South Africa

ANALYSIS

South Africa at the crossroads: Which direction will we take?

South Africa at the crossroads: Which direction will we take?
President Cyril Ramaphosa briefs the media in Pretoria on 19 March 2020. (Photos: Phill Magakoe / Gallo Images via Getty Images | Jaco Marais / Foto24 / Gallo Images via Getty Images | Elmond Jiyane​ / GCIS)

Fear is running rampant. There are many worrying questions. Will we (and our parents) survive the coronavirus? Will communities living in shacks survive the lockdown? Will I still be employed in what could be a global depression afterwards? Still, there is value in taking a longer-term view and asking what this could do to South Africa’s 10-year outlook.

Everything seems apocalyptic. Trips to the shops involve possible checkpoints and roadblocks, people living in poorer areas are being bullied and often forced back into tiny shacks. Around the world, there is dark talk of planetary disaster and economic depression.

It won’t be like this forever, though. While this is unprecedented, we have never been so properly armed and able to defend ourselves. There is talk of vaccines being 12 to 18 months away. At the absolute worst, it is likely that certain protocols will be developed that allow people to work and travel safely, involving masks and sprays and protective clothing. Food production continues. One day, and hopefully sooner rather than later, international airline travel will resume, just perhaps not at the scale of what it was before.

But what will the world look like in 10 years’ time?

It’s important to realise that we are not alone in these uncertain times. It is one thing to be the only person or country dramatically affected by certain events; it is different if others are in the same boat. If you suddenly cannot keep up with your mortgage payments and you are the only person in that position, you are vulnerable to losing your home. If everyone in the street is in the same position, it is very different. Then, the authorities, in this case the central bank, will lower interest rates. It is also not in the interest of banks to suddenly repossess properties on a large scale because they will be worthless. And so your position of power, relative to the bank, becomes very different.

This is also true on a global scale. Were we alone as South Africa in this, money would simply leave our economy. But we are not alone. The search for yield will continue, which means that what happens to us will be dictated also by what happens in other economies. We are likely to benefit in some form from both the US economic stimulus and the $5-trillion that is being pumped into the global economy by G20 countries

Then there is our own political trajectory.

One consequence of this crisis is that President Cyril Ramaphosa is almost guaranteed a second term in office. Certainly, what is often derisively called the “RET crowd” have been quiet – so far. Ramaphosa has shown leadership and lent his own legitimacy to the organs of state, the police and soldiers who have to enforce the lockdown. For many, this has been summarised in the question, “What if it were Jacob Zuma” in office during this time?

Ramaphosa’s personal authority has been enhanced, and this will make it harder to criticise or campaign against him.

This might well be part of a bigger global shift. For the last decade, populism has been on the march, driven by fear and prejudice. The LGBT rights and other wedge cultural issues have been used to win elections. Populists like Donald Trump, Jair Bolsonaro, Rodrigo Duterte and others like them, while terrifyingly unqualified to lead in any crisis, have won political power and won’t be giving it back easily.

And yet, after this global pandemic, there may be more appetite among voters for better, stronger leadership.

Here, things could go two ways. 

There may be more desire for leaders with legitimacy across all of society, leaders like Ramaphosa. There may also be more of a willingness to allow tendencies that remove the onus from “rights” to “responsibilities”. The argument might run that instead of people demanding the “right” to leave their home, they have a “responsibility” to the rest of society to obey the government’s decisions. Should a large number of people die in South Africa because of the coronavirus, this demand may grow stronger.

This could well enhance the power of the person who happens to be in charge at the time – Ramaphosa.

The optimists among us (of which there are still some) may see this as changing our trajectory over the next 10 years in a positive way. This is because Ramaphosa could come out of this crisis with a strongly enhanced mandate, both among citizens and within the ANC. That would allow him a much freer hand to implement his reform agenda.

The silence of his opponents during this time, the timing of the Moody’s downgrade and the massive scope of Covid-19 means that he will have the opportunity to implement reforms.

If the optimists are right, then this could mean that in 10 years’ time, the trajectory will have been changed for the better.

But the pessimists will say that this could, in fact, strengthen populist voices. Police officers and soldiers abusing people during the lockdown, a calculated campaign to blame Ramaphosa for whatever happens during the lockdown and to claim that he is solely responsible for what might be the toughest economy since the Great Depression might still find fertile ground.

This would see him under attack both from within the ANC and by voters, and there would be no reform, no improvement. Populists could try to stoke the flames of racism (how it was white people who brought the disease to South Africa, etc… these claims don’t have to be true). 

If the populists win, we would find ourselves in a much worse position in 10 years’ time.

After the lockdown, people who have skills that can be used to make other people money will still be valuable. There will still be capital, and capitalism will continue. The drive to make money, the profit motive, will survive. Money flows will continue, and globalisation will change in important ways (where you are in the world has possibly never been less important in terms of productivity during a time when over three billion people are living in lockdown).

What has happened in international markets, and the JSE, has the potential to be disastrous. The JSE had lost 30% of its value at one point this year. For those who were planning on living off their investments, this is devastating. Some might go from having an international trip every two years and leaving something for their children to moving in with their children just to survive.

But the adverts that are currently running for some investment firms are right when they say that the two most important dates are when you put your money in, and when you take it out. 

The world is at the crossroads and the events that play out over the next few months will have a vital bearing on which direction South Africa, and the human race, choose. DM

Gallery

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