In the build-up to President Jacob Zuma’s State of the Nation Address last Thursday night, there was a keen anticipation about whether he would adopt a more radical tone. There was much speculation about the possibility of a real shift in policy, and whether he would actually tackle the economic structure caused by our history. What the Gupta Press would have you believe is as simple as “white monopoly capital”. And, in some ways, Zuma delivered. His tone was more radical, more indicative that change was coming. And yet his speech has been received with a weary cynicism. Because there is no real indication that the ANC is about to turn populist. Mainly because it would not be in the party’s best interests. By STEPHEN GROOTES.
To listen to the national debate, the callers to radio stations, the Twitterati, it is obvious that we are an angry country. People are fed-up, with corruption, with the fact their life chances are not improving, with the lack of change. This anger is perfectly legitimate. The structure of the economy has been opened up, but not nearly as much as it should have been. One generation is not enough time in which to make real changes. Unless you want some kind of outright revolution, with the damage and often bloodshed that that entails.
But one of the main reasons that this change has not occurred is because those with real political power have not done enough to open the gates of the economy. This is a hugely contested area, there are different views, and different ideas about how this could be done. But if you consider that much of the narrative at the moment believes that the real enemy is “white monopoly capital”, then consider this: Surely, the biggest obstacle to real change is actually the divisions within the ANC. The party has never been able to agree whether to go with the real socialism/communism of Jeremy Cronin, or the whatever-you-want-to-call-it capitalism of Cyril Ramaphosa.
Or, more simply, it is surely true that if the ANC was united on the issue of the economy, and wanted to go in one particular direction, “white monopoly capital” would be toast pretty quickly.
So then, when Zuma got up to speak, after all of the signals he had given, the speech at an ANC Youth League gathering, the reports about his demand for the ANC to stop being “so apologetic” and the general political context around him, hopes were high in some quarters that he would indicate that real change was coming with 2017 SONA.
Instead, we got a change in tone, and a series of points that we have heard before. It’s hardly radical to tinker with competition law. You can say what you like about the “highly concentrated” economy, but if you don’t name sectors, or even name names, no one is going to shiver in their Sandton Towers.
Of course, part of the reason for this is the simple internal politics within the ANC itself. Zuma is surely weaker than he was three years ago; he is at the end of his time as ANC leader, and his retirement plans may well depend on the outcome of its leadership contest. When the stakes are that high, it’s best to move carefully, and make sure you don’t lay the seeds of a revolution against yourself.
But this can also mask the point that for the ANC, to go populist, to engage in radical action, may not be in its best interests.
If the ANC were to start going in this direction, there would be immediate consequences, whether the party liked them or not. The first would be, as we all felt back in December 2015, the weakening of our currency, and the general rise in the cost of living. While the firing of Nhlanhla Nene was quickly reversed, it took a long time for the rand to recover. Which pushed up inflation, at a time when food prices were already rising. Millions were wiped off pension funds because of the reaction of the stock market. The owners of these funds are often black middle-class voters. The kind of person who just didn’t vote in the local elections last year. But who had always voted ANC in the elections before that.
South Africa is, despite the wishful thinking of many, just too tightly meshed into the global economic system not to feel a huge reaction to any kind of populist move. We are a small boat in a large economic sea, we don’t get to make the current, and if we spring a leak we will run aground depressingly quickly.
It goes without saying that if there was a move in this direction, and inflation jumped up, the people who would feel it first, and the most, would be the poor. Again, that’s those who have voted ANC up until now. And it’s almost an iron rule of politics in democracies that if the cost of living goes up, the party in charge at the time gets punished.
In some ways, the ANC could be in a bit of a bind. If it pushes too far in the radical direction, it risks a revolution against itself. If it doesn’t push far enough, and the anger against the lack of action continues to build, well, it faces a revolution.
But there is a big reason why the ANC is in this position. It’s because it is now facing problems on the left as well as the right.
No matter what “radical” action the ANC could propose, Julius Malema would outflank it. This reporter has suggested before that if the ANC tried to impose a wealth tax on white people of, say, 10%, Malema would immediately demand it be 20%. The same would hold on almost any programme the ANC could propose. If the ANC were to say it would take land without compensation, the EFF would say it wants to keep the farming machinery too, and all the land in urban areas. If the ANC were to say that it would intervene more in the economy, the EFF would just chant “nationalise!”. Remember, Malema is not burdened with the actual governing – his words will cost him far less than they will cost the ANC/Zuma.
Once you start down that road, you can’t stop until you’ve hit the bottom. You end in a very poor and very miserable cul-de-sac of your own making. And it is almost impossible to get out of it.
And while you are doing that, you are shedding votes rather than gaining them. This is because elections would become straight contests between those who have something to lose and those who don’t. Except that the side of those who don’t would be split, between the ANC and the “more radical” EFF. Which leaves the possibility of a party occupying the sort-of centre-right, picking up all the middle-class votes. Even if their party colours are blue. If that were to happen, the numbers games of our elections starts to get very complicated indeed.
All of that said, there is a pressing need for change to our economy. It would be best if this were through strong economic growth – you want everyone’s position to improve. It’s also morally correct to concentrate on the poor. But this can be done without populist measures; it can also be done without damaging the entire economy. One such measure could well turn out to be the national minimum wage, which was arrived at through a process of negotiation.
To continue in this way, as the ANC has for the last 20 years, may be frustrating for some. And it does carry some risks. But those risks are surely not as large as moving too quickly, in a panic kind of way. The Zuma’s Sona last week seems to suggest that he may share that analysis. DM
Photo: South African President Jacob Zuma (L) addresses the crowd during the 105th anniversary rally of the ruling African National Congress (ANC) in Soweto, South Africa, 08 January 2017. EPA/KIM LUDBROOK
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