South Africa’s economy is in deep trouble and saying anything to the contrary does not change the situation. The World Bank has revised our growth projections downward to 0.9% from what was an already unattractive 1.5%. We live in a country where more than 10 million of our citizens are unemployed, where wealth inequality is pervasive and poverty is on the rise.
This is the crisis we must be fully focused on, rather than the drama that surrounds certain players in our politics. Our politics has turned into a Generations omnibus and we can’t change the channel. We have failed to recognise the systematic decay and decline our economy is currently in. We need change, and not only to our economy. But we must fix our politics to fix our economy.
To flip a popular election message on its head, “it’s the politics, stupid”.
Our politics in Africa are far less ideological than what is often debated in other countries. Nowhere is this more evident than in the ANC. We have a government that is a coalition led by the ANC, an unholy and untenable mixture of communists, capitalists and socialists. This motley mix of all ideological groupings, in what the ANC calls a broad church, has led to this sidelining of ideas and ideology.
We live in a country where we created an unholy triangle between business, labour and politics. Most times this has been at the expense of citizens. The triangle creates the latitude for business not to reform into a different type of modern capitalism. The facts remain, we still have monopolies in the public service and consumer-hostile activities occurring often in the private sector. We have a system of CEOs whose primary mandate still remains short-term profit-seeking. The consequences of this short game have meant quick wins, short-term gains and retrenchments, but as Larry Fink in his recent Annual letter to CEOs: A fundamental reshaping of finance so eloquently puts it:
“The money we manage is not our own. It belongs to people in dozens of countries trying to finance long-term goals like retirement. And we have a deep responsibility to these institutions and individuals – who are shareholders in your company and thousands of others – to promote long-term value.”
To place merit in Fink’s argument, what is the long-term value business gives to consumers? To the South African public?
Let me be clear, business is not the enemy and for us to build a South Africa for all, all role-players must contribute. We must make it possible for new entrants, not entrench monopolies. Yes, let’s create work and furthermore create real value for citizens over a long period. Extractive capital is archaic – we need reform.
The smoothest transition from apartheid to post-apartheid South Africa occurred in the business community: in the exchange for being able to keep making profit and to monopolise certain industries, the arrangement between the business class and the ruling class has been not to upset the commercial status quo. The symbiotic relationship was clearly based on the arrangement that the ANC would get the state and the private sector would keep the markets. Business, in return for not being troubled too much, would fund the political parties and they, in turn, would not implement anti-business policies and would award tenders to favourable companies.
The biggest compromise that business had to make was around labour rights, the third aspect of the triangle being the status afforded to labour formations through the big unions. Under the agreements, labour would be assured political connections and proximity and they would receive above-inflation pay increases. Big unions were given bargaining power at the expense of informal labour and unorganised labour through the creation and continued existence of Nedlac. And while Nedlac is still necessary, it is wholly in need of reform.
This council delivers nothing except to keep organised labour at bay and make the leaders of the labour movements comfortable. Labour is quiet because its leaders have been rewarded for co-operation. The long and short of it is that business, labour and capitalism in South Africa are unreformed and unresponsive to the changing times, the political parties having been co-opted through funding. This is largely why we remain in an economic stagnation. We are still sitting cosily on the sofa of this agreement.
My argument is: this triangle was designed to keep the largest sectors of our society at bay. Within the triangle is the element of provision of grants — keeping the poor in place, but with the cold comfort of waiting for pennies and scraps to fall from the table. This consensus was not designed to end poverty, it was designed to manage it. Our economic pact was not designed to create equality of opportunity through equitable policy formulation and implementation. It was designed to normalise the systemic separation of the preceding political epoch.
Bluntly put, we are not working on a model of economic policy that will ultimately eradicate poverty. It is a model that locks out poor people from accessing work. The most excluded in our society are poor South Africans.
They are locked out and anyone who seeks to start a new business is also effectively locked out. The system is broken and we are still falling for the trap of analysing the players on the chessboard, not the structural challenges. We can blame one group of people and idolise another group, but the system itself must change. This is why the game of choosing the good guys in the ANC versus the bad guys in the ANC is a vacuous project.
So we need change, but in order to reach that change, we first need a change to our politics. We must reform parties. At this stage, the ANC enjoys the spoils of the triangle and keeps donors and unions at bay. They show no genuine development to the poor and poor stimulus to micro-enterprise. Are labour/unions not also the poor “working class”?
We must create a new coalition. A coalition that is future-focused.
The solution to Eskom is not to fix the current situation, but to aim to be the biggest supplier of renewable energy to the continent. We certainly have the best coastline, best weather conditions (sunny skies and wind) and labour to achieve this goal. This is the ambition we must aim for. Africa can lead the way in renewables, we certainly have the minerals for battery supply. My dream is an Africa that can provide the world with batteries and energy. This is possible. We can do this, but it will take bold reforms. It will require that we truly ask corporations to consider the long-term value and build companies that are climate-friendly so that ultimately we break the alliance.
Second, we must be future-focused. No one owes us anything; we must have labour laws that remind us that the worker in South Africa is competing with the worker in Japan, in Germany — or China. Let’s make it easier to employ and while some may not want to hear this, easier to redesign our employee needs.
Last, with Davos taking place this week, is it not time that we look at exchange control? I have wondered how easy it can be for us to move money in and out of SA. We make these reforms, we can ensure investment can flow into our country. Surely this must be one of our priorities?
The greatest obstacle to these reforms is that our established political parties prefer the status quo. I would genuinely urge that if we reform our politics, we can reform our economy. When citizens can directly elect their MPs, party loyalty will be trumped by constituency and Constitutional loyalty.
Let the citizens take their power and let us not remain under ransom to the status quo. I have maintained that a movement of South African citizens will be the ultimate change that this country needs. We need this new movement. We already have 48 parties in the country. Party number 49 will add some colours and perhaps some new thoughts but in the main, the same model will apply. Politics of the future focus on a South Africa where all citizens can prosper together and active citizens can hold their public representatives accountable. That one day no one will ever abuse the power of office to hold citizens to ransom. This is the long game.
If we don’t reform, then let’s obsess about personalities; today its Gordhan, before maybe Zuma, then DD, then Ramaphosa, but in the end a different cast will always end up with the same script, and same outcome.
I call on the church, civil society and business. Let’s work to form a new movement for change that is by the people, for the people. That comes from rich and poor, black and white. This will be a new movement for change.
Let’s build our nation and build an economy that is inclusive and has a future for all. I will work with anyone who believes in non-racialism, justice and a future for our young people. Who wants to see electoral reform and ultimately the eradication of corruption? DM
"This is my simple religion. There is no need for temples; no need for complicated philosophy. Our own brain; our own heart is our temple; the philosophy is kindness." ~ Dalai Lama XIV