IF LOCAL economic fall-out and the prospect of capital flight ultimately put paid to President Zuma’s short term economic plans, take a look at what happened to the country’s macro-economic outlook.
After meeting with Chinese President Xi Jinping earlier this month, Zuma announced that he was replacing South Africa’s finance minister with a relative unknown, David van Rooyen, effectively downgrading the status and prestige of the portfolio, which all ended in a massive flipflop, see here.
As to why the President thought he could do this, was not immediately self-evident to the media. Granted, there were many reasons offered by pundits as to why the President would want to remove Nene — the alleged friction around the SAA and Nuclear deals, the inconvenient problem of fiscal prudence and fund raising and so on.
But then Zuma announced that he was redeploying Min. Nene to the BRICS bank. Arguably outsourcing the treasury, and moving Nene to a position in which the Minister had apparently not even been short-listed, never mind appointed. Was this global real-politiek playing itself out at the expense of the country, or simply another expedient marriage?
If you see the BRICS New Development Bank (NDB) as just another bank, all fine, it is easy to forget that NDB aims to counterbalance Bretton Woods structures such as the World Bank, a central bank of central banks, but at what price? Will participation entail domestic interference? Changes in foreign policy? The Nene saga does not bode well.
The covert power-game, surrounding the emergence of a supranational, global cabal — an economic elite focused around the NDB, is really what has been revealed over the course of the month.
Unaccountable, autocratic and without any particular national loyalty, save for the amorphous arrangement which is BRICS, NDB and its cronies, (along with its capacity for intrigue), has been seen by the Zuma administration as the quick fix solution to all manner of national, regional and personal troubles. In other words, a veritable license to print money or issue bonds outside the local economy, that exists as some form of debt birthed out of the peculiar position which its one anchor tenant, China holds within the world economy.
A positive spin, would see it as a safety net, courtesy of the Chinese (PRC), but such conclusions are not necessarily foregone. China itself, experienced a major stock market meltdown, requiring drastic intervention by the PRC party. Turning South Africa into a client-state is thus not necessarily conducive to long-term economic growth and stability. The Johannesburg Stock Exchange (JSE) for example, is a lot older than the Shanghai Stock Exchange (SSE), 1887 versus 1990, a difference of 103 years.
China recently announced that it was issuing Rand-denominated bonds to pay for infrastructure in South Africa, a duty usually the preserve of the Reserve Bank and the treasury.
The events of the past weeks thus beg the question: Does Jacob Zuma see himself as the President-elect of a new country called Afrochinistan? A nation-less, global politician, who recently made the startling statement that his party came before his own country, a leader of a political movement, which now sees itself as the equivalent of the PRC ruling party, in which party congresses are held in what is effectively a one-party state that has no state, except the currency markets.
Clearly Zuma, until the events of yesterday, which saw Pravin Gordhan reappointed, had ceased being accountable to the people of his own country, never mind his own party.
With so many bilaterals, trilaterals and Paris Conference of the Parties, the Zuma administration has really began looking as if it has permanently relocated itself outside of the country. Then, along came a major upset, an open rebellion within the ranks, the reality of Rands and Cents.
Following upon the heels of the Gupta controversy (merely a sad attempt to marry Indian and South African politics), the Xi Jinping meeting has resulted in ANC apparatchiks announcing parallel policies that could take South Africa in the direction of the Chinese political system, with the tragic consequence of an erosion in civil liberties, individual rights and freedoms.
If it isn’t the controversial Cybercime Bill, which could see a National Firewall censoring the Internet, then it is the clampdown on Press Freedom, (or as some might see it, a general purchase of the press), the embrace of radical terrorist groups such as Hamas, and the Dalai Lama debacle, all of which speak to a failure to protect the nation’s secular legacy of peace and human rights, and especially the rights of religious, ethnic and cultural minorities.