Allister Sparks
From the moment of his inauguration on Saturday, Jacob Zuma will face the most critical choice of his presidency. The election results are telling him a fork in the road lies ahead and that he will have to decide which branch to take – either left to confront a looming socialist challenge, or right in a belated attempt to stimulate growth and reduce the rising tide of unemployment and rebellious anger.
He can prevaricate no longer. Zuma spent his first term trying to keep the various factions in the ANC alliance placated and contained within the broad tent of the alliance. It became a prolonged balancing act, the outcome of which was political inertia. Simply including all the factions in the alliance burdened the country with a bloated cabinet of 68 ministers and deputies, one of the world’s largest and certainly the most cumbersome.
On the economic front particularly, it led effectively to having three different ministers of economic development with different views on how to run the country and chart the road ahead.
For the past five years, we have heard endless talk about a developmental state, a national democratic revolution, a National Development Plan and a New Growth Path. But none has been implemented. All have stagnated in a flurry of ideological cross-talk, while the economy has missed out on a major global resource boom, the ratings agencies have downgraded us and unemployment, particularly youth unemployment, has continued to rise. We can’t go on like this. Decision time is now.
Eighteen months ago, in the run-up to the ANC’s Mangaung conference, Finance Minister Pravin Gordhan flashed a warning light. In his medium-term budget statement in October 2012, he lambasted ministers for their gross overspending and warned the government that it needed to focus urgently on cost-cutting and economic growth.
“We need faster inclusive growth,” he said. “Without growth we cannot increase the number of enterprises or create more jobs.
“Without growth we cannot generate the revenue needed to fund our social programmes, infrastructure investments and incentives to support important industries. Faster and more inclusive growth calls for a better alignment between labour, business and government to get things done – helping each other out, finding solutions, encouraging innovation, building a smart South Africa.”
No business leader could have offered a more powerful call for positive action to get the economy going. And to strengthen the case Gill Marcus, governor of the Reserve Bank, issued a similar warning a day or two later.
These warning statements seemed to strike a chord with Zuma. I imagine he must have been particularly alarmed by Gordhan’s warning that without better growth the government might find itself defaulting on its social welfare payments, which sustain some 16 million recipients who are the backbone of the ANC’s solid rural support.
For the first time, Zuma seemed to recognise the need to increase economic growth to reduce unemployment. He made three positive statements in as many months ahead of Mangaung.
First, he expressed an interest in the DA’s idea of a youth wage subsidy; then, as the teachers’ union again went on strike in the face of the matric exams, he talked of proclaiming teaching “an essential service”, which would prohibit it from striking; and, third, he came down firmly in favour of Trevor Manuel’s National Development Plan (NDP) in preference to rival plans from Economic Development Minister Ebrahim Patel and Trade and Industry’s Rob Davies.
In each instance, Cosatu secretary-general Zwelinzima Vavi sought to veto Zuma’s proposals, culminating in his challenging declaration at Mangaung that if the NDP were to be part of the ANC’s election platform, Cosatu would have “great difficulty” campaigning for it in the 2014 election.
That is what triggered the war against Vavi, with Cosatu’s president, Sdumo Dlamini, acting as Zuma’s proxy.
Now, with the election over and Zuma about to be inaugurated for his second term, it is time to consider what course he is likely to follow.
If, as I believe, Zuma took Gordhan’s warning about the need for growth seriously, then now is the time for him to choose that fork in the road and go for it decisively.
But will he? Dominated as he is by his strong survivalist instincts, Zuma may well feel himself to be in a Catch 22 situation.
As he surveys the post-election political landscape, Zuma will surely note that Vavi is now a much diminished political figure and that Cosatu itself is in disarray. Indeed the ANC has shown it doesn’t need Cosatu to win a national election comfortably.
But a closer look will show him that the ANC is now in an awkward pincer situation. The DA is making significant gains in the metropolitan areas, which are the engines that drive the national economy (our nine metro councils account for 70% of the country’s growth domestic product), while Julius Malema’s Economic Freedom Fighters (EFF) pose a potentially fast-growing threat from the left.
It is a threat that may grow exponentially if the National Union of Metalworkers (Numsa) goes ahead with its plans to form a Workers’ Party, which its secretary-general, Irvin Jim, says could happen around April.
Such a party would surely subsume the EFF and be a serious challenger to the ANC.
Which will Zuma regard as the greater threat? Therein lies his dilemma, for whichever flank he focuses on will be to the advantage of the challenger on the opposite flank.
Commonsense suggests that the only way out of this dilemma is for Zuma to choose the growth road. Only by delivering growth, and with that jobs, can he effectively counter Malema’s populist appeal to the vast and growing constituency of unemployed youth.
But it is a high-risk strategy. Turning around a stagnated economy like South Africa’s is like turning a supertanker. It takes time – and time is not on Zuma’s side.
Local government elections are just two years away and if Zuma can’t show meaningful results well before then, the EFF (possibly with Jim’s Workers’ Party) will wreak havoc on the ANC’s left flank.
It requires little imagination to realise what a meal the rabble-rousing duo of Jim and Malema could make of a clear-cut shift to the right by the Zuma-led ANC.
Yet the opposite strategy, a leftward shift to occupy the political territory the Workers-cum-EFF will be targeting, would be much worse – for the ANC and even more so for the country.
In the wake of the ANC’s election victory, secretary-general Gwede Mantashe has issued an appeal to foreign investors to come here. Badly needed, to be sure. But you can kiss that prospect goodbye if the ANC starts competing with Malema over nationalisation, land redistribution without compensation and the like.
Not only foreign investors but local investors as well would take flight and move offshore.
That would be the road to more rating agency downgrades, an imploding currency and a nose-diving economy, all of which would open the gates to a catastrophic populist landslide. The road to disaster.
Yes, it’s a tough call, Mr President. But you have only yourself to blame for wasting so much time equivocating.
l Sparks is a veteran journalist and political commentator.