There is nothing in Zuma’s cabinet appointments to indicate he is aware of the economic perils that lie ahead, says Allister Sparks.
Cape Town - A camel, it is said, is a horse designed by a committee. Certainly the disfigured beast President Jacob Zuma gave birth to last Wednesday presents all the features of a body having been put together by a group of conflicted political pressure groups.
There is no sign of a single designer who knows what the country needs and has focused his mind on shaping a cabinet to deliver those needs.
What we have is a hodgepodge, a camel of a cabinet. All the conflicted factions in the ANC and its alliance partners have had a hand in pushing for their particular interests, producing a collection of contradictory elements incapable of defining any clear course of action.
There is nothing new in this. It is what we have had ever since Zuma became president – a balancing act to keep all political factions rewarded without regard to the country’s needs. That is what has created a state of inertia, causing our economy to decline to its lowest point since the advent of democracy.
The fact is we have one single need that towers above all others. Growth.
Without growth we cannot create the jobs needed to reverse our worsening unemployment, now heading towards 40 percent in real terms. Without reducing unemployment, the threat to the government from the left – from Julius Malema’s Economic Freedom Fighters (EFF) and possibly a workers’ party that may be formed next year by the National Union of Metalworkers (Numsa) – will grow exponentially.
Without growth, as Finance Minister Pravin Gordhan warned 18 months ago, the government won’t have the revenue to fund its social programmes, whose 16 million recipients are the bedrock of the ANC’s electoral support. Nor will it be able to fund the infrastructure programmes and incentives to support vital industries.
In other words, we shall be in a mess. And an economic mess spells political trouble.
Yet there is nothing in Zuma’s cabinet appointments, nor in his inauguration speech, to indicate that he is even aware of the economic perils that lie ahead.
He has even shunted aside the one man who persistently warned him of those perils. Pravin Gordhan is no longer head of the Treasury.
In noting this, I don’t mean to demean his successor as minister of finance. Nhlanhla Nene is a highly competent man who understudied both Trevor Manuel and Gordhan at the Treasury. But he does not have the political clout of his predecessors. He is neither a member of the ANC’s national executive committee nor its national working committee, and the cabinet as a whole, notwithstanding the presence of Deputy President Cyril Ramaphosa, appears stacked against him.
Moving the highly regarded Gordhan has sent a negative message to investors, whose confidence we should be actively courting to bring about that desperately needed growth. So why did Zuma do it?
The answer is clear. Zuma is worried about the forthcoming local government elections, in which the ANC could lose a number of seats in the country’s 284 municipal councils – possibly including control of some of the big nine metro councils which are the engines of the national economy. So he wants the capable Gordhan to take charge of that sector before those elections.
The ANC’s vulnerability in the urban areas, particularly the big cities, was exposed in last month’s elections. This is largely because of its service delivery failures, which in turn are the result of Zuma’s strategy of shoring up his own political position by appointing loyalists rather than competent people to key jobs.
By shifting Gordhan to the Ministry of Co-operative Governance and Traditional Affairs, Zuma hopes he can fill the role of a Mr Fixit to get the municipalities functioning more efficiently before 2016. Gordhan has certainly shown himself to be a capable administrator, having built a highly professional SA Revenue Service before becoming finance minister. But given the patronage system the president has entrenched and the reputation for corruption he continues to set, it will be a helluva job.
Moreover, the Gordhan move also demonstrates once again that party political interests take precedence in Zuma’s mind over the national interest, even in so grave a matter as the economic crisis looming before us.
In my column two weeks ago I argued that, with the national election over, Zuma faced the most critical decision of his presidency. I said there was a fork in the road directly ahead of him and he would have to decide which branch to take – either left to confront the prospect of a looming socialist challenge, or right to stimulate growth and reduce the rising tide of unemployment and rebellious anger.
It was, I suggested, a Catch 22 situation, for the normal political response would be to move left to counter the growth of the EFF and a possible workers’ party, but that this would be the wrong choice because increased unemployment would enlarge the disaffected constituency that is feeding the left-wing’s growth. Better be bold and go for growth, which would shrink that constituency.
I really thought that Zuma, safely installed for his second term and speaking boldly about bringing about radical socio-economic transformation, would choose one or the other. But he hasn’t. His cabinet choices show he intends carrying on as before, which is surely the worst of all options.
The only ray of hope lies in the fact that Ramaphosa, the one man who does understand the need for growth, is now deputy president. But what can he do alone in a bloated cabinet (there are now 82 ministers and deputies, up from 78) in which only eight are really of top quality. With Manuel gone, he will cut a lonely figure.
Ramaphosa will no doubt be put in charge of the National Development Plan (NDP) which he helped to draft and which seemingly constitutes the sum of Zuma’s economic understanding.
But the NDP is not actually a developmental programme awaiting implementation; it is more of a broad indication of a course to be followed over the next 20 years, which means it can easily be thwarted by those who don’t like its ideological direction. Already a whole series of legislative enactments have either been passed or are in the pipeline which conflict with its basic objectives.
Will Ramaphosa be able to rescind these? Or shelve them? Having watched him during the Codesa days, I am an admirer of Ramaphosa’s political and negotiating acumen, but one man can’t turn this ship around. Certainly not when so many others will be hell-bent on obstructing him.
So what is the prognosis? Not encouraging, I’m afraid. With India the new darling of foreign investors and other African countries beckoning, I can’t see much investment coming our way. Not to a country with such a terrible strike record, a president who doesn’t seem to understand economics and a government that is ideologically hostile to business anyway.
Of course things can change, sometimes quite suddenly, as a result of unforeseen catalytic events. But short of that, I fear our economy is likely to continue its steady decline, with unemployment and unrest increasing, until our voters eventually learn the hard way that countries get the governments they deserve.