Tuesday, May 28, 2013

How to get ahead if you’re an ‘insider-outsider’

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28 May 2013 | Tony Leon | Original Publication:  BDlive

'Transformation' in South Africa has become a rent-seeking asset grab dressed up in the garb of restoration, writes Tony Leon

TRANSFORMATION" is in danger of becoming the greatest weasel word in the South African lexicon. This has nothing to with its original motive and justification: to ameliorate the wrongs of our discriminatory past and create an inclusive future. But some of the present claims and claimants under the banner of transformation are distorting the concept with results that range between the comic and the dangerous.

A "weasel word" derives from the furry animal’s habit of sucking the content out of an egg without breaking the shell. The same applies to words that become emptied of meaning or are used to hide the truth. In many instances in South Africa today, "transformation" has become a rent-seeking asset grab dressed up in the garb of restoration.

Perhaps the extreme, or absurd, example that will soon play itself out in the Competition Tribunal is the claim of advocate Simba Chitando of the Cape bar. According to reports last week, he is suing four commercial law firms and three senior counsel colleagues on novel grounds: that he remains unbriefed in the esoteric field of shipping law, his purported field of expertise, due to the fact that "he is black and Zimbabwean".

The proceedings have been spiced up with an element that could have been scripted by the creators of The Sopranos or any other drama depicting a Mafia shakedown: in their replying affidavits, the three senior counsel aver that Chitando attempted to "extort" R300,000 from each of them, in exchange for which he would withdraw his claim.

But while the drafters of the constitution might shudder at the absurdities of such an action, the claim itself merits both interest and some historic comparisons, none of which will necessarily assist the applicant.

On the merits, I have no idea whether Chitando is an unrecognised Sydney Kentridge or simply clambering aboard an overcrowded black economic empowerment bandwagon. But he is, demographically at least, a member of what can be termed the awkward group of "insider-outsider". Being black in today’s South Africa confers certain legislated advantages and preferment. However, being a Zimbabwean makes him an outsider, where racial advantage can be trumped by xenophobic prejudice. He might do well to study two interesting works relating to the occupational prejudice suffered in the 20th century by Jews in South Africa and the US.

Locally, as professors Richard Mendelsohn and Milton Shain describe in The Jews in South Africa, there was a disconnect between the apparent advantage immigrant Jews had on arrival here. On the one hand, their whiteness advantaged them into occupations and other preferments from which black South Africans were excluded. On the other, their religion and ethnic origins meant that the door to certain professions and firms were shut in their faces.

The authors quote from an occupational survey of Jews in Johannesburg in 1935, which found a significant majority of Jews in the city were self-employed or described themselves as members of an "independent class". According to the authors, "the survey accentuated the difficulty encountered by Jews in seeking employment in certain branches of the economy, especially in mining and banking. This inclined them to entrepreneurial activities where there would be fewer obstacles, real or perceived."

Closer to the matter before the tribunal, I recall several animated discussions I had with my late parliamentary colleague, Harry Schwarz, who had practised as both an attorney and advocate in Johannesburg in the 1950s. He had the advantage of being very bright, but had the perceived double disadvantage, for those times, of being both German and Jewish. He would recite to me the names of some major Johannesburg law firms that would refuse to either employ Jewish articled clerks or brief Jewish barristers.

In the US, Malcolm Gladwell’s study of success "outliers" provides a fascinating example of how rank prejudice led to the exclusion of Jews from "white-shoe" Wall Street law firms, the preserve of white Anglo-Saxon clubby lawyers. Joe Flom and Alexander Bickel, and other brilliant law students denied berths at the top-end firms, did not sue the lawyers who excluded them. They either started their own firms or specialised in "unglamorous" areas of law the mainstream lawyers deigned not to touch. One such area was proxy fights associated with hostile commercial takeovers. By the 1970s and 1980s, this was one of the most sought-after and profitable areas of legal practice, and Gladwell found it had attracted a disproportionate number of Jewish practitioners. The pioneers in this field in the 1950s were the young lawyers who had been excluded from mainstream firms 20 years before.

Litigating every slight will not restore meaning and content to transformation. But reading some history might assist.

Leon is the author of The Accidental Ambassador (Pan Macmillan). Follow him on Twitter: @TonyLeonSA OR on Facebook: facebook.com/TonyLeonSA

Tuesday, May 21, 2013

‘Do no harm’ dictum should apply to making law

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21 May 2013 | Tony Leon | Original Publication:  BDlive

In legislating and regulating, sober analysis might yield better results than gesture politics, writes Tony Leon

IT IS seductive to mistake activity for result. Governments do it all the time, perhaps exemplified best by Tony Blair’s observation: "When I was leader of the opposition, I would wake up in the morning and think: ‘What can I say?’ As prime minister I would think each day: ‘What can I do?’." Of course, some of Blair’s acts, such as the invasion of Iraq on an essentially false prospectus, were consequential. Others, such as introducing "antisocial behaviour orders", were typical of what one can term "gesture politics", aimed in this case at curbing binge drinking among teenagers and other juvenile delinquencies. The coalition government now in power in the UK apparently intends to scrap them.

But governments everywhere often mistakenly believe that legislating and regulating will simply create the desirable ends embedded in the instrument.

Readers might recall that the Labour Relations Act was introduced with the promise of inaugurating an era of peaceful industrial relations. Events in Marikana and elsewhere suggest a lived reality somewhat at variance with the paper pledges of Parliament. Our constitution is also stuffed full of promises, from decent housing and education to affordable healthcare, which are often observed only in the breach. This led me to observe at the time, that if legislation led to the results promised, then South Africans would live in a promised land.

A number of encounters at the Franschhoek Literary Festival at the weekend were useful in fortifying the belief that, in most circumstances, government and legislators generally would do well to apply the "do no harm" dictum when it comes to making laws. I bumped into David Lewis, the impressive head of Corruption Watch, the civil society movement that monitors this pandemic in our midst. He confirmed that many traffic policemen pay bribes to get into various municipal traffic departments and then, to pay off the bribe, in turn extort bribes from motorists, especially those suspected of driving above the legal alcohol limit. Interestingly, in February, Corruption Watch reported that the two institutions whom callers to their hotline identified as the most corrupt in the country were local government followed by the traffic police. In other words, the bodies most responsible for policing road safety and interdicting drunk drivers are also the most corrupt.

Now, onto this rickety foundation, the ministers of health and transport, frustrated and angry at the staggeringly high number of road deaths — over half of which are caused by drivers or pedestrians under the influence — now propose to outlaw the consumption of alcohol before driving and to legislate a total ban on alcohol advertising.

The virtues and demerits behind this latest government impulse cropped up at the festival during a debate in which I participated alongside Judge Dennis Davis and social commentator Eusebius McKaiser. We were discussing whether the much-maligned concept of liberalism in South Africa was a swearword or a noble idea, and probably concluded it was a bit of both. But from different perspectives, we agreed that our constitution was premised on a liberal idea that the sovereign power of the state over the individual is bounded by the requirement that individual citizens remain inviolable in certain areas of activity.

Doubtless, Ben Martins, the communist who heads the Ministry of Transport, and Health Minister Aaron Motsoaledi would be delighted to be accused of being illiberal. But they might be less happy to be regarded as ineffective. The best answer I found to whether, how and when the state should regulate against private behaviour that can have harmful public consequences, such as drinking and smoking, came from US President Barack Obama’s regulatory czar, Cass Sunstein. On his watch, any federal regulation must now be based on data and evidence rather than intuition, impulse and interest-group pressure. It is a requirement that any prohibition is accompanied by a simple table that offers three things: a clear statement of the quantitative and qualitative costs and benefits of the proposed curb; a presentation of any uncertainties; and similar information for reasonable alternatives to the action.

It is apparent that the desirable end of keeping alcohol-induced deaths off our roads will not be achieved by the means proposed by the ministers. The UK has more generous blood-alcohol levels for driving than South Africa. Yet in the UK, road deaths per 100,000 inhabitants are one-tenth of the South African total. Equally, it is impossible to prove that alcohol advertising, already highly regulated, causes greater consumption than merely reflecting greater demand.

Simply put, sober analysis, forgive the pun, and a reconciliation between the ends desired and the means legislated to achieve them, rather than gesture politics and legislative grandstanding, might yield results.

Leon is the author of The Accidental Ambassador (Pan Macmillan). Follow him on Twitter: @TonyLeonSA OR on Facebook: facebook.com/TonyLeonSA

Monday, May 20, 2013

The unacceptable ambassador

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20 May 2013 | Jarred Myers | Fin 24 

I HAD the opportunity to chat to former leader of opposition and DA stalwart Tony Leon about his recent stint as ambassador to Argentina. 

Sitting in a leafy Johannesburg suburb, we discussed current events in light of his recent biographical work The Accidental Ambassador.

As ambassador Leon maintained a balanced budget, received back-to-back clean financial audits, completed performance reviews and expended funds for their intended purpose.

He also managed to increase South African exports to Argentina by 80%, no mean feat in a militantly anti-import country, but in so doing he was categorically an unacceptable ambassador for South Africa and was prematurely yanked back home before he could further tarnish the nation’s image with such flagrant displays of competence.

I was pleasantly surprised by how much I enjoyed reading the book – both on a personal and professional level – but for me at least, my fascination with Argentina, Uruguay and Paraguay is pedestrian at most.

My interest lay in exploring what Harvard professor and management guru Clay Christensen calls associational thinking, or the cross-pollination of solutions in one sphere to another unrelated sphere: in this case what take away applications could be gleaned from Argentina for South Africa.

As I've learnt, there are surprising similarities between our two nations on many levels including population size, economic stature and resource dependency. But what I found even more intriguing is that Argentina far and away surpasses South Africa in terms of corruption, state embezzlement and labour union interference.

This realisation of Argentina’s superiority in state malfeasance piqued my interest in practical applications for South Africa.

As it happens, at the turn of the twentieth century the Argentine economy was larger than that of Brazil. This seems hard to fathom in light of the current situation, where Brazil’s economy is four times larger.

Is Nigeria the next Brazil?

My thoughts immediately moved towards comparison between South Africa and Nigeria – could it be that in 50 years’ time, the Nigerian economy will be four times larger than South Africa’s?

I swiftly plotted available data, which I have displayed below.


It is clear that Nigeria and South Africa are very close in terms of gross domestic product (GDP) output over the past 50 years. What is striking is the similarity between this tandem movement and that of the graph below, indicating the same metric for Argentina and Brazil over the first 50 years of the twentieth century.

What is more astounding is the graph below, which indicates Brazil’s break-out where its growth was turbocharged and followed an almost exponential trajectory, whereas Argentina plodded along with stagnation the norm and growth spurts the exception - leading to the current divergence.


Apparently, there are more than adequate lessons to be learned for South Africa from a country which has so deftly and consistently managed to screw up its economy and hamper its competitiveness.

The metaphor which best describes the situation is ironically that of the flightless cormorant which the author encountered on a trip to the far-flung Galapagos Islands.

The bird, not very different in appearance from our locally found cormorant, cannot fly at all – and it is with good reason, because it has no need to do so with abundant fish supplies. Along with no land predators, this bird adapted its wings and muscles for swimming rather than flying.

This flightless cormorant aptly describes the governments of both South Africa and Argentina: neither has any natural predators with safe voting majorities, so no need to pay no more than lip service to democracy; both are stocked with such abundant natural resources that there is scant reason to learn to fly and, appropriately, both have evolved into the flightless democracies with which we are saddled.

Where the parallels diverge, however, is that South Africa has depleting resources in its mineral wealth, whereas Argentina with its 20 feet of topsoil provides enough food to feed half a billion people. It continues to do so despite its myopic leadership, and in so doing has a far more sustainable pillage strategy than our own.

The way forward

So how does South Africa follow the Brazil trajectory rather than Argentinian economic malaise?

The book offers some words to the wise best summarised by an interaction between the author and former US president Bill Clinton.

“Clinton suggested that the only way to address the myriad challenges and crisis was to stay focused on what he termed ‘the future business’ and not to be enthralled by the past.”

Tony emphasised that what the South African government needs to do in order to turn the country around is well documented and understood, thanks to the efforts of armies of consultants and advisers.

So it is not lack of clarity which inhibits South Africa from focusing on “the future business", rather it is the political will to make tough decisions and to implement these proposals which is sorely lacking.

I was privileged to attend one of the Argentina World Cup games in Soccer City in 2010 and vividly recall the impassioned chants of ‘vamos Argentina!’ or 'go Argentina!'. Unfortunately, as is well understood in the realm of kicking balls into the net, it takes more than well-intended encouragement to score goals.

Perhaps that is the apt take away message for South Africa’s leaders.

- Fin24

*Jarred Myers is a resources strategist and can be followed on Twitter on @JarredMyers. Opinions expressed are his own.

Tuesday, May 14, 2013

Empowered citizens are better than Big Men

14 May 2013 | Tony Leon | Original Publication:  BDlive

Perhaps big-vision leadership is less important than empowered citizens, writes Tony Leon

MY 88-year-old father has been supporting Manchester United, from Durban, since circa 1935, and he still does. My 25-year-old Israeli stepson became a Red Devil fan before he could speak English.

When, after 26 years of leadership, Alex Ferguson, dubbed "the ultimate manager", announced his retirement last week, there was a cascade of bouquets and no brickbats for the Scot who, like his team, had risen to the summit of sporting excellence as perhaps the greatest, and most valuable, brand in sport. Although the product of a hardscrabble upbringing in Glasgow’s Clydeside, and a committed Labour Party man, Ferguson’s redness in his politics and football allegiance did not preclude his adapting to the global requirements of modernising the "beautiful game". Indeed, last year, he gave a lecture in the citadel of capitalism, the Harvard Business School, where he preached the virtues he had so assiduously practised: the importance of openness and adaptability in making even the most venerable brands — countries, companies and professional football teams — fit for purpose. Not for nothing is Manchester United the first team in the world to be valued at more than $3bn.

Doubtless the "team that will never die" will continue winning under new manager David Moyes, but we can’t know whether he will achieve Ferguson’s success.

Quite how central human agency is to corporate success is underlined by the vertiginous fall of Apple. US financial analyst James Surowiecki laments that, until recently, the global technology leader was almost universally venerated. It was the most profitable hi-tech company in the world, with many predicting it would be the first trillion-dollar US company. But: "Since September, the stock has tumbled more than 35%, losing more than $200m from its market cap." Its sudden fall from grace is attributable to many reasons, not least the premature demise of its iconic founding genius, Steve Jobs.

The departure of Ferguson occurred when an event of less global significance but of some local importance was convened in Cape Town, the World Economic Forum on Africa. But, even here, the lessons of Ferguson’s legacy resonated. As Business Day editorialised, for Africa to maintain and extend its flavour-of-the month status with global investors requires dollops of vision and ambition and the discarding of outdated mind-sets: "If Africa is to use its resources to develop itself, it must discard its victim mentality and grasp the opportunity to maximise the benefit from the billions of dollars in investment the world is ready to deliver."

Does the present crop of continental leaders harbour the political equivalent of a Ferguson or a Jobs? I was recently rereading Martin Meredith’s magisterial account of our continent’s post-colonial history, The State of Africa. It commences with his account of the 1958 All-African People’s Conference, hosted by the first head of a decolonised African country, Kwame Nkrumah, in Accra. The key guests went onto become the leading lights of African liberation: Julius Nyerere, Joshua Nkomo, Kenneth Kaunda, Hastings Banda and Amilcar Cabral.

Yet, none of them — especially Nkrumah, whose megalomania resulted in his later ousting — achieved the sort of economic success and democratic governance today routinely predicted and practised on the continent. Some plundered their countries, or in the case of Nyerere, were personally incorruptible but practised ruinous economic grand experiments. The African leaders who gathered in Cape Town last week are of a lower wattage than their forebears. And the world in which they lead is vastly changed from the superpower conflict that formed the template, and often provided the cover, for their predecessors’ misgovernance.

One such moderniser today, who benefits from the investor search for yield rather than a Soviet or US quest for a Cold War ally, is Paul Kagame of Rwanda. His country recently floated its first dollar bond of $400m, or almost 6% of its annual output. From the ravages of genocide in 1994, he has constructed an economy that is the seventh fastest growing country tracked by the International Monetary Fund. But he is equally noted for his authoritarian streak. In contrast, Malawi’s President Joyce Banda is admired for her democratic instincts and poor economic prospects.

Here’s a thought: perhaps big-vision leadership is less important than empowered citizens. The spectacular growth of mobile telephony on the continent, for example, has brought social and economic goods within reach of one in two African homes. And social networking famously helped topple ageing North African dictators.

Global and country brands, like football teams, are augmented by great leaders. But you still need the players, the market and the fans to win the game.

Leon is the author of The Accidental Ambassador (Pan Macmillan). Follow him on Twitter: @TonyLeonSA.
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Tuesday, May 7, 2013

Sun City shenanigans give ‘Gupta’ new meaning

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07 May 2013 | Tony Leon  | Original Publication:  BDlive

'Gupta' has become a verb denoting the selling of a country’s soul and patrimony to foreign bidders with deep pockets, writes Tony Leon

A FOREST’s worth of paper and gridfuls of electrons have been expended on commenting on Sun City’s version of our very own Monsoon Wedding. There is something appropriately Bollywood about the Gupta nuptials and the drama evoked in their breaching of national security, flouting of protocol and the sheer excess of the event. A comedy of errors and the symbolic shaming of a nation evoked a chorus of condemnation which, just for once, united the "usual suspects" in the opposition and media together with the paladins in the highest reaches of the governing alliance.

According to my old Collins English Dictionary, "Gupta" is a noun denoting "the dynasty ruling northern India from the early fourth to the late sixth century AD, a period of famous achievement in the fields of art, science and mathematics". However, according to the more contemporary blogosphere and Twitterverse, Gupta has become a verb denoting the selling of a country’s soul and patrimony to foreign bidders with deep pockets and close connections to the ruling family. Or perhaps a synonym for the crony capitalism embedded in the paraphernalia of black economic empowerment and the vertical nature of power — where "know who" trumps "know how" and personal enrichment is acquired through political access and greasing the wheels of political parties.

But the uncharacteristic speed and decisiveness of the government’s response to the outrage evoked by the Gupta wedding saga suggests other forces are at play.

Arguably, the arms deal scandal is of far greater weight than the unauthorised landing of one plane at an air force base; or the serial revelations concerning the communications minister and her apparent confusion between her public duties and her private relationships, not to mention her inability to manage her own office, never mind South Africa’s barely built digital highway. Yet, in the first case, the judicial commission of inquiry has become a site of internal controversy and nonperformance. In the second, the Presidency, in whose gift the appointment of ministers lies, seems unconcerned about the damage caused by a key presidential lieutenant.

None of this suggests that the intensity of the scrutiny and the response to the Gupta affair is either unwelcome or unnecessary. But perhaps Gupta has also become a byword for a growing unease about the meshing of commercial power and political influence, with a dash of xenophobia adding some spice to the mix. Then there is what the African National Congress (ANC), borrowing from the language of Stalin, called in the Mbeki era, "the national question", code for dealing with ethnic minorities in our racial mosaic.

Stephen Ellis’s masterful recent book, External Mission — The ANC in Exile, provides a compelling account of the often tortuous interplay between the Africanist forces in the ANC and the explicitly multiracial South African Communist Party, before and after the ANC opened its ranks to non-Africans. On his account, deep suspicion by ANC security chiefs of a largely Indian and derisively named "cabal" during the heyday of the United Democratic Front (UDF) in the 1980s owed a great deal to the fact that the UDF in Natal "owed its strength to the Indian constituency especially".

But if some of the Gupta finger-pointing has an ethnic dimension, what of another national minority, the coloureds? Rapport newspaper on Sunday headlined a case in the Labour Court. It concerns the underpromotion of 10 coloured officers in the Department of Correctional Services in the Western Cape and revolves around the department using national rather than provincial demographics to determine its equity targets. One of the complainants, Geo-Nita Baartman, testified that not only was she both previously and severely disadvantaged but, as she put it: "I fail to understand why I sit here today … to defend myself over policies I have no control over." She was referring to the "coloured labour preference policy", which the National Party enforced in the Cape to keep Africans out of the province.

The Gupta affair provides, ironically, both a distraction from and another perspective on an intense national debate.

But there is something also rather universal about it. Last week, for example, The Economist published a searing critique of South African-style affirmative action under the headline, "Fool’s Gold". In this week’s edition, a correspondent’s pithy response was published as the "featured comment". CA-Oxonian wrote: "SA is doing a replay of the Russian game whereby a tiny number of well-connected people become fabulously wealthy through the acquisition of assets other people have created, and then entrench themselves in both the economic and political hierarchies. We’ve seen it before and we’ll see it again."

Another definition, perhaps, for Gupta.

Leon is the author of The Accidental Ambassador (Pan Macmillan). Follow him on Twitter: @TonyLeonSA OR on Facebook: facebook.com/TonyLeonSA

Tony bewys hom as ’n verteller soos min

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5 May 2013 | Jan-Jan Joubert  | Original Publication: Beeld

The Accidental Ambassadoris ’n subjektiewe vertelling deur ’n fyn waarnemer wat ook maar mens bly, skryf Jan-Jan Joubert.

Wat gebeur agter die mure en deure van ’n hedendaagse Suid-Afrikaanse ambassade? En wat is die aard en doel van ons land se buitelandse beleid?

Dit is die twee vrae wat Tony Leon, jare lange opposisieleier en tot onlangs die Suid-Afrikaanse ambassadeur in Buenos Aires (verantwoordelik vir Argentinië, Uruguay en Paraguay), trag om te beantwoord in hierdie boek waarvan die titel terugspeel op die ekonoom John Kenneth Galbraith se beskrywing van sy termyn as Amerikaanse ambassadeur in Indië in die Kennedy-era.

Die boek is ook ’n voortsetting van Leon se omvattende outobiografiese vertellings, On The Contrary, wat in 2008 verskyn het.

Daarom is daar ’n lang aanloop tot sy vertrek na Argentinië, waarin sy laaste twee jaar as parlementslid (ná sy uittrede as DA-leier in 2007) en sy betrokkenheid by Harvard en by die Cato-instituut in Washington DC beskryf word.

Hierdie vroeë deel van die boek is nie die sterkste deel van die vertelling nie, en dit sal die skrywer dalk gemoedsrus gee as hy besef en aanvaar dat sy opvolger, Helen Zille, nie betrokke was by die groep wat in 2006 begin geluide maak het dat hy as partyleier moet terugstaan nie. Daardie groep se hoofspeler, die Oos-Kaapse woelgees dr. Tertius Delport, is heeltemal goed daartoe in staat om selfstandig en om sy eie redes die politieke water op te klits, soos hy ook sedertdien bewys het.

En om te impliseer dat Zille selfs sou twyfel daaroor om vir Sandra Botha te stem as parlementêre leier is ’n mistasting.

Leon was versigtig om in 2007 nie die stryd om sy opvolger aan te wys te oorheers nie.

Dieselfde geld Zille se rol in die wedloop om die DA se parlementêre leierskap tussen Botha en Delport.

Waar die boek vlam vat, is wanneer Leon vertel van sy tyd in Argentinië.

Enigiemand wat hom ken, weet sy belesenheid, intellektuele skerpheid, humor en taalvaardigheid maak hom ’n gespreksgenoot en verteller soos min.

Hy het ook die sonderlinge vermoë om op papier niks van sy impak as raconteur in te boet nie, so die boek lees heerlik.

Boonop is sowel die Suid-Afrikaanse diplomatieke korps as die huidige Argentynse bewind van pres. Cristina Kirchner absurd genoeg dat Leon se skerp waarnemingsvermoë en selfs skerper tong tot hul reg kom deur die oorvertel van sappige vignettes wat die tone laat krul.

Om dit hier oor te vertel, is om dit te bederf, so ek gaan nie, maar ek het dikwels hardop gelag by die lees van die boek. Sy beoordeling van ’n Argentynse skoonheidskompetisie, sy vertellings oor die ampswoning en sy beskrywings van die Argentynse staatsdiens is die beste. Sy uitwys van parallelle en verskille tussen die Suid-Afrikaanse en Argentynse samelewings stem mens tot instemmende nadenke. Die pit van die boek vind jy teen die einde wanneer Leon op sy kenmerkende en kosbare reguit, priemende wyse Suid-Afrika se buitelandse beleid ontleed.

Sy oorwoë en toegeligte gevolgtrekking dat ons buitelandse beleid koersloos en beginselloos is, en dat dit ’n bespotting maak van oudpres. Nelson Mandela se onderneming dat dit op die uitbreiding van menseregte sal berus, is ongelukkig heeltemal in die kol.

The Accidental Ambassador is ’n subjektiewe vertelling deur ’n fyn waarnemer wat ook maar mens bly.

Beslis die moeite werd om aan te skaf. ­

– Jan-Jan Joubert is Beeld se politieke redakteur