Mixing my metaphors: SA is like a punch-drunk boxer, a ship sans skipper facing a perfect storm (my Moneyweb column - and no, Im not predicting an Arab Spring for SA; we had ours in the 1980s) South Africa’s ‘Tunisia Day’ will arrive in 2020, analyst Moeletsi Mbeki famously warned in February 2011. The year 2020 is when China estimates that its current minerals-intensive industrialisation phase will be concluded, a process that forced up the prices of South African minerals, said Mbeki. When that happens, the ANC government will have to cut back on social grants “which it uses to placate the black poor and to get their votes”, he wrote. That is the day “when the masses rise against the powers that be”. Tunisia Day refers to the start, in 2010, of what became the violent Arab Spring. It led to the overthrow of the Tunisian government a month later, and was followed by turmoil – and in some cases, civil war – in Egypt, Syria, Oman, Morocco, Libya and Yemen. Sooner than expected It seems as if Mbeki was wrong. Well, at least about the date - and the cause of our own turmoil. If nothing drastic changes soon, South Africa could face instability well before 2020 - and we won’t be able to blame the Chinese or anyone else. The crisis is almost completely homemade. The term ‘perfect storm’ has become a bit over-used, but it’s certainly applicable now. This meteorological term is used to describe a combination of events or circumstances creating an unusually bad situation. That is what’s on South Africa’s horizon right now – in fact, the first clouds are already darkening our skies and the winds are picking up. It’s a storm that could lead to a fundamental reorganisation of political forces and indeed the end of ANC rule. But it could also lead to instability, which could further compound the destructive impact of the storm. Zuma: The turning point I think we will one day look back and say December 2007 was the turning point from where our national affairs started a spiraling decline. That was when one Jacob Gedleyihlekisa Zuma was elected president of the ANC at its Polokwane congress. The new-look post-Polokwane ANC fired then president Thabo Mbeki unceremoniously – and some say unconstitutionally – nine months later and in May 2009 Zuma became president of the country. Over the last six years the Zuma government has wasted many billions of rands through corruption, vanity projects and maladministration. Huge infrastructure and other expensive projects were spectacularly mismanaged. National policies became increasingly confusing and contradictory. The disastrous education system and faltering local government did not improve. The president crudely manipulated the criminal justice system to stay out of jail. But South Africa was a resilient country and it didn’t appear to be badly affected by the body blows. Until now, that is. South Africa in 2014 is like a boxer in the eleventh round who had taken too many punches to the head in the previous rounds and his knees are buckling. We are beginning to feel the cumulative effect of all our failures and follies. To use another cliché: the chickens have come home to roost. South Africans have lost their patience and stopped believing in promises. The anger and frustration among the poor and working class is boiling over because their lives haven’t improved according to their expectations. The middle class is pessimistic and resentful because they see their tax money being wasted and that the state is malfunctioning. The absolutely disastrous school education for black youngsters has not improved significantly over the last decade. The number of youth in townships and squatter camps who have fallen out of the system has grown to several million – people with no realistic prospect of ever getting a good job or a decent life; thus people with no hope. Aided by an economic growth rate of just over 1% and a massive civil servant salary bill, the state’s coffers have now run dry and we actually face a fiscal cliff. Our national debt is fast approaching half of our GDP. The rating agencies are undoubtedly going to downgrade us early next year, which will have a further knock-on effect. Our energy problems are not going away soon. So, just as the government needs more means to pacify the angry citizenry, it’s run out of money. Deputy president Cyril Ramaphosa remarked euphemistically this week that as the economy comes under stress, so do the key economic actors, causing a worrying trend of social bonds becoming increasingly frayed”. If a ship has a good captain, it can weather even a severe storm. Ship South Africa doesn’t have that luxury. It has a president who is more of a traditional chief than the head of a modern democracy and economy. His main focus is on enriching himself, his clan and his cronies and staying out of jail, instead of providing leadership. Split Before Zuma became leader, the ANC only had one major split: in 1959, when the Pan Africanist Congress was formed. Since he became leader, three factions broke away: first Cope, then the Economic Freedom Fighters and now the faction under Numsa’s leadership. Joseph Mathunjwa’s Amcu can also be added to this, although it isn’t a purely political movement. The break-up of Cosatu will undoubtedly lead to more militancy among trade unions, at least in the short term, as the different actors try to woo workers. The recent platinum and Numsa strikes were important contributors to the slowing down of economic growth, and now we face more of the same. The public discourse is now dominated with demands for socialism, nationalisation and so-called radical economic transformation, but the ANC government, while using those phrases itself, knows that reality demands the opposite. The government knows it should sell SAA and stop dumping billions into that black hole, but privatisation has become a taboo word. The decision to keep on bailing it out is a strategic, political one rather than an ideological or financial one. In Zuma’s first four years in power, the salary bill for civil servants rose 76%. For every R100 generated by our economy, R14 goes to paying bureaucrats. This makes our civil service the most expensive in the world. In Russia this figure is R3.70, in Brazil R4.60 and in Nigeria R4. Some 17 million people now get social grants from the state, costing us more than R390 billion. Combined, welfare payments and public service salaries consume 56.4% of all state revenue, leaving just 43.6% for everything else that has to be done in this country. That is madness. Two weeks ago, Minister of Finance Nhlanhla Nene promised to curb state spending. But as he was speaking, moves went ahead to employ some 700 more people in the Presidency. Zuma is pushing for a 300% increase in his own budget, from R366 million to R1 billion. A few days after Nene’s speech the president spent R330 000 to fly to Nkandla and back. I’m sure Nene is sincere. But I’m equally certain that state expenditure will not be significantly cut while Zuma is president. Government will not stop bailing out parastatals like Eskom and SAA. The Medupis and other infrastructure programmes will continue to overrun and their costs will continue to increase five, tenfold. The government and the ANC don’t have the political guts to limit civil service pay hikes to the inflation rate, because they don’t want to annoy the trade unions. What now? The ANC needs to be transformed fundamentally if it is to take us to calmer waters. I know for sure that Zuma will not do this. He doesn’t want to and he doesn’t have the capacity. The question then is: can it be done? Can the ANC be saved? Who will save it? How long will Zuma be at the helm? Has the rot not gone too deep? Perhaps it has. It is in this climate that Julius Malema’s EFF is flourishing. My guess is that it has already doubled the support it received in the May elections. Now Numsa is planning to launch a Democratic Front, and later a proper socialist party to be a part of that. This evokes the memories of the United Democratic Front (UDF) of the 1980s, the popular movement that did more to force the apartheid government to the negotiating table than the ANC itself. If this front materialises and turns into a broad movement of all aggrieved parties and people, as the UDF did, the ANC will struggle to stay in power after 2019, especially if the DA maintains its steady growth of the last decade. So Ship South Africa is going into this storm without an able skipper. At least it’s still a resilient ship with good engines. We will need all hands on deck – business and industry and civil society – if the ship is to survive and South Africa is to avoid its own Tunisia Day.
Posted on: Thu, 06 Nov 2014 07:03:00 +0000
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