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Conferences will fine-tune ANC policy

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Photo: Phill Magakoe.

The year ahead for the ANC will be a momentous one, starting with the centenary statement in Bloemfontein/Mangaung today where President Jacob Zuma will recapture the historical highlights while portraying a vision for the future.

The year, however, is likely to be a little bit of a tug-of-war as the ANC battles with its suspended Youth League (ANCYL) leader Julius Malema. He is likely to pop up all over the show testing the limits of the party’s resolve to sideline him.

Much of the political theatre will be a repeat of the years when Zuma himself, dismissed as deputy president of the country by then president Thabo Mbeki, popped up to sit next to his nemesis at conferences of the movement – including the 2006 national general council.

Watch the benches of the leadership as Malema makes his public entrance at the public events on this year’s calendar, including today’s statement, the policy conference and the elective conference at the end of the year.

It could be a messy ride. It is too early to tell whether Zuma will be re-elected as ANC president or whether he will face an opponent at the elective conference, likely to be at the University of the Free State in Bloemfontein in December.

At the moment it looks as if Zuma will be unopposed as there is no obvious candidate who would carry a bigger constituency than he still does.

Ironically, a Zuma win will probably mean that policy positions under attack, such as a prudent approach to the management of the fiscus, will be cemented.

Malema’s and the ANCYL’s support for nationalisation of mineral resources and collectivisation of land will probably be watered down drastically.

The chances are that the team appointed by the ANC national executive committee to study nationalisation options will come up with plans for greater state involvement in the mining sector, but the state has already set up a state mining company, adding to an existing one which is involved in diamond mining.

The policy and elective conferences will fine-tune government thinking on economic matters. Economic Development Minister Ebrahim Patel’s New Growth Path, and the national planning commission’s long-term national development plan, differ in the sense that Patel’s plan sees a greater role for the state in the economy and the creation of jobs.

The commission – whose political boss is Planning Minister Trevor Manuel – sees a partnership role for the state and business in creating jobs and driving growth.

Resolution of the Walmart-Massmart matter will provide signals as to whether or not South Africa is viewed as friendly to foreign direct investment.

It is expected that, some time in January, Judge Dennis Davis, the Competition Appeal Court judge, will announce a decision on Walmart’s purchase of a controlling stake in Massmart. In November he gave a guarantee “that it will be out by the end of January”, Bloomberg reported.

Last May, the competition tribunal authorised Walmart, based in Arkansas, to buy a 51 percent holding – for R16.5 billion – in Massmart, a food and general goods wholesaler. Trade unions, including Cosatu-aligned unions, argue that jobs will be lost as Walmart is known to source the cheapest products, usually from abroad.

The Competition Tribunal gave its approval for the sale, subject to a moratorium on retrenchments for two years.

In October the ministers of Agriculture, Forestry and Fisheries, Tina Joemat-Pettersson; Economic Development, Ebrahim Patel; and Trade and Industry, Rob Davies, argued that the acquisition of Massmart “can have a potentially devastating effect on local jobs and the transaction should be sent back to the Competition Tribunal for a proper consideration and more effective conditions to be imposed”.

The Minister of Economic Development specifically argued that he was bound by the law and the constitution to intervene in the appeal by the SA Commercial, Catering and Allied Workers’ Union, to ensure realisation of the objectives of the Competition Act. Davies said there was no evidence to Massmart’s claim that the deal would create 15 000 jobs in the next three years. Instead, he argued Walmart’s growth was likely to come at the expense of large numbers of jobs in manufacturing.

Had Walmart been compelled to provide more information on the growth of imports, the true extent of job losses in South Africa would have become evident, he argued.

Joemat-Pettersson said the implications of a displacement of local suppliers by Massmart were well understood by the agriculture sector “in terms of lost income and likely losses of jobs”. It appeared that in some industries this had already taken place since the merger.

She cited the example of olive farmers who had been advised that they should not expect orders from Makro – a Massmart subsidiary – for locally produced olive oil as they intended to import cheaper products.

No case tests South Africa’s trade policy – and friendliness to foreign direct investment – better than the Walmart/Massmart deal. Its outcome will indicate how friendly the country is to business or whether a protectionist stance is likely to be followed in future.

As Europe, one of the country’s biggest trading partners, battles to resolve its debt and currency problems, pressure will grow on the government to move to a protectionist stance.

Curiously it will be the courts – arguably more than the elective and policy conferences of the ANC – which will play a guiding role in the economic direction which South Africa will follow. - Donwald Pressly


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