THE announcement of a green-light to Karoo fracking couldn’t have come at a worse time. The very same week, saw the world pummelled by kill the environment ideologue Donald Trump, who two days ago, scrapped Obama climate change policies. Thus Mineral Resources Minister Mosebenzi Zwane was merely walking in the footsteps of Trump’s anti-Earth agenda on Thursday when he made the announcement that could see a less than 10 year resource opened to exploitation by international gas companies at the same time that it jeopardises future generations.
Agriculture and water resources will be affected far longer than the short-term gains to be had. The sudden surge in development projects of dubious origin, but with major environmental consequences, alongside the rush to strip away environmental protections under NEMA, itself watered down by a Ministerial override, is an insult to the guarantees of Earth rights in our constitution, and can be seen as short-term business interests being put ahead of sustainable development goals.
This week also saw strange announcements by Eskom that it was contemplating revisiting its failed PBMR programme which had already gobbled up some R10bn of taxpayers money with nothing to show except a few fat physicists. As the townships remained underserviced and households in Cape Town were being told to save water, the Minister was encouraging the abuse of precious water resources in the Karoo, while Eskom, the national power utility was getting ready for another bout of atomic spend without so much as concern for consumer safety.
The Trumpist drumbeat appears to have taken the Zuma administration by storm, as if suddenly the mantra of ‘ecological sustainability” crucial to South Africa’s unique development path, was no longer so relevant. Does this mean there is now a Planet B? And those melting polar ice sheets are nothing to worry about? The sudden dash back to a previous age of coal and steam, oil and gas guzzling consumer excess is what is most attractive to the likes of Zuma and his neoliberal agenda. Time to start talking in earnest about ecocide?
THE LOSS of the Johannesburg, Tshwane, Nelson Mandela Bay metros, means all major South African centres with the exception of Durban, Bloemfontein and Kimberley are now controlled by the opposition Democratic Alliance. It is a major upset for the ANC, a political movement which has ruled South Africa for the past two decades. Having once stood on the shoulders of giants such as Nelson Mandela, Oliver Tambo and Walter Sisulu, the party is squandering its struggle legacy under Jacob Zuma.
It is no secret that the country’s proportional political system has delivered a stinging defeat for Zuma. Metro government, alongside provincial government, compete with national government and thus allow a semblance of regional autonomy. The situation is akin to a trilateral democratic order — or having a Republican Senate and a Democratic House of Representatives, and also a conflicted executive President — except here we see the metro system paving the way for future DA control of the provinces, and an overdue national renewal, come the national elections.
South Africa’s National Assembly and National Council of Provinces, although both ANC strongholds, could very well succumb to the strange situation today, in which the blue machine of the DA, has an erstwhile voting partner in the red EFF at municipal level. The DA has entered a number of coalitions with smaller parties such as COPE, IFP and UDM.
Increasingly under siege, from the party’s own ranks, and traditional partners such as the SACP, the beleaguered Zuma administration has chosen to deflect criticism following the election, with another Nenegate, followed by more trade deals. Thus in the awkward Janus masked double-step of JZ, the administration is selling trade to appease the middle class, whilst paradoxically attacking the party’s own finance minister, apparently to show the masses that Number 1 has a grip over the democratic ‘revolution’.
One could not make up this kind of formulaic Marxist illogic, even if one were a beret wearing, champagne drinking activist in birkenstocks . The result is an ideological vacuum which is also reflected in the liberal opposition’s dependence on the far-left, and surely the demise of the very modus operandi which created the ANC?
That the latest moves against finance minister Pravin Gordhan emanate from within the ANC top brass is clear. Although Zuma has repeatedly stated that he is powerless in the face of the Hawks investigation, it is the ANC which needs to account for the manner in which the investigative entity, once known as the Directorate of Special Operations (DSO) or Scorpions, was turned from an independent investigative unit into a mere political lapdog.
The DSO was once a unit of the National Prosecuting Authority of South Africa, a multidisciplinary agency that investigated and prosecuted organised crime and corruption. In order to protect Zuma from the Shaik investigation, and various related scandals, it was the ANC which decided to merge the Scorpions with the SA Police Service. The Khampepe Commission, thus drastically reduced its power, and effectively placed the unit under the national executive, Quo Vadis Zuma?
Although many ANC veterans are extremely vocal over the antics of the President, who is embroiled in a number of serious controversies, including allegations of graft and sexual impropriety which refuse to go away, none appear to see the irony. Even with Sipho Pityana launching a stinging attack on the President, at the funeral of Eastern Cape ANC stalwart Makhenkesi Stofile, one can only wonder how it is possible that the president who is increasingly seen as a liability, is still in charge. This despite efforts at damage limitation, which have sent Zuma on a host of trade missions, the latest being his attendance at TICAD, followed by a trip to China.
THERE was something unbelievably cool about Nelson Mandela’s South Africa. It wasn’t merely that a country on the Southern tip of Africa, which had spent the past forty years in the racial stone-age, had made a giant leap forward into non-racial democracy, or that after decades of war and civil conflict, citizens black and white, were prepared to set aside their differences in rebuilding a nation.
It was the vision and promise of a world in which race no longer defined us, in which human rights exceptionalism and a “We the People” constitution marked us all, as somehow morally superior. Citizens with something to write home about, compared to those poor devils living in countries where similar conflicts had ended up in turmoil and worse, a racial conflagration. Not only did we put an end to the death penalty, but we buried our nuclear weapons programme, embraced gay rights, women’s rights, environmental rights and embarked on a course of national reconciliation.
There is something unique to the story of the birth of modern South Africa. In 1994, the very same year that we voted for our first black President, the Rwandan Genocide occurred, resulting in nearly 1 million deaths. In another part of the world, Jordan and Israel, found time to put aside their differences and declared peace. Peace looked as if it could catch-on around the globe, as a cri de coeur, (a cry from the heart), and for many it was Nelson Mandela in a Springbok jersey which symbolised such hopes and dreams.
Now some 22 years later, the country has never been so polarised as before. The sight of burning campuses, the latest round in which paintings have been torched — by protesters at UCT waving the banner of decolonisation — has brought home just how fragile this simple dream appears. In the face of ongoing inequality, racism, poverty and global economic turmoil will the country once again stumble into civil war? Will political leaders take us forward into a new era, via the path of peace, or will we repeat the tragedy, of yet another cycle of violence, or worse, an institutional lustration and blood-letting that has tacit support from those in power?
Clearly the current administration under Jacob Zuma is out of touch with events in the country. In such times a direct address to the nation would be in keeping with the gravity of the situation. Instead we have seen the disruption of the President’s annual SONA address, as the executive takes responsibility for misappropriation of public funds, and Zuma hides behind the trappings of office.
It needs to be said, that while there may be a black majority government, the same government has shown itself to be beleaguered, under siege from its own electorate. A change in leadership, a new President, could bring hope and renewal, but for so long as we have a lame duck in Zuma, the nation appears leaderless, its policies increasingly dictated by opposition groups, and an opposition which equally appears unable to form a government without a split in the majority ruling party.
Only time can tell if South Africa’s electoral system prevails, in forming a new government empowered and capable of dealing with the crisis, while continuing the legacy of the nation’s founder, Nelson Mandela.
TODAY’S RAND depreciation, the so-named flash crash, is the result of several factors, many of them self-inflicted.
Although analysts attribute the drop as a reaction to the blow-out in the Chinese market, and the fallout from the Nene fiasco, there are several important factors, all of which contribute to Rand volatility.
- Over-reliance on Chinese imports, this retail (arbitrage) model creates dependency on Yuan-Rand exchanges.
- Too much debt, not enough liquidity = Rand vulnerability. Insufficient savings, a culture of spend as if there is no tomorrow. South Africans need to be saving more, see new tax free savings accounts. A highly indebted nation.
- Emphasis on the dirigiste economy, shackles growth by removing competition in key areas, including transport, telecoms, energy and health. Instead of bailing out SAA, government could settle sovereign debt while taxing the sector.
- Twenty years of bashing neoliberalism and open markets without providing functioning, workable alternatives. The experiment with a mixed economy has shown that the dirigiste-side has failed. Time to move on from ideology towards long-term stability.
- Caving into the Agoa trade war, not being pro-active enough and too readily resorting to the begging bowl, shows weakness. Why is South Africa not marshalling support within the AU and SADC where trade is concerned? Why are we in a currency war?
- Punching above our weight when it comes to BRICS, and not being active enough when it comes to African Unity, the good story in our backyard. Both Angola and Mocambique have been booming. Trade with Mocambique, an economy whose GDP Annual Growth Rate averaged 6.36 percent from 2000 until 2015, is increasing, this good story gets lost when we appear to be the weakest member of BRICS. Angola, another neighbour recorded growth rate of 3.8 in 2015 and looks set for 4.1 in 2016.
- Not managing inequality and wealth distribution via a social wage and instead resorting to political brinkmanship, mob violence and threats of expropriation, which inevitably spook markets. Does the social contract need to be explained to the masses, who will benefit indirectly from capital inflows such as the listing of Ab InBev, and directly from government grants funded via taxation?
- Foreign policy, backing corrupt regimes such as Assad, Omar al-Bashir, and Hamas, and not standing up for human rights when it comes to issues such as the Dalai Lama, Myanmar, Syria, all affecting sentiment.
- Weak national leadership, a president who increasingly appears to be the ruler of one province, the emergence of tribalism and other demands, which all stem from the administration’s own policies. The flipside of this is are Zuma’s global ambitions, at the expense of national unity. A party that comes before the country. See Zuma’s Afrochinistan Affair.
- Insufficient attention to South Africa’s image abroad. SABC remains invisible when it comes to the important issue of connectivity via the Internet. Why is the national broadcaster not available alongside RT, Al Jazeera and BBC?
- Erosion of civil liberties and human rights within the country, as evidenced by several pieces of legislation before parliament, each one seeking to remove key individual rights protected by the constitution, acts as a disincentive to investment.
- Lack of coherent industrial policy and marketing of SA brands abroad. Where are the special economic zones? NDP appears to be nothing more than a talkshop, without follow-through from government. Where is the next economy, how is South Africa planning for the future?
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.
IT IS NO longer a question of IF but WHEN Zuma goes. The President has spent his political credibility, frittered away Polokwane, and presided over an economic fiasco entirely of his own making.
The faults of Zuma’s administration are so numerous, one needs hours merely to wade through the analysis of the ineptitude and wrong-headed politicking which has dogged his time in the Presidency. Zuma must make way for better, more equipped leadership. If ever there was a reason for deposing the man at the head of the country’s political system, the events of the past days, demonstrate what is at stake.
In the space of a week, South Africa has gone through three finance ministers. The losses are staggering. The entire market cap of the JSE fell R169.6bn from R11.35 trillion to R11.18 trillion (1.49%), while the Rand bounced from a low north of R16.30/$ to R15.11/$, as markets reacted to what appear to be a volta-face in economic policy.
At one point, Zuma was suggesting that he could command the economy by introducing a Marxist labour value system. As writer Rian Malan put it:
“Well, yes. The East Germans once priced their copper according to this Marxist formula, concluding that the labour value of socialist copper was 18 times higher than the world price as determined by the capitalist law of supply and demand. And then struggled to understand why nobody wanted to buy their copper. Hopefully Zuma will be more successful at amending the laws of nature.”
It really does seems as if we have two factions in government, the commandeerists and centralists who believe the economy is there to do their bidding, in particular the bidding of the party, and the realists and federalists who understand that markets are by their nature, fickle and based upon economic laws.
Laws such as supply and aggregate demand, retail and consumer confidence, balancing the books and fiscus, budgeting and living within our means. Markets require predictable policies, i.e. stable banking and financial markets, in order to maintain liquidity and create jobs while driving opportunity.
The shock reappointment of Pravin Gordhan will go some way to stabilising the situation, but for how long?
The problem, as so many commandeerists who constantly rail against the bugbear of “neoliberalism” fail to see it, isn’t double-column accounting. If I were against the dominant Maths, I would not spend my life becoming a spokesperson for an Anti-Algebra movement, I would rather seek out a new arithmetic.
Instead, as we see under Zuma and the far-left opposition, we now have a trend towards outright ‘denial-of-reality’, an increasingly belligerent regime, which believes that it can escape the numbers, via pure ideology and propaganda alone. One that is then driven into a sudden flipflop, since its policies are really no policy at all.
This is exactly what lead to the undoing of the Soviet Union. One of the largest Empires of modern times, it covered 15.31% of the Earth’s land mass (compared to British Empire at 22.6%).
South Africa risks breaking up under the Castroism of Jacob Zuma and the Maoist rhetoric of far-left opposition leader Julius Malema, we may very well devolve into distinct and separate entities as centralisation fails and the federal guarantees enshrined by our constitution kick-in, and with the stubborn refusal of the commandeerists to accept anything less than a “socialist” (read communist), state, that operates on ideology alone.
Painting such criticism as the work of “white supremacists” merely confirms the problem — there is no such thing as a ‘black economy’ or a ‘white economy’ as such. The numbers in themselves, do not discriminate, and attempting to view important issues such as wealth distribution and economic inequality, in purely racial terms, disguises the deep structural problems of a resource-based economy that desperately needs the world to recognise its emergence as a financial hub, one that has to provide for social services accessible by all citizens, irrespective of race.
THE ZUMA administration is the subject of a number of public embarrassments. All involve, maladministration, graft and the failure to abide by the rule of law. The latest comes with the release of a report into the 2012 Marikana massacre which led to the deaths of approximately 44 people, and more than 70 persons being injured.
The Farlam Commission appointed by president Zuma, predictably, whitewashes the administration’s involvement in the events which lead up to the massacre. Deputy-President, Cyril Ramaphosa, who was non-executive director of Lonmin, a significant shareholder in the company (through its shareholding structures), and a senior member of the ANC at the time, has been given a clean bill of health, so too the political structure and chain of command which lead directly to the massacre.
The release of the report comes days after scandals involving the failure to arrest Sudan’s Omar al-Bashir wanted by the International Criminal Court and international community for the Darfur Genocide, and just weeks after a FIFA bribery scandal involving Danny Jordaan and under-the-counter payments made in exchange for votes.
Only a month earlier, Police Minister Nathi Nhleko was telling the public that additions to the Zuma compound at Nkandla such as a swimming pool and amphitheatre, were all vital “security features”, for which the president “is therefore not liable to pay”.
The embarrassments are leading ordinary South Africans to ask whether it is perhaps time for Zuma to go?
South Africa under Msholozi, the clan name under which Zuma is also known, has seen a bloated cabinet, one of the biggest in the world, with a concomitant increase in departmental complexity, government red-tape and an out of control civil service, as the modus operandi of the country has moved from industrial output, to the aegis of big government, a nation which produces politicians instead of productivity.
Anyone following the debate over Eskom’s tariff increases, could be forgiven for thinking that South Africans exist to fund the energy parastatal and its emphasis on Soviet-style gigantism — two large fossil fuel projects and a failed R10 billion Pebble-bed Modular Reactor programme, and now the threat of a BRICS-lead trillion rand nuclear build, for which the country undoubtedly, has insufficient foreign reserves to foot the bill, when and if it arrives.
Eskom, despite having a monopoly mandate, increasingly finds itself unable to provide electricity. The simple logic of the market has proven to be an Achilles heel. The increase in the civil service has not countered the loss of jobs in the private sector.
That the economic master-plan of the ruling party, known as the National Development Plan, along with its shibboleth of central planning and anti-privatisation rhetoric, is beginning to unravel, can be seen in the failure of other parastatals to deliver. In short, Telkom sucks, as does SAA which exists on annual bail-outs. (There are some 120 such quasi-government entities)
20 years after the constituent assembly drafted the Constitution and Bill of Rights, ushering in a universal franchise and human rights, the country is paying lip-service to its contents, institutions such as the public protector are ignored. Likewise, the judiciary.
Under Zuma, a narrow ethnic nationalism has found itself at odds with the secular values established under previous governments. The president has cemented power, rolling out salary increases for “headmen” (what no women?) under a new dispensation which favours tribal authority at the expense of citizenship and the rights of the individual.
Thus the road to serfdom, instead of the great society of Nelson Mandela.