Any of us who expects the biscuits to fill the cardboard carton will know the sadness, the grief, of realising you are getting less than you had expected.
The same goes for SA Summits.
Take the BRICS Summit….a three-day event that was crushed to just two days, with a poorly-attended investment conference on the first day.
One hears of the actual Summit that the Indians nearly didn’t come; Putin was late, but surely the fault lay with the hard-working but inept organisers, who are thankfully banned from any event involving breweries and piss-ups.
Then came the Job Summit – did you blink? You might have missed it.
An afternoon of pretty tedious speeches from very tedious people. Even Cyril was less animated than normal. A list of things was agreed to, but not posted online until the following day. Shows how serious they all were about jobs.
And then there is the Investment Summit (rebranded Investment Conference, which cannot be a positive move.)
Today, Thursday, is Day 1 and not a lot is happening. Cyril has gone awol to open a train factory in the West Rand, which may be able to turn trains out almost as fast as our beloved countrymen torch them
A gala dinner in the evening? Media not invited. A great opportunity to get coverage is being squandered by organisers, who appear deeply dysfunctional and unable to issue timely information. There is a website for the Conference, which must have cost a fortune. Looks pretty. Hard to navigate, and lacking in fine detail. Symbolic, really, of the whole thing.
The Friday may have some meat, with announcements due on some new investment. How much of this is really new, how much of it will actually happen….? It may be difficult to pick it apart. As they no doubt intended.
And then there are break-away sessions, with a choice of three different themes, running all at the same time.
They could have stretched this into another day, to give more people a chance to listen to more stuff. But no. Conference or con?
And then on Saturday, soon after dawn, the President will be leading a stroll through Soweto. One suspects it is more about the images than about anything of substance.
Bilaterals are then promised, which may lead to some real wheeling and dealing, substance, investment.
But it may be difficult to judge this squashed Summit, and there are fears it may miss as many opportunities as the BRICS one and the Jobs get-together.
Maybe it is time that when we organise high-level events, with valued guests, we should get the professionals to put it together.
Or maybe it remains the case that when you are trying to get the right people into the right place at the right time, over a few days, you are biting off a lot more than you can chew.
Except at the gala dinner, where I won’t be allowed to bite off anything.
Welcoming the media, it seems, is an investment too far.
Finance Minister Tito Mboweni has dangled the prospect of debt-strangled SAA being allowed to collapse.
He was speaking to journalists, Wednesday, just before delivering his mini-budget address.
When asked about parastatals, which continue to receive billions of rand in bailouts, he said there should be no sacred cows in seeking solutions.
He said state companies such as Sanral should approach the markets for their funding.
And on SAA, he suggested that closure should be an option.
He gave the example of Swissair – which was in trouble, was “closed down”, and this paved the way for the launch of another Swiss airline.
“We need to be open minded,” he said. “You need to progress in your thinking to the wi-fi generation. Otherwise you are stuck in the 60s.”
Mboweni also supported belt tightening in government, and when asked about a cut in the number of departments, he suggested 20-25 ministries would be better than the current line-up – with around 70 ministers and deputies.
“There is no economic, financial or political reason to have an executive of up to 70,” he said. “But this is the President’s problem.”
He also appeared lukewarm on the NHI – suggesting that the existing infrastructure is excellent, but state health provision may need private sector expertise to reach its potential.
He said he prefers the concept of development to that of service delivery – where people wait for help.
He emphasised that red tape must not delay action. He gave the example of Vaal pollution and said that the Military has been called in to help. In his budget speech he spoke of the military supplying “engineering and other expertise”
Meanwhile he described the Giyani water project as a “cesspit of corruption”, with spending exploding.
He appeared to have been unmoved by calls to introduce zero VAT on chicken, but he did approve Zero VAT rating on sanitary pads, bread flour and cake flour.
The mini-budget was a maiden appearance for the new Finance Minister, and he appeared cheerful, relaxed and gave an impressive performance.
He said he is using his honeymoon period to say some things which equate with his most recent experience in the private sector, but which may not be in line with current government thinking.
The President’s Investment conference, which will be held at the end of next week in Sandton, is expected to eclipse the recent, rather underwhelming, Jobs Summit.
Unlike that event, which saw most of the cabinet stiffly sitting in a row while others waffled on (and on), the government team looks poised to do some actual work next week.
Economic Affairs minister Ebrahim Patel told a rather poorly-attended media briefing, Thursday, that he expects a number of announcements of new investment plans next Friday, which seems to be staged as a showcase for SA, an exercise to show that – despite all the negatives – people are still prepared to start new operations in SA.
And there are negatives aplenty – the land seizure issue, inadequate labour skills and worker unrest, crime, corruption, the challenges of meeting ever-tighter BEE rules, little worth watching on SABC……
However, Patel was playing the good cop – admitting that tough questions will need to be answered.
Moving away from the endless waffle of the Jobs Summit, the Investment Conference will have a series of focused discussions on specific sectors where investment is being most sought – agroprocessing, advanced manufacturing, ICT, mining, infrastructure. And a few others.
Lots of visitors from big corporations, both local and global. Lots of face-to-face discussions.
Patel said a key focus will be to tackle obstacles to investment, so that these can be dealt with, where practicable.
He suggested a “single market-place” will be the theme, comparing it to Davos, where a lot of movers and shakers, politicians and businesspeople, are in the same place at the same time.
He also promised that this is not a one-off, but part of a continuing process.
So expect some headlines on progress towards Ramaphosa’s goal of securing $100bn in new investment.
And if it does get boring, delegates will have the comfort of knowing that in the same Sandton Convention Centre, the big wine tasting party Winex will be underway.
A great retreat to which they can escape, where we really do show the world that when we put our minds to it, SA can shine. With wine.
Make mine a magnum, please Gladys.
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It is a common temptation, in the months before an election, for politicians to promise the moon to those voters they fear might be attracted to the similarly lofty promises of a rival party. But it would be easier to send someone to the moon than to deliver on many of the more shameless promises made by desperate politicians. The latest attention-grabbing promise, through which South African politicians have made world headlines, is that the expropriation of land without compensation will assure greater prosperity through enhanced economic efficiency and improved food security through the diversity of farm ownership.
Although there are conditions under which a reasonable argument for “land reform” could be made, governments that make such promises of expropriation under electoral duress rarely understand, or are willing to implement, the policies needed to assure the fair and efficient allocation of property in the future. That is why most such politically expedient reforms have resulted in Zimbabwe-style poverty and widespread hunger.
Recent political pressure in South Africa for uncompensated land confiscation seems intended more to satisfy a factional lust for retribution – and the enrichment of cronies – than a desire to improve the general welfare or even to assure food security. Such demands invariably come unaccompanied by any recognition of what is necessary for such a policy to have a hope of succeeding.
In South Africa, the legal processes for the transfer of property ownership are inefficient, expensively slow, and often seen to be corrupt. The inefficiency of the normal property transfer process makes it less likely that efficient patterns of land ownership will emerge in the future. Current land ownership patterns are almost certainly less well allocated than they would have been were the government capable of instituting a more competently operated property transfer system. Experience gives us no reason to believe that an arbitrary expropriation of land and its redistribution to politically favoured individuals would benefit the broader population or even maintain current levels of food production. In the absence of genuine respect for private property rights and equal legal treatment of its owners, the opposite is more likely.
Property ownership is important not because of the specific physical or intellectual assets that are susceptible to seizure. Those items can be seized only once. The creative source or steward of those expropriated assets cannot be compelled to replicate past creativity or productivity – or even to apply the attentiveness of a good manager. Governments with a reputation for theft, even under the guise of a popular redistribution of wealth, always elicit a counterproductive response from those creative individuals who are perceptive enough to see themselves as the latest political goats to be milked. They take the creativity and skills with which they once served the people of their communities and either move to less politically visible endeavours or emigrate to new jurisdictions where their personhood is better respected.
In that sense, theEconomic Freedom of the World: 2018 Annual Reportis a global measure of respect. It is a measure of how well governments respect the humanity of their residents and how well they maintain policies compatible with that humanity and the need to be free and to flourish. It is a broad-based index that should be taken seriously as a guide to all those interested in good governance. Countries with high, or rising,Economic Freedom of the World(EFW) ratings are invariably those with the highest, or most rapidly improving, standards of living.
Since the economic successes of the Reagan and Thatcher years, and the subsequent collapse of the Soviet Union and other socialistic regimes, economic freedom has been increasing worldwide, reducing poverty and increasing the potential prosperity of those people blessed by their increased freedom. But since the turn-of-the-century, South Africa has failed to keep up with that trend and has, thereby, failed to reap the promised rewards of the 1994 transition.
In this year’s EFW report, South Africa ranks 110th out of 162 countries. This leaves South Africa in the third quartile of the rankings based on data from 2016, which are the latest data available. The EFW Panel Dataset, which is adjusted to improve year-to-year comparisons, shows South Africa losing economic freedom in absolute terms. Each of the five categories of economic freedom that comprise the EFW index declined since the last report. Although there were some improvements in minor components within the area of Regulation, the most significant changes were downward within the area of Legal System and Property Rights.
Despite a record of low and slowly declining scores for the legal system overall, the judiciary had long been seen with respect, and its relatively high EFW component scores reflected that. The ratings fluctuated over time, but in the last measured year the ratings for “judicial independence” and “impartial courts” declined by 18% and 26% respectively. And as if to set the stage for, and perhaps to predict, the headlines of 2018, the rating for “protection of property rights” also dropped by just over 20%. A parliament unconstrained by respect for either constitutional limits or an independent judiciary is an institutional force that bodes badly for economic freedom. The political attacks on private property rights, not only for land but also for the right fully to exercise ownership of a business, are a symptom of the institutional and moral decline that presages economic and cultural stagnation.
Even the (largely symbolic) calls for the “nationalisation” of the South African Reserve Bank should give pause, not because the private shareholders exercise any control (they do not), but because those shareholders ostensibly oversee and bring a modicum of transparency to the operations of a government agency. In the EFW category of “Sound Money,” South Africa ranks 102ndin the world. The inflation rate remains within its official target range of 3% to 6%, with consumer price inflation showing an annual rate of 5.1% through July 2018. The Producer Price Index showed a higher rate of 6.1% through the same period. By world standards, these inflation rates are high, though they are reasonably stable and predictable.
Within South Africa, the Reserve Bank is one of the better-run institutions. The calls to nationalise an agency that has always beende factonationalised suggest that the thin façade of central bank independence could suddenly be torn away as the ruling ANC responds to shifting political pressures. Fiat money has always served the ruling class as a pre-election anodyne and as a convenient, and at times blatant, means of redistributing wealth to government and supporting politically favoured businesses. The depressing effect of inflation on standards of living goes beyond the mere loss of purchasing power, disrupting the structure of production and affecting lives in a way that few can detect.
Of more pressing concern in daily life are matters of livelihood and personal safety. The rate of economic growth has trended downward in recent years, just as economic freedom has slowly declined. Crime has long been a problem in South Africa and has been reflected in low EFW scores for “reliability of police” and “business costs of crime.” Crime rises in any society that fails to protect and show respect for life – and for the property that is part of each life. A government that fails to protect economic freedom and private property will eventually lose its ability to maintain civil order. Ultimately it will lose the respect of the people and any claim to its own legitimacy.
Richard J Grant is Professor of Finance & Economics, Cumberland University & Publications Editor, Free Market Foundation
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The latest reshuffling of South Africa’s finance minister, following the resignation of Nhlanhla Nene and appointment of Tito Mboweni, may have negative origins but it brings with it some positive energy.
Nene resigned as finance minister after it emerged that he lied about the nature of his contact with the controversial Gupta family, the friends of former President Jacob Zuma who stand accused of championing massive misappropriation of public funds in a process branded as state capture.
In an initial response to a journalist’s question, Nene claimed that he had only met the Guptas in passing. But in his recent testimony to a commission investigating state capture he admitted that he’d met Gupta family members on numerous occasions, including a number of visits to their house and their offices.
The inconsistency tarnished his integrity and sparked massive public criticism. Within a week of making his admissions he resigned. South Africa’s President Cyril Ramaphosa immediately appointed former South African Reserve Bank governor Tito Mboweni as the new finance minister.
On the one hand Nene’s departure must be hailed as setting a new tone for South African politicians, particularly for the cabinet. By falling on his sword, he has taken responsibility for his actions – a rarity in South African politics. It’s tempting to cast his action in stone as the “Nene Rule” that sets a standard for politicians to resign when in the wrong.
On the other hand the appointment of Mboweni brings back someone with considerable skills and the political finesse needed to steer South Africa out of its current economic quagmire.
Mboweni needs to hit the ground running. In late October he must present the country’s medium-term budget policy framework. All eyes will be on how he steers the challenge of rebalancing the national budget. His political skills and ranking might come in handy.
Equal to the task
Mboweni takes over the finance portfolio at a difficult time. Tough decisions will be required in a hostile environment as a strong populist wave sweeps through the ruling party, the African National Congress (ANC).
It’s therefore a positive that he commands a more senior political ranking than Nene had within the ANC. Mboweni claimed the 11th position in the tallying of the votes for the ANC’s National Executive Committee (NEC) during the ruling party’s 2017 elective conference that made Ramaphosa the President. The NEC is made up of 80 members and is the ANC’s highest decision making body between conferences.
In addition to this, Mboweni has a strong financial background. He served as governor of the South African Reserve Bank from 1999 to 2009. Prior to that he served in Nelson Mandela’s first cabinet as minister of labour.
Both experiences should help equip him to meet the economic challenges facing the country. There’s no doubt that he’s knowledgeable about financial matters and is respected among investors.
His tenure at the Reserve Bank should ensure a smooth working relationship between the minister of finance, the national treasury and the central bank. As a previous governor, Mboweni understands this important relationship while valuing the autonomy and the independence of the various institutions and their responsibilities.
High expectations of Mboweni
Mboweni will need to be a quick study. He has only two weeks in which to familiarise himself with the details of the medium-term budget.
He can’t afford to disappoint. This year’s budget will be watched more intensely than usual by key stakeholders, including investors and credit rating agencies because it follows closely on an economic stimulus and recovery plan announced by Ramaphosa. Details are expected to be unveiled in the medium-term budget.
The medium-term budget is also expected to signal how South Africa is dealing with its fiscal challenges. This is where government faces its very hard choices.
The ultimate aim must be to increase economic growth and eradicate unemployment. But to achieve these objectives the government must revise its expenditure priorities.
Expenditure on civil service remuneration, social grants and interest on government debt currently equates to 70% of the government’s tax revenue. This is clearly untenable. If not addressed, South Africa will face a fiscal cliff – the point at which these three expenditure items account for all government revenue and make spending on anything virtually impossible.
At the same time, Mboweni will have to work closely with Pravin Gordhan, the Minister of Public Enterprises, on the restructuring of state-owned enterprises. The precarious financial position of a number of state-owned enterprises is placing a heavy burden on taxpayers. Removing this burden will release resources that can be used to stimulate the domestic economy. Mboweni must therefore help with tough decisions about unaffordable vanity projects.
And, finally, Mboweni must sort out the challenges facing the Public Investment Corporation which is responsible for managing civil servants’ pension funds, and is worth over R1,5 trillion.
South Africa is in serious economic difficulty. It also faces a trust deficit owing to the state capture project of the Zuma administration. The golden triangle of trust between the government, the public and the business community has been broken. No country can succeed without this. Mboweni can play an important role in restoring it.
Serious collectors of contemporary art had already started to leave the room at the Sotheby’s New Bond Street auction house in London last Friday night as a successful evening sale drew to a close. Most people seemed more interested in getting to their post-auction dinners than in the final two lots: paintings by KAWS and Banksy, who are generally perceived to be interesting for new or young buyers but not serious collectors. KAWS, the American graffiti artist also known as Brian Donnelly, is seen as too comic; Banksy as too “street”.
That doesn’t mean they are not in high demand. KAWS’ large yellow comic face, Again and Again, sold for just over £1m, making him – in the words of auctioneer Oliver Barker – the Damien Hirst of the 21st century. And the last lot of the sale was Banksy’s 2006 Girl with Balloon, which was last year named in one survey as the UK’s favourite artwork.
Unsurprisingly, bidding was intense and the hammer came down at £860,000, making a final sales price (including buyer’s fees) of £1,042,000 – quadrupling the previous estimate of the work. But the moment after the hammer came down a faint alarm went off in the room and, shortly after, in front of a roomful of gawping faces, the canvas slipped out of the frame, being shredded in the process by some concealed machine, before being hurriedly carried away by attendants.
Under near chaotic circumstances, the sale ended. At the delayed press conference, all Sotheby’s experts would say was: “We got Banksy-ed”. And all they did was to reiterate that they had no prior knowledge of the prank, failing to shift attention away from it.
In our media-crazy society, everyone likes a prank – especially when it hits the top end of the art market which excludes all but the very rich. So to nobody’s surprise this story has gone viral, cheered on by Banksy’s “official” Instagram feed, where he not only claimed ownership of the prank, but also “documented” its genesis.
Since then, speculation around the value of the shredded piece and Banksy’s role in the art world has led to a lot of hype. But what needs to be considered here is not only value generation in the art market but ultimately the role and agency of the artist within the market’s resale structure, where artists usually benefit only marginally from the resale of any of their works. That the stunt happened during the Frieze Art Fairs, one of the most important art fairs for contemporary art worldwide, has also given it added currency.
As a case study, the prank has been so successful that it will occupy the art world – as well as academics and students of the art market – for a long time to come. It might even become art history’s most famous stunt. Who are the involved parties, for example? Despite a great deal of speculative comment, I don’t think Sotheby’s was in on the game. The story really doesn’t benefit them; it detracted from all the other good news the evening was supposed to spread.
At this point, Sotheby’s is still claiming – and it does sound plausible – not to have touched the work or its frame, following the instructions of Banksy’s studio that the frame is an integral part of the work. Again, not unusual. Neither does the inclusion of the piece in the auction come as a surprise. As a quick search on Artnet’s price database shows, no less than 26 works by Banksy have been offered this year alone at auction – most of them with very good results above estimates. Banksy is hot.
So the fact that the work sold for more than £1m is not surprising, considering both the previous auction prices of the artists and the buoyant atmosphere of the sale that evening.
More interesting, of course, is what the work is worth now. Despite excitement by the press, claiming that it would now be worth far more (and what appears to be a copycat attempt by a collector to shred his own print copy of the painting), the case has not been decided contractually yet. In a comment to the author, the auction house states it is unclear whether the sale will go through and that negotiations are still ongoing. There is a debate to be had that the buyer obviously bid on a work in pristine condition – and we won’t know if the work is worth double its sale price until it has been sold again in this state.
It’s a tempting thought – and a terrific story – but an artist’s stunt and a weekend buzz are not a guarantor for ongoing investment value. It will, however, surely alert any auction house to ensure proper due diligence and conservation examinations when taking on more of his works.
But where does Banksy stand, as someone who so happily seems to claim to stand outside the market? Given he is so against the resale of his work, has he attempted to sabotage more of his works? As mentioned above, his paintings as well as prints often come up at auction and have been an integral part of his output for years. For street artists who have become famous for often radical actions, the question of how to interact with a collector market has always been a challenge.
But one thing is for sure: if this was instigated by Banksy as a marketing stunt it was a big success. Even if the future of this particular Girl with Balloon is as yet unclear, Banksy’s name will be in everybody’s mind and his brand value has definitely risen.
So let’s wait and see what he will produce and sell next. In the meantime, the people cashing in on this story are also the so-called art experts who keep media outlets busy with comments – most of them, let’s not forget, unproven and highly speculative. And as such this story is a perfect image of the contemporary art market today – about money, but at least as much about the buzz.
The release this week of the Intergovernmental Panel on Climate Change’s (IPCC) special report on global warming of 1.5℃ above pre-industrial levels marks a critical point in climate negotiations. Billed in the media as “life changing,” the report illustrates how crossing the ever-nearer threshold of 1.5℃ warming will affect the planet, and how difficult it will be to avoid overshooting this target.
The special report takes a worldwide look at the growing impacts of climate change. For climate change “hotspots” – hot, dry and water-stressed countries like Botswana and Namibia in southern Africa – local warming and drying will be greater than the global average.
The report underscores the urgent need for countries like Botswana and Namibia to prepare and adapt – and do so quickly. The Paris Agreement’s goal of limiting global warming to well below 2°C, ideally 1.5°C, by the turn of the century will be extremely challenging. To date, mitigation pledges by nations fall far short of what is needed, with global temperatures on track for a warming of 3.2°C by 2100. Under an increasing emissions trajectory, the 1.5°C threshold could be breached as early as the next decade, and the 2°C mark the decade after.
Our analysis of the effect in Botswana and Namibia of 1.5°C, 2.0°C and higher levels of global warming shows that they’re likely to get hotter, drier and more water-stressed. The sooner southern African countries prepare and implement adaptation strategies the better.
Botswana and Namibia already know the challenges of droughts and floods. A few years ago, Botswana’s capital city Gaborone was on the brink of running out of water as the country battled its worst drought in 30 years. Neighbouring Namibia has battled with recurrent and devastating droughts and floods in recent years, especially in its northern regions, where most of the population live.
Global warming of 1.5°C would lead to an average temperature rise above the pre-industrial baseline in Botswana of 2.2°C and Namibia 2.0°C. At 2.0°C global warming, Botswana would experience warming of 2.8°C. Namibia would warm by 2.7°C.
Changes in rainfall are also projected to shift. At 1.5°C of global warming, Botswana would receive 5% less annual rainfall, and Namibia 4% less. At 2.0°C global warming, annual rainfall in Botswana would drop by 9%, with annual rainfall in Namibia dropping by 7%.
Both countries would also see an increase in dry days. At global warming of 1.5°C, projections show Botswana having 10 more dry days per year. That number rises to 17 extra dry days at 2.0°C global warming. For Namibia, dry days increase by 12 at global warming of 1.5°C, and by 17 at 2.0°C.
The impact of global warming on extreme events is also evident. Both countries can expect roughly 50 more days of heatwaves at 1.5°C global warming, and about 75 more heatwave days at 2.0°C global warming.
Tables show the projected impact of hotter temperatures.
What global warming of 1.5°C.
and higher means for Botswana.
What global warming of 1.5°C.
and higher means for Namibia.
The effects of higher global and local temperatures will be felt in various sectors key to the prosperity of people and economies in both countries.
Understanding what this will mean for sectors like agriculture, health and water, is crucial for adaptation planning and thinking about what must be done, and by when.
In a hotter, drier future there will be less domestic water available. Runoff in Botswana’s Limpopo catchment is projected to decline by 26% at 1.5℃ global warming, and by 36% at 2.0℃. In Namibia, evapotranspiration rates increase by 10% at 1.5℃ global warming and by 13% at 2.0℃, leading to reduced river flows and drier soils.
Agriculture is particularly vulnerable, with potential drops in crop yields and increased livestock losses. In Botswana, at 1.5℃ global warming maize yields could drop by over 20%. At 2.0℃ warming, yields could slump by 35%. Rain-fed agriculture is already marginal across much of the country, and anticipated climate change may well make current agricultural practices unviable at 1.5℃ and above. In Namibia, productivity of cereal crops is expected to drop by 5% at 1.5℃ and by 10% at 2.0℃
The impacts of global warming on human health are also essential to consider. Heat stress is projected to become an increasingly greater threat. At 1.5℃ of global warming, Namibia and Botswana can expect roughly 20 more days of heat stress exposure in a year. At 2.0℃, in Namibia this doubles to around 40 more days of heat stress exposure.
All of these factors become even more severe should the 2.0℃ threshold be overshot.
Urgent action is needed
The progressively serious climate impacts at 1.5 and 2.0℃ in these countries demands concerted action, both locally and internationally. Leaders from countries such as Botswana and Namibia cannot let-up on the global stage in pushing for nation states to make good on, and further improve, their pledges to cut greenhouse gas emissions in line with the Paris Agreement. As the IPCC report shows, early and decisive action will not only reduce the risks of overshooting the Paris temperature targets, but also slow down the rates of change, making local adaptation easier to roll out.
At the same time, highly exposed countries such as Namibia and Botswana need to anticipate and plan for quite rapid changes in local weather and climate. They need an acceleration in developing adaptation strategies in a way that works for all people and across the economies of these countries. The time for pilot adaptation projects and experiments is over, and the moment to start mainstreaming climate resilience into public, private and community sectors has arrived.
In parallel, governments, scientists and development practitioners need to think longer term, to consider what overshooting the 1.5°C and 2°C targets really means for adaptation. At some stage, adaptation of these systems may not be enough, and complete transformations to new livelihoods that are suitable in a 2°C+ world may be needed.
Brendon Bosworth, a communications officer with ASSAR, based at the ACDI, University of Cape Town contributed to writing this article. Tiro Nkemelang, a PhD student at ACDI and Roy Bouwer, a research assistant at ACDI, contributed to the underlying analysis.
South Africa’s once-lauded, lately beleaguered Finance Minister, Nhlanhla Nene, has had his resignation accepted by President Cyril Ramaphosa. His successor, Tito Mboweni, becomes the country’s sixth finance minister in four years.
The President is desperately trying to dig South Africa out of an unholy mess created by his predecessor Jacob Zuma and his multiple cronies in and out of the governing African National Congress (ANC). The particularly odious Gupta family have loomed large in what a succession of research projects, commissions of inquiry, books and investigative journalism projects, have labelled state capture.
Nene was formerly regarded as “clean”, having been fired by former President Zuma for refusing to fund his more ludicrous rent-seeking projects. He was replaced by Des van Rooyen for a weekend, and then left in the cold while Pravin Gordhan became Finance Minister (before in turn being fired by Zuma). Nene was rehabilitated by Ramaphosa – who defeated the entire Zuma strategy by winning the ANC (and then national) presidency. Nene’s reinstatement as Minister of Finance was widely regarded as both politically astute and market-friendly.
But then Nene dropped two bombshells: one, that he had met the Gupta brothers at their homes and offices between 2010 and 2014, but had not shared this with Ramaphosa; two, that he had refused to sign off a nuclear deal with Russia that would have simply broken the country financially for decades to come.
And now he is gone.
Did anyone pause to reflect on the fact that after a decade of impunity, this was an act of decency and moral courage? Ignore the party colours, and look at the human being. That is clearly a test all South African politicians failed abysmally. If they have a conscience they clearly forgot to dust it off and use it.
Almost by definition, anyone who is found to have past dealings with the Guptas – themselves now safely ensconced in mansions abroad – is unclean. And by definition that includes huge swathes of the political and business classes, whom the Guptas seem to have variously seduced, corrupted, cajoled, threatened or by-passed, depending on the strength of character at stake.
Many are in parliament, some are in civil society, others in the private sector – including the consultancy firm KPMG, and UK-based now defunct PR company Bell Pottinger – and elsewhere. Not all are sitting on ANC benches. Perhaps that is why the President had no option but to remove Nene. Politically, the liability was too great as an election approaches – national elections are due next year – and none are so shrill as those with something to hide.
Nene went to the Zondo Commission into state capture and ‘fessed up. Yes, he had met the Guptas. No, he had not taken bribes (well, he would say that, right?). Yes, he had been put under immense pressure to sign off on the nuclear deal which would have opened South Africa’s coffers to looters. Yes, he refused to sign, and was fired.
Remarkably, he had not told Ramaphosa about the earlier meetings with the Guptas. But, he took responsibility – unlike the lies and bluster of others caught in the act. Nene said to South Africa:
In return for the trust and faith that you have placed on me, I owe you conduct as a public office bearer that is beyond reproach. But I am human too, I do make mistakes, including those of poor judgement.
This was followed by his offer to resign. This is accountability and decency.
In any version of the world, this was a man seeking an honourable redemption. He acknowledged his own mistakes, sought forgiveness, and asked to be relieved of the trappings of office for which so many continue to drool and slobber.
Were there questions to be asked? Absolutely.
But what did he get in return? The Economic Freedom Fighters (EFF), whose leadership has repeatedly been accused of corruption, leapt to the offence, claiming Nene was “corrupt as hell” and promising to release more compromising details – which are yet to appear. The opposition Democratic Alliance (DA), desperately seeking the front foot it has lost since Ramaphosa’s ascendancy, demanded Nene’s axing and wanted other possible conflicts of interest investigated.
Empathy is the ability to understand or feel what another person is experiencing from within their frame of reference. In simple terms, to put yourself in their shoes. It is singularly lacking in politics – from Trump mocking abuse survivors to South Africa today. Shout down the other side, win by volume and crassness, see honesty as weakness, but above all win – nothing else seems to matter.
Not one politician had the decency to say ‘that was a decent thing to do.’ The lack of empathy was deafening. A lack of empathy is part of narcissistic personality disorder – an inability or refusal to identify with the feelings of others. This is a rather neat description of politicians, confirmed repeatedly.
If politicians see only personal advantage, especially from the ‘weakness’ of others – weakness defined here as honesty, seeking forgiveness, repentance – then the future is bleak.
But to all those self-serving, smug TV chasing politicians and others, whose own meetings with the Guptas, or other corrupt activities, have yet to come to light, remember one aphorism: people who live in glass houses shouldn’t throw stones.
I am a guilt-stricken carnivore. Even though I love eating meat, I have become increasingly uncomfortable with the ethics of killing animals for consumption, and with the environmental impact of the meat industry. I also have mixed feelings about gentrification. I clearly see the benefits it can bring, but I am also aware it can adversely affect local communities and businesses. One thing I have not done until now is think of these two issues in conjunction.
A few days ago, a colleague sent me an article in the British free newspaper Metro about the recent closure of one of London’s oldest pie and mash shops, AJ Goddard in Deptford. According to the article, the owner blamed gentrification (a claim that has been previously made about the closure of pie and mash shops more generally). The influx of newcomers who were vegan, vegetarian, or “into fad diets” were apparently what caused the shop’s closure after 128 years of operation.
My initial reaction was to question this claim. The owner told the Metro that he’d had a few people coming in and asking if they did vegan pies: “It’s like some kind of bad joke – we’re a traditional pie and mash shop, of course we don’t sell vegan pies.” If this was the case, I thought, why not seek to reflect the desires of local customers and start selling a vegan option? If people were coming in to ask for them, then the demand was certainly there.
The owner’s apparent refusal to sell vegan pies was because the shop was a “traditional” one (in other words, one that sells meat pies). But this claim is problematic: the contents of London pies have changed over the years in response to changes in supply and demand. Pies in the East End were originally associated with eels. The move towards meat (mostly beef) came with the overfishing of eels in the 19th century, though the tradition of eating eels is still present (most shops sell jellied eels and a few also do hot stewed eels). And, the second element of the dish, mash, was only added on a few decades later.
Meanwhile, the media charge that vegetarians and vegans are to blame fits in well with a meat industry that perceives itself as being under siege.
Across the world, there have been campaigns to prohibit vegetarian and vegan products from using meat-based labels such as sausage, steak and burger, and in France the industry has even asked for government protection from vegans.
But the closure of this south London shop raises a wider question regarding the relationship between food and identity. People’s food culture tends to reflect their class, gender, national and political identifications and as such are often slow to change. The French gastronome Brillat Savarin famously said, “tell me what you eat and I will tell you who you are”.
Britain has been described as a “nation of pie-lovers” and pie and mash served with liquor (parsley sauce), aka the Londoners’ meal, has been closely associated with East End “cockney” culture for more than a century. And so one could read the closure of AJ Goddard, and many other pie and mash shops, as an indication of the decline of cockney culture and identity.
But we could go even further and lament, with Brexit in mind, the decline of traditional English culture and identity; in terms of food culture this has included the closure of “traditional” pubs, cafes and fish and chip shops. Gentrification and veganism are thus associated with foreigners or out of touch liberal elites who not only do not understand, share or respect local culture and traditions, but actively seek to change them, and authorities who do nothing to protect them. A pie shop’s decision not to reflect the tastes of local customers could in this view be political as well as pragmatic; tied to “traditional” views of food culture.
Food culture is dynamic and not immutable. The rise and fall of pie and mash, just like other national food icons, reflects the changing nature of social and economic life in Britain over the past century.
The first pie and mash shop opened in 1844 to cater for the demands of a growing working class in East London, fuelled by the growth of the docks, and based on the flow of people (migrants) and goods (most of the eels originally served came from Dutch fishing vessels). Pie and mash were thus products of change and were probably, at the time, seen as a food fad. They were also, to an extent, products of migration from other parts of the country and from abroad. Of the three families that started the pie and mash trade in London, the Kellys, the Cookes, and the Manzes, the latter two were Irish and Italian.
The pie and mash shops that have survived have increasingly moved away from a narrow interpretation of authenticity and tradition. Most now include vegetarian options, which according to one owner are “really popular”, and some have even gone as far as providing non “authentic” sides such as gravy and chips. A few of the more modern shops have gone further and have included less traditional options such as Thai green curry and chicken tikka masala (and the latter can be arguably seen as a British national dish). One of the most successful London pie shops offers 21 different pies, including three vegetarian and five vegan ones.
All this is true. But the desire, particularly after Brexit, to lament the decline of English culture and to read events through the lens of identity politics has become pervasive. And in fact, according to the Huffington Post, the closure of this pie and mash shop had more to do with local politics and austerity than simply the influx of vegans. Apparently the owner later claimed that the real reason his shop was relocating to Kent was because of the rise in rent and business rates and the condition of the building, which is owned by Lewisham Council.
Whatever the reason, in today’s era of healthy eating, whether you are a vegan, meat eater or flexitarian, serving carbs with carbs is always going to be a hard sell.
The economic stimulus package announced by South African President Cyril Ramaphosa shows that he and his political allies are, contrary to much analysis in recent months, in charge of economic policy.
Ramaphosa insists that it is a ‘bold’ attempt to initiate economic change which will particularly benefit youth, women and small businesses . It rests partly, he adds, on ‘significant regulatory reform’.
But the package is more interesting for what it says about the politics of economic decision-making in South Africa’s governing African National Congress (ANC) than for its likely impact on the economy.
Certainly, it does not signal readiness by Ramaphosa and his allies to use their power to introduce much-needed reforms. In an article in the financial press explaining the thinking behind the package, Ramaphosa acknowledged that it rested not on new ideas but on trying to get the government to do what it has already said it will do. He wrote that it was “tempting to unleash novel policy directions” but it was far more important “to build a track record of successful implementation.”
Much of the package depends, therefore, on trying to ensure that government lives up to commitments it has already made – on, for example, funding infrastructure and allocating broadband spectrum licenses – rather than striking out in a new direction.
It is hardly surprising, then, that critics to the President’s left complain that there is no change in the government’s market-friendly approach. Indeed, a business chamber noted that it repeated much that the government had been promising to do over the past five years. The package does not depart from the policy framework which has guided government thinking on the economy for more than two decades.
This might make it seem like a non-event. In reality, the background to the package means that it is politically important.
The package’s details were announced in late September two months after Ramaphosa first announced it was on the way. At the time, he also revealed that the ANC had changed its mind and would seek a constitutional amendment to allow it to expropriate land without compensation, having previously insisted that it did not need to change the constitution to do so. Both announcements followed a meeting of the ANC’s national executive committee which makes decisions between conferences. This strongly suggested that the national executive committee had insisted on both the land and the stimulus decisions.
This seemed to send an important message on the balance of power within the national executive committee on economic issues – that Ramaphosa and his allies had been caught off guard by supporters of former president Jacob Zuma.
Ramaphosa narrowly won the ANC presidency, whose leadership, including the national executive committee, is divided almost evenly between his supporters and those who backed Zuma. His backers, who are inclined towards a market economy approach, are opposed to the patronage politics of Zuma’s faction, which has come to be associated with corruption and ‘state capture’ (using government for personal enrichment).
Ramaphosa’s chief mandate was to tackle corruption and ‘state capture’ and it was assumed that the Zuma group would try to stop him. But his opponents seem to have shifted their strategy. Instead of, as expected, complaining that anti-corruption measures were doing the bidding of white-owned corporations, they demanded change on policy issues such as land. This seemed to have wrong-footed Ramaphosa and his supporters, forcing them to react rather than to steer the ANC’s agenda.
The stimulus package seemed to stem from the same source as the land announcement – a push by the Zuma group to shape economic policy. All of this suggested that the Zuma faction was successfully pushing ANC policy in a less market-friendly direction.
But the fact that the package is firmly within the current framework signals clearly that Ramaphosa and his supporters are, after all, in charge of economic policy. It shows that they decide the government’s response to economic challenges despite the Zuma faction’s strong presence.
This does not mean that they are directing the ANC and government economic agenda. They still seem to be reacting to pressures for policy change from their rivals.
This is not surprising. Poverty and inequality are still strong realities in South Africa and many black professionals and business people still believe that they do not enjoy equal opportunities. If Ramaphosa and those who agree with him simply dismiss the calls for change, they will appear to be defending the indefensible. This allows its opponents to insist on government action – but they do not control the details when the decision to take action is turned into a concrete policy or programme.
That they were able to decide the details of the stimulus package is important if we bear in mind that the economy is in recession, which should increase pressure for more government spending – a pressure which they resisted. And, if they are able to shape the details of the stimulus package, it seems likely that they are equally able to shape policy changes on land and other issues, such as national health insurance, which are likely to be sources of pressure for change in the near future.
What is not clear is whether they are able to decide what will change – rather than just react to what their opponents want. To do this, they need to move beyond their current framework and to seek to take the economy in a new direction, which would tackle the exclusion of millions from its benefits while preserving, and strengthening, its ability to produce.
Need for a new path
It is now widely agreed that a new path is needed. Ramaphosa’s group will, therefore, remain on the defensive as long as the voices insisting that change is needed are those of their opponents. There is no contradiction between taking seriously the need for growth and investment and steering the economy in a direction which will open opportunities for many more people. On the contrary, the one depends on the other.
Given this, the voices calling for change – as well as those deciding what form it should take – should be those of the faction which insists it wants to get the economy working for all. It should not wait for the group which sees calls for radical change as a means of siphoning off the public’s resources to a small group of connected people to place the need for change on the government’s agenda.