FRANS CRONJE: Why SA may be better off under No 1 than under many of his political critics - Business Day, 13 December 2016

Zuma’s Cabinet may have allowed these policies to continue and has indeed worsened some of them, but the Zuma administration is not responsible for the fact that those policies were adopted in the first place.

 

By Frans Cronje 

The outcome of the ANC’s recent extended national executive committee (NEC) meeting is perhaps not as terrible as many analysts and commentators suggest. As much as anything, the meeting was a defeat for the leftist camp of the governing party. Many of those who spoke out against President Jacob Zuma (although not all, by any means, a point that must be emphasised) were members of the South African Communist Party or carried deep leftist sympathies. If the attempted coup had succeeded, it would have amounted to a further left-wing takeover of the governing party, leaving SA in an arguably worse predicament than under Zuma.

The president can be accused of many things, but to attribute to him exclusively the parlous state of the economy is a criticism too far. SA’s weak economic performance has far more to do with the long-term consequences of the structural policy mistakes that were made long before he came to office. These mistakes include SA’s counterproductive empowerment policies, restrictive labour laws and lack of respect for property rights.

Zuma’s Cabinet may have allowed these policies to continue and has indeed worsened some of them, but the Zuma administration is not responsible for the fact that those policies were adopted in the first place.

This is the trouble with many of Zuma’s ANC and communist party critics. Within their ranks are some of the very people responsible for SA’s parlous economic performance, who now insist that the problem is Zuma.

It is easy to blame Zuma. His flawed character, and the many prominent examples of corruption that have accompanied his reign, make it all too easy for the media and the public to caricature him as SA’s biggest problem.

But the real problems lie far deeper and seldom receive sufficient scrutiny. It is possible to go further and say that the policies that still underpin those problems remain the preferred policy positions of many of Zuma’s critics.

The rising debt-to-GDP ratio and the expansion of the public service happened, for example, on Finance Minister Pravin Gordhan’s watch. He was the one who signed several hundred thousand new public service salary cheques inbetween his austerity and belt-tightening speeches.

Or take the example of Gordhan’s proposed changes to regulations under the Preferential Procurement Policy Framework Act. The act authorises a 10% black economic empowerment weighting for contracts above a certain threshold and a 20% empowerment weighting for contracts below that threshold. That threshold was initially set at R500,000 — then doubled to R1m. Now Gordhan’s draft regulations propose raising it 9,990% to R100m — a policy change that will vastly increase the government’s procurement costs even as Gordhan warns about the regrettable inevitability of income tax increases.

Deputy President Cyril Ramaphosa has championed raising minimum wage levels that will almost certainly undermine the emergence of the hundreds of thousands of small businesses needed to tackle SA’s unemployment crisis over the next decade.

Thulas Nxesi, who sits in the Cabinet and who called for Zuma’s axing at the recent NEC meeting, is a former head of the South African Democratic Teachers Union, which has done more damage to the life prospects of young black people than any other force or influence of the past 20 years.

These are just some examples of why SA may actually be better off under Zuma than under many of his critics. Should events of the NEC meeting lead to a Cabinet reshuffle, such a change may actually be a good thing.

Many business and civil society leaders have been less than circumspect in backing some of Zuma’s critics. In a sense it is, of course, a good thing that business leaders have finally found their voice — civil society activism is always to be welcomed. But in focusing their attacks on Zuma the man and not the flawed policies over which his government presides, and then compounding the error by backing his leftist critics, business leaders have got it badly wrong. Unwittingly, they are helping to delay the reforms SA’s private sector requires to lead an economic recovery. They would be better advised to stay out of political fights they do not understand. Rather than backing individual personalities, they should restrict their activist efforts to arguing for the specific policy reforms that are necessary to position SA as a more competitive economy.

Alternative Policies

There is also a danger that their activist efforts are crossing an important line. SA is a democracy. Zuma was not foisted on the country. Civil society and business may raise arguments against the man and his government. They may lead protests and warn of the consequences of failing to reform. They may propose reforms and proffer alternative policies for the government to consider. When the Constitution has been breached, they may bring court cases while remaining cognisant of the fact that, in bringing matters before the courts that should be settled in Parliament or through elections, they are placing the judiciary in a very awkward position. But they cross the line when they set themselves the goal of removing the president from office.

The ANC is entitled to pick any leader it wishes, and Parliament to elect the president as it sees fit. They have a mandate to do so. When activist efforts and protests are not sufficient to change those decisions, that is it — there is no second bite at the cherry. No civil society group was elected to lead SA. Such groups are not justified in trying to govern the country through the courts or via remote control when they do not like the decisions made by political leaders between elections, let alone business leaders who work with civil society groups between elections to change the leadership of a party or of the country.

The ultimate check and balance in our democracy is the electoral system and the votes of ordinary people. If the government of the day and the party that leads it assume a posture of immunity to criticism, it is through the ballot box that political change should take place, yet few of the governing party’s many critics in business and civil society have shown any willingness to consider supporting the policies of the political opposition.

The structural reforms SA requires are in any event unlikely to be introduced by the ANC leadership that parts of the business community and civil society would like to bring to power. If the ANC is to turn the economy around, the necessary reforms are more likely to come from the relative right of the party, an argument the Institute of Race Relations (IRR) developed in a paper entitled SA: The Rise of the Right, which can be read on our website.

I will not repeat it here other than to say that, in some respects the outcome of the recent NEC meeting is in line with the analysis developed in that paper.

Some reformist ANC leaders (as distinct from the leftists, who are again distinct from the traditionalists) understand that to allow a left-wing takeover of their party would be to fatally lessen the prospects for future structural reforms. Other ANC leaders believe that holding the ANC together will now be the priority for the party if it is to adopt reforms. Yet other ANC leaders understand that their political position is now so dire that Zuma may be the best thing the party has going for it — in the sense that his eventual axing as party leader will release a great amount of positive sentiment towards the party. You do not want to exhaust that sentiment a year before an election. Rather delay his axing to ensure the ensuing positive media cycle will run right through the election.

Dignified Exit

Our reading is that there is a strategy to replace Zuma as leader of the ANC towards the end of 2017, allowing for his dignified exit as SA’s leader around May 2018. It is perhaps not entirely accurate to say the ANC has retained Zuma as its leader because the party supports him, even though some ANC leaders including the secretary-general, have said exactly that.

The choice facing the ANC and its supporters is a very tough one. They have their pick of the communists and their dated and destructive ideology on the one hand, and the crooks and their corruption and lack of respect for democracy on the other. Between those groups is a small band of pragmatic reformers desperately trying to hold the rotten mess together. To ultimately prevail would be a remarkable political feat for them.

* Frans Cronje is the CEO of  IRR, a think-tank that promotes political and economic freedom. 

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