Much noise, few decisions expected

As observers, analysts, the business community locally and wider and indeed the country are keenly watching developments at the ruling ANC’s national general council (NGC) this week in Durban, indications after the first of the meeting’s five days were of less overt drama and battles than most anticipated. The situation surrounding the Youth League (ANCYL) and its president Julius Malema might, however, be the one exception.

President Jacob Zuma’s opening speech was welcomed and praised by both the ANC’s governing alliance partners, the South African Communist Party (SACP) and the Congress of South African Trade Unions (Cosatu). Tellingly both the ANCYL’s Malema and its secretary-general Vuyiswa Tulelo refused to comment.

Zuma told the conference: "We have noted some regrettable incidents, particularly relating to the ANC Youth League conference, which are unacceptable and need to be dealt with."

After the congress the party's leadership would work with the league "intensively" to deal with these organisational problems, he said.

Key economic data is also due this week and could give a fresh perspective on the strength of South Africa's recovery, but the figures are unlikely to have more impact on investor perceptions than the NGC’s deliberations.

More insight into the health of the job market will come today when Stats SA releases the results of the quarterly employment survey of 22 000 businesses in the second quarter.

Unemployment stands at more than 25% after 61 000 jobs were lost in the second quarter, according to Statistics SA's latest quarterly labour force survey of households, which includes the informal sector.

Policy review

The NGC  is largely a policy review occasion. While leaders cannot be removed or elected here, motions of no confidence can be tabled. This however looks unlikely after the first day.

With the exception of a media tribunal, policy decisions are also mostly expected to stand over until the ANC national conference in 2012.

Some developments and expectations this week, some of which are already showing after the first day, include:

• The leaders of the various organisations and factions of the ruling alliance are likely to try to gloss over their differences and present a united face at the NGC;
• Heated discussions on a number of policy issues are expected, but most of these may result in deferred compromises. Thus, the NGC in Durban is more likely to produce a lot of noise rather than actual decisions;
• The tone of President Zuma’s opening speech seemed to promise a tightening of discipline and action against the ANCYL  and others who are promoting premature leadership succession campaigns;
• While a number of economic policy matters will be discussed, finance minister Pravin Gordhan at a side event reminded delegates and members of the business community that South Africa needed growth of 6.5% if it were to create much-needed jobs; and
• Markets will be watching the NGC closely for any shifts in economic policy with reactions a possibility. However while tough debating on economic issues is anticipated, no firm decisions are expected at this stage;

The nationalisation proposal has gained support in varying and qualified degrees from varying quarters, the latest being from billionaire businessman and Human Settlements Minister Tokyo Sexwale who has called for balanced consideration.

While the nationalisation issue and issues like inflation targeting and the exchange rate will probably remain subject to further discussion, there  is likely to be broad agreement among the parties on industrial policy as contained in Cosatu’s new economic policy document.

Although a deal in the public sector still has to be reached after suspension of the strike earlier this month, our view is that the labour relations situation in South Africa will now start normalising and stabilising again. However, the longer-term toll of this wage-negotiation and strike season is yet to be felt.

Cosatu may try to use the NGC meeting to try and score some left-shifting policy points, as well as trying to shift the centre of power away from the ANC and into the alliance where it would give the left a greater say in how South Africa is governed. But, for Cosatu the real indaba will be at the forthcoming alliance summit.

Media tribunal

It is literally still early days and much can happen during the week. However, at this stage it is anticipated that the leaders of the various organisations and factions of the ruling alliance will try to gloss over their differences and present a united front.

Heated discussions on a number of policy issues are expected, but most of these may result in deferred compromises. The exception may be an immediate, but qualified decision for government to proceed with implementing some form of a media tribunal. This was already adopted as ANC policy at Polokwane in 2007.

This issue may also be used to deflect attention away from the ANC and the alliance’s own serious squabbles and troubles. The question is how much of the actual policy adoption and decision-making will be deferred to the ANC’s national conference in 2012? For the mid-term NGC is really only there to review policies.

Rather than changing existing policies or adopting new ones, it is more likely to give an indication of what will follow at the 2012 national conference. Thus, the NGC in Durban is more likely to produce a lot of noise rather than actual decisions.

But, the tone of President Zuma’s opening speech seemed to promise a tightening of discipline and action against the youth league and others who are promoting premature leadership succession campaigns.

We will be filing update reports here during the cause of the week.