Frans Cronje’s ‘Good News’ diagnosis debunked – Gabriel Crouse - Biznews

In response to Frans Cronje’s “Good News” political diagnosis for South Africa – which he delivered at the BNC#6 conference in Hermanus – Gabriel Crouse aims to debunk the claims that the SRF chairman made in his keynote address.

Gabriel Crouse

Dr Frans Cronje is arguably the best public analyst in South Africa, and a dear former colleague. He deserves some criticism. His most recent diagnosis of South Africa is wrong.

There is something painfully ironic about the fact that the day after Cronje delivered his BizNews 6th Conference keynote address with the conclusion that ‘I think the country is more strongly positioned than it was five or six years ago’, the NCOP passed the Expropriation Bill, which will allow the state to expropriate private property without compensation. This bill, and those like it, went without mention.

On what matrix did Cronje conclude his speech by saying the rainbow republic ‘is more strongly positioned’ than it was back in 2018? The answer is not obvious. His speech included data, lots of it on social relations particularly, but none comparing 2018 to now. The only empirical point spanning this period was the increase in privately produced electricity.

But if Cronje had compared any basic economic indicators between the beginning of President Cyril Ramaphosa’s administration, and today, he would not have been able to create any misimpression of a ‘stronger now’ positive trend. The Ramaphosa report card, as a car mechanic once joked, only looks nice if you first blind yourself by staring into a solar panel.

Groenewald also stated that the JSE has lost a fifth of its value, in dollars, in this period while the S&P 500 has gained 75% and the Nasdaq-100 gained 147%.

This video of FF+ leader Dr Pieter Groenewald makes the point better (and has racked up half a million views). ‘When you became the president in 2018,’ he said to President Cyril Ramaphosa after the latest Sona, ‘the growth rate was 1.3%. Last year it was 0.9%…When you became president in 2018 the local currency against the dollar was R11.55. Yesterday it was R18.92. That’s under your leadership.’

‘Those are the realities,’ Groenewald repeated. ‘If you go and look at the unemployment rate when you became the president the unemployment rate was 24%, it is now 32%.’ Youth unemployment, he also noted, had increased by 20 basis points to 60%. 

Public debt has worsened too. On the standard form of measurement it was roughly half of GDP when Ramaphosa came to power, and is now above 70%.

‘The murder rate when you became the president was 35 per 100,000 of the population. It is now 45 per 100,000 of the population,’ Groenewald said. 

‘Stronger’? No. More lethal.

South African corruption has gotten worse too. According to this World Bank index South Africa suffered the fastest decline in corruption control according to a World Bank index of any sovereign democracy on the planet since the 1990s, with the worst single drop hitting in 2022.

In sympathy with Cronje, who is a friend and a gentleman, I concede that it is foolish for people to pretend that South Africa is simply ‘the worst’. As World Bank data shows, we are roughly in the middle of the pack, globally, when it comes to corruption. 

But the rate of change is awesome. South Africa’s corruption control has fallen at the fastest rate of any working democracy on record over my lifetime. Sometimes, in qualified ways, we really are the worst. The corruption change is worth emphasising because expressing the notion that South Africa ‘is more strongly positioned’ to combat corruption now than it was six years ago is, whether at a Biznews Conference or a Maverick Insider conference, probably the most dangerous mistake that I think most analysts make in this country, but I will come back to this point further down.

As Cronje could not have been talking about the economy, or crime, or corruption, what could he mean by saying South Africa ‘is more strongly positioned’ now than it was circa 2018?

The short answer is that he meant the opposition is now stronger than it was during Ramaphoria, which is true. But the opposition is not ‘the country’, it is not even most voters. The opposition, broadly defined, will double from 20% in 2004 to an expected 40% in this year’s election. That is according to Cronje’s highly credible reckoning, and I agree. This means the ANC and its ideological allies will get about 60% of the vote in May.

To mistake the part for the whole is a problem. Mistaking the opposition getting stronger for the country getting stronger in socio-political analysis is an error worth correction.

Another way to describe it is by reference to Cronje’s key claim, which is correct, that South Africa’s electorate acts as a kind of ‘natural immunity’ that is disposed to combat this country’s main sickness. If the body politic patient is bedridden, dehydrated (literally), and emaciated (literally) and getting worse on every vital sign in the beeping hospital, then imagine a doctor who says,‘Well, the good news is that the patient is actually in a stronger position now than it was before he fell flat from sickness, because now his immune system is getting excited’.

I think it would be decent, with great respect, to push back. The immune system is not the organism, and the opposition is not the country. The former are strengthening, good, but it is best not to confuse matters by claiming that the latter is stronger now too.

There is another problem with Cronje’s analysis that pops out, using his ‘natural immunity’ metaphor. His repeated claim is that if South Africa remains a proper democracy then the electorate will bring about positive change. I fully agree. But that is a little bit like the good doctor saying, ‘Your immune system will definitely beat this sickness, if you don’t die first’.

That is not any consolation if the immune system is losing the race against time, which brings us back to the question of whether South Africa is now better, or worse, at beating corruption than it was five or six years ago. Cronje submits, again correctly, that if a hole is blown in South African public finances this will significantly increase the likelihood of a collapse into fascism.

I say corruption control is now worse than it was, so that scenario is now more likely. There are many reasons for this, but the simplest is the passage of the Public Procurement Bill, which is like steroids for corrupt patronage in the R1.1 trillion+ annual procurement spending. This bill will, if passed into law, cripple public finances in exactly the way that has preceded the collapse of democracy, and the rise of fascism, every time that fascism came as a ‘surprise’.

Still, patronage networks alone have never been quite enough to destroy democracy, but what about expropriation without compensation (EWC)? Last year US Congressman John James said, ‘There is no country in the world that has remained democratic after removing its population’s private property rights and I remain concerned about the ANC’s democratic drift away from constitutional rule.’

The rainbow republic owes a debt to Cronje for leading the largest civil society charge against EWC when he was still CEO of the Institute of Race Relations. But despite some heroic efforts and active participation by hundreds of thousands of South Africans, EWC is now closer than ever before, and certainly closer than it was six years ago. The ANC is weeks, or possibly even days, away from passing the final technical amendments with a simple majority, which that party commands in the National Assembly.

This will not change everything overnight, but it will define an existential challenge to this country over the next five years. The ‘natural immunity’ will win, only if it is given the chance. But Congressman James is right. That has never happened. Voters that let their property rights get taken away have never, and I really mean never, been able to keep their votes fair and square. 2029 here we come.

Cronje ended his ‘stronger position’ conclusion with a genial invitation to sceptical criticism, which I have been happy to supply. I aim to follow in the footsteps of his wisdom in saying that I might have missed the mark, as to err is human. Critical feedback is most welcome. In the meantime, cherish your vote.

Gabriel Crouse is a Fellow at the Institute of Race Relations

https://www.biznews.com/leadership/2024/03/24/frans-cronjes-debunked-gabriel-crouse