With weak political leadership, a worrying economic outlook and declining public trust, the time is ripe for constructive engagement, liberal analyst Frans Cronje tells Michael Morris.
Cape Town - ONLY hours before the ruling party’s unseemly applause at the forced removal of unbowed EFF MPs from Parliament on Thursday night, Frans Cronje extracted from a generous, if disquieting bouquet of data at an economics seminar, a seemingly isolated indicator he regards as especially telling.
The chief executive of the South African Institute of Race Relations could not have wished for a more illuminating illustration than the unnerving shambles that evening of a besieged president, a nervy parliamentary leadership and the shaming episode of police being summoned to – as the ANC appeared to view it – do the dirty work of democracy.
The setting of Cronje’s probing analysis could not have been more different – a hushed seminar room in the airy, studiously quiet School of Economics among the trees of UCT’s middle campus. But the one indicator he picks out, rather like a rare gem spotted in the grit, provides a crisp glimpse of the true state of things – borne out, it could be said, by Thursday’s news coverage.
It is a graph, the longest bar of blue along the bottom indicating the tally of some 15 000 riot police employed by the state in the period 1995 to 2001. The next bars tail off quite sharply over the ensuing decade, the tally of 7 000-odd between 2002 and 2006 dropping to around 2 500 between 2006 and 2010. And not surprisingly – riots were down, too.
What’s stark is that, as riots double from the 1 000 mark in 2011 to around 2 000 three years later in 2014, there is a corresponding re-employment of riot police, now up to 4 500.
Cronje explains in a brief interview after the seminar that he encourages his team of researchers to dig around in pursuit of the “tangential oddity”, that unexpected insight that is capable of casting the crispest light on what’s really happening – beyond, say, balance of trade data or fluctuations in electricity generation, dips in school pass rates or household income.
And this graph does just that: “A government that hires riot police,” he elaborates, almost unnecessarily, “cannot deny it has a problem.”
And, judging by the array of disheartening data covering everything from economics and politics to health care, electricity generation and tax, it risks being a more or less circular problem, a whirlpool of mutually reinforcing impacts that will likely make it harder for the ANC-run government to keep things stable, grow jobs, attract investment, satisfy the mounting demands of youth, and stay in power.
Cronje pauses for a moment. The litany of shortcomings, lapses, missed or ill-used opportunities is not, it becomes clear, the source of any kind of smug self-approval, even if it implicitly validates the essential liberal proposition of the think tank he heads.
“Our thinking is that to be unremittingly negative is fundamentally destructive. There is a positive alternative, and that is to work with all parties, and particularly the ruling party, in a constructive way, and to work with the better leaders, of which there are some, in the civil service mainly, to find solutions.
“It means being clear on what’s unacceptable, but we think that convincing those in power to adopt policy reforms is the type of strategy think tanks should follow. It is not a question of becoming politically aligned – it means also helping opposition parties to put pressure on the government.
“The idea that you should seek to destroy (the ruling party) would create bigger problems than it would solve. A strong, stable and effective ANC with sound policies is not a bad thing for South Africa to live under.”
Cronje draws a comparison that would doubtless unsettle the ruling party.
“It’s the same as working with the National Party at the end of apartheid. We are strong proponents of constructive engagement, fashioned by US diplomat Chester Crocker in the 1980s.
“Of course the ANC is not the apartheid government,” he says.
But he adds thoughtfully: “To some extent, though, Zuma is governing PW Botha’s country … if you look at the current account and budget deficits, the abuse of security forces, the goings-on in the intelligence services, the weak economy, rising social tensions, increasing protests, and the world getting fed up. We know of disinvestment decisions among some of our clients … it’s not big, but it’s an indication.
“So what you are looking at is these two leaders (Zuma and Botha) managing a similar country.”
Key elements of Cronje’s nearly hour-long presentation – “South Africa’s Next 10 Years: Trends, Risks, Scenarios and Probabilities” (produced by the institute’s Centre for Risk Analysis and due to be released soon) – sketch the salient features of a state confronting a range of potential crises with less than visionary wisdom.
The analysis suggests weak economic growth will dampen tax-base expansion as government finances come under further strain. There will likely be low growth levels, which will dampen inflation and exclude rate hikes as debt and deficit levels rise.
Eskom and power generation deficiencies will hold back growth.
“If more things fall down or blow up, we will have to push anticipated three percent growth rate downwards. So there will not be much job creation.”
While the emerging middle class is significant, and the black middle class is “catching up” with the white middle class, the scale of middle-class wealth is small, with only some 5.5 percent of black households spending more than R10 000 a month. The risk is that middle-class size is overstated.
Almost 60 percent of government expenditure takes the form of income redistribution to poor people. In contrast, while – out of a population of some 55 million – South Africa has about 18 million registered taxpayers, only 5 million are liable to submit returns, and only 10 percent earn more than R700 000 a year.
“Revenue will not see much growth, and the government will not be able to borrow itself out of trouble.”
Cronje underscores his concern about growing dependency on welfare in answering a question about inequality as a pressing issue.
“We have not been terribly convinced by the inequality argument. We believe that in countries as poor as South Africa was, as there is a growth in welfare, it becomes less equal inevitably. That’s not the problem. The bigger problem is a sense among the poor that they are not going anywhere. And the problem with the inequality argument is that that leads to redistribution and there is not enough to redistribute.” Invariably, redistributive measures will satisfy political sentiment, but do nothing for poverty.
The analysis notes while the outlook is for further currency weakness amid declining manufacturing output, the government continues to emphasise industry – when, in fact, the services sector is at once the one showing the highest growth, and offers the potential for South Africa to position itself as the services hub for Africa, as Hong Kong is for China.
To capitalise on services-sector growth, South Africa will need better schooling, yet literacy and numeracy rates are poor. Labour reform will also be necessary to encourage entrepreneurs, but the government’s inclinations lie in the opposite direction.
Every major poll points to jobs being the public’s number one concern.
“The huge injection of cash into poor communities through the welfare system, together with the relative success of service delivery, means basic living standards are higher than 20 years ago, but this is dangerous because it raises expectations, and failing to meet them can cause more political trouble.
“We anticipate sustained high levels of joblessness centred around young people. Despite half of children now completing their school education, quality remains very poor.
“And young people are a key factor – their living standards are much higher than their parents’, they are active on social media, but if they do not have a job and see no realistic prospect of entering the economy, that’s a problem. This will be a significant force for the future – if you cannot realise their expectations or repress them, they will take you to a new scenario.”
Not surprisingly, then, political indicators point to growing disenchantment with the liberation party.
Approval of the government dropped from 72 percent in 2000 to 54 percent last year, and, as protest levels pick up, confidence in democratic institutions falls.
In the last election, more registered voters did not vote (40 percent) than those who voted for the ANC (36 percent).
But Cronje cautions against the idea that the electoral defeat (perhaps in 2024 or thereafter) of the ANC will usher in a new party with fresh ideas and a popular mandate to implement them.
A defeated ANC, he argues, will not likely slink off to the sidelines. The most likely outcome will be a coalition with whoever it can find to work out a deal with.
“And that could mean the ANC will return stronger than ever.”
* Cronje is the Chief Executive of the South African Institute for Race Relations.
** The views expressed here are not necessarily those of Independent Media.
Weekend Argus