Wednesday, November 26, 2014

Impatient South Africa

NEW YORK – The African National Congress, which has governed South Africa since the end of apartheid, is in serious trouble. Unfortunately, the country may not be far behind.

In 1994, the ANC – widely credited with ending decades of white minority rule – came to power with a near-monopoly on political legitimacy among the country’s black majority. Together with President Nelson Mandela’s moral authority, this status helped the party to accommodate a wide range of interests and establish a stable economic order without losing the support of poor black voters, many of whom fell outside that order. Although supporters’ expectations were high, so was their patience – a dynamic reinforced by the ANC’s liberation mythology and early successes in expanding housing, electricity, and social grants.

Nearly 20 years later, this patience has worn thin. While poverty has decreased slightly since 1994, inequality has vaulted upward, fueled by extreme unemployment, state incapacity, corruption, and affirmative-action policies skewed toward the upper reaches of the economy (not to mention the pernicious legacy of apartheid).

Rapid urbanization has increased the number of people living in settlements surrounding the country’s major cities, where deprivation is especially stark and government malfeasance is more widely felt. Meanwhile, a new generation of “born free” South Africans are not swayed solely by the ANC’s historical credentials, especially with youth unemployment near 45%.

As a result, the ANC’s monopoly on legitimacy is loosening. Although still electorally dominant, the party’s parliamentary representation has dropped below the two-thirds threshold required to change the constitution. And, if the 2011 local elections are any indication, its popular backing continues to decline (the ANC won just 63% of the vote). Meanwhile, growing apathy and discontent with the scope and pace of economic change has substantially reduced voter turnout.

Beyond the ballot box, violent, inequality-driven protests are on the rise, as citizens step outside the ANC and its affiliates to demand economic improvements. There has been a boom in so-called “service-delivery protests” in the settlements surrounding urban areas.

Last year’s wave of wildcat strikes in the mining sector – which precipitated the infamous “Marikana massacre” – ended up shaving 0.5% off the country’s GDP growth in 2012. Recent labor unrest on wine farms in the Western Cape reflects the same dynamic. While violence and instability have long marred the informal sector – witness the country’s high crime rate and frequent attacks on foreign traders – they are becoming more common in the formal sector as well.

These structural, “bottom up” pressures will continue to weigh on South Africa, making 2013 another year fraught with political risk. President Jacob Zuma’s sweeping re-election as ANC president at the party’s December conference was a defeat for the most radical factions, and will foster a more decisive government than the country had in 2012. But the ANC leadership will alienate leaders and constituencies from the very same areas where protests and strikes are most common, including Gauteng, Western Cape, swaths of Eastern Cape and Free State, and mining communities in North West and Limpopo.

Government efforts to control provincial spending will exacerbate tensions, as will the growing influence of Zulus in Zuma’s ANC. Retrenchment and shutdowns at gold and platinum mines –as well as the expiration in June of wage agreements in the gold and coal industries – will almost certainly spark more labor unrest, especially considering the growing rivalry between the ANC-aligned National Union of Mineworkers and the more militant Association of Mineworkers and Construction Union.

Given that the ANC’s overwhelming priority is to maintain political dominance in the 2014 elections, the party will be tempted to win public support through increased spending and statist policies, rather than implementing critical structural reforms that investors demand. Although the ANC dismissed proposals to nationalize the country’s mines, its embrace of “strategic state ownership” has brought further policy uncertainty to the sector while paving the way for a weightier government presence in related industries like energy and steel.

Similarly, the party’s endorsement of the pragmatic National Development Plan and the election of popular labor leader-turned-billionaire Cyril Ramaphosa as Deputy President are unlikely to stem the risks that it now faces. The NDP’s most urgent proposed measures – more flexible labor laws, education reform, and rationalizing local government – will be watered down by vested interests and weak governance, while its (otherwise welcome) emphasis on expanding infrastructure will be undermined by political favoritism and corruption.

Ramaphosa’s respectability will undoubtedly provide the party (and the scandal-plagued Zuma) with some badly needed cover. But the ANC government will still have to focus on short-term measures and patronage in order to shore up its electoral support. Without these steps, continued bouts of social unrest may well shake investor confidence more than unwelcome policies do.

The ANC no longer has sufficient credibility with poor South Africans to ask for continued patience in achieving “a better life for all.” It is no longer 1994, and Zuma is no Nelson Mandela.

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    1. CommentedSimon Freemantle

      If indeed I have "missed the point", then it is odd that your rebuttal in fact states precisely the point I was making - that lazy analyses of South Africa's various troubles too often neglect the country's structural strengths. And your suggestion that the "broad church" ANC will move to become "more autocratic" is in many ways contradictory, the very nature of the broadness of the institution provides a constant and regular set of checks and balances against its drift. Finally, you suggest in your rebuttal that we should "watch out" in the shorter term, though the initial article makes no such disclaimer.

    2. Portrait of Mark Y. Rosenberg

      CommentedMark Y. Rosenberg

      Simon, all that bombast and you miss the point. The ANC’s ‘broad church’ dominance has kept the post-apartheid political economy in place, despite deep - and growing - structural instabilities. It is common sense that its decline will activate these faults; indeed, it is already happening. In response, the ANC will exploit state resources and move in a more autocratic direction in order to maintain power. In the long run, South Africa’s strong institutions, active civil society and dynamic tertiary sector (well positioned to take advantage of African growth) will see the country through. South Africa is certainly not Zimbabwe, particularly because its capital is more mobile and its political elites are (now) more integrated into the private sector. In the shorter term, however: watch out.

    3. CommentedSimon Freemantle

      This is a surprisingly weak and poorly constructed article. Surprising given the author, and the august forum which hosts it. First, to equate weaknesses in the ANC with broader weaknesses in South Africa's political economy displays a poor understanding of the depth and strength of the private sector, civil society, and the robust preservation of the independence of executive, legislative and judiciary powers. Second, there is absolutely nothing new in this contribution. No new perspective, no novel analysis. It is a bland and simplistic overview of a select range of known challenges, without context or insight. Third, the article pays little heed to how the ANC has legitimately provided support and dignity for millions of poor South Africans since 1994, and similarly provides little insight into how the development of viable alternative political institutions in the country is deepening political contestation and providing the structural means for multi-party democracy.

    4. CommentedZsolt Hermann

      I think we will need to change the "tools" we observe the global crisis with, increasing the resolution, and instead of simply dealing with separate details, we start seeing patterns, connections, the whole interconnected system.
      We can deal with European problem, Chinese problem, US problem or as in this article South African problem, and of course there are different characteristics, flavors depending on history, culture, given conditions, but the overall pattern of the emerging problems is always the same.
      We are all living in a socio-economic system where the whole structure is set up to serve the benefit of a small minority, while brainwashing, exploiting the rest.
      The whole of humanity is rendered alongside a pyramid model, and despite talking about "freedom and democracy" all over the world, in each and every country, governing system, this "free democracy" is set up in a way that it is skewed towards the "few lucky" ones on top of the pyramid.
      Thus inequality and the gap between layers is increasing, but at the same time as the pyramid is losing its stable base, the "rising waters of the crisis" are presently washing away the middle class in each society, the whole structure is going to collapse, as the tip of the pyramid cannot simply float in the air.
      This collapse is already threatening with unpredictable and violent conflicts at the weaker parts of the chain or in between them, but it is only a matter of time this warning reaches even the strongest ones.
      And here comes another important condition of today's system: since we live in a totally interconnected and interdependent network, as soon as the weaker dominoes start falling there will be no stopping until all the dominoes fall, no individual or nation can escape.
      We are in a system failure and the only solution is a complete system overhaul, which given the global network we can only do together in a completely mutual and equal cooperation.