by Piet Coetzer

South African Analysis

Taking a balanced view of South Africa's current situation

President Jacob Zuma’s spokesman, Mac Maharaj
Mac Maharaj.JPG

“Sad South Africa - Cry, the Beloved Country,” is the heading of a recent article in the prestigious publication, The Economist, in which the country gets extremely negative political and economic reportage. In reaction to this, President Jacob Zuma’s spokesman, Mac Maharaj, painted a dramatically different picture in his statement. However, the  truth lies in a balance of the two views. 

The Economist's article, like many South African domestic commentators, seems not only to focus almost exclusively on negative 'facts' but is also short on holistic and global perspective.  Maharaj's reaction, in turn, hammers mostly positive elements but falls short on addressing the huge challenges that still face the country.

A point-for-point comparison of the two documents in some of the key ares helps to give one clearer perspective:

One

The Economist: In September Moody’s, a credit agency, cut South Africa’s sovereign rating, citing the declining quality of the government, growing social stresses and worsening conditions for investment.

Maharaj: The country may have received a downgrade from two rating agencies, but so have many other countries some of which are even in Europe. It is a sign of the times. The world is going through a period of serious economic upheaval. 

This point has to go to Maharaj. The global economic and financial crisis has seen even a number of so-called developing countries suffer rating downgrades.

Two

The Economist: The past two months’ industrial strife is about more than just pay or salary benefits. The protests are a symptom of a deep malaise that has taken hold of South Africa. The ANC was dealt a bad hand in 1994 and it has played that hand badly. South Africa’s difficulties are now so entrenched that the ANC looks incapable of solving them.

Maharaj:The strikes should not be exaggerated, as intimated by The Economist, to conclude that South Africa's economic fortunes will decline majorly against its African counterparts. Any such reckless conclusion would not have taken into account the strides that have been made in anchoring economic growth that has weathered the storms that even developed countries of the North could not survive. 

The Economist's report fails to place its statement in proper global perspective of societies around the world presently experiencing systemic stress due to the economic and financial crisis. The frequency of violent protests in southern Europe, for example, is on the increase. Maharaj, however, also fails to acknowledge that organisations like the Congress of South African Trade Unions (Cosatu), because of political contamination, are failing to fulfil their primary mission as a credible voice of the workers. This has greatly contributed to the “wildcat” nature of the present labour strife.

Three

The Economist: South Africa used to see large, if infrequent, foreign investment, but it has not seen virtually anysince the beginning of the year. Investors are worried about labour laws, the prevalence of strikes and the unions’ close relations with the ANC. Increasingly, they invest elsewhere.

Maharaj: In direct contrast to The Economist, a strong vote of confidence on South Africa was given during the past week by the international business community with the country's recent inclusion in Citigroup's World Government Bond Index. South Africa has attracted strong flows of foreign investment into its bonds as investors have switched to emerging markets. South Africa will be the first African country and the fourth emerging market to be included in the index and while the banking system of the North had to be subsidised by the governments, South Africa's banking sector demonstrated absolute resilience and managed to shield the economy from the economic meltdown that continues to affect many developed economies. 

Maharaj has a strong point here. Most commentators on the South African scene, including domestic commentators, tend to only concentrate on the negatives and downplay or totally ignore positive factors.

Four

The Economist:The immediate test of the ANC is its leadership election, to be held at its conference in December. Kgalema Motlanthe, the deputy president, is Mr Zuma’s most likely opponent. Some think he would be a more competent leader, but he is less popular than the president and has not officially said whether he will stand.

That leaves Mr. Zuma unchallenged for now. He came to power promising to tackle unemployment and corruption, but has accomplished little. He owes so much to South Africa’s vested interests that it is difficult to imagine him embarking upon radical reform. If he is re-elected without promising anything new, it will be a worrying sign that the ANC has failed to grasp what ails the country.

Maharaj: We have noted the tendency of late to exaggerate debates and contestation within the ruling party, the ANC as being a symptom of instability. ANC conferences are no more controversial than political dynamics in many other countries and the robust debates, though uncomfortable at times, result in policies that are agreed to by the majority which ensures stability and cohesion. The democratic exercise should be seen as a strength rather than a weakness for the country.

While the Economist has, to an extent, a point that the ANC’s internal party politics have a disproportionate impact on the country and society as a whole, it under-estimates the influence of other forces in society, such as civil organisations. Maharaj, however, strengthens this over-simplified view of South Africa by equating internal ANC democracy with democracy in the state and society as a whole.

It is clear that South Africa faces a challenge to ensure a more nuanced and balanced view of the state of the nation. As reported last week the time has probably arrived to have a holistic and all-inclusive review of the  social contract that brought the country democracy in 1994: from the party list system in national elections to the acceptability of institutions like trade unions entering into formal relationships with political parties, that inherently leads to conflicts of interest.

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