South Africa’s Fight Between Hostile Brothers

Today’s conference vote for leader of the African National Congress is make-or-break for the ruling party, though probably not for the society as a whole. More than 4000 voting delegates to the city of Polokwane must decide between two presidential candidates, Thabo Mbeki and Jacob Zuma.

Mbeki is the current president of the party and the country, but cannot legally seek reelection as head of state in 2009. Yet the ANC’s own constitution makes its president the ruler of the government, and no one doubts the ANC will again score around two thirds of the vote in that poll. The question is whether Mbeki can retain ANC power, now coming from behind in an epic battle?

Zuma is the disgraced ex-deputy president of the government, fired by Mbeki in mid-2005, although still the current deputy ANC leader. He was accused of corruption during negotiations for the government’s $5 billion arms deal (his bribery take was allegedly $80 000 from the French firm Thale); his closest financial confidant, Schabir Shaik, is presently in jail for facilitating the deal.

Zuma was later charged with raping a young (HIV+) woman – a family friend – and admitted to taking a shower afterwards as protection. His supporters burned effigies of the woman outside the court during her trial. Zuma declared it consensual sex, and was acquitted.

Zuma’s ethnic base (Zulu) is strongly mobilised but he also enjoys support across the country in part because of the lower-income majority’s disgust at how little has changed since liberation in 1994.

Both served the anti-apartheid cause for decades in exile, Zuma as a (relatively ineffectual) military commander and Mbeki as the leading diplomat. Zuma’s peasant background gives him a much more sensitive ear to political rumblings than the elitist, alienating and often overly intellectual Mbeki, who trained at Sussex and the Lenin Institute in Moscow so is able to pepper his weekly newsletter with a quaint Marxology.

In ANC branch nominations late last month, Zuma surprised Mbeki with his 60-40 margin, including endorsement from the ANC Women’s League. He should win the party election convincingly, but Mbeki–an accomplished Machiavellian – cannot be counted out, and in any case that would not be the end of the story.

After all, the socio-economic status quo is unacceptable by all accounts, save those of the top two ANC leaders. ‘Nothing will change’, Zuma promises international financiers who for years have panelbeat SA’s pro-business economic policy.

In reality, expressing a variety of policy/delivery grievances, grassroots activists have ratcheted up protest activity to unprecedented levels, with more than 20 000 separate demonstrations recorded by the police over a 24 month period in 2005-07, after about 6000 over 12 months in 2004-05. The rate increased further this year, thanks to the longest-ever public sector workers’ strike.

So as the ANC conference begins, independent progressives wonder:

* can Mbeki pull out all the state’s resources to win reelection to the party presidency (or if not, still retain maximum power ahead of the 2009 national elections)?

* will the Mbeki-Zuma battle continue to degenerate into a full-fledged conflagration that splits the ruling party?

* or will the ANC ‘big tent’ once again open some flaps on the left and draw in dissidents?

* is there perhaps a genuine policy opening ahead for the centre-left (and even the left), as trade unionists and leading communists provide crucial backing for Zuma’s campaign?

* or would a president Zuma clamp down hard upon taking over state power in early 2009, given his and some supporters’ traditions of militarism, nationalism, patriarchy, ethnicism and (passive) neoliberalism?

* or as another option, are Zuma’s many profound weaknesses to be welcomed by independent leftists, as the basis for a ridiculous, weak presidency?

* what structural power shifts might this contest signify, given both the profound paranoia expressed by the neoliberal bloc and the ANC’s paralysed socio-economic imagination?

* is the corruption-ridden ruling party capable of being reformed, or is a new people’s/worker’s party inevitable?

* or should most independent activity aimed at social change continue to eschew electoral politics?

I don’t know the answers to these questions. But two tragedies are unfolding: the independent left’s inability to make a dent in popular consciousness, and the ANC’s debate boiling down to a personality contest.

It didn’t have to be, for class struggle over economic policy should be on the front burner.

As Business Day newspaper reporter Wilson Johwa put it a few weeks ago, ‘Despite Mbeki’s shortcomings, prudent economic management has been one of his key successes, hence market jitters that a Zuma presidency would take a radically different course.’

That might have been grounds for optimism, but then Zuma was called in by both Merrill Lynch and Citibank to explain himself.

Might we imagine Zuma addressing these bastards as follows?

‘You international financiers have wreaked havoc on the South for more than three decades: * with your loans to dictators like the apartheid regime, * with your Third World Debt Crisis from the early 1980s which completely wiped out our 1960s-70s socio-economic progress, * with your Emerging Markets crises starting in Mexico in 1994 and continuing across the world, including destruction of post-apartheid SA’s currency on four occasions, and now, * with your Subprime Mortgage gambles which suckered African-Americans and other low-income people into the US real estate bubble leaving them to now suffer wealth shrinkage more severe than at any other time in modern history – at the same time threatening the safety of the world financial system.

‘Your two institutions had to fire your CEOs Stan O’Neal and Charles Prince for incompetence and write off more than $20 billion in bad investments. And you’re telling me I must dance to your tune, to calm your goddamn jitters? Actually, you should calm OUR jitters!’

Nah, it’s simply inconceivable.

On the one hand, a bourgeois organic intellectual like William Cline of the Peterson Institute for International Economics offered this quote recently: ‘You’ve basically got capital market jitters about the United States.’

On the other, Zuma would be crucified by the mainstream media and the markets if he made such an obvious point about Merrill and Citi.

Zuma visited Houston late last month, hosted by spooky Stratfor, a CIA-related thinktank. As our Centre for Civil Society founder Adam Habib put it, ‘Zuma should explain the US visit, which placed him on the platform of an institution that may violate the very principles of the ANC’.

(In contrast, Habib, a prolific, well-respected scholar and leading political commentator – and by coincidence a Muslim filmed addressing an anti-war rally in 2003 at a US consular office here in Durban – was last year banned from entering the US by the proto-fascist Homeland Security gatekeepers, so it is important for you readers to sign his ACLU petition).

What Stratfor and the others confirmed is that Zuma is an Mbeki mini-me on neoliberalism. But is conventional wisdom correct, that Mbeki’s strength is economic stewardship? Specifically, as finance minister Trevor Manuel bragged this week, does SA enjoy ‘a level of macroeconomic stability not seen in the economy in decades’?

* Stability, ahem. The value of the Rand in fact crashed by more than a quarter in 1996, 1998, 2001, and 2006, the worst record of any major currency, which in turn reflects how vulnerable SA has become to whimsical international financial markets thanks to steady exchange control liberalisation starting in 1995.

* SA has witnessed GDP ‘growth’ since 1999, but this does not take into account the depletion of non-renewable resources; if this factor plus pollution were considered, SA would have a net *negative* per person rate of national wealth accumulation, according to even the World Bank.

* SA’s economy has become much more oriented to profit-taking from financial markets than production of real products, in part because of ‘sado-monetarism’. From March 1995 (when the finrand exchange control was relaxed), the after-inflation interest rate rose to a record high for a decade’s experience in SA economic history, often reaching double digits. After a recent 3.5% spike, consumer and housing credit markets are badly strained by serious arrears and defaults.

* The two most successful major sectors from 1994-2004 were communications (12.2% growth per year) and finance (7.6%) while labour-intensive sectors such as textiles, footwear and gold mining shrunk by 1-5% per year, and overall, manufacturing as a percentage of GDP also declined.

* Government admits that overall employment growth was -0.2% per year from 1994-2004 – but -0.2% is a vast underestimate of the problem, given that the official definition of employment includes such work as ‘begging’ and ‘hunting wild animals for food’ and ‘growing own food’.

* The problem of excessive capital intensity in production – too many machines per worker – will probably get worse. SA’s Industrial Development Corporation (a state agency) forecasts that the sector with the most investment in the period 2006-2010 will be iron and steel, with a massive 24% rise in fixed investment per year. But iron/steel is also one of the leading sectors for job-shedding, with employment expected to fall 1.3% per year, in spite of–or indeed because of – all the new investment.

* Overall, the problem of ‘capital strike’–the big business failure to invest – continues, as gross fixed capital formation hovered between 15-17% from 1994-2004, hardly enough to cover wear-and-tear on equipment.

* Where did businesses invest if not in SA? Dating from the time of political and economic liberalisation, most of the largest Joburg Stock Exchange firms – Anglo American, DeBeers, Old Mutual, SA Breweries, Liberty Life, Gencor (now the core of BHP Billiton), Didata, Mondi and others – shifted their funding flows and even their primary share listings to overseas stock markets.

* The outflow of profits and dividends due these firms is one of two crucial reasons SA’s ‘current account deficit’ has soared to amongst the highest in the world–at 8.1% of GDP this quarter – and is hence a major danger in the event of currency instability, as was Thailand’s (around 5%) in mid-1997.

* The other cause of the current account deficit is the negative trade balance. Blame this on a vast inflow of imports after trade liberalisation, which export growth cannot keep up with.

* Another reason for capital strike is SA’s sustained overproduction problem in existing (highly-monopolised) industry. Manufacturing capacity utilisation fell substantially from the mid 80s% range during the 1970s, to the high 70s% range during the early 2000s.

* So where did corporate profits go, if not into overaccumulated plant, equipment and factories? The answer is obvious: speculative real estate and the Johannesburg Stock Exchange. There was a 50% increase in share prices during the first half of the 2000s. The property boom began in 1999 and by 2004 house prices had risen by 300%, in comparison to just 60% in the US market prior to the burst bubble, according to the International Monetary Fund.

In sum, is this ‘macroeconomic stability’? Or instead, a parasitical, slow-growth, high-poverty, unemployment-ridden, ever more unequal, capital-flight-prone, volatile, vulnerable, elite-oriented economic machine plowing over poor people, whose gains appear only as temporarily restored profitability for big capital and a conspicuous consumption binge for a credit-saturated petit-bourgeoisie?

If so, isn’t it convenient that the problems above are largely off the public agenda, and hence like the US, we’re witnessing a contest between capitalist tweedledum and tweedledee?

PATRICK BOND directs the Centre for Civil Society, which on Thursday convenes an e-debate on the implications of Polokwane for the independent left–to join us see http://www.ukzn.ac.za/ccs

 

 

 

Patrick Bond teaches at the University of Western Cape School of Government, South Africa. His research interests include political economy, environment, social policy and geopolitics. He can be reached at: pbond@mail.ngo.za

[CDATA[ $('input[type="radio"]
[CDATA[ $('input[type="radio"]
[CDATA[ $('input[type="radio"]
[CDATA[ $('input[type="radio"]