[Source: http://www.economist.com/news/middle-east-and-africa/21610245-jacob-zumas-government-drifting-between-populism-and-liberalism-up-creek. Cartoon by Peter Schrank.]
Jacob Zuma’s government is drifting between populism and liberalism.
A WHITE woman in the fluorescent-yellow jacket of a freelance parking attendant steps into the road, gesticulating at an empty bay outside a restaurant in Johannesburg’s rich northern suburbs, as black drivers in luxurious German cars swish past, their darkened windows sealed against the chill evening air. Few scenes illustrate more starkly the erosion of white privilege since the end of apartheid two decades ago.
Inequalities remain—the median wage of whites is still four times higher than that of blacks. But a vast new black middle class has emerged. Almost half the country’s skilled workers and 40% of its senior managers are now black. Schools once reserved for whites are now filled with faces in all the hues of the rainbow nation. Absolute poverty among blacks has fallen sharply. Most homes now have clean water and electricity.
Convergence between the races of South Africa is not just economic. They are also uniting in dissatisfaction with Jacob Zuma, who recently started his second term as president. His approval rating has fallen to 46% from a heady 77% in 2009. His government, according to Ipsos South Africa, a polling firm, is only marginally more popular.
The dissatisfaction shown in surveys is not entirely reflected at the ballot box. Though its share of the vote fell, the African National Congress (ANC), which has ruled South Africa since the advent of democracy in 1994, still won a comfortable 62% of the vote at the general election in May. Scratch beneath the headline number, however, and two trends emerge that both rattle and divide the ruling party.
The first is a sharp erosion of its support in some of the country’s biggest industrial regions. Allied to this has been the rise of two rivals: the Democratic Alliance (DA), the liberal-leaning and still white-tinged main opposition party; and the Economic Freedom Fighters (EFF), a new black-populist party that wants to confiscate white-owned land and nationalise the economy’s “commanding heights”.
Despite their very different platforms, both parties have found the best fishing for votes among urban, educated young blacks seeking alternatives to the corruption, cronyism and bumbling of the ANC. DA people concede that its relatively disappointing result in May was due to a loss of potential votes to the EFF, which got more than 6% of the national tally. Though the DA’s share rose from 17% to 22%, helped by a campaign fronted by Mmusi Maimane, its charismatic parliamentary leader, it was still a long way off its target of 30%.
In any event, the rise of these rivals caused the ANC’s majority to slump by about ten percentage points in Johannesburg, the country’s economic hub, and Tshwane, which encompasses Pretoria, the capital. In both cities its share of the vote fell close to or below 50%. That raises the prospect of the ANC losing these cities in local government elections in 2016.
Also at risk for the ANC is Nelson Mandela Bay, a municipality that includes Port Elizabeth, a manufacturing centre close to the ANC’s historic heartland in the Eastern Cape. Add in Cape Town, which is already governed by the DA, and the ANC may lose sway over the country’s main economic hubs. That would be galling for a party that was swept into power in 1994 by militant trade unions and activists in sprawling industrial townships.
The second development now rattling the ANC is a rise in militancy among unionised workers and a fragmentation of support for the ANC-aligned Congress of South African Trade Unions (COSATU), the country’s biggest labour federation. In late June platinum mineworkers ended a five-month strike, the longest and costliest in the mining industry, that had been orchestrated by the Association of Mineworkers and Construction Union, an upstart and unaligned union.
A stream of concerns
Although the striking miners did not achieve their demand for a minimum monthly wage of 12,500 rand ($1,160), about double what they were earning before the strike, their wishlist is being echoed elsewhere. Workers in gold mines and industries such as forestry and farming, where the minimum wage is below 2,500 rand, are also demanding 12,500. Smaller protests against the government over largely local issues have also risen in number. The South African Institute of Race Relations, a think-tank, reckons the country is averaging four or five violent anti-government protests a day.
A dismal economy stokes much of the discontent. After a brief spurt of growth in the years leading up to the global financial crisis of 2008, South Africa has expanded at an anaemic rate of little more than 2% since. That is well below the 5% needed to make a serious dent in unemployment, which remains stubbornly above 25% by official estimates; some say the real figure is as high as 40%.
Among the reasons for such lacklustre growth are sclerotic labour laws and bungles by the government. One such was its failure either to open up electricity generation to private investors or to give the state monopoly the cash to build new power stations. As a result, a series of crippling power shortages may have slowed the country’s annual growth by as much as one percentage point.
Pulled between these contradictory demands to liberalise the economy to boost growth or to swing to the left to head off the EFF, Mr Zuma is trying to do both. As a result he is not doing either effectively. His new cabinet, which first met in early June, is a stew of competing ministries riven by factional and ideological differences.
Nhlanhla Nene, the new (and level-headed) minister of finance, says he is confident the government has united behind the growth-friendly policies outlined in a national development plan issued in 2012. Yet the ANC will struggle to enact the required reforms without fracturing its alliance with the South African Communist Party (whose members make up a big chunk of the cabinet) and COSATU.
Tilting with windmills
To be fair, at least some of the proposed policies are being put in place. The finance minister hopes to contain spending increases to avoid further downgrades in the credit ratings of South Africa’s government debt. So bottlenecks in infrastructure are partly being unclogged by luring in private capital. One particularly successful policy is encouraging private investors to build windmills and solar-power plants.
Other ministries seem to be doing their best to deter investment, however. Gugile Nkwinti, who as minister of rural development and land reform since 2009 has effected little of either, proposed in late June that farmers be forced to give half their land to their workers.
New investment in mining has all but dried up as companies wait for the results later this year of a government review of the industry’s record of black economic empowerment, code for handing a share of firms to politically connected black businessmen. Many in the industry fret that they will be told to give away further stakes.
The ANC’s muddled politics are failing to please even its most loyal supporters, many of whom are either hardened trade unionists or are decidedly middle-class. Until it decides which group it hopes to serve, it is likely to keep haemorrhaging votes without giving the economy the boost that is so badly needed.
57 700 000 (mid 2018 estimate)
4.5% y/y in December 2018 (CPI) & +5.2 y/y in December 2018 (PPI)
2.2% q/q (3rd quarter of 2018)
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