Tuesday, June 4, 2013

Dreaming of summer after ‘winter of discontent’

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04 Jun 2013 | Tony Leon  | Original Publication:  BDlive

The recent spate of gloomy economic data suggest that South Africa’s political economy is entering a ‘winter of discontent’, writes Tony Leon

WITH winter storms encasing the Western Cape in an icy grip and cold fronts moving across the country, it is tempting to suggest that, parallel to the weather, South Africa’s political economy is entering a "winter of discontent". There is plenty of gloomy supporting evidence from the economic data: according to Reuters, the beleaguered rand’s breaching of the R10 barrier against the dollar on Friday made our currency the worst-performing currency after the Venezuelan bolivar fuerte and the Syrian pound. The currencies of two failed states, one of which is in the midst of full-scale civil war, is not the sort of association or benchmark South Africa needs.

More galling, no doubt, for the Presidency is that the rand’s plunge came after a media conference by President Jacob Zuma last Thursday that was intended to reassure investors that the government had a plan to bolster economic confidence, particularly in the mining sector. "Markets defy Zuma" was the next day’s headline, proving that the political weather is often as impervious to outside intervention as the Cape storms.

It will doubtless offer scant comfort to local leadership to know that the political update of the Shakespearean-originating "winter of our discontent" arose in the UK during the 1978-79 industrial unrest. It was the coldest winter for 16 years and the trade-union-acquiescing Labour government of James Callaghan was confronted with the unravelling of its pay and wage constraints and the postwar consensus that unions, government and business could keep the peace through "consensus politics". Militant unions had other ideas, however, and the spectre created by images of striking gravediggers refusing to bury the dead and uncollected garbage spilling onto the streets would not only haunt the government, it would destroy it. Within months, Callaghan and Labour would be driven from office by a resurgent Conservative Party with Margaret Thatcher at its helm. She had very different ideas from Callaghan about the unions, the postwar consensus and how to fix the economy.

Interestingly, and of cold consolation to Zuma after his own attempt to use the presidential podium to douse the flames incinerating our economy, Callaghan, before his defeat and at the height of the crisis caused in part by his own policies, also decided on a press conference intended to reassure voters and calm the markets. He also cracked a few jokes — and was then asked about his view of the mounting chaos in the country.

Fresh from a Group of Seven retreat in the French Caribbean, he gave a complacent reply: "Please don’t run down your country by talking about mounting chaos. I do not feel that there is mounting chaos." The next day, The Sun newspaper immortalised his nonchalance in a famous headline: "Crisis? What Crisis?" Its editor was knighted after Thatcher won the election.

In fact, Zuma also sounded far less complacent last Thursday than he did recently in a Financial Times interview, in which he blamed our economic travails on outside factors and awarded himself 70% for governance. But aside from announcing a high-level ministerial intervention to settle the tumult in the mining sector, there was little of substance in his pronouncements.

Far more recently than the UK’s winter of discontent, another European voice was heard on the dilemma politicians face when it comes to prescribing the harsh medicine of unpopular economic fixes. Luxembourg Prime Minister Jean-Claude Juncker candidly admitted of the economic reforms required to fix the sclerotic eurozone: "We all know what to do, we just don’t know how to get re-elected after we have done it." Zuma’s government is cushioned by a far greater electoral margin than any of his European counterparts. Even on the most positive estimates of the opposition, next year’s election will not lead to a change in government and only two, at best three, provinces are going to be competitive.

Zuma and his government do not have to really announce new measures. That would be a bonus. They could start by implementing what they have already undertaken to do: implement the youth wage subsidy, declare education an essential service and stare down the tripartite alliance and Cabinet opponents of the National Development Plan. He could also reprimand his land reform minister, who announced the day after Zuma’s press conference that it was "an honour" to have South Africa’s land reform process compared to what happened in Zimbabwe.

It might also help if the minister of trade and industry took his foot off the throat of the business sector he is meant to be helping and if Communications Minister Dina Pule was relieved of her duties. Shelving plans for a new presidential jet would also assist in marrying deed to word.

The advantage of the bleakest winter is that you can dream of a mythical summer. At the very least you can, more realistically perhaps, hope for a break in the clouds
Leon is the author of The Accidental Ambassador (Pan Macmillan). Follow him on Twitter: @TonyLeonSA OR on Facebook: facebook.com/TonyLeonSA

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