Tuesday, October 29, 2013

Worry that SA is not a republic fit for bananas

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29 Oct 2013 | Tony Leon | Original Publication:  BDlive

Pundits putting percentages on the risk of South Africa’s descent into the league of 'failed states' makes for good headlines but it is probably not time to head for the hills, writes Tony Leon

NEVER make predictions," US movie tycoon Samuel Goldwyn cautioned, "least of all about the future". I recently read a piece on the perils, or otherwise, of population growth by US journalist Elizabeth Kolbert. She recalled that, in 1978, Paul Ehrlich published a bestselling work, The Population Bomb, which predicted an imminent apocalypse. According to this Stanford University biology professor, nothing could be done to avert losing the final battle to feed humanity. He predicted the 1970s would see the world "undergoing famines — hundreds of millions of people are going to starve to death".

Back then, the population of the world was 3-billion, and today it has more than doubled to 7.2-billion.

I recall Steve Mulholland once saying something similar along these lines: "Ever since I was five years old, I was always told that SA had five years to go; well, I am now 75 and we are both still here."

So when pundits put percentages on the risk of South Africa’s descent into the league of "failed states", it makes for good headlines but it is probably not time to head to the hills. This is not because of the likelihood or otherwise of the prophecy being realised but for a far more prosaic reason: as the investment industry always footnotes its rosy scenarios of how your retirement nest egg will wondrously multiply, "future performance cannot be determined from past results". Indeed.

Last week, I was involved in a conference on the much contested and seldom read National Development Plan (NDP).

One reassuring fact presented to the audience by a senior officer of AgriSA was the news that, officially, South Africa is not a banana republic and nor is it likely ever to become one.

He did not quite put it in those terms. Rather, he noted that due to the facts that fuel, electricity and labour prices are about 50% cheaper in Mozambique than here, most South African banana growers had relocated across the border.

Finance Minister Pravin Gordhan delivered a masterful medium-term budget policy statement last week. By highlighting the pushback against government bling and excess after more than a dozen years of frenzied feedings at the taxpayer-funded trough, he switched off some of the supply: small measures, a big signal and excellent headlines. But in the small print were indications of the very tight fiscal spot in which Gordhan and South Africa find themselves.

One of these macrotrends is also central to the NDP. Capital investment spending in the 1980s was about 30% of gross domestic product and today has fallen to about half that figure. As the NDP notes, the country has "missed" a generation of spending on "road, rail, port, electricity and sanitation", etc.

There is, it notes, no prospect of growing the economy in an inclusive fashion until we, economically at least, go back to the 1985 benchmark, presumably before the Rubicon speech. Quite how this will be done with consumption spending on 16-million monthly cash grants and salaries for 1.25-million public servants is not addressed, except for saying we must make some "tough choices".

But, as a business leader told our NDP conference: "We need to become again a savings-based investment economy and no investment can be funded without savings."

This mantra might be so obvious as to be banal. But there is no sign of the fact that our only historic source for extra long-term investment, foreign direct investment (FDI), gets anything but proverbial lip service from our economic overlords.

Growth and investment seem to be "nice to haves" and "optional extras" in the priority stakes, way behind the queue of black economic empowerment and tighter state control, as though the prioritisation of these policies has no, or at best a neutral, effect on the quest for growth and savings. The reversal of FDI flows tells its own story. So does the exit of our banana growers.

On the subject of predictions, last week Politcsweb decided to republish a speech I made in Parliament in August 1998, opposing the Employment Equity Bill, due to its race-based provisions and coercive codes.

Both the debate and the party concerned have since moved on.

I did think back then that the prescriptiveness of the legislation would deter FDI and prove to be a job-crusher, except for the middle and upper classes. In the debate, I used a quote from then finance minister Trevor Manuel as a warning. It seems even more relevant 15 years on: "We have to attract foreign savings … the benchmarks used to assess SA as an investment centre are the same across all countries."

What has also changed since then is Manuel’s position at the Cabinet table. Now he is in charge of the NDP. Perhaps while he remains in the government, he can remind his colleagues of his now old, but still relevant, warning. And maybe others, in the business-class cabin where all must now fly, can join up the dots.
Leon is the author of The Accidental Ambassador (Pan Macmillan). Follow him on Twitter: @TonyLeonSA OR on Facebook: facebook.com/TonyLeonSA

Tuesday, October 22, 2013

Warriors for race and the socialism of fools

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22 Oct 2013 | Tony Leon | Original Publication:  BDlive

PW Botha has a latter-day provincial and tactical successor in the form of Marius Fransman, Western Cape leader of the ANC and a ‘warrior for race’, writes Tony Leon

IN NOVEMBER 2004, I was in New York City the day after President George Bush had won re-election against the odds. Until the day before, the liberal New York Times had been reporting on the multiplicity of factors that favoured his Democratic opponent, John Kerry. They were spoilt for choice between the invasion of Iraq on a false prospectus, a cratering economy and a ballooning budget deficit.

However, the day after Bush won, its columnist, Nicholas Kristof, posed the question: "How was it," he asked, that "unemployed waitresses in Ohio stood in line to vote for tax breaks for billionaires?" For the essence of the Republican economic offering back then — in contrast to its even more hara-kiri tactics today — was a version of "trickle-down economics". Bush had presided over the largest modern tax cut for the seriously rich which, his party suggested, would spur economic activity down the income chain. The increasing number of unemployed and underemployed Americans, including Kristof’s waitresses, suggested otherwise. But many of them, apparently, voted for the architect of their immiseration.

Kristof answered the question by suggesting that the Republicans had borrowed a stratagem first defined, ironically, by the father of false consciousness, Karl Marx: ignore class interests and mobilise people along the lines of values. In that election, by concentrating attention on "God, Gays and Guns", Bush had mobilised support from sections of the population most adversely affected by his economic prescriptions, but whose social views he best articulated.

Locally, the indifferent performance of the African Christian Democratic Party suggests there is no electoral profit in values. But South Africa provides generous returns for race mobilisation. It was ever thus, as countless white elections have proved. And when the war between the then two largest white parties in the 1970s — the National Party (NP) and the United Party (UP) — reached saturation point, the NP Cape leader of the day, PW Botha, found another variant on the theme in a 1972 by-election in Oudtshoorn. He accused the UP of the additional sin of being "Boere-haters". His party’s results improved.

Botha has a latter-day provincial and tactical successor in the form of Marius Fransman, Western Cape leader of the African National Congress. Last week, he claimed that 98% of land and property owners in Cape Town were not only "white" but, in particular, "Jewish". Doubtless Fransman has never heard of the 19th-century German Marxist thinker, August Bebel, who warned that left-wing anti-Semitism was "the socialism of fools". And as to the facts, Fransman could not explain how he knew the racial or religious origins of local landowners, as the former have been expunged from the deeds registry since 1994, and even the benighted apartheid regime did not require the religious identity of property owners to be declared. Anyway, the fires of prejudice and the embers of resentment are always better stoked by anecdote than by fact.

Few middle-class homeowners in Cape Town will recognise any of the favourable treatment that Fransman suggests the Democratic Alliance bestows on its core supporters. The local rates bill has gone through the roof and a mayoral insider advised me recently that only Durban parallels Cape Town in its aggressive redistributionist levies. "Squeezing the rich (and the not so rich) until the pips squeak" might have originated in the British Labour Party in the 1970s, but the idea has now settled below Table Mountain.

And, doubtless, too, in his part-time capacity as deputy international relations and co-operation minister, Fransman will soon enough send out cables to all South African embassies abroad instructing them to celebrate and propagate the 20th anniversary of South African democracy, and in particular the "miracle" of its nonracial era.

Despite the violence this all does to the legacy of Nelson Mandela and 1994, I suppose it makes rough sense: deflect from the facts of sky-high unemployment, double and rising deficits on the current account, the budget and the trade balance, and scarce and increasingly scared foreign investors. Leave that to Finance Minister Pravin Gordhan in his medium-term budget to conjure something up. Anyway, without using race as the whip, how on earth do you keep everyone, from black-empowerment billionaires to unemployed farm workers, in the tent?

Fransman might be a crude race warrior but the launch sounds emanating last weekend from Julius Malema suggest he will soon be outbid on his preferred terrain. Much of the future of South Africa is about its contested past. Somewhere in Simon Schama’s sprawling study on the French Revolution, Citizens, is a useful reminder of what happened to the Jacobins: their revolutionary rhetoric made their future governance all but impossible. There is something very fresh in the old saying that "those who cannot remember the past are condemned to repeat it".

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

Tuesday, October 15, 2013

‘Hinterland’ just the ticket in a leaderless world

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15 Oct 2013 | Tony Leon  | Original Publication:  BDlive

Very few of the leaders on the global stage today have had much hinterland other than politics, writes Tony Leon

A LOCAL cynic noted the other day that while South Africa’s government functions for only about half the day, in recent weeks that is immeasurably better than watching the US government closed down for the whole day.

The capture of the US Republican Party by its take-no-prisoners Tea Party wing of true believers, who don’t believe as much in election results as they do in stripping President Barack Obama’s healthcare reforms of funding, has provided an extraordinary spectacle. The old phrase, "crippled giant", has been given new meaning.

Not that the minority outliers in the House of Representatives should shoulder all blame. It has been a curious sight to watch the rhetorically impressive US president prove so feeble at what should be at the core of his job — doing the political business and forging the compromises to further his agenda.

The beetle-browed, 96-year-old British statesman Denis Healey had it right when he said every leader needed what he termed "hinterland". By this he meant being genuinely curious about the world around you and having a range of interests and a reach of ideas that draw on life outside your profession. This opens you to a world of inspiration to call on, which, far from crowding out your laser-like focus on your work, enhances it and inspires the decision-making process needed to enhance it.

Famously and balefully, Nelson Mandela fashioned much of his later political leadership from his prison experiences, enforced on him over 27 years. But it was also quite striking how often he referenced decision-making to experiences he gleaned in the unusual (in the sense it was the only black firm of its time) circumstances of the legal practice he established with Oliver Tambo in the 1950s. He certainly had hinterland.

Ronald Reagan built a hugely effective presidency because of his Hollywood background. This didn’t only allow him to become the "great communicator", but his clashes, as president of the Screen Actors Guild, with the powerful trade unions there gave him an essential idea about free markets to communicate as well.

Two of South Africa’s corporate leaders who grew family enterprises into global corporations were Harry Oppenheimer and Anton Rupert. They both had hinterlands in spades. Oppenheimer had spent a decade in opposition parliamentary politics and had a lifelong love of Africana. Rupert’s fascination with South African art and his love of his Karoo hinterland were not examples of corporate social responsibility — the concept had yet to be conceived and codified in his lifetime — but the consequence of real passion.

The contrast between those times and today’s leaders is quite striking. Very few of those on the global stage have had much hinterland other than politics. Obama was essentially a community organiser and a state legislator before serving two years in the Senate and running for the presidency. British Prime Minister David Cameron, born into affluence, aside from a brief spell in financial public relations, has spent his whole life in government and politics.

Locally, practically the entire Cabinet and the president have either spent a lifetime in politics or trade union work and have experienced little of the challenges of professional, nonpolitical activity. Of course the extraordinary circumstances of our history accounts for some of this — but not entirely. For example, Finance Minister Pravin Gordhan is admired across the cacophonous divisions of our polity. But aside from a lifetime in "the struggle", he had also practised as a pharmacist. And before his appointment to the Cabinet, his leadership of the South African Revenue Service provided him with knowledge of the intricacies and challenges of business and the corporate world, which went beyond the theoretical.

The emerging new leadership on the opposition side is cut from a similar, politics-only cloth and few of them could claim too much hinterland either.

But hinterland alone is not enough for successful and consequential leadership, which can change country destiny or corporate fortune. I was reminded of this when I participated in a debate the other night with AgangSA leader Mamphela Ramphele. She is charming, erudite and certainly has a greater hinterland of experience than any other recent leader in this or most other countries. The policy positions she elaborated were sensible. But I am not sure that she moved much of the capacity audience in Cape Town that night.

The additional missing ingredient is to explain the "why" and not just the "what" and the "how": a belief in something that inspires followers to believe in it themselves. There’s a brilliant TED lecture on the subject by Simon Sinek. It lasts about 10 minutes and is free to download on YouTube. It provides more insights than most I have heard from an army of expensive management consultants and political strategists. Take a view.

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

Tuesday, October 8, 2013

As in the UK, ‘nostalgia ain’t what it used to be’

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08 Oct 2013 | Tony Leon | Original Publication:  BDlive

Something that centres on a vanquished leader appears to be happening on the local election front that calls to mind humorist Peter de Vries’s words: ‘Nostalgia ain’t what it used to be,’ writes Tony Leon

AT THE risk of incurring the displeasure of the proprietor of this newspaper, who — probably correctly — believes most readers are oversaturated with politics, permit an observation on next year’s elections. It starts with a nugget gleaned during a visit to London. There, a good friend who has spent decades representing the Conservative Party in parliament pointed out that the Tories took more than 20 years to recover from their brutal political assassination of their most successful modern leader, Margaret Thatcher.

The Conservative Party, which enjoys the distinction of being the most electorally successful political machine in the 20th-century democratic world, was in its own terms quite right to get rid of Thatcher in November 1990. Despite having won three general elections for her party and recast the mould of her country’s political economy, by then she had saddled her party with more negatives than positives. These included an unpopular policy (the poll tax), an increasingly divisive and imperious leadership style, which she viewed without end ("I plan to go on and on," she said), and a take-no-prisoners approach to any dissidents (whom she dismissed as "wets" or "spineless").

Her successor, John Major, stepped in and won an improbable fourth term of office for his party. But that was the high point of a premiership that pretty quickly unravelled.

But as the humorist Peter de Vries noted: "Nostalgia ain’t what it used to be." At last week’s Tory conference, Thatcher, in the form of a video titled Our Maggie, was portrayed in heroic terms to stir the party faithful. Something similar appears to be happening on the local election front, also centred on a vanquished leader.

In December 2007, when Thabo Mbeki was dumped as president of the African National Congress (ANC) and then, 10 months later, "recalled" as state president, an ANC colleague in Parliament made an interesting observation: "Just watch what happens. The genie is now out of the bottle and leading this party and country will never be the same again."

 Reflecting back on those twin acts of ANC regicide, it is quite striking how a party, which hitherto had been almost blinded by leader-worship, could act so decisively when vital interests were threatened. Like Thatcher, not an obvious comparison, Mbeki had delivered two major electoral victories (greater than achieved by Nelson Mandela) and had stared down some powerful interests to impose a degree of market-friendliness in some, crucially though not all, areas of economic policy. His eloquent "I am an African" speech was perhaps the defining moment in the country’s constitutional process.

But there was even more red ink on the negative side of his leadership ledger than on the scorecard of the "Iron Lady". Imperious leadership, pumping up racial division and an African Renaissance that morphed into trysts with tyrants come to mind. His HIV/AIDS policy, which cost hundreds and thousands of unnecessary lives, originated from an intellect detached from reality. But merited or not, his removal from office remains a defining feature of our politics.

What a difference five years makes, though. The Mbeki years are now remembered through the lens of the troubled present far more warmly than could have been imagined. The ANC in Gauteng desires his presence in its campaign; and even though this has been slapped down from above, it is noteworthy that when he voted in the 2009 election, Mbeki famously refused to comment on-camera on whether he was even voting for the ANC. Doubtless the fact that his key lieutenants had formed a rival party, the Congress of the People, also on the ballot that day, weighed on his comment.

But the rediscovery of ANC leaders past is not confined to the ruling party. Hot on the heels of lashing the colours of the Democratic Alliance to the mast of Mandela, its Gauteng premier candidate, Mmusi Maimane, this week, more surprisingly, also joined the Mbeki revival club. Maimane is a highly personable and charismatic man whose origins are in the church. But he is also very politically ecumenical. His slogan "Believe in Gauteng" is borrowed, with local adaptation, from Mitt Romney, while his rhetoric is much inspired by Barack Obama. But this flexibility was extended last week when he announced that he had been an ANC-aligned Mbeki supporter and that his presidency instilled in him a sense of pride and that its high point was the policy of black economic empowerment.

Doubtless in order to score an immediate point against Mbeki’s successor, he chose to elide straight past the red ink in the past president’s ledger. But by casting politics in terms of a narrative — "the previous president was good, this one is bad" — suggests that the difference between the two largest parties in the country is a disagreement on the leadership choices of the ANC. Perhaps that was not the intention. But, then again, motive is less relevant than result.
Leon is the author of The Accidental Ambassador (Pan Macmillan). Follow him on Twitter: @TonyLeonSA OR on Facebook: facebook.com/TonyLeonSA

Tuesday, October 1, 2013

Culture of self-censorship affects big business too

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01 Oct 2013 | Tony Leon | Original Publication:  BDlive

Self-censorship is found in Corporate South Africa too and, on occasion, business leaders speak out, but in the main keep their heads down and hope for the best, writes Tony Leon

GARLANDED with honours, showered with honorary degrees and heaped with international gongs, including a Nobel Peace Prize, Nelson Mandela is not exactly short of acclamation at home and abroad. But in retelling his storied presidency, it is easy to overlook a notorious, much less merited award he once received. Back in February 1998, the South African edition of porn magazine Hustler indecorously named the great Madiba, "Asshole of the Month."

According to Mandela’s authorised biographer Anthony Sampson, then deputy minister of home affairs Lindiwe Sisulu criticised the magazine as "vile, outrageous and obscene" and considered, apparently, banning it. Mandela, in contrast, "laughed the matter off’’ and said, somewhat oxymoronically, that the magazine should use its "own sense of morality and judgment". In the midst of the fuss, he surprised his director-general, Jakes Gerwel, by asking him impishly: "Have you seen this month’s Hustler?"

Fifteen years on, Mandela’s aversion to censoring anything appears to have been replaced by a self-censorship that invades some of the very spaces that under apartheid manned the ramparts of free expression in a very unfree society. Despite the generous provisions for freedom of expression under our constitution, weekend reports suggest "a politically sensitive work of art" was banned by organisers of last week’s Joburg Art Fair. The offending item, according to the Sunday Times, was Ayanda Mabulu’s painting, which depicts, in the wake of Marikana, "a laughing President Jacob Zuma holding the leash of a dog that is threatening to bite a kneeling miner’’. Others in the tableau are Cyril Ramaphosa and a laughing (in itself unusual) Queen Elizabeth who shares a veranda with Prince Charles and the African National Congress logo.

Ross Douglas, one of the fair’s organisers, said the artwork was removed because of "sensitivities" around government sponsorship of the art fair, which he feared would be jeopardised by the display. Only the forceful response of internationally acclaimed Johannesburg photographer David Goldblatt, who removed his works in protest, led to the ban being rescinded. Liza Essers, director of the Goodman Gallery, which housed The Spear last year, and at least had the excuse of mass marches and vandalism to force her hand on removing that painting, noted: "As a result of The Spear saga … a culture of self-censorship has become increasingly ubiquitous in the South African art world."

There is something paradoxical about the instances of self-censorship, by no means confined to arts and culture, and the exuberance of often extreme antigovernment and deeply personal attacks on the president — both of which feature in South Africa today. The rule of thumb appears to be: the further away from the government and the less dependent on it for your fortunes, the more hyped, even on occasion exaggerated, the criticism. Think here of the egregious Julius Malema’s depiction of the government as "worse than the apartheid regime". This covers the opposition, much of the nongovernmental organisation and media community (with some notable exceptions) and many international investors.

Conversely, the more enmeshed with the government and dependent on its favour, the more muted the response even when vital interests are at stake. Corporate South Africa uneasily straddles this divide, despite a torrent of market-unfriendly measures coming down the pipeline. On occasion, business leaders speak out and even break down in tears as Anglo’s Mark Cutifani recently and memorably did. But in the main, they keep heads down and hope for the best. It’s reminiscent of the great scene in the movie Annie Hall. Woody Allen and Diane Keaton are on a date and mouthing onscreen the usual platitudes of courtship. However, below the scene appear subtitles which depict what each of them is actually thinking. We are witnessing many Annie Hall moments in the business-government dialogue.

A contrast came from Britain last week. Labour Party leader Ed Miliband decided to offer up some red-in-tooth-and-claw anti-big business sentiment to pacify his supporters. Miliband used his conference speech to take aim at and decry the country’s energy firms, deeply unpopular with voters because of ever-rising gas and electricity bills. He announced that on entering office, he would price control and freeze all gas and electricity prices for 20 months after the next election.

There was an instant and angry response from the big six energy companies targeted. One of them announced such a move would make it unviable to continue to provide supplying energy in Britain. A second predicted blackouts and another decried Miliband’s policy as "economic vandalism" and "insane".

A head-on collision between big business and the possible next prime minister might be troubling for some, but it certainly deepens the debate. And neither side has any doubt what the one thinks of the other.
Leon is the author of The Accidental Ambassador (Pan Macmillan). Follow him on Twitter: @TonyLeonSA OR on Facebook: facebook.com/TonyLeonSA