Nene cannot rely on parallel universe to balance books

03 Oct 2014 | Tony Leon |  Business Day

Many of the new finance minister’s ministerial and party colleagues seem to derive their assumptions from realm of science fiction, writes Tony Leon

WHEN former finance minister Trevor Manuel presented his medium-term budget policy statements in Parliament, he used to adorn his speeches with literary bells and whistles, quoting the likes of Ben Okri, before presenting his numbers and forecasts.

New Finance Minister Nhlanhla Nene is a decent and conscientious man but far plainer spoken than Manuel. Financially, he also has a far worse set of books to contend with. If so inclined, he could draw from a rich seam of quotes, from Shakespeare to the Bible and even the unmentionable (for African National Congress ears at least, in the post-Mbeki era) Margaret Thatcher to spice up his prose when he presents his medium-term budget policy statement in Parliament this month.

Nhlanhla Nene. Picture: TREVOR SAMSON

Claudius’s lament in Hamlet that "when sorrows come, they come not single spies but in battalions" is as good as any starting point for a description of the bleak economic canvas on which Nene has to paint his projection for the next three years.

Our terms of trade have deteriorated sharply, and much worse than expected, with the August trade deficit widening to R163bn (double the market expectation), explicable by a sharp drop in exports of R77bn against a surge in imports of about R93bn. SA is caught in the classic "double whammy", in which currency weakness — the rand has been on the slide since 2009 — has not led to export growth. As we import inflation, and financing the current account deficit has become crucially dependent on foreign flows, the interest rate needs to be competitive to compensate on both fronts, hence the rise in rates in a year of very low growth.

Wage rises not tethered to productivity increases hardly help, nor does the surge in public sector jobs, which do nothing to allow us to export our way out of difficulties. They simply increase Nene’s difficulties in balancing the books with an unhealthy 5.4% current account deficit. This places us second only to Turkey of the 45 countries whose economic and financial indicators are published by The Economist. Further spending will just pile on the misery, and tax increases are hardly an option, when economist Dawie Roodt recently forecast a revenue shortfall of R15bn-R30bn, measured against the projections in this year’s budget estimates.

Actually, the higher figure in Roodt’s estimate coincides almost exactly with the figure the auditor-general identified as lost to unauthorised or wasteful or irregular spending by government departments, which suggests state failure of a vast magnitude, the rectification of which would go a long way to assisting Nene in his balancing act.

In the unvarnished warning of Investec chief economist Annabel Bishop, the once beneficent global economic environment has turned sharply against us, especially the Chinese economy, that traditional anchor of our resource exports: "As economic growth in China has moderated, commodity prices have eased…. Should China experience further slowdown, the rand will likely weaken further as commodity prices ease once again.

"Quite aside from tear-gassing pro-democracy protesters in Hong Kong and ensuring that its client states like ours keep the Dalai Lama out, the Chinese are involved in a massive attempt to reorientate their economic model away from manufacturing and saving, towards consumption and services, causing a very hard landing for economies such as our own. Especially when, as the Financial Times advised recently, the most vulnerable emerging markets, in the wake of the removal of quantitative easing (QE) and anticipated uptick in US interest rates in the US … are those ill-prepared for the change in the economic weather."

Here’s where the Bible comes in handy, although quoting Hebrew prophet Joseph might be career-limiting for a minister given the anti-Israel rhetoric of the ruling party. Still, back in the land of the pharaoh, Joseph famously could interpret his master’s dream of seven lean cows devouring seven healthy ones to mean that seven years of famine would follow seven years of abundance. His prudent suggestion to fill the granaries in the boom times to compensate for the lean period to follow not only made him the second-most powerful man in ancient Egypt but also provided a clue for today’s policy makers. SA went in the opposite direction, trying to spend its way out of its difficulties, not saving for the proverbial lean years that are now upon us.

The smart money, so to speak, is now following emerging market economies such as Mexico, Peru and Colombia, which were recently cited as having used the resource boom and the QE years, which coincide with the biblical seven, to increase their savings and reduce public debt. Our savings rate (about 13.5% of gross domestic product) and public debt (more than 40% of GDP) mean we are not in their company.

Enter Thatcher. She once famously said: "The problem with socialism is that you eventually run out of other people’s money to spend." Here, Nene is spoilt for choice. South African Airways has guzzled at the taxpayers’ feeding trough and now cannot publish its results unless it gets further state aid. This is despite, perhaps because of, its addiction to bail-outs. In the estimates of opposition MP Natasha Michael, the airline has received, over the past two decades, "R16bn in bail-outs and has been subject to nine turnaround strategies in 13 years". Further state assistance, she suggests, would be tantamount to "madness". Perhaps professional aviation and commercial management would be the ticket, but, like Thatcher, any suggestion of reviewing or cancelling the ruinous cadre deployment strategy is off limits. There was something rather touching, were the track record not so disastrous, in the proffered solution of Public Enterprises Minister Lynne Brown to the almost across-the-board rot and ruin at state enterprises. "An interministerial task team has been meeting for months," she said. Well, that should help.

I went this week to visit Nene in his Pretoria office. I was reminded that he is down to earth, has a realistic appreciation of the enormous challenges, surrounds himself with smart advisers and actually goes around the country, from boardrooms to the factory floor, to get a proper appreciation of the real economy and its ailments.

But if Nene is admirably grounded, many of his ministerial and party colleagues seem to derive their assumptions from the realm of science fiction. In the movie Star Trek, the laws of nature are different, and its citizens inhabit a parallel universe where the laws of motion and gravity do not apply. Our local inhabitants of this charmed planet are to be found everywhere. ANC policy head Jeff Radebe has decreed that the most important issue facing SA is the "power of monopoly capital". Given that the Post Office has not delivered letters for the past month and Gauteng residents are crippled by water and power cuts, evidence here on planet Earth suggests he could look closer to home, and inside his government, for the real challenges.

Another star of the parallel universe is ANC secretary-general Gwede Mantashe, who advises that the lack of investment by the private sector is evidence of a "lack of patriotism". Back in the real world, it relates to a lack of confidence and the failure of the government to provide investor certainty. The least vulnerable emerging market countries are those that used the fat years to improve poor business climates. We have gone in the opposite direction.

Nene’s speech will perhaps reveal that, contrary to sci-fi movies, the laws of gravity do apply, and you can’t defy them forever.

• Follow Leon on Twitter: @TonyLeonSA

 

Worry that SA is not a republic fit for bananas

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

 

Manuel can put this in his envelope and pass it on

09 Apr 2013 | Tony Leon | Original Publication:  BDlive

 

Perhaps Trevor Manuel will hand over the problem of cadre deployment to his successor, writes Tony Leon

THERE’s the apocryphal tale of the departing president handing three envelopes to his successor. "When the going gets rough," he advises the new head of state, "open an envelope".

As an early crisis hits the new president, he opens the first envelope. In the note inside it, his predecessor has written: "Blame the global financial crisis." This buys some time for the new man, until a new problem confronts him. So he opens the second envelope. The note in it from the former president advises: "Blame me."

This also works for a good while, until yet another crunch point threatens his administration. With rising panic he reaches into his desk for the third envelope prepared for him by his predecessor. The note inside it says: "Prepare three envelopes."

In his interview last month with the Financial Times, President Jacob Zuma, metaphorically, opened the first and second envelopes when he blamed both the eurozone crisis and the legacy of apartheid for the flat-lining of the South African economy and our coruscating failure to create economic growth and employment.

I very much doubt whether Zuma, the arch-survivor, is preparing three envelopes for an early succession. But last week, Planning Minister Trevor Manuel actually threw away the second envelope entirely with his headline-grabbing speech to a government leadership summit. He now famously said: "Nineteen years into democracy, our government has run out of excuses. We cannot continue to blame apartheid for our failings as a state."

Such brutal candour is both unusual and refreshing, leading to suggestions that Manuel is preparing to leave the government at a not too distant date. But as someone who created both an enclave of excellence in his many years at the Treasury and who has bequeathed the country an impressive road map into a sustainable and inclusive future in the form of the National Development Plan (admission: I have read only parts of it), he knows whereof he speaks.

But for all the attention Manuel’s speech achieved, it is actually some of the detail in his groundbreaking speech that points to the Sisyphean task of building a "developmental state" without the bricks and mortar, in the form of an engaged and professional public service, to do so.

Having just emerged from three years "in the belly of the beast" as a chief director and ambassador in the public service, I readily identified with many of Manuel’s observations about a "risk-averse public service that thrives on passing the buck". I recount some of the lurid tales of missed opportunities and hair-raising bureaucratic obstacles placed in the path of the public servants who do actually arrive at work on time and display a conscientious application to their tasks in my new book, The Accidental Ambassador.

One of the stories I don’t recount in it is worth retelling here, in the light of Manuel’s speech. Last year, when we were planning to use the Freedom Day celebrations in Argentina to showcase a gifted emerging South African artist to art-loving Argentinians, I obtained the immediate buy-in of the director-general of arts and culture for the project. He promptly sent us the details of the programme and we selected an artist from the approved list provided by his department. However, the problems and obstacles emerged the moment the matter left the desk of the director-general and went down into the lower reaches of his department. In short, and it is a very long and sad tale, an excellent young artist, John Vusi Mfupi, was eventually flown from Johannesburg to Buenos Aires but, due to a combination of incompetence and lethargy, he arrived without his excellent portfolio of works to display to the audience of more than 200 high-end locals we had gathered together for our Freedom Day celebration. The artworks had been erroneously sent to Amsterdam, not Argentina and arrived four days after the event.

The net result of this botch-up is that I now have a large Mfupi collage on display in my lounge in Cape Town, as I both appreciate his art and felt so bad about his missed opportunity that I purchased his work for my own account.

South Africa, of course, has more pressing issues than showcasing its artistic talent. But the same malady in the middle and lower reaches of arts and culture is evident in health, education and the police, to name just three front-line services where the state has the essential role in providing public goods.

Manuel attributes the problem to high policy turnover, high turnover of staff and a critical shortage of technical skills.

He’s right in his diagnosis, except on one essential point. He says, "SA has not suffered … from having incorrect policies". Actually, one of the roots of the problem he so fearlessly dissects is just such a policy. It’s called "cadre deployment". Perhaps in handing over to a successor in due course, he will place that in an envelope.

 

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Lesson for SA textiles sector in the fate of an American icon*

TWO features of power and affluence stand out from my Durban boyhood. The one was textile mogul Philip Frame, and the other was the swanky American car, the Pontiac.
Frame’s Waverley brand literally blanketed the country — protected from competition by the high tariff walls and the policy of import substitution, which was the apartheid state’s quid for Frame’s quo of locating his factories in border areas designed to keep black labour far from the white heartland. In those times, there was little talk of trade liberalisation.
The Pontiac, a far more exotic sighting than a Frame blanket, fed schoolboy fantasies of American excess . The reality of SA was more accurately located in the satanic mills of the Frame Textile group, where in 1973 ultra-exploited black workers defied the law and organised a strike. Frame was unmoved. But the protest galvanised the formation, and ultimate legalisation, of modern trade unions in SA.
There are no end of ironies in the fact that today the South African Clothing and Textile Workers’ Union (Sactwu) has, via its investment arm (nogal) a significant stake in Frame parent company Seardel , and thus in Frametex, as the fast-fading textile empire is today called. Philip Frame had access to the National Party government via his long-standing membership of the prime minister’s economic advisory council. Sactwu’s influence with today’s government is even more direct. Its outgoing secretary-general, Ebrahim Patel, is now the minister for economic development.
He and Trade and Industry Minister Rob Davies appear eager to use Industrial Development Corporation (IDC) funds to bail out Frame, which is bleeding R30m a month, and will be closed unless it receives government life-support.
This is where the Pontiac comes in. This uncompetitive icon will cease to exist. It’s part of the price the US government has extracted for its infinitely larger (perhaps ultimately R500bn) bail-out of the US car industries. At General Motors, CE Rick Wagoner was replaced; 13 factories will close by next year ; 21000 jobs will be lost, and the powerful United Auto Workers Union has had to accept restrictions on employee entitlements. This stringent package was described by Michigan governor Jennifer Grenholm as “tough love”.
Actually, “tough love” was the exact formula Trevor Manuel prescribed for the South African textile industry in 2004. He later told Parliament “the country cannot protect uncompetitive industries from destruction through global exposure”. Reserve Bank governor Tito Mboweni was even more hawkish. He opposed the three-year quota on cheap Chinese imports when it commenced in 2006. He told MPs there was not “a dog’s chance” that the industry would become more competitive in the period, having failed to modernise or globalise in the preceding 12 years. Protection through quotas would simply raise consumer prices and fuel inflation.
Well, despite our government obliging the Chinese on the Dalai Lama, their government was decidedly disobliging last December when it declined to renew the quota restrictions on textile imports. The jobs massacre that followed and Frame’s proposed closure proved the point made in a study on, of all things, a 3- pack of women’s panties. The Chinese version retails in SA for 10 times less than the South African equivalent. But now Davies, a softer touch than Manuel, says there is “a strategic importance” in preventing local clothing manufacturers from being dependent on imports.
He did not elaborate on this curious proposition, and fed the impression of a policy being made on the hoof, in response to insider pressure. Leaving aside the glaring conflict of interest between Patel and Sactwu, the government is sitting with the Harvard report. It warns against an industrial policy which seeks to pick and predetermine “ winners”. But if the government bails out Frame, despite the IDC finding no “economic merit” for doing so, it will be backing a loser. Of course, there are 1700 jobs to be considered and the retention of plant and capacity. But, as industry experts point out, there are 600 companies in the sector — all exhibiting the stress fractures and ailments consequent to the recession and the cheap imports. There has been a 46,7% rise in all corporate bankruptcies in the first quarter of this year, compared with last year. How will Davies and Patel determine which is “of strategic importance”, which are “too big to fail” and when does the government apply the laws of moral hazard? What about the most vexed issue of a bail-out: “privatising profit (for the company) and socialising losses (for the taxpayer)?”
A bail-out policy requires transparency, thought, and fairness. It needs to account for, and answer to, the whole of society — from workers, to consumers, to competitors and to our global commitments. It’s a tall and difficult order. And some Pontiacs will get ditched in the process.

* Column in Business Day, Friday 29 May 2009

Migrant Crisis, Suspect Passports, Corruption ... Welcome home to nasty affairs, Minister!

A forest’s worth of comment has been devoted to the new cabinet unveiled by President Jacob Zuma.
My eye caught one of the less politically sexy transfers announced last Sunday: the decision to move Dr Nkosazana Dlamini-Zuma from dealing with the affairs of the world to the smaller but, arguably, even more anarchic, universe of home affairs, where the long-serving former foreign minister will now preside. She will need less quiet diplomacy and more shouting and shoving, if she is to succeed.
The announcement coincided with my own transition from parliamentarian to private citizen. In between writing and speaking engagements, I find myself reflecting on gains and losses.
I will certainly not miss the often dreary non-debates about non-issues which, over the past decade, often passed as the staple of parliamentary engagement. Nor will I mourn, too deeply, the dark arts of political in-fighting and intrigue with which political leadership is associated.
But it will be a challenge and a welcome reality check to experience the daily tribulations of ordinary citizens.
Part of the compensation for listening to all those dreary speeches and enduring the rituals of endless protocols is that MPs are spared from the hassles of, for example, dealing with home affairs. An MP has to threaten neither homicide nor suicide to obtain an ID book or renew a passport. I had the advantage, along with the rest of parliament, of an ultra-efficient and courteous home affairs official who would visit either my office with the necessary forms, or arrange an appointment to process the required document speedily.
This is not the experience and expectation of the rest of South Africa, to put matters at their mildest.
I am not outing my former colleagues about some unearned advantage. But it goes to the point so brilliantly underlined by Professor Paul Collier, director of the Centre for African Economics at Oxford University and author of a recent and riveting work, The Bottom Billion: Why the Poorest Countries Are Failing and What can be Done About It.
South Africa’s position in the middle ranks of world economies does not qualify us for automatic inclusion in the author’s diagnosis. But Collier’s point on the difference between successful and failing departments of state could have been drawn directly from our experience.
He notes that many governments in the developing world, such as South Africa, have removed the revenue-raising function from the traditional civil service. His explanation is both accurate and uncomfortable: “Why did governments go for the radical option on revenue but not on service delivery? The answer is depressingly obvious. Governments benefit from the revenue, whereas ordinary people benefit from basic services. Governments were not prepared to let the traditional civil service continue to sabotage tax revenues because governments themselves were the victims. They were prepared to leave basic service delivery unreformed because the governing elite got its services elsewhere.”
The new minister of finance, Pravin Gordhan, is much admired for his achievements as our chief tax collector. In 2007, on the 10th anniversary of the establishment of the SA Revenue Service, it was recorded that the outfit had topped the half-a-trillion rand mark in revenue collection for the decade. That year alone, it had exceeded, by some 16%, the original printed estimate for taxes.
No doubt, Gordhan is a sharp manager. But the decision back in 1977 to create SARS as “an administratively autonomous revenue agency functioning independently from the public service administration”, to use the full glory of government-speak, was a decisive factor in improving, nay, radically transforming, the coffers of the state.
When Dlamini-Zuma studies her new in-tray, she will see that our local problems with home affairs have now been universalised. Hot on the heels of the British government’s decision to require South Africans to obtain visas for the UK is a new US Department of State Country Report on Terrorism. With just more than a year to go before our showpiece World Cup, it makes gloomy reading. It cites “poor administration”, “lack of institutional capacity” and “corruption” in home affairs as hampering our government’s ability to “pursue and intervene in counterterrorism initiatives”.
Today’s depiction of home affairs could have been, a decade or so ago, an accurate working description of the old Receiver of Revenue, as SARS was known pre-transformation.
The decision to yank revenue collection outside the stifling embrace of the public service was decisive. No quotas, no inappropriate wage and occupational bands, coupled with the importation of skills and technology and Gordhan’s management, turned a dysfunctional department into the brightest star in a fairly bleak universe of service delivery.
The former minister of finance, now enthroned as our planning czar, became famous for requesting tips for his budget. Perhaps the man who has now taken his place, and filled the coffers, could pass along some of his own. Home affairs would be a good place to start.

*Published Sunday Times 17 May 2009

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.