clinton critic who concluded “she’s smart and tough and a lot better than any of those old hacks like Richard Holbrooke and Madeleine Albright.”
However, I think the real clue to the apparent American and world receptivity to Clinton’s new incarnation probably lies in the acronym “ABBC” (“Anything Is Better Than Bush and Co”). A senior Russian MP was quoted this week as saying, “the most important thing is not who is coming in, but who is leaving.”
But Hillary Clinton, star wattage and stellar intellect aside, is weighed down with a lot of baggage. I was advised at a recent dinner by a veteran of her husband’s administration that “most of it is carried by Bill”. My informant was scathing on the excesses of the soon-to-return Clinton soap opera: the paranoia, the infidelities, the leaks, the volcanic tantrums. All of this seemed ill suited to the discipline and thoughtfulness of the “No Drama Obama” regime. Globalisation guru and veteran foreign policy watcher, Thomas Friedman opined that if the relationship between the president and his secretary of state sours or becomes remote (as it became between the much-admired Colin Powell and President George W Bush) then “foreign leaders will spot the daylight between them from a thousand miles”. And here the “big dog”, as Bill Clinton has been dubbed by some, enters the frame. He practically has his own foreign policy apparatus: his global philanthropy foundation employs 800 people. He earns R100 million in speaking fees annually, many of which are apparently thinly-disguised influence-peddling events sponsored by doubtful foreign potentates. He also has 200 000 (actual number) donors to his presidential library whose identity have never been publicly disclosed. But at the time of Hillary Clinton’s nomination, it was mentioned that he received a $10 million gift from the Saudi Royal family.
No doubt the new administration will resolve these conflicts of interest. But a conflict of interest of a different sort potentially looms between the new administration in Washington and the next government in Pretoria. This is the hangover from Thabo Mbeki’s penchant for temporising with African tyrants. If this pattern persists going forward then the Union Buildings can expect a serious early collision with another appointee announced here on Monday. Susan Rice, a close Obama confidante has now been elevated, with cabinet status, to the US ambassadorship at the United Nations. In contrast to Mbeki’s shielding of the Sudanese dictator and oppressor Omar al-Bashir from indictment by the International Criminal Court, Rice is a vehement and committed adherent to using “America’s muscle to protect human rights in Africa.” When Jacob Zuma recently visited Washington I suggested to him that we should change course away from the Mbeki approach of “never meeting a dictator he didn’t like”. I hardly expect our wannabe president to accept my unsolicited counsel .But as South Africa’s rights-delinquent term of office on the Security Council is about to expire, Pretoria might have consideration for the fact that many key people in the new administration in Washington consider our performance there to be more befitting of a “rogue democracy”.

* Written for the Weekender, to be published 6 December 2008.

Monday, November 17, 2008

The Looming Recession

Last weekend, exiting President George W Bush, hosted the leaders of the G20 nations at a summit here to discuss a coordinated response to the global economic crisis.

While the world leaders, including our own, rushed into the Capitol, we drove out of it in search of America’s equivalent of the Rosetta Stone to help illustrate the meaning of this sprawling economic mess.

Washington DC is not the place to find it. It is virtually recession-proof, given the high numbers around here who work for Government or are involved in lobbying it. I witnessed this a few weekends ago when we had dinner at the uber-expensive Palm steakhouse (where the rudeness of the waiters is matched only by the number of Washingtonians who clamour for a table here). The bill for a meal for four, without dessert, amounted to around R4000. Fortunately my visiting, and wealthier brother picked up the tab.

But Greenwich, Connecticut seemed to be a better place to take the weakening pulse of the wealth creators (and laterally destroyers) of the American and world financial markets. One of the wealthiest enclaves in the United States, it headquarters the major hedge fund companies and financial service corporations, and is home to some of America’s richest people.

Last Saturday, we approached this gleaming citadel of American capitalism via the neighbouring town of Stamford. My friend, Laurence Kaplan, pointed out two of the imposing and shiny structures which house UBS’s American trading operations – which boasts the largest trading floor in the world - and the Royal Bank of Scotland. Both stand today as monuments to the subprime crisis which has caused them to write down, and write off, tens of billions of dollars of dodgy mortgages and credit default swaps. RBS has landed up as a state-owned asset of Gordon Brown, and UBS’s fate is even worse: last week a US Federal Grand Jury indicted its head of global wealth management on a slew of charges relating to tax evasion and other breaches of American regulatory law.

Our walk along the main street of Greenwich was even more instructive of what Paul Krugman, winner of this year’s Nobel Prize for Economics, recently termed “the long feared capitulation of American consumers”. Indeed, on this crisp autumnal morning, there were hardly any shoppers around. In the chic boutiques and splendid luxury store fronts of this immaculately maintained town (where appropriately, perhaps, the “Stepford Wives” was filmed here four years ago). We were the only visitors at a tony luggage store. The shop assistant advised us, that the dearth of customers was “soul-destroying”. Greenwich might be the high-end of the American retail. But the desertion of its shops and stores is now reflected across the board. Real consumer spending is plummeting and fell at an annual rate of 3.1% in the third quarter while spending on durable goods (cars and TVs, etc.) fell at an annual rate of 14%. As Krugman points out this is a real change in consumer behaviour which could not have come at a worse time. Because while excess household debt got a lot of Americans into their current problems, and trimming debt and boosting savings is always a virtue, a freeze on spending by consumers right now will slide America, and much of the world, into a recession. (The so-called “paradox of thrift”).

Laurence Summers, the once and possibly future US Treasury Secretary, tartly summed up the central cause of the financial markets’ crisis as a case of “too much greed, not enough fear”. But the fear which now keeps shoppers out of the stores presents its own set of headaches. It is further driven by the new fear of banks and lending institutions proving as unwilling as ever – despite the $700 billion rescue package – to lend to consumers and to each other. General Motors, now titters on bankruptcy just two months after celebrating its 100 birthday, it says it may not survive to see another year unless it is rescued by a Federal bailout. Starbucks, the corner-store icon of globalisation, posted a net income drop of 97%.

The current desertion of main street Greenwich is also explained by looming job losses in the financial industry as banks attempt to slash costs, to cushion the blow of further market turbulence anticipated for 2009. The Financial Times reported last week that up to 70 000 jobs could be lost in US banks and financial institutions over the next few months. Across all sectors of the American labour market some 1.2 million jobs have already been lost in 2008 and 3.8 million homes are under foreclosure. Clearly, a fiscal stimulus of some sort is required. But will it work in unfreezing the credit markets? In any event, the new administration is hedged in by the thicket of the national debt, which currently stands at around $10 trillion, and rising.

All this bad news has led to a schadenefreude by the pundits all-round. The most prescient of the lot is Michael Lewis who lifted the veil on the excesses of Wall Street in “Liars’ Poker” way back in 1985. He retuned to splendid form in a recent article posted on Tina Brown’s marvellous new blog “The Daily Beast”. In it he profiles Steve Eisman, a hedge fund manager who was among the first to detect the weakness of the subprime mortgage market, and who made a fortune from shorting it and everyone with a hand in it: first, the lenders; then the rating agencies; finally, the big banks. As he explains, the subprime market was actually too small to feed investors greed and so they created a market of side bets. This is where derivatives and other esoteric, and ultimately toxic, assets created a market which at its height was worth trillions of dollars worldwide.

Lewis also quotes the analyst who apparently first saw the basic lack of real value underlying these assets. Meredith Whitney of Oppenheimers, back in last October, was the first to blow the whistle on this financial house of cards. As she put it “if you want to know what those Wall Street firms are really worth, take a hard look at the crappy assets they bought with huge sums of borrowed money, and imagine what they’d fetch in a fire sale.” Lewis’s own interpretation is priceless: “this woman wasn’t saying Wall Street bankers were corrupt (if mere scandal could have destroyed big Wall Street investment banks, they would have vanished long time ago), this woman was saying, they were stupid.” And this was much more seditious and calamitous.

The marvel of the American economy is that 60% of its citizens own shares today, literally from Warren Buffet to the legendary Joe Six-Pack. But it is now demonstrating the defects of this quality: like its wealth the misery is now spread about, but by no means equally.

*Written for the Weekender, to be published 21 Nov.

Tuesday, November 11, 2008

Obama: The hope, the contradiction

There are days that define a country’s history and which signal a sea-change in its national course. 27 April 1994 was such a date for South Africa, when against expectation and history; we turned our back on three-and-a-half centuries of racial division and political exclusion. 1 May 1997, less dramatically, marked a profound shift in British political history, as nearly two decades of unbroken Conservative rule were swept away in a tidal wave of change in favour of Tony Blair’s Labour Party.

Tuesday, November 4 2008, proved to be, at so many levels and in many different ways, a hinge day of change for America. Ironically, it was the rallying cry which the vanquished Republican standard bearer, Senator John McCain used in his frenetic and futile dash across seven states on the last day of the campaign, which accurately summed up the epoch-changing result of the US presidential election: “We never hide from history! We make history!”

As the results rolled in on Tuesday night, and were relayed with a degree of technological wizardry and television mastery which made me gape, America made history, but, from the Republican perspective, for all the wrong reasons.

On the back of a surging turnout, buoyed by the worst financial crisis this country (and the world) has seen since the Great Depression, Barack Hussein Obama was elected President with a huge Electoral College sweep of 338 votes to 163 and a slightly narrower, but equally decisive, popular vote haul of 51% of the ballots cast.

The most obvious and commented upon aspect of the remarkable achievement of the 47 year-old first-term Senator is his racial identity. As the New York Times exulted “he swept away the last racial barrier in American politics with ease”. For the candidate, now president-elect, it was a moment to savour. As he told over 200,000 of his supporters gathered on the balmy Fall evening in Grand Park in Chicago, “I was never the likeliest candidate for this office”.

Perhaps it was appropriate that it was the state of Virginia, which swung behind Obama and voted for a Democratic presidential candidate for the first time in 44 years, which assured Obama of his win. In many ways, the state of Virginia, known as the “Old Dominion“ symbolised the struggle for slavery and on its battlefields, the bloodiest conflicts of the Civil War were fought. This was a true moment of American exceptionalism, which seemed, as the ballots piled up and the results were declared, to sweep away the ugly stain of a racially disfigured past and which in the words of one commentator witnessed, “tens of millions of white Christians, voting freely, select as their leader a man of modest origin, the son of a Muslim”. Obama’s improbable, but emphatic, election is certainly at odds with some comfortable and conspiratorial assumptions made about the United States. Steven Kull of the BBC recently reported on an international conference he attended in Malaysia where some of the delegates assumed that the US was controlled by “a cabal of white bankers and Jews who use police and fire hoses to repress blacks”. Obama’s rise will trigger “severe cognitive dissonance” amongst America’s detractors abroad for whom the excesses of the Bush presidency provided easy ammunition.

Cynics argue that it was only a-once-in-a-century economic crisis which got enough white people in America to vote for a black man. But this actually misses the wider point: Obama was a transformational candidate in many, perhaps less obvious, ways. When his quest for the presidency seemed somewhat vain and Senator Hillary Clinton was a prohibitive favourite to win the Democratic nomination, I happened to attend a rally he addressed just over a year ago in the urban parkland of the Boston Common. I thought the crowd was impressive, but the 10000 people he drew that night, was in the course of the long campaign which followed to be eclipsed typically by hundreds of thousands who flocked to hear a candidate whose campaign propelled him into the iconic status, and gave him the pulling power, usually reserved for rock stars. Although his crowds increased, his message never wavered: that night in Boston he never spoke about race, or his suffering, or his people’s struggle for equality. He addressed the future and offered hope for the resolution of the myriad conflicts in America’s national life and international projection. By turning his back on the sort of race-holding politics which has characterised the debate about transformation in South Africa, and which Jesse Jackson has preached unwaveringly in America, Obama got Americans to see beyond skin colour.

American voters in Tuesday did not simply turn a new page for a country whose racial history and current antagonisms are perhaps as severe as, or even exceed, those of South Africa. They also took a huge leap of faith. Half of the voters who cast their ballots told exit pollsters that they did not believe Obama had the experience to be an effective president, as opposed to 6 out of 10 that said that Senator McCain did. But an overwhelming 90% said that the economy was in bad shape and seven out of 10 voters disapproved of the job which President Bush has done. Thus the election of Obama, whose opponent was 72 years-old and a veteran law-maker and prisoner-of-war hero into the bargain, marked the end of a generational era as well. The public clamour for change, spurred by young voters who cast ballots in record numbers and older voters who are fearful as they watch 40% of their retirement savings being obliterated by the Wall Street blow out, proved decisive.

Taking a timeline of the polls, you can trace Obama’s victory and McCain’s defeat back to the third week of September, the day Lehman Brothers collapsed, a harbinger of the financial crisis to come. On that pivotal day, it is now clear, that the election would become, in large measure, a referendum on the economy. Campaigning in Jacksonville, Florida McCain made the fateful, and politically fatal, remark, “the fundamentals of our economy are strong”. Up until then the polls were even and his controversial pick of culture warrior Governor Sarah Palin had enthused the Republican base. But the financial fires of Wall Street which fanned across America and which saw, for example, General Motors announce (just the day before the election) its worst month of sales since the Second World War , sealed the deal. It says much for the discipline, the brilliance and the awesome financial power of the Obama campaign that it could exploit and magnify every misstep of its opponent and minimise the contradictions contained within its own ranks and hidden behind its message of “hope”: a candidate offering change and a new direction, anchored to liberal policies which looked decidedly antique given the enormity of the unchartered territory the American and world economy has now entered.

But America’s embrace of its most liberal president in two generations and the end it heralds to laissez-faire Reaganomics does not change another fundamental. This most adaptive of all nations remains 40% “moderate”, 40% “conservative” and only 20% “liberal” according to the polls. Obama is a shrewd enough politician to know that he will have to govern, as he campaigned, from the centre of the political spectrum.

Obama’s in-tray is overcrowded. He has promised to end an unpopular war in Iraq, and win a necessary one in Afghanistan; he has promised universal health care and to find alternatives to America’s crippling dependence on Middle East oil. He has to do all this against the background of record budget deficits and a looming crisis in America’s Social Security programmes which will soon be bankrupt. He has to divine a manner of satisfying the resurgent big government spenders in his own Party, whose ranks have now increased in both Houses of Congress who wish to spend a trillion-plus dollars to avoid a deep recession. But he has also promised tax cuts to 95% of the population. Former Democratic Party grandee, Mario Cuomo once archly observed, “You campaign in poetry, and you govern in prose”.

However, Obama’s historic victory suggests that he has exceptional and disciplined talents to meet the challenges of extraordinary times and to balance, if not resolve, the contradictions he both epitomises and has already overcome.

*Published in The Star Newspaper, Johannesburg, 10 Nov. 2008

Profiting from election theft in Africa

Written with Marian Tupy of the Cato Institute

South Africa and its partners in the Sothern African Development Community have again temporized with the tyranny of Zimbabwe’s Robert Mugabe. The announcement, after last weekend’s summit, that the opposition Movement for Democratic Change should relinquish claims for sole control of the Home Affairs Ministry, which supervises the country’s police force and electoral machinery, is a further blow to the faltering power sharing agreement brokered by South Africa’s now vanquished President, Thabo Mbeki. This latest “compromise,” which the MDC’s leader Morgan Tsvangirai has rightly rejected as “unworkable” is a further dilution of the March poll, which despite a widely flawed electoral process, saw the opposition gain a majority of the parliamentary seats. It also suggests that Africa’s democratic awakening, which has seen the demise of many one-party dictatorships and military rule since 1990, is, in many ways, only skin deep. An unfortunate pattern has emerged in some key countries, whereby elections are either rigged in favor of the incumbents or ignored if their outcomes are unfavorable to the ruling regimes. Shockingly, both African and Western countries have often been complicit in legitimizing and rewarding such election theft.
Take Kenya’s presidential elections in December 2007. Prior to the vote, the opposition candidate Raila Odinga led the incumbent, Mwai Kibaki, in all the opinion polls. Some had him 15 to 19 percentage points ahead. With half of the 210 constituencies reporting, Odinga had a commanding lead. Suddenly, the Electoral Commission of Kenya stopped the count. When the counting resumed, Kibaki surged past Odinga. An hour later he was sworn in to his second term at a hastily arranged State House ceremony.
According to the chief European Union monitor Alexander Lambsdorff, the tallying process “lacked credibility.” Enraged Kenyans took to the streets. In the violence that ensued, 1,000 people died and 600,000 people were displaced. Through a combined diplomatic effort of Kofi Annan, Condoleezza Rice and others, a compromise was eventually reached. It created a new position of the Prime Minister for Odinga, while leaving Kibaki as President. Kibaki and his henchmen subverted democracy and Western countries, grateful for an end to violence, quickly resumed their aid payments to Kenya. A similar arrangement is currently profiting Zimbabwe’s Robert Mugabe. Having lost the first round of presidential elections in March 2008 to Tsvangirai, Mugabe unleashed a wave of violence against the MDC. Amnesty International estimates 180 people were killed and 9,000 injured, forcing Tsvangirai out of the subsequent run-off and ensuring that Mugabe was installed for his sixth term as President of Zimbabwe.
Given their own problematic accession to power, it is perhaps understandable that peer pressure from Mugabe’s fellow African leaders is both mute and moot. For example, Umaru Yar’Adua, the chosen successor of Olusegun Obasanjo, won the Nigerian presidency in an election marred by fraud. Obasanjo himself came to power in a poll where, according to the EU observes, the “minimum standards for democratic elections have not been met.” After losing the 2005 election, Meles Zenawi, the Prime Minister of Ethiopia, ordered his troops to shoot anti-government protesters in Addis Ababa. Some 200 have perished. Yet, the West rewarded the former with debt forgiveness and the latter with large amounts of foreign aid. Allegations persist that the October election result in Zambia was doctored in favor of the incumbent. It would be sheer hypocrisy for many African leaders to call on Mugabe to go. And so, they did not. Even South Africa, which has the democratic credentials to speak out and to act, has over the past eight years cosseted Mugabe behind the veil of so-called “quiet diplomacy.” Undertakings by Mbeki’s successor, Kgalema Motlanthe, and other ANC leaders, to peruse a tougher line on Zimbabwe, were not on display over the past weekend. Botswana’s exceptionally critical attitude to Mugabe remains just that - an exception.
The original power-sharing compromise in Zimbabwe involved Mugabe’s ZANU-PF and the MDC sharing cabinet seats on an equitable basis, with Mugabe staying on as President and Tsvangirai becoming the new Prime Minister. But, even those generousterms were not enough for the Zimbabwean ruler. The latest incarnation of the “compromise,” will further strengthen Mugabe and undermine the outcome of the March 2008. Mugabe will thus literally get away with murder.
What we seem to be witnessing in Africa, therefore, is not the triumph of democracy but the triumph of incumbentocracy. Elections are held, but real transfers of power are still rare. Most worryingly, people who preside over electoral theft and sometimes murder are legitimized by their peers and rewarded with dollops of foreign aid. The will of the African electorate, in the meantime, goes ignored.

Thursday, November 6, 2008

Thoughts about the US presidential election

Two grand historical arcs define America – its exceptionalism and its contradictions. And they converged on Tuesday, election night.

Less than a year ago I had lunch in Cambridge, Massachusetts with Harvard academic, former presidential advisor and, more famously, CNN’s election pundit, David Gergen. I had recently had some stardust sprinkled in my eyes by Barack Obama after I attended his rally in Boston when my jaded cynicism was swept away by his soaring and inspirational rhetoric. After I relayed, somewhat breathlessly, my positive impression of the then long-shot Democratic candidate, Gergen said to me “so you think a good orator will make a good President?”

On Tuesday, as Americans embraced the politics of change and hope, they also swopped from one of the most inarticulate Presidents – whose famous battle with the English language connected him to many ordinary Americans – for one of the most articulate – and also arguably the most liberal since John F. Kennedy. That he also happens to be the first black, half African (in the continental sense) occupant of the White House drives this barrier-smashing exceptionalism into realms that would have been, until recently, unimaginable. After all, when Obama’s white Kansan mother and black Kenyan father were married, dozens of American states outlawed interracial unions. However, the successful anti gay marriage ballot initiative in California, whose result was made known just hours after America celebrated the election of its first black President, suggests that the struggle of equality is far from over.

But back to the oratory. On election night, gathered in my current Washington residence were a dozen visiting or detribalised South Africans plus one or two genuine American voters. Only in America could such an emphatic and predetermined victory for Obama be turned into an evening of television drama as the map increasingly changed from 2004 red (Republican) to 2008 blue (Democratic). Shortly after midnight, addressing over 200,000 of his supporters, near the Chicago lakeside, Obama spoke with grace and passion about the greater meaning of his political and personal triumph.

His preternatural coolness, his ease, his fluency, and the trumping of hope over experience, embodied by his election were impressive enough and on display as usual. But there was something more. It was that almost, in a stroke and with millions of ballots to back it up, Americans have turned the page on a racially disgraceful past and on the excesses of the Bush years. Obama’s invocation of the Civil Right’s struggle, of America’s battle with the concept and reality of equality, seemed almost superfluous: after all, in one generation and in one extraordinary individual it appeared as if indeed America had overcome. I looked around our TV room as Obama said, “If there is anyone out there who still doubts that America is a place where all things are possible, who still wonders if the dream of our founders is alive in our time, who still question the power of our democracy, tonight is your answer.” Up until those words, there had been something of a raucous noise, a teasing of the lone McCain supporter in our midst, visiting journalist Jan-Jan Joubert, and the ususal party background noise. But at the moment Obama spoke, there was complete quiet and very few dry eyes.

But, of course, the Obama campaign had hardly emphasised race at all during his ascent. In fact, the genius of his ultra-disciplined quest for the presidency was that he offered to the majority of white American voters a sort of political equivalent of the Bill Cosby reassurance - which made the TV star the white nation’s darling a generation before.

The contradiction in the excpetionalism was driven home to me last Sunday, as my wife and I tramped around the beautiful Monticello Estate of founding father Thomas Jefferson in rural Virginia. This was the home of the philosopher of the American Revolution, the author of its Declaration of Independence with its invocation that “all men are created equal”. Yet, the official brochure reminds visitors that the same person was also the largest slave owner in Albemarle County. But at least Americans are unblushing about the contradictions in their own history. We were informed that among the 200 Jefferson slaves, was one Sally Hemings – and that the “existing evidence indicates that Jefferson was the likely father of all her known children.”

Virginia, was, of course, the crucible of the American Civil War, which its side, the slave-holding confederacy decisively lost. And on Tuesday, for the first time since I was a seven year-old boy, a democratic presidential candidate prevailed here- and a black one into the bargain.

If Obama’s election binds up, and arguably heals, the most gaping wound of America’s racial past: it does not resolve other fundamental and, far more modern, political contradictions. 9 out of 10 American who voted described their country, and particularly its economy, as “moving in the wrong direction”. By a healthy margin, and ignoring dire Republican warnings that Obama was a “socialist”, or the “redistributionist in-chief” as McCain described Obama, Americans elected as president somebody who is going to tax them more heavily and spend far more government resources on public welfare than was previously thought to be electorally possible. It was only the tanking economy, and the widespread fear and misery it has spawned, which made such an unlikely prospectus a winning political formula. But as Obama surveys a bloated Democratic Congress, a Federal Reserve which has now reduced interest rates to 1% (and has little further room to stimulate the economy), and a slate of programmes and tax-credits which will cost perhaps 500 billion dollars, he might pause to consider the wise words of Gideon Rachman. On Election Day, he wrote in the Financial Times, “the economy has been Mr. Obama’s friend during this campaign. It could become his enemy the moment he steps into the Oval Office.”

Obama’s contradictions, at least, can be resolved from a position of presidential power, to which the Democrats return after nearly a decade. For the Republicans there are no such consolations: a reduced presence in both Houses of Congress; and a once-vaunted party-machine was revealed, in the final days of the campaign to be low on discipline, money and message rendered finally useless by a President of historic unpopularity and a reckless stewardship of both the economy and the national interests.

But that’s all for the future. At a magic moment around midnight on Tuesday, it appeared as though all Americans, black and white, and red and blue, were celebrating the extraordinary self-correcting powers of this enduring, and surprising, democracy.

*Written for the Weekender in South Africa, for 8 Nov. 2008 publication.

Friday, October 31, 2008

Race: A Factor in the US Elections? *

In this most political of all seasons in Washington DC, it seemed appropriate, on Tuesday exactly a week before the presidential election, to take breakfast at the Cosmos Club. The local power elite has an obsession with English-style clubs and this venue is one of the grandest. Established in 1878, it boasts among its past and present members, three presidents, two vice presidents and 32 Nobel Prize winners. The Cosmos has been described as “the closest thing to a social headquarters for Washington’s intellectual leadership.”

My host, who sat across from me in the breakfast room of this rather splendid French Renaissance structure bracketed by imposing wisteria and magnolia trees, had served as a senior and respected member of both the Reagan and George H W Bush administrations. He epitomises the fast-disappearing segment of the East Coast Republican Party – which has about as much in common with the shrill divisiveness of Republican Vice Presidential candidate, Sarah Palin as, say, Terror Lekota enjoys with Julius Malema. Not surprisingly, he informed me that he will be casting his ballot next Tuesday for Barack Obama. “Actually”, he pronounced somewhat mournfully over a fine omlette, “I don’t know a single Republican of my stripe who is voting for McCain-Palin.”

Indeed, last Sunday one of the most distinguished members of the Republican foreign policy establishment had, with great public prominence, declared himself for Obama. Colin Powell proclaimed that the young Senator’s election, “will not only electrify our country. I think it will electrify the world.” Coming from George W Bush’s former Secretary of State, this amounted to an extraordinary apostasy. Even more so was his stated belief that Obama’s election would “fix the reputation that we have left with the rest of the world.” No doubt, in his high-mindedness, Powell believed that Obama’s election would redefine the American “brand” as less about Guantanamo and more about equality. However, in the somewhat jaundiced view of my breakfast companion, the brand Powell was most anxious to repair was his own. “He still has a lot of explaining to do about his role in cheerleading the invasion of Iraq at the United Nations – and he still has plenty of ambition left”, I was informed.

The desertion of McCain by some major mainstream Republicans mirrors his vertiginous descent in the polls which, with a week to go, show Obama enjoying a steady seven-point lead (which in American terms translates into a landslide). And if the polls are somewhat unreliable you simply have to follow the money. For those who wager cash on the election, the Intrade betting gives the Democrat a 87% prospect of success. On the subject of money, by some estimates, Senator Obama will have spent $250 million on local, cable and network television in just 5 months, a rate of advertising that, according to the New York Times outstrips Burger King, Apple and Gap on an annualised basis. And it dwarfs the previous record set for presidential campaigns, which was $188 million that President Bush spent in 2004. “Right now Obama is one of leading brands out there” said Evan Tracey, President of the Campaign Media Analysis Group.

While the city of Washington DC votes Democratic by almost as great a margin as Soweto votes for the ANC (or did so until the recent split), our TV stations here are flooded with campaign commercials. That is because they carry all the advertising from Northern Virginia, one of the most contested areas of all the battleground states in this election. On my unscientific survey, Obama’s adverts are flighted five-to-one over McCain’s. Obama now enjoys a double-digit lead in Virginia - once the most reliably Republican of all states, which last voted for a Democrat presidential candidate way back in 1964. Virginia, and the other states of the former confederacy, was the place where Richard Nixon perfected the winning Republican “Southern Strategy”, which was a formula which untethered anxious white voters from the historic allegiance to the Democratic Party by playing on (coded) racial anxieties. If the polls are to be believed, this strategy has now run its course.

The only lingering uncertainty, however, is whether indeed the racial identity of the lead candidate could tip the result. Professor Tom Schaller, a political scientist at the University of Maryland, put it crisply: “there aren’t any examples of a candidate coming back this late in the game with a deficit that big. The only potential straw for McCain to clutch on to is that the race is unprecedented in many respects and that the man in the lead is black”. Does racism still lurk in the polling stations of America? A survey completed last month by Stanford University, suggested that Obama’s support would be 6% higher if he were white. The Stanford political scientist who analysed that data, Paul Sniderman concluded, “There are a lot fewer bigots than there were 50 years ago, but that doesn’t mean that there are only a few bigots.”

The McCain campaign has studiously avoided any references to race at all, whether explicit or implicit. The Republican, to his credit, has ruled out using the incendiary and racist remarks of Obama’s former controvertial Pastor, the Reverend Jeremiah Wright. Equally, Obama has not, since his August Convention, referred to his exotic parentage. But there is much contention here about something called “the Bradley Effect”. This dates back to 1982 when some polls predicted erroneously that a black candidate, Tom Bradley, would win the Governorship of California. The conventional explanation given for the disparity between the polls and the result was that many white Californians were too embarrassed to acknowledge openly their own prejudice to the pollsters - but were less shy to do so when it came to marking their ballots. But its salience now seems massively reduced. The desire for change and the desperate need among voters for some form of economic salvation appears to trump other concerns. As one commentator languidly observed “there are not and have never been enough racists in 2008 to flip this election”.

Just how extraordinary the election of the first African American to the White House will be was captured in a comment relayed from East Africa by liberal commentator Nicholas Kristof. Noting that Obama’s father was of the Luo tribe, a minority which has suffered discrimination in both Kenya and Uganda, he reprinted a bitter joke circulating around Nairobi: A Luo has more chance of being elected president of the United States than of Kenya.

And it’s about to happen.

* Written for the Weekender newspaper in South Africa, publishing date 1 Nov. 2008

Jacob Zuma Visits the USA *

Last week a senior South African ANC politician managed to break through the media radar screens in Washington DC. Given the intense attention, and corresponding coverage which the US presidential election and the simultaneous and ongoing financial crisis enjoy, this was no mean feat.

Unfortunately, perhaps for him, his Party and the country, the politician in question was the Chairperson of Parliament’s Finance Committee the accident-prone Nhlanhla Nene. His fifteen seconds of infamy when he fell through the chair in the SABC TV studio ensured him primetime place on at least one cable TV news network – MSNBC (and more than 36 000 hits on YouTube, where viewers gave his performance a 5-star rating.) Jacob Zuma, who was in Washington last week, received far less coverage.

To be fair to the ANC President, his visit was designed to calm the waters – and uncertainties relating to his presumptive State Presidency – rather than to make waves. In this regard he went to considerable lengths before his major Washington audience at the Council on Foreign Relations to indicate that there would be “no change” of broad economic policy and political direction under his leadership.

He claimed, for example, that his allegiance – and indebtedness – to the forces on the ANC left, particularly the SA Communist Party and COSATU, was no greater or more significant than that of his two predecessors, Nelson Mandela and Thabo Mbeki. He also managed, or attempted, to pivot his leadership away from the flagship issues of AIDS and Zimbabwe which has made Mbeki, and through him South Africa, a figure of some notoriety and certain unpopularity in Washington. He dismissed the Mbeki-Manto Tshabalala-Msimang AIDS denialist regime as one characterised by their “personal opinions”, at variance with mainstream ANC policy, now being corrected. On our benighted northern neighbour, Zuma gave a tepid endorsement of “quiet diplomacy” but robustly denounced Robert Mugabe’s refusal to grant Morgan Tsvangirai a passport.

Zuma was, by all accounts, well received by the soon-to-exit Bush administration at the White House. But perhaps his visit there, meeting with Secretary of State Condoleezza Rice and even a quick grip-and-grin session with President George W Bush underlined the ambivalence of his reception. On the one hand, Zuma is, in effect, if not in formal office yet, the most powerful politician in South Africa. We are, beyond argument, the most important country in Africa. Even Bush’s detractors regard his Africa policy – particularly the PEPFAR AIDS-fighting fund and the Millennium Challenge Account as his “finest hour” (to quote no less an adversary than Democratic Vice Presidential nominee Joe Biden). Therefore, Zumas’ clout ensures him access. On the other hand, the notoriety which the unresolved criminal corruption charges have attached to his name ensured that the White House cancelled a photo opportunity of his visit.

Zuma was hardly evasive on his legal challenges. With a degree of mind-numbing detail which probably bewildered, in its labyrinthine complexity, the Washington grandees and old Africa hands listening to his address at the Council on Foreign Relations, Zuma painted himself as the innocent victim of a political conspiracy. And I suppose, if you are to press such a charge, Washington is the ideal place to do it. He described his case as “a very obvious political manipulation” and he had no qualms in fingering Mbeki, and former Director of the National Prosecuting Authority, Bulelani Ngcuka, and ex-Justice Minister Penuel Maduna as the guilty parties.

The complex detail which Zuma provided around his legal travails stood in sharp relief to his vague bromides around South Africa’s economic challenges and the massive downturn in overseas investor confidence towards our country and other developing economies. On the very day that Zuma was suggesting to his American audience that they should “invest more in South Africa”, the New York Times published a list of the currencies of emerging markets countries that have fallen against the US Dollar over the last three months. The South African Rand ranked second from the bottom of the world’s worst performers, beating only the Icelandic Krona (we dropped 31.38% compared to Iceland’s 31.78%). Unhappily, Iceland has declared national bankruptcy. Yet, the run on the Rand and the vertiginous decline in commodity prices – barely preoccupied Zuma. Or at least, his answers evinced little fresh or reassuring thinking on the subject. He simply repeated the mantra that “the ANC has good policies” and announced that even the President of the Party – or the country for that matter – was unable to change them.

I spoke to a key Wall Street investor (or more accurately, one of the few still left standing) who attended a smaller Zuma event at the Harvard Club in New York. He said the ANC President displayed more charm than substance and did not present a persuasive case for investment or, given the latest portfolio reversal out of the JSE, reinvestment. “On the other hand”, he said, “he was neither frightening nor arrogant.”

My impression of Zuma in Washington was similar. I was struck by how he reached out to me, seated in the audience, and described the government and South Africa’s parliamentary opposition, as partners in South Africa’s democracy, in a manner that Thabo Mbeki never countenanced. This strongly suggested, to an audience containing many Africa-sceptics, that our democratic gains are less reversible than the fluctuating fortunes of our currency.

* Written for the Independent Newspapers in South Africa - submitted 29 October 2008.

Friday, October 24, 2008

A Healthy Schism in South Africa*

In 1990, when Nelson Mandela was released after 27 years' imprisonment in South Africa, he noted in his first speech to a waiting world: "I am a loyal and disciplined member of the African National Congress. I am therefore in full agreement with all of its objectives, strategies and tactics." His iconic status helped sustain the ANC over the next decade and a half as it transformed itself from a liberation movement into an electorally unassailable democratic government.

That unity unraveled last week. In short order, the party membership of former national chairman Mosiuoa Lekota was suspended after he claimed that the ANC had moved away from its founding principles. Mbhazima Shilowa, the former premier of South Africa's wealthiest province, Gauteng, resigned from the party. Both said they would call a national convention early next month with a view toward forming a new opposition party. This dramatic rupture in South Africa's ruling behemoth, which won nearly 70 percent of the vote in the 2004 election and governs the country's nine provinces and all but one of its major cities, creates hope that my country's somewhat sclerotic political system will be rejuvenated.

The seeds of this discontent can be traced to December, when the arrogant Thabo Mbeki was ousted as party president by the populist but ethically challenged Jacob Zuma, and even earlier to Zuma's 2005 ouster as deputy president of South Africa after he was implicated in a corruption case. The democratic defenestration of the once all-powerful Mbeki and his ejection from the country's presidency last month have unleashed waves of disaffection that could lead to a reconfiguration of South Africa's largely one-party politics. Both Lekota and Shilowa are key Mbeki allies, and while Mbeki has not yet signaled his support for the incipient party, other ANC grandees who exited the government in solidarity with Mbeki may pitch their tents alongside them.

I was a close observer of the ANC in power, having led the largest opposition party, the Democratic Alliance, in parliamentary elections in 1999 and 2004. Despite my movement's strong anti-apartheid origins, pro-poor policies and liberal political program, the ANC branded us "the white party" in particular reference to my skin color. That did wonders for the Democratic Alliance in minority communities, but it excluded us from any meaningful share of the majority-black vote. Race mobilization helped the ANC secure its overwhelming majorities. By invoking ethnic solidarity and the struggle against apartheid, Mbeki kept restive and increasingly contradictory constituencies -- from black billionaires to rural peasants -- under one tent.

At least if a new party is formed, this "race card" will be ineffective against it. In addition to claiming credit for defeating apartheid, each party would attempt to outdo the other in loyalty to the "real core" of the ANC. Unlike previous schisms in the ANC's nearly 100-year history, this split is neither purely ideological nor tribal. Shilowa, for example, has strayed far from his trade union roots, and he and his powerful wife have amassed a fortune under government-directed "black empowerment" deals. Zuma and those who remain in the ANC government are surrounded by rich businessmen, including former politicians such as Tokyo Sexwale and Cyril Ramaphosa, who both ran afoul of Mbeki. And with the ethnic factor largely absent, both sides will have support across tribal lines. More worrisome is the attitude of some activists and dissidents. Some of Zuma's supporters, especially his allies in the ANC Youth League, have announced that they would "kill for Zuma." The ANC secretary general, Gwede Mantashe, has described members of the judiciary as "counter-revolutionary." Others feel humiliated by the brutal ousting of Mbeki and his supporters and resent their exclusion from power.

It is good that they wish to regain influence via the polls. But South African soil has remained stony to newcomers to the opposition. Still, this could be the country's most significant post-apartheid political division and could make the outcome of April's election less predictable. In some combination or coalition, the old and new opposition forces could easily win control of the three most significant provinces: Gauteng, KwaZulu-Natal and the Western Cape. Significant growth in the number of opposition members of parliament is also likely. The ANC's overwhelming majority in South Africa's past three elections has allowed it to retain the trappings of multiparty democracy while depriving parliament of any meaningful role. In many respects, South Africa has begun to resemble a one-party state where major decisions are made by the party executive, not the national assembly. A larger and more racially diverse combination of opposition forces could significantly help to restore meaning and content to South Africa's vital but somewhat hobbled democracy.

*Published 23 October 2008 in the Washington Post

Thursday, October 16, 2008

A view from Washington DC - Financial meltdown

Tuesday’s lunch with an old friend (of South Africa’s and mine), Walter Kannsteiner, former US Assistant Secretary of State for African Affairs, yielded a useful insider insight. Walter observed that Washington DC is “the only city in America where entrée to power is more important than access to money”.

Ironically, a stone’s throw away from our downtown restaurant a drama was underway that very afternoon, which saw the fusion of power and money in a scene unwitnessed here since the Great Depression. The CEO’s of the nine largest banks were in conclave in the marbled conference room of the Treasury Department. They were presented with a one-page document by Treasury Secretary Hank Paulson that said they agreed to sell shares in their banks to the Federal Government. According to the New York Times, Paulson told them they had to sign it before they left. They duly obliged. This part nationalization of the American banking system was seen by a clearly reluctant Paulson as the only key to unlocking what had become a global financial crisis headquartered in, but by no means confined to, America. His $250 billion bank recapitalisation scheme clearly stuck in his Republican craw. As he justified it afterward: “Government owning a stake at any private US company is objectionable to most Americans, me included. Yet, the alternative of leaving businesses and consumers without access to financing is totally unacceptable.”

What Paulson failed to disclose was how strenuously he had initially opposed the very step the markets forced him to take. Because by Friday of the preceding week ,the Dow industrial average had recorded its worst decline in a week, percentage wise, in its 112 year history. On that day alone, it lurched on a rollercoaster ride of more than a thousand points. Since J M Keynes has now elbowed out Milton Friedman as the reigning intellectual prophet here, Paulson no doubt decided that Keynesian adage: “when the facts change I change my mind” was the best philosophical straw to grasp.

Whatever the explanation for the turnaround, anticipation of the step had, by Monday, seen the Dow rebound by an extraordinary 936 points (11%), the largest single day-gain since, you guessed it, the Great Depression.

The one person, however, who was having no positive effect on market sentiment (and even less bounce, except of the dead-cat sort, on the fortunes of his fast-fading presidential standard bearer John McCain) was President Bush. Somewhat gleefully, Dana Milbank wrote in the Washington Post that “for the twentieth time in recent days Bush tried to calm the markets. The previous nineteen times the markets ignored him and continued their downward plunge, and this time would be no different.” The columnist was referring to Bush’s Rose Garden speech last Friday when the President said “the American people can be confident on our economic future”. A few minutes later, 300 points were shaved off the Dow.

Given the distrust, and ineffectiveness of the political classes around here, it seemed a better bet to soak some wisdom from the intellectual sponge of the globalization guru, Thomas L. Friedman (author of the award-winning “The World is Flat”). I went to hear him speak at the Washington launch of his new work, “Hot, Flat and Crowded”, a critical look at the unsustainability of a rising world population coupled with global energy demands and the destruction of our biodiversity.

But Freidman wasn’t simply interesting on the convergence of global warming, global flattening and global crowding. He was also apt on the current financial crisis. As he put it, “in some ways we‘ve become a subprime nation that thinks it can just borrow its way to prosperity – putting nothing down and making no payments for two years. Subprime lenders told us we could have the American dream – a home of our own – without the discipline or sacrifice that home-ownership requires”. A welter of evidence supports his thesis: Since the 1980s, Americans have consumed more than they produced but made up the difference by borrowing. (South Africans, incidentally, do precisely the same – only in America, like the food, it’s all super-sized).

Two decades of easy money and innovative financial products (including the dark and unfathomable ones like the derivatives that caused all the trouble) has seen household debt balloon in this country from $680 billion in 1974 to $14 trillion today. And the government has mirrored (or led) the consumer trend by ringing up a budget deficit of $454 billion in the current financial year. Freidman noted that the worst message Bush sent out after 9/11 was to tell Americans, immediately after that disaster, to “go shopping”. A nation addicted to consumption, not saving, hardly needed any presidential encouragement.

Instead of retail therapy, a much better strategy, he suggests, would have been to promote investment in energy efficiency, cut America’s dependence on energy-guzzling fossil fuels and the “petro- dictatorships” on which American oil imports depend.

Understandably, various American doomsayers have triumphalised about “a shattering moment of America’s fall from power”, to quote the Guardian of London. But its ideological opposite, the Wall Street Journal, suggests that despite current travails, America will remain a superpower. Two figures were striking in their analysis: its staggeringly large bailout of nearly a trillion dollars constitutes only 5% of U.S. Gross Domestic Product (whereas Britain’s slightly more expensive version amounts to a whopping 30% of its GDP). And last week’s historic plunge in the Dow still meant that the U.S. bourse outperformed nearly every single major stock exchange throughout the world, from Germany to China.

As the old Nedbank advert used to say, “It makes you think, doesn’t it?”

Saturday, October 11, 2008

Home Thoughts From Abroad: The US Election and Africa

The American financial meltdown is upmost in the minds of both US Presidential candidates and voters. It seemed unlikely, therefore, that the continent of Africa would be more than a minor footnote, and certainly provide no sound bite, as the campaign enters its final month.
Yet, in last Tuesday’s second presidential debate, both Senators Barack Obama and John McCain used several bloody and conflictual examples from the oft-forgotten continent to illustrate the reach and purpose of their foreign policy doctrines.
In suitably vague terms, Obama proclaimed that standing “idly by” in Ruanda “diminishes us”. He announced that the genocide in Darfur can only be curtailed by an American-led effort to bolster the UN- African Union Peace Keeping Force there. McCain offered similar boilerplate assurances on preventing genocide, but pointed to the “limits of our capability”. He cited the infamous, “humiliating” Somalian intervention as a cautionary case of reach exceeding grasp. McCain went much further in Foreign Affairs (December 2007) by naming Africa as the most compelling case for humanitarian intervention and promised to use “all elements” of US power to halt the outrages in Darfur.
But Africa’s two minutes of presidential primetime raises prospects about the continent’s relationship with the next occupant of the White House.
President George W Bush’s policies and programs in Africa have provided him with rare approval from his domestic opponents. His $15 billion AIDS-fighting PREPFAR initiative has provided 1.7 million Africans with anti-retrovirals and has converted the disease, for them at least, from a death into a life sentence. Senator Joe Biden proclaimed it as one of Bush’s “finest hours”. The substantial enhancement by the Republicans of the Clinton administration’s Africa Growth and Opportunity Act (AGOA) and the generosity, and crucially the conditionality, of the Millennium Challenge Account (MCA) has been described as one of his most important foreign policy innovations. Both Obama and McCain are enthusiastic supporters of the MCA. Obama initially announced he would fund it more generously but has now pulled back that pledge in view of the deteriorating fiscal picture in the US. McCain would enhance it in a different, and arguably more durable, direction: by abolishing wasteful agricultural subsidies for US farmers which so tamp down African agricultural exports.
While the Bush administration acted decisively and swiftly against Kenyan President Mwai Kibaki’s electoral theft last December, its attempts to restore democracy in Zimbabwe have been uneven and feeble. By appointing then regnant, now vanquished, but at all times pro-Mugabe, Thabo Mbeki as his “point man” in Harare, Bush effectively handed the issue over to South Africa to resolve (or not, as the current stalemate suggests).
Too often the Bush focus on “the war against terror”, allowed rights’ delinquent regimes such as Ethiopia’s to escape the democratic-deepening requirements of the MCA. Meanwhile the multiple conflicts and violent anarchy in the strategically significant Horn of Africa remain unaddressed.
Bush’s engagement with Africa has not always been reciprocated. The recent establishment of the stand-alone Africom (US Military Command for Africa) has generally been coolly, even suspiciously, received on the continent. The pre-emptive unilateralism of the Bush doctrine has given forward cover to the anti-American chorus which has escalated in volume over the past five years.
Africa will remain in the frame of the next President because of the other major driver of US policy, aside from the war against terror, namely America’s energy needs: by 2015 it is estimated that no less than 25% of US oil imports will come from Africa, up from 15% in 2007.
Obama’s campaign advisor on Africa, Witney W Schneidman recently suggested that his perspective is informed by the fact that “he is the product of the African Diaspora, the son of a Kenyan father, whose grandmother still lives in Kenya”. This unusual provenance has suggested to some, in my country at least, that Obama will be a “soft touch” when it comes to Africa. In fact, a close analysis of his record indicates otherwise: during his 2006 visit to Africa, he forthrightly attacked the disastrous AIDS-denialism of South Africa’s then Health Minister. In Kenya he railed against “the lack of basic rule of law and accountability” in many predatory African states. While Obama has scaled back his promise of doubling US foreign aid he has not adjusted his requirement of conditionality: it is helpful that Obama has coupled US aid with “an insistent call for reform, to combat the corruption that rots societies and governments from within”. Citizens of the world’s poorest continent, governed by some of the world’s richest leaders, can only say “amen” to that.
Obama’s initiatives in the Senate such as his 2005 amendment which helped bring Liberian tyrant Charles Taylor to international justice, suggests that Obama might become impatient with the “big man solidarity” which the African Union invokes repeatedly to shield dictators from justice and accountability, most recently, in the case of Omar Al-Bashir of Sudan.
Obama proposes to renew and restore America’s somewhat tattered international partnerships. However, in dealing with Africa and the world, he will soon enough confront the limits imposed on United Nation’s action imposed by Russia and China who had vetoed decisive action from Burma to Zimbabwe.
McCain has elaborated little in the campaign on his grandiose project of creating “the league of democracies”, to act “where the United Nations fails”. He clearly envisages such a body to overcome the shield for tyranny which the Russia-China vetoes provide. However, there is no appetite in Pretoria and in other African emerging democracies for such a league.
Whoever wins in November, Africa’s worst problems, from AIDS to Zimbabwe and its best prospects, from deepening democracy to spreading economic opportunity, require a continued engagement and partnership with the United States.

Thursday, October 9, 2008

Letter from Washington - First Week Here as a Visiting Fellow, Cato Institute

Five days is a lifetime in Washington DC, a city that is as much a metaphor as it is the capital of the world’s only, but fast declining, hyper-power.

I had barely shaken the jetlag out of my eyes last Thursday night, when I forced myself to stay awake for the much-hyped debate between the nation’s two Vice Presidential candidates. The expectations were both huge and diminished: would Republican Governor Sarah Palin manage to stutter out a few comprehensible sentences? Would she fall off the stage? In the event, the nation’s now most famous “hockey mom” managed a performance, which exceeded the expectations of this Samuel Johnson sort (“She does it exceedingly badly, but the wonder is that she does it at all”).

Palin’s shtick was a bazooka assault on the city which is to be my home for the next three months. She vowed throughout the debate insistently to “change”, “clean up”, “fix”, “reform” and “shake everything up” in Washington.

The following evening I attended a swanky party in the toniest DC neighbourhood. Our hostess, Katharine Weymouth, is both the granddaughter of Washington grandee, the late Katharine Graham, and currently publisher of the Washington Post – which happens to be the family newspaper and one of the very elite symbols that Palin so disparages.

My interest in the event is both political and anthropological: the party is the launch event of a searing book on the dark but hugely consequential vice presidency of Dick Cheney (“The Angler: The Cheney Vice Presidency” by Barton Gellman). Having had a dozen or more book launches of my own recently in South Africa, I can only commend Mrs. Graham-Weymouth’s event: the Chardonnay was superior and the canapés spectacular – no doubt confirming every prejudice of Governor Palin and her constituency. Although I couldn’t sight a single Republican at the party, most of the marquee democrats were strangely subdued despite the extraordinary news just in that Senator John McCain had pulled out of campaigning in the State of Michigan which he had previously described as a “must-win”. The cause of the sombre tones was Congress’s decision to eventually nod through the $700 billion rescue plan. Few thought that despite its size it would soothe the global financial system and provide the “stick of dynamite” which Treasury Secretary Hank Paulson claimed would unfreeze the stuck credit markets. As it happened, the sceptics were proved right by Monday morning: the credit contagion continued to rage like wild fire and on Wall Street the Dow dropped a frightening 800 points, while stock prices collapsed around the world.

Sometime Democratic Presidential candidate (back in 1992) and Bill Clinton’s Interior Secretary, Bruce Babbit advised me that the only thing which could save McCain at this late stage was “a Hail Mary pass”. I could not confess to this suave Washington fixture that I was utterly ignorant of American football argot, but on subsequent inquiry I discovered that the term relates to a forward pass made in utter desperation, with only a small chance of success, at the end of a game.

The very next day Sarah Palin threw such a long shot at Barack Obama by reminding a fired-up audience in Florida of his links to William “Bill” Ayers, a founder of the 1960’s radical terrorist group “The Weatherman Underground”. In Palin’s folksy vitriol this amounted to the Democratic frontrunner “palling around with terrorists”.

But this is one “Hail Mary” that doesn’t seem to connect. Because while the Republicans are desperate to change the subject from the economy (which the voting public holds them, and especially the toxic presidency of George W. Bush responsible for) most American voters cite the collapse of Wall Street, and the collateral damage to main street America as the seminal issue. Indeed, this is arguably the biggest economic event in world history for the past eighty years. Just put this crisis in perspective: Americans (who largely acquire stocks and shares for the purpose of retirement) have lost a combined $1 trillion dollars in net worth in just the last four weeks. More than one million people have lost their homes in the last two years and one million more are expected to lose their homes in the next year or so. All this makes it a hard, if not impossible, sale for the Republican belief in deregulation, unfettered free markets and its associations with some of the “villains” of Wall Street.

So is the race for the American presidency over? Based on the polls it would appear as though McCain’s candidacy is “as much a casualty of Wall Street as Lehman or Merrill” to quote democrat strategist Howard Wolfson. And while McCain’s campaign has come back from the dead more than once before in this electoral season, his appearance in Tuesday night Presidential debate with Barack Obama was certainly no game changer. Sadly, he almost looked half-dead: waxen and wooden, desperately trying to churn out some lines stuffed into his head by his campaign operatives including the, extraordinary suggestion (from a Republican, at least) that his administration would buy up all the bad home loans in America and renegotiate mortgage repayments.
Ronald Reagan must have spun in his grave.

In fact, some of McCain’s solutions were more substantive than Obama’s light fare. But the Democrat projected a fluency and ease which cast him, ironically, as the more seasoned and reliable hand on the tiller. Given the perfect economic storm now raging, such reassuring poise is probably the game winner.

Sunday, September 28, 2008

The end of Mbeki and Mbekism: Quo Vadis South Africa?

On Tuesday at 13h00 I boarded a plane in Johannesburg. Two hours later I arrived in Cape Town to discover that one-third of the cabinet had resigned. I thought, somewhat cynically and mischievously, that if I had been on a six hour flight that afternoon, then with a bit of luck the entire government might have left office!
Well, of course, as we know 48 hours later, Tuesday’s gyrations appeared to be a witch’s brew of calculated malice by the presidency, the last kick of the Mbeki loyalists and an incoherence of tactics and an infirmity of strategy by the rest of the cabinet.
Trevor Manuel cited “reasons of decorum” for his on-again, off-again resignation. To many it seemed the uncoordinated posturing of a prima donna. I don’t believe as experienced a politician as Trevor Manuel, who is also the world’s longest-serving Minister of Finance, could not have foreseen the punishment to our currency and the spooking of the markets which his temporary resignation caused. Well, he caused a run on the rand and caused an afternoon of chaos in the markets. Perhaps he has proven his indispensability to government. Or, maybe, it was an expensive but early signal to the “macro-populists” as he once derided the Vavi-Nzimandi axis of the left, not to “mess with Manuel”. On the other hand, as the former municipal boss of Johannesburg, JF Oberholzer, was fond of observing, “West Park Cemetery is filled with indispensable people.”
So the early days of the post-Mbeki era are far from reassuring. Indeed, given the ANC’s pride in collective politics, and its constant mythologizing of the “discipline of the deployed cadres at all levels of government”, senior ANC members and ministers have, of late, been demonstrating the reverse. They bring to mind the adage of “every man and woman for him or herself.”
Personally, I believe the governance of South Africa is better off without the high-flying of Phumzile Mlambo-Ngcuka, the Stalinistic bullying of Essop Pahad, the serial blundering of Alec Erwin and the fanatical anti-Zionism of Ronnie Kasrils. But, of course, the bulk of the cabinet members who remain represent a pretty shallow bench of ministers - many long past their sell-by date and others whose election to high office has always been inexplicable but for reasons of loyalty to the now-vanquished president, and various imperatives of quota-filling.
A few hours ago, Parliament brought down the final curtain on the Mbeki era when we elected his successor. At the height of my cold war with the former president over AIDS in 2001, Thabo Mbeki compared me to a Shakespearean villain, Prospero in The Tempest. As I contemplate the sad end and baleful legacy of his presidency, one is left with the distinct feeling, or emotion, that it would take several Shakespearean tragedies to do justice to the rise and fall of Thabo Mbeki: his presidency and the forces behind its collapse seem to combine the ambitions of Lady Macbeth, the jealously of Othello, the backstabbing of Iago and, ultimately in its last act, the impotent rage of King Lear.
But we should not, I believe, underestimate what the end of Mbeki and what I call “the politics of Mbekism” means for the governing party and the future politics of our country:
• First, Mbeki’s ascent to office owed a great deal to the politics of exile and his pre-eminence as an ANC prince or dauphin: primogeniture was a key asset in his preferment. In contrast, neither Kgalema Motlanthe, nor Jacob Zuma owe their rise in politics to either their parents or to their overseas experience or contacts. Both are grounded in the politics of prison and Motlanthe’s rise was forged in the furnace of an at-times militant, even Stalinist, trade unionism.
• Second, Thabo Mbeki reanimated in South African politics and gave intellectual respectability to a fairly antique nationalism, replete with lashings of race and division. He abandoned the legacy of reconciliation bequeathed by Nelson Mandela and put in its place the paraphernalia of transformation in which was embedded both corruption and cronyism. There is, of course, no guarantee that matters might not spiral downward under his successors. But in his removal from office South Africa has been liberated from the dangerous fallacy of presidential infallibility, and the overweening arrogance of office caused by the over-accumulation of power in one person and in one institution.
• Third, the brutal, but democratic, toppling of the once all-powerful president of the ANC in December, and nine months later, his even more brutal removal from the country’s presidency has unleashed a tidal wave of resentment and uncertainty. In 1990 Britain’s governing Conservative Party defenestrated their all-powerful Prime Minister, Margaret Thatcher, notwithstanding her economic accomplishments after 11 years at the helm. The backlash from that seismic event remained with the Tories for more than a dozen years, and four leaders later. The fact and manner of her removal divided and demoralized her party and rendered the movement once dubbed “the most successful election winning machine in the western world”, unelectable in three consecutive general elections. The British Tories are hardly comparable to the ANC, but some parallels are relevant: do not underestimate just how consequential this week and last weekend’s event will be for the politics of the ANC and South Africa. The ANC’s once-vaunted unity has shattered, its ideology is incoherent, and the walking wounded in its ranks will unleash their own revenge. We will feel the eddies and backlash flowing from recent events for decades to come.
• Fourthly, if Mbeki had far too much power, his two successors seem to have almost too little. I did not approve of “Mbekism” - racial nationalism, the over-concentration and centralisation of power and the pretensions of the developmental state. But I knew what it was. But what does Zumaism or Montlantheism stand for? They will say that they are the servants of the “collective”. And no doubt they are. But what does this mean? Is it the lowest common denominator between Cyril Ramaphosa and Julius Malema? At a critical time for South Africa and the world, who will provide the national moral and political leadership this country requires and on what foundation will it rest?
• Finally, for the past fourteen years there has been a remarkable continuity in the basic ecology of electorate - at least in terms of its racial stratification and electoral results cleaving along lines of ethnic identity. The toppling of the ANC’s leadership and the abrupt change in the country’s national guard, and the anger evinced by many at this dramatic turn of events suggests that beneath the surface continuum, a tectonic shift will take place among the voters. At the moment it is formless and even party-less. Furthermore the centrifugal force of our politics remains an extreme form of proportional representations which militates against pre-election coalition formations. However, having tasted blood once and having the screen of power from a political Wizard of Oz, ANC cadres and MPs are unlikely to go back to their previous meek and obsequious ways. The media and the judiciary have also flexed their muscles, after a fairly lengthy slumber during much of the Mbeki presidency. That is likely to continue going forward and our democracy will be the better for it.
The end of “Mbekism” suggests the end not just of one presidency and the demise of a once impregnable political leader. It indicates that politics has changed; the arrogant assumptions and certainties of the past have been challenged. South Africa’s current uncertainty could, over time, lead to far less predictable and far more democratic political outcomes, not immediately, but certainly over time.