tag:theconversation.com,2011:/global/topics/south-africa-downgrade-27748/articlesSouth Africa downgrade – The Conversation2018-01-14T15:19:09Ztag:theconversation.com,2011:article/900952018-01-14T15:19:09Z2018-01-14T15:19:09ZRamaphosa takes on ANC leadership role with alacrity: and clarity of intent<figure><img src="https://images.theconversation.com/files/201839/original/file-20180114-101518-lwtkib.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">ANC President Cyril Ramaphosa celebrates the party's 106th anniversary with its deputy general secretary Jesse Duarte and president of South Africa Jacob Zuma.</span> <span class="attribution"><span class="source">Reuters/Siphiwe Sibeko</span></span></figcaption></figure><p>Cyril Ramaphosa, the newly elected President of South Africa’s governing African National Congress, made his position clear when he delivered a much anticipated <a href="https://city-press.news24.com/News/anc-president-cyril-ramaphosas-january-8th-statement-20180113">speech</a> to mark the ANC’s 106th birthday over the weekend.</p>
<p>The statement has historically set the tone for government and informed the annual state of the nation address delivered by the president of the country at the opening of parliament in February. It also outlines the five-year mandate of the ANC’s decision making body, the <a href="https://www.timeslive.co.za/politics/2017-12-21-anc54-these-are-the-80-members-elected-to-the-nec/">National Executive Committee</a>. </p>
<p>Ramaphosa’s speech had particular significance because even though he’s been elected as the new president of the ANC he won’t take over the reins of state until 2019 when President Jacob Zuma is due to step down after the next round of national elections. That’s if the normal pattern of succession unfolds. <a href="https://www.timeslive.co.za/politics/2017-12-18-the-anc-has-a-new-leader-but-south-africa-remains-on-a-political-precipice/">Rumours are rife</a> that Zuma will be forced to step down before then.</p>
<p>Given the controversies swirling around Zuma and the legacy of his presidency, South Africans wanted to gauge, among other things, what the ANC considers to be the main challenges facing the country. And how it plans to face them. </p>
<p>Ramaphosa didn’t disappoint. It was clear – as well as remarkable – that the ANC’s members and its leaders have begun to unite behind a man they now <a href="http://www.dispatchlive.co.za/news/2018/01/12/ramaphosas-new-social-media-names-buffalo-silili/">affectionately call Silili</a> - a derivative of the name Cyril. This was clear from the welcome he was given by ordinary people as he did a walkabout in the Eastern Cape town of East London as well as the reception he got from the tens of thousands of ANC supporters who came to hear him in the stadium. <a href="http://www.huffingtonpost.co.za/2018/01/13/crowd-boos-zuma-4-times-at-anc106-celebrations-in-east-london_a_23332489/">The hostility</a> Zuma elicited from the crowd stood out in sharp contrast.</p>
<p>In addition, Ramaphosa is looking comfortable in his new role. It was evident from the speech he delivered that he feels confident enough to speak his mind on some of the big issues facing the country. Take this comment on state owned enterprises and corruption.</p>
<blockquote>
<p>We need to act with urgency and purpose to restore state owned enterprises (SOEs) as drivers of economic growth and development. Several key SOEs are in financial distress, threatening not only their own operations, but the national fiscus. Many of these enterprises have experienced serious governance lapses and poor delivery of their mandate. These challenges have been exacerbated by state capture, through which billions of rands have been illegally diverted to individuals.</p>
</blockquote>
<p>But there’s no gainsaying that Ramaphosa faces a tough year ahead as he navigates what is essentially a transitional period for the ANC, and for the country. </p>
<h2>Ramaphosa’s trademark</h2>
<p>Ramaphosa clearly meant to get off to a strong start. As he began his speech, he sounded like a disciplinarian busy extolling the virtues of starting on time. He pointed out that both the gala dinner the evening before and his speech ran to schedule. This was no mean feat – it’s not uncommon for ANC events to start hours later than scheduled.</p>
<p>There was another sign of the kind of leadership he intends to impose on the ANC: he regularly went off script to emphasise a rules-based approach to transforming the economy. So the dismantling of monopolies and oligopolies in the private sector will be done through the expanded mandate of the Competition Commission to create a more competitive economy. </p>
<p>Ramaphosa also appeared to be able to straddle difficult discussions with ease. He addressed hot topics, staying true to the policy decisions taken by the ANC conference. </p>
<p>Take the issue of the Reserve Bank and a decision by the ANC conference that its ownership structure should be changed from private to public ownership. Ramaphosa affirmed the independence of the bank but also called on government to ensure its full public ownership. </p>
<p>But it isn’t going to be an easy five years. These policy decisions, as well as others, will be difficult to implement. It will be interesting to see how Ramaphosa and his national executive committee navigate these waters. </p>
<h2>Room for manoeuvre</h2>
<p>The difficult work begins now. </p>
<p>Ramaphosa’s rules-based logic is likely to provide him with political mileage. In particular, it’s likely to earn him the confidence of a divided national executive committee. </p>
<p>The other thing that’s likely to give him room for manoeuvre is his emphasis on unity and party cohesion. This should help him counter perceptions that he’s cut from money rather than from the ANC’s culture and traditions given his cosy relationship with South Africa’s captains of industry as a result of his long stint in the private sector.</p>
<p>The time between now and the 2019 national elections is, in effect, a transitional period that needs to be characterised by strong backroom negotiations on a range of difficult issues. These include the removal of Zuma, as well as some of his problematic cabinet members, and the recapitalisation of state owned institutions. </p>
<p>There is a lot of confidence-building that the ANC leadership has to do. Zuma has weakened the ANC – as well as the government. And the South African economy has been haemorrhaging for the past 10 years. Confidence has been hit by the weakening of state owned enterprises such as South African Airways and the country’s energy utility Eskom, <a href="https://theconversation.com/public-enterprises-played-a-big-part-in-south-africas-credit-ratings-downgrade-75745">downgrades</a> by international rating agencies, corruption in the private and public sectors, investigations into state capture and widespread incidences of racism. </p>
<p>If Ramaphosa fails to hold the party together while simultaneously digging the country out of the hole that it’s in, a big question mark will continue to loom over the ANC’s elective fortunes in 2019.</p><img src="https://counter.theconversation.com/content/90095/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thapelo Tselapedi receives funding from the Centre for the Study of Democracy at the University of Johannesburg.
</span></em></p>Cyril Ramaphosa seems to be on the way to uniting a fractious ANC. But he’s got a rough road to travel before he can claim any victories.Thapelo Tselapedi, Politics lecturer, Rhodes UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/771942017-05-07T12:41:01Z2017-05-07T12:41:01ZZuma’s attack on capital is digging South Africa into a deeper hole<figure><img src="https://images.theconversation.com/files/168106/original/file-20170505-21018-1exv774.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">REUTERS/James Oatway</span></span></figcaption></figure><p>South Africa’s governing party, the African National Congress, is adopting a dangerous political approach used in failing states like Algeria, Zimbabwe and Venezuela. Its aim is to deflect attention from its <a href="https://www.project-syndicate.org/commentary/south-africa-zuma-knowhow-shortage-by-ricardo-hausmann-2017-03">policy failures</a> and from numerous scandals surrounding President Jacob Zuma, his <a href="http://city-press.news24.com/News/the-rise-and-fall-of-duduzane-zuma-20160409-2">family</a> and the politically connected <a href="http://www.bbc.com/news/world-africa-22513410">Gupta</a> network.</p>
<p>The approach was allegedly crafted by <a href="http://www.timeslive.co.za/sundaytimes/stnews/2017/03/19/White-monopoly-capital-chosen-distraction-in-PR-strategy-to-clear-Guptas1">Bell Pottinger</a>, a London based public relations firm. It focuses on two concepts. </p>
<p>The first is the term “white monopoly capital”. The phrase <a href="http://www.timeslive.co.za/local/2017/03/11/What-exactly-is-%E2%80%98white-monopoly-capital%E2%80%99-Mzwanele-Manyi-offers-a-definition">broadly refers</a> to control of the economy by apartheid beneficiary capitalist oligopolies at the expense of South Africa’s black majority. </p>
<p>Accompanying it is the term “radical economic transformation”. This is defined differently by various senior government officials. But is <a href="http://www.702.co.za/articles/251821/so-what-exactly-is-radical-economic-transformation">understood to mean</a> rapidly changing the economy’s ownership, control, and production patterns in favour of the previously disadvantaged.</p>
<p>However, beyond damaging South Africa’s social fabric, framing the country’s current economic impasse in such a dichotomous politically charged way has negative consequences. </p>
<p>Firstly it distracts attention from the private sector’s real sins. This makes it more difficult to objectively hold business to account for its own nefarious activities. These include tender fraud, collusion, price fixing, fronting, illicit capital flows and <a href="https://panamapapers.icij.org/">tax evasion</a>. Framing the discourse as “white monopoly capital” muddies the waters. It becomes unclear whether exposing private sector crimes is merely a politically motivated assault, or an attempt to uphold the law. </p>
<p>Secondly the ongoing rhetoric will further damage the chances of economic recovery. This is because it will deter long-term domestic and international investment. It will also encourage companies to move their <a href="http://www.businesslive.co.za/bd/economy/2017-04-28-more-investment-in-sa-likely-to-be-put-on-ice/">capital elsewhere</a> and use complex tax avoidance mechanisms.</p>
<p>Thirdly trumpeting vacuous slogans is also unlikely to raise the prospects of credible policies that will deal with the country’s structural challenges.</p>
<h2>Populist slogans don’t fix structural challenges</h2>
<p>Over the last two decades South Africa has failed to modernise its labour and education systems. This has meant limited success in rolling back <a href="http://www.politicsweb.co.za/documents/south-africas-troubles-a-diagnosis">poverty, inequality and unemployment</a>. As a result the country has one of the highest unemployment rates and <a href="http://www.worldbank.org/en/country/southafrica/overview">gini coefficients</a> in the world.</p>
<p>The structural problems in the education system have resulted in <a href="http://www.universityworldnews.com/article.php?story=20100114190733824">poorly prepared</a> senior school and <a href="http://www.capetalk.co.za/articles/240257/black-students-are-not-adequately-prepared-for-university-life-edu-professor">university graduates</a>. This is despite the number of children attending school increasing exponentially since compulsory education was introduced in 1994. </p>
<p>Consequently, the country is poorly positioned to take advantage of the <a href="https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/">“fourth industrial revolution”</a>. This is broadly understood as a range of new technologies that fuse the physical, digital and biological worlds. </p>
<p>Making things worse is the failure to adopt industrial policies to diversify the country’s export mix away from commodities to more <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0351.2008.00337.x/full">sophisticated</a> beneficiation and manufacturing activities. Commodities such as gold, platinum and coal, thus continue to comprise a significant portion of the country’s <a href="http://atlas.media.mit.edu/en/profile/country/zaf/">export earnings</a>. </p>
<p>Although the services-based sectors have given rise to an <a href="http://www.news24.com/MyNews24/Rise-of-the-black-middle-class-20140604">emerging middle class</a>, this new wealth is largely <a href="http://www.destinyconnect.com/2015/05/22/sas-black-diamonds-riddled-with-debt/">debt-fueled and consumption driven</a>. This limits savings, capital accumulation and <a href="https://www.businesslive.co.za/bd/opinion/2017-01-27-household-wealth-drop-trips-up-economy/">class mobility</a> for most of the population. </p>
<h2>What’s at stake</h2>
<p>In mid-2017 the rating agency Moody’s will review South Africa’s <a href="http://www.enca.com/money/moodys-pushes-back-sa-credit-rating-decision">sovereign credit rating</a>. This comes after two recent downgrades by global credit rating agencies <a href="https://www.businesslive.co.za/bd/economy/2017-04-07-fitch-downgrades-south-africa/">S&P and Fitch</a>.</p>
<p>A great deal hangs on Moody’s decision. If it downgrades the government’s rand-based bond credit rating two notches to junk status, the country will be expelled from the <a href="https://www.businesslive.co.za/bd/economy/2017-04-10-sa--risks--losing-r150bn-with-more-downgrades/">World Government Bond Index</a>. This will compromise its credibility as an investment destination. It will stimulate significant capital flight as international bond funds with investment-grade mandates are forced to sell off South African sub-investment grade bonds. </p>
<p>The rand will then depreciate and the trade deficit will widen. The central bank could then be forced to hike interest rates to curb inflationary pressures. Unemployment will rise and the government’s fiscal slack will be further depleted. </p>
<p>A downgrade of the rand denominated bonds would spark economic instability, and potentially significantly weaken the country’s private sector. The country’s politically connected elite could respond to this crisis by seeking to consolidate political power. This could be achieved using “radical economic transformation” to decimate the vestiges of “white monopoly capital.”</p>
<p>In the wake of the recent downgrades, some politicians have been peddling an <a href="http://www.news24.com/Columnists/MaxduPreez/sa-is-making-a-historic-mistake-20170425">illusion</a> that the country’s current woes are simply <a href="http://www.news24.com/SouthAfrica/News/we-want-the-rand-to-fall-so-that-when-it-rises-we-will-control-the-economy-maine-20161222">“short-term pain</a> for long-term gain” for the majority of South Africans. </p>
<p>But the experiences of numerous countries have shown that there is no gain from going down the populist economic path – <a href="http://whynationsfail.com/summary/">only state failure</a>.</p>
<p>There are tentative signs that this risk is beginning to take hold among some ANC leaders. Even Zuma’s newly appointed Finance Minister began watering down the term “radical economic transformation” at the recent World Economic Forum Africa gathering. Instead he opted to use the phrase <a href="http://citizen.co.za/news/news-national/1503159/gigaba-tells-investors-not-worry-radical-economic-growth-talk/">“inclusive growth”</a>.</p>
<p>What needs to be made clear is that the debate around “white monopoly capital” and “radical economic transformation” is about much more than statistics and definitions. It is about the ownership and control of both public and private capital by a politically connected elite. Thus it comes with the potential risk of turning South Africa’s entire economy into a centrally controlled patronage network.</p><img src="https://counter.theconversation.com/content/77194/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sean Gossel receives funding from the University of Cape Town. </span></em></p><p class="fine-print"><em><span>Misheck Mutize does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The populism politics adopted by South Africa’s ruling party, African National Congress, mask a strategy to deflect attention from the party’s policy failures and to hide its many scandals.Sean Gossel, Senior Lecturer, UCT Graduate School of Business, University of Cape TownMisheck Mutize, Lecturer of Finance and Doctor of Philosophy Candidate, specializing in Finance, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/760262017-04-19T15:16:15Z2017-04-19T15:16:15ZSouth Africa’s ANC can stay a liberation movement and govern well<figure><img src="https://images.theconversation.com/files/165115/original/image-20170412-25898-1979v02.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span></figcaption></figure><p>The African National Congress (ANC), South Africa’s governing party, is <a href="http://www.aljazeera.com/news/2016/08/cloneofsouth-africa-anc-awaits-key-municipal-ele-160804084046975.html">weakening</a>. It has recently committed some <a href="https://theconversation.com/firing-of-south-africas-finance-minister-puts-the-public-purse-in-zumas-hands-75525">terrible mistakes</a> in government. </p>
<p>High on the list of errors is its decision to close ranks in defence of President Jacob Zuma during the <a href="http://ewn.co.za/2016/09/15/Joel-Netshitenzhe-Nkandla-state-capture-evoke-indignation">Nkandla debacle</a> where public money was used on upgrades to his private homestead. Then there’s the deployment of incompetent “cadres” to critical positions in government as well as Zuma’s ill-timed <a href="https://www.businesslive.co.za/bd/opinion/columnists/2017-01-24-aubrey-matshiqi-zuma-move-will-show-who-insiders-are/">cabinet reshuffle</a>. </p>
<p>Critics argue that these problems stem from the ANC’s insistence on being a <a href="https://v1.sahistory.org.za/pages/pdf/raymond-suttner/ANC-attainment-power.pdf">liberation movement</a> which they say is incompatible with a constitutional democracy. </p>
<p>This has raised the question about the party’s very nature: Is it not time for the ANC to stop seeing itself as a liberation movement but rather a modern, professional political party?</p>
<p>But that argument is hard to sustain. There’s nothing particular about political parties that makes them compatible with constitutional democracy.</p>
<h2>Liberation movement vs political party</h2>
<p>Those opposed to the ANC’s holding place as a liberation movement argue that a movement – liberation or social – is the old way of doing politics. This, they claim, was suitable during the struggles against colonialism and apartheid. But that struggle is now over and the post-apartheid era presents a new set of challenges.</p>
<p>The idea of a liberation movement keeps archaic and obsolete traditions alive. These include the leadership collective, consensus choice of leadership, revolution, comradeship, cadre deployment and patriarchal leadership patterns.</p>
<p>The role and character of liberation movements in power is informed by the democracy theory (coming out of <a href="https://www.saylor.org/site/wp-content/uploads/2012/08/POLSC2312.1.4.pdf">liberalism ideology</a>) and the <a href="http://www.sahistory.org.za/sites/default/files/party_dominance.pdf">theory of party dominance</a>. These theories suggest that for democracy to be effective, there should be vibrant political party competition because it strengthens deliberative aspects of a liberal democracy. It also engenders internal dynamism and change of groups of elites in power. </p>
<p>The party dominance theory leads to the view that the ANC dominates South Africa’s politics because of its liberation movement legacy. This dominance is seen as inimical to democratic competition. </p>
<p>But when liberation movements become political parties they enhance their efficiency and effectiveness. They also deepen their internal democracy and their ability to connect with the wider public.</p>
<p>Internal democracy within the ANC is seen as <a href="https://theconversation.com/how-a-countrys-constitutional-court-can-consolidate-and-deepen-democracy-54184">particularly important</a> given its political dominance. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/165810/original/image-20170419-6375-ra1l0b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/165810/original/image-20170419-6375-ra1l0b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/165810/original/image-20170419-6375-ra1l0b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/165810/original/image-20170419-6375-ra1l0b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/165810/original/image-20170419-6375-ra1l0b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/165810/original/image-20170419-6375-ra1l0b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/165810/original/image-20170419-6375-ra1l0b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">ANC military veterans guard the party’s headquarters ahead of a march by the opposition DA.</span>
<span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span>
</figcaption>
</figure>
<p>Political parties shed the tendency towards <a href="https://www.marxists.org/history/erol/ncm-7/basoc/ch-5.htm">democratic centralism</a>, and its opaque internal political systems which insist on toeing the party line and brooks no dissent. </p>
<p>Political parties are assumed to operate like professional associations. They value accountability and transparency embracing modern systems of management and leadership. This enables them to become dynamic platforms for advancing refined political ends. </p>
<p>The conduct of Zuma and his cohort of leaders has been blamed on the ANC’s choice to remain steeped in the traditions of a <a href="http://www.politicsweb.co.za/iservice/the-marginalisation-of-parliament">liberation movement</a>. The form determines the content: it produces tendencies that cause all manner of problems. </p>
<p>The ANC has made some catastrophic mistakes. It sometimes displayed arrogance in power and has allowed corrupt leaders to go <a href="https://theconversation.com/south-africa-is-at-an-inflection-point-will-it-resist-or-succumb-to-state-capture-66523">unpunished</a>. </p>
<p>There has also been a vacillation of policy stances on the economy, land and other crucial policy areas. Largely sound policies have been poorly implemented. </p>
<p>And there have been cases where the party and the state’s affairs have been <a href="http://www.enca.com/south-africa/anc-urges-government-to-review-madonselas-party-state-separation-findings">conflated</a>.</p>
<p>Some have argued that these problems stem from the ANC remaining essentially a liberation movement. To move with the times, they argue, it needs to assume a new, modern professional political party posture. </p>
<h2>Lessons from elsewhere</h2>
<p>The challenge in the ANC is, however, not unique to South Africa.
Liberal democrats in Japan, Christian democrats in Italy, the <a href="http://www.economist.com/news/asia/21711925-new-law-has-allowed-government-freeze-its-assets-leaving-it-unable-pay-staff-taiwans">Kuomintang</a> in Taiwan and nationalist democrats in Kenya all experienced similar challenges. </p>
<p>Although they were not liberation movements, they share a number of features with the ANC. This includes arrogance of power, personalisation of power, elitism and the preponderance of sectional interests over the common good. So, it seems these are tendencies that need to be overcome.</p>
<p>It’s hard to sustain the argument that liberation movements are not right for democratic consolidation merely because they are movements or that political parties are by nature good for competitive politics. Political parties can dominate, distort, corrupt, abuse, and complicate democratic systems just as liberation movements deepen democracy by strengthening its social basis. </p>
<h2>What the ANC needs to do</h2>
<p>The ANC doesn’t need to transition into a political party, whatever that means in practice. But, it needs to develop a leadership that’s competent to use the state to change the economy fundamentally in order to serve the majority and bring about qualitatively positive changes to the people, especially the poor.</p>
<p>The party needs to put a stop to the self-inflicted damage to its image through endless scandals, public displays of arrogance, factionalism and internal conflict. </p>
<p>The ANC also needs to end its practice of deploying poor quality cadres to critical state structures, and start heeding the counsel of its friends and foes that it must place the country’s interests before sectional interests of whatever faction of its leadership is in power. </p>
<p>It can look to the <a href="http://www.monitor.co.ug/OpEd/Editorial/What-we-can-learn-from-Tanzania-s-Chama-Cha-Mapinduzi/689360-2787692-1173726z/index.html">Chama Cha Mapinduzi</a> movement that’s been in power in Tanzania since the 1960s for example.</p>
<p>The party has ensured an open contest for leadership positions. The elected leaders are then expected to root out corruption, crime, tribalism and so forth.</p>
<p>There’s a constant change of national leadership and a level of dynamism that enables the movement to adapt to changing society. It has produced leaders like <a href="http://www.sahistory.org.za/dated-event/former-tanzanian-president-julius-nyerere-dies">Julius Nyerere</a> and <a href="http://zikoko.com/list/8-reasons-tanzanias-john-magufuli-africas-beloved-president/">John Magafuli </a>who commands respect across party lines. </p>
<p>If liberation movements were formed to achieve total decolonisation and freedom, then for as a long the process is incomplete, they will have a good reason to exist. Like orthodox political parties, they constantly have to adapt to change.</p>
<p>Ultimately, democracy is meaningless if it doesn’t improve the material circumstances for the people. To do this, political formations must be occupied by conscientious, competent, compassionate and interested political elite.</p>
<p>This is what the ANC has shown it lacks as it attempts to “deal” with every scandal and crisis it causes. The problem isn’t its commitment to being a liberation movement, but rather that it wants to be a callous one.</p><img src="https://counter.theconversation.com/content/76026/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Siphamandla Zondi works for Department of Political Sciences, University of Pretoria, which sometimes receives funding from research funding foundations like the Mellon Foundation and NRF. </span></em></p>Democracy in South Africa is meaningless if it doesn’t improve the lives of the people. To do this, the governing ANC must be led by conscientious, competent and interested leaders.Siphamandla Zondi, Professor and head of department of Political Sciences and acting head of the Institute for Strategic and Political Affairs, University of PretoriaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/761182017-04-12T16:56:03Z2017-04-12T16:56:03ZANC military veterans and the threat to South Africa’s democracy<figure><img src="https://images.theconversation.com/files/165248/original/image-20170413-25898-1lzqft3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">ANC military veterans guard the party’s headquarters.
</span> <span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span></figcaption></figure><p>We may look back on the days in April 2017 when tens of thousands of South Africans marched demanding that President Jacob Zuma <a href="http://ewn.co.za/2017/04/06/anti-zuma-protest-gains-momentum-outside-parliament">should fall</a> as the beginning of something bigger.</p>
<p>There’s been a wistful glint in the eyes of ageing activists as they gear up for action again, predicting a return to the 1980s. Many have embraced the idea of the reconstitution of a <a href="http://www.sahistory.org.za/organisations/united-democratic-front-udf">United Democratic Front-style</a> multi-class, non-racial and popular anti-apartheid alliance of NGOs, community movements and religious groups to <a href="http://ewn.co.za/2017/04/08/south-africans-strengthen-calls-for-president-zuma-to-step-down">“Save South Africa”</a> from the capriciousness and corruption of the Zuma government.</p>
<p>We are told that Friday April 7, the day of the nationwide marches against Zuma, was the day when ordinary people stood up and said to the ANC: “Enough is Enough”! It was followed by another large demonstration of opposition political parties marching on the government’s seat of power in Pretoria, the Union Buildings, on April 12, which was also the president’s <a href="http://www.timeslive.co.za/politics/2017/04/12/Zuma-reveals-his-birthday-wishes-amid-protests1">75th birthday</a>. </p>
<p>Yet, while we should in no way underestimate this democratic stirring, we may look back and say that its greater significance was that it was this moment when it became manifest that Zuma’s faction of the ANC would be prepared to resort to violence to entrench its domination.</p>
<h2>Signs of intolerance of dissent</h2>
<p>Once the first marchers had marched, the ANC government sought to save face by proclaiming the day a <a href="http://ewn.co.za/2017/04/07/ayanda-dlodlo-thanks-anti-zuma-protesters-for-their-conduct">triumph for democracy </a> – which, of course, it was. Yet during the build-up to the march, the ANC had filled the air with threats of violence. </p>
<p>The most explicit warning was delivered by the newly installed Minister of Police, Fikile Mbalula. He did <a href="http://ewn.co.za/2017/04/04/mbalula-issues-stern-warning-to-violent-protesters">not want another Marikana</a>, he said, but implied the repeat of such an event, when police killed 34 striking miners, if protesters damaged property.</p>
<p>Other ANC officials, notably eThekwini mayor Zondile Gumede, issued <a href="http://www.timeslive.co.za/politics/2017/04/06/Durban-mayor-says-anti-Zuma-march-is-treason1">not-so-veiled threats </a> against those marching. Others sought to tie up the marchers’ right to march by <a href="http://ewn.co.za/2017/04/07/phahlane-insists-save-sa-march-is-illegal-despite-court-permission">denying permission</a>; others referred to marchers as <a href="http://www.timeslive.co.za/thetimes/2017/04/06/War-talk-from-MK-vets">“counter-revolutionary”</a>. </p>
<p>The most chilling threat was represented by the MK Veterans Association <a href="http://mkmva.anc.org.za/">(MKMVA)</a>, supposedly former members of the ANC’s armed wing uMkhonto we Sizwe (MK). Its press briefing before the marches took place stated that it was “mobilising” its members, who would be <a href="http://www.timeslive.co.za/thetimes/2017/04/06/War-talk-from-MK-vets">“combat ready”</a> to defend Luthuli House, the headquarters of the ANC. It was backed up by statements by the ANC Youth League that it was ready to defend the premises with <a href="http://www.iol.co.za/news/special-features/zuma/watch-ancyl-backs-zuma-amid-calls-for-his-head-8497214">all the weapons at its disposal</a>.</p>
<p>Given that the opposition Democratic Alliance (DA) had changed its initial plans to march upon Luthuli House, there was little or no need to “defend” the ANC’s headquarters from anyone. Even so, on the day, <a href="http://www.timeslive.co.za/politics/2017/04/07/MK-vets-gather-outside-Luthuli-House">some 700 MK “veterans”</a> assembled outside Luthuli House. </p>
<h2>Threat to democracy</h2>
<p>Dressed in military fatigues, the MK “veterans” explicitly presented themselves as the ANC’s armed wing ready to go into battle to counter the party’s enemies. In the event, they <a href="https://en.oxforddictionaries.com/definition/toyi-toyi">toyi-toyied</a> and demonstrated – and were fortunately denied the opportunity by the police to prove their metal in clashes with the DA or anyone else. Yet the threat of violence was immanent.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/165060/original/image-20170412-25859-1tm0mv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/165060/original/image-20170412-25859-1tm0mv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/165060/original/image-20170412-25859-1tm0mv1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/165060/original/image-20170412-25859-1tm0mv1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/165060/original/image-20170412-25859-1tm0mv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/165060/original/image-20170412-25859-1tm0mv1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/165060/original/image-20170412-25859-1tm0mv1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Supposed veterans of the ANC’s military wing perform the toyi-toyi protest dance outside the party’s headquarters in Johannesburg.</span>
<span class="attribution"><span class="source">Reuters/Mike Hutchings</span></span>
</figcaption>
</figure>
<p>The real issue is how MK, as it’s presently constituted, views itself and is viewed by key elements amongst the ANC’s leadership as a militia ready to be deployed against its political opponents – internal as well as external. How many of those who presented themselves outside Luthuli House were genuinely former MK veterans we do not know. But, we can be pretty sure that many if not most - too young to have fought against apartheid – have been more recent recruits, with no genuine claim to membership.</p>
<p>We also know that under the national leadership of <a href="https://mg.co.za/tag/kebby-maphatsoe">Kebby Maphatsoe</a>, the deputy defence minister, the Veteran’s Association has been deeply corrupted. Major questions posed about its internal finances are the subject of a <a href="http://www.news24.com/SouthAfrica/News/mk-veteran-head-in-court-this-week-over-alleged-fraud-20160531">court case</a>. It’s been used to intervene violently in party <a href="https://theconversation.com/comrades-in-arms-against-apartheid-are-now-at-one-anothers-throats-64643">factional battles</a> on behalf of Zuma. Yet it has reserved its main animus for parties of opposition, regularly referred to by Maphatsoe as “the enemy”, “agents provocateurs”, and <a href="http://www.politicsweb.co.za/news-and-analysis/south-africa-first-an-organ-of-the-counterrevoluti">“counter-revolutionaries”</a>.</p>
<p>It would be a mistake to dismiss all this as harmless political theatre. Rather, it constitutes a very real and present danger. It’s worth recalling that Siphiwe Nyanda, a former leading member of MK who became chief of the South African National Defence Force, has already referred to the veterans under Maphatsoe as a <a href="http://www.sundayworld.co.za/news/2012/09/03/mkmva-is-divisive---nyanda-slams-anc-s-army-veterans">“private army”</a>. If he’s worried, then so should we be. Armed militias aligned to a political party, or a faction within it, have no place in a constitutional democracy.</p>
<h2>Shades of Zimbabwe</h2>
<p>We have no need to look further than Zimbabwe to recognise the threats to democracy posed by armed militias. Formed in 2000, the <a href="http://dev.icicp.org/wp-content/uploads/2013/11/Country-Profile_Zimbabwe.pdf">National Youth Service</a> was subsequently responsible for the military style training of some 80 000 youths. Many of them went on to join the ruling Zanu-PF’s affiliated militias the <a href="http://www.refworld.org/docid/45f147ce2f.html">“Green Bombers”</a>which wreaked havoc upon supporters of the opposition Movement for Democratic Change in the 2008 general election. </p>
<p>Subsequently, many were to be incorporated into security structures such as the military, police and prison service. They remain a major reservoir of violent support for Zanu-PF, which doesn’t hesitate to use to intimidate and liquidate its opponents. As we know, Zimbabwean elections have now become a <a href="https://theconversation.com/how-are-elections-really-rigged-mr-trump-consult-robert-mugabe-68440">farce</a>.</p>
<p>Following the ousting of Pravin Gordhan as South Africa’s finance minister in the recent <a href="http://www.gov.za/speeches/president-jacob-zuma-appoints-new-ministers-and-deputy-ministers-31-mar-2017-0000">cabinet reshuffle </a>, and the <a href="http://www.fin24.com/Economy/breaking-fitch-downgrades-sa-to-junk-status-20170407">downgrade by ratings agencies</a>, fears that South Africa under Zuma has embarked down a road which leads to Zimbabwe-style authoritarian kleptocracy have gained considerable ground. For the moment at least, such fears are probably exaggerated. </p>
<p>Although Zuma may be dominant within ANC structures for now, and although he will probably survive the forthcoming vote of <a href="http://ewn.co.za/2017/04/11/mbeki-calls-on-anc-mps-to-put-sa-first-in-vote-of-no-confidence-1">no-confidence</a> in the House of Assembly, his reshuffle has alienated many within the party. It has threatened his ability to secure the party presidency for his former wife, <a href="http://citizen.co.za/news/news-national/1394103/1394103/">Nkosazana Dlamini-Zuma</a>, at the party’s <a href="http://www.anc.org.za/content/54th-national-conference">elective conference</a> in December.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/165066/original/image-20170412-25898-vtmcu0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/165066/original/image-20170412-25898-vtmcu0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=388&fit=crop&dpr=1 600w, https://images.theconversation.com/files/165066/original/image-20170412-25898-vtmcu0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=388&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/165066/original/image-20170412-25898-vtmcu0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=388&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/165066/original/image-20170412-25898-vtmcu0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=488&fit=crop&dpr=1 754w, https://images.theconversation.com/files/165066/original/image-20170412-25898-vtmcu0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=488&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/165066/original/image-20170412-25898-vtmcu0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=488&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">President Zuma’s supporters from the ANC Youth League disrupt a memorial service for anti-apartheid and ANC hero Ahmed Kathrada in Durban.</span>
<span class="attribution"><span class="source">Reuters/Rogan Ward</span></span>
</figcaption>
</figure>
<p>Furthermore, the recent marches may have given backbone to some ANC MPs who fear the electoral consequences of the party continuing to cling to Zuma’s coattails. Yet the more desperate Zuma and his supporters become, the more the risk that they will turn to the MK Vets to help them. If, in turn, the Zuma faction was to prove triumphant in the leadership battle, it’s unlikely to hesitate to deploy MK vets (alongside its Youth League) against opponents during the lead up to the 2019 election.</p>
<p>Although the DA would go running to the courts, the militant <a href="http://www.effonline.org/">Economic Freedom Fighters</a> would be likely to respond to violence in kind, rendering the 2019 election campaign the most violent we will have seen since 1994. We are not there yet, and hopefully we never will be. </p>
<p>But, an economy which is about to hit the skids and which offers a massive pool of <a href="https://www.saldru.uct.ac.za/images/pdf/PresentationIZA.1-31.pdf">unemployed youths</a> available for political recruitment, is highly combustible. In such a context, were MKMVA to receive the covert (or not-so-covert) backing of the ANC, the prospect of a Zimbabwean scenario would loom ever larger.</p>
<p>If the white right wing was to reconstitute and parade in public in military uniforms, the ANC and all democrats would be rightly outraged. Equally, there should be no place in our democracy for MKMVA to play the role of soldier: that should be left to the South African National Defence Force.</p><img src="https://counter.theconversation.com/content/76118/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Roger Southall receives funding from the National Research Foundation </span></em></p>The militant talk and antics by the ANC’s ex-soldiers may seem like theatrics, but they are a chilling reminder of how Zimbabwe used armed militia to crash opponents and democracy.Roger Southall, Professor of Sociology, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/607152016-06-16T13:07:43Z2016-06-16T13:07:43ZHow investors see South Africa: lots of potential, not worth the hassle<figure><img src="https://images.theconversation.com/files/126344/original/image-20160613-29222-26djv1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">International investors are still rattled by President Jacob Zuma’s sacking of respected Finance Minister Nhlanhla Nene.</span> <span class="attribution"><span class="source">Reuters/Sumaya Hisham </span></span></figcaption></figure><p>South Africa has narrowly survived a downgrade of the rating of its government bonds. The reprieve, however, is temporary because government has been warned by the <a href="https://www.ted.com/talks/annette_heuser_the_3_agencies_with_the_power_to_make_or_break_economies/transcript?language=en">Big Three</a> rating agencies – Fitch, Moody’s and Standard & Poor’s – to pull up its socks. </p>
<p>South Africa’s <a href="http://reports.weforum.org/global-competitiveness-report-2015-2016/competitiveness-rankings/">current rating</a> – just about investment grade, heading south fast – puts it more or less on par with countries such as Italy and Spain. And even with a downward trajectory through speculative grade it is still several notches away from outright “junk” or “CCC”. </p>
<p>But a downgrade to sub-investment grade would slow inward investment and the economic fallout could become a self-fulfilling prophecy: as outflows increase, the economy slows.</p>
<p>Such meta-narratives are especially powerful during periods of global turbulence as is currently being experienced, with volatile commodity prices, the oil rout, the slowdown in China and speculative investors moving large amounts of short-term capital very quickly around the world. </p>
<h2>Why sovereign debt matters</h2>
<p>When governments need to raise money they may decide to do so by borrowing on international financial markets. Such loans, or sovereign bonds, are each assigned a rating by a credit ratings agency. The rating estimates the likelihood of a government’s creditors being repaid against a range of factors. These include hard economic data, political analysis, reputation and sentiment. </p>
<p>The yield of the bond can be roughly understood as the interest rate on a loan. The lower the credit rating, the higher the risk of a default and the higher the yield payable to investors for taking on that risk.</p>
<p>It’s important to note that sovereign bonds are just another asset class investors can consider in a universe of investable assets. A downgrade is not desirable as it may slow down institutional investment and make the economy more vulnerable to speculative activity. But some investors may very well have an appetite for risky sovereign debt if it means they can make a lot of money. </p>
<p>In fact, high-end brokerages such as <a href="http://www.forbes.com/sites/charlesschwab/2016/04/22/why-global-diversification-matters/#2571f7e63870">Charles Schwab</a> advise investors on investing in high-yield, sub-investment grade emerging market debt. This sort of speculative sentiment is exactly what <a href="http://www.theguardian.com/world/2012/nov/07/africa-economy-rising-growth">drove</a> the “Africa Rising” narrative. It also <a href="https://www.moodys.com/research/Moodys-Primary-issuance-by-African-sovereigns-year-to-date-has--PR_283968">drove</a> the introduction of ratings for previously unrated sub-Saharan sovereigns, as investors sought new sources of alpha in the low-growth fallout of the financial crisis in Europe.</p>
<p>Despite this, countries need to borrow to plug the gap between projected tax revenue and budgeted expenditure. However, as debt has to be repaid at some point in the future, any debt raised should be used to finance investment such as infrastructure, which expands an economy’s capacity and therefore potential for growth and increased tax revenue. In addition, the interest government pays on its debt is of paramount importance. </p>
<h2>What there’s to like, not to like about South Africa</h2>
<p>Rating agencies have cited maintaining investor confidence as one of the critical factors towards preventing a future downgrade for South Africa. So it’s important to know what investors were thinking about South Africa in the run up to the ratings, and what they’re thinking now.</p>
<p>The first point to make is that local institutional investors and financial institutions are also influenced by the global context. The political and economic developments of all countries are viewed proportionately to other markets. For example, in the case of South Africa, Investec Asset Management evaluates the country relative to other emerging markets. It recently <a href="https://www.investecassetmanagement.com/international/professional-investor/en/insight/investment-views/emerging-market-debt-indicator">did so</a> in relation to Brazil in particular.</p>
<p>Investec’s house view on the two countries is informed by two insights. The first is that South Africa and Brazil have political headwinds that are governance risks to long-term economic development, and may present watershed moments. The other is that the strength of institutions in these countries is often overlooked. An example of this is the South African <a href="https://theconversation.com/zuma-court-ruling-south-africans-witness-a-massive-day-for-democracy-57070">Constitutional Court’s ruling</a> on President Jacob Zuma’s spending on his private home in Nkandla.</p>
<p>Publicly available international perceptions also matter. An example is the World Economic Forum competitiveness ranking. South Africa is <a href="http://reports.weforum.org/global-competitiveness-report-2015-2016/competitiveness-rankings/">ranked</a> 49th out of 140 countries and only second to China among the Brazil, Russia, India, China, South Africa group. </p>
<p>Investors also like the country’s sound fundamentals. These include a sophisticated financial markets sector, and respect for property rights and the rule of law. And despite US government complaints about infrastructure gaps and the inaccessibility of officials, it still regards South Africa as an important gateway to the rest of the continent.</p>
<p>However, inequality, unemployment, power shortages, policy incoherence around black economic empowerment and labour relations remain risk factors. The UK government, for example, <a href="https://www.gov.uk/government/publications/overseas-business-risk-south-africa/overseas-business-risk-south-africa">singles out</a> corruption, fronting around empowerment deals and dubious tender processes. </p>
<p>International investors are also still rattled about President Zuma’s <a href="http://mg.co.za/article/2015-12-09-nhlanhla-nene-removed-as-finance-minister">unexpected decision</a> late last year to replace his respected finance minister, only to reverse the decision a few days later. </p>
<p>Another bugbear is Zuma’s weakened position and how <a href="http://www.financialmail.co.za/coverstory/2016/04/28/will-cyril-ramaphosa-be-sa-s-next-president">succession</a> within the ruling African National Congress will play out, particularly the realisation that Cyril Ramaphosa, currently the deputy, may not have enough power to become president. </p>
<p><a href="http://www.bloomberg.com/news/articles/2016-05-16/zuma-factor-stymies-gordhan-s-bid-to-rescue-south-africa-economy">The competition</a> between Zuma and Finance Minister Pravin Gordhan is also being watched closely, as Gordhan is seen as a business champion.</p>
<p>Overall South Africa, right now, is viewed as a terribly difficult place to do business, with overweening bureaucracy, a collapsing education system, poor policy and militant labour groups. Kenya and Nigeria are increasingly seen as more favourable destinations. </p>
<p>As one investment advisor in London pithily described South Africa:</p>
<blockquote>
<p>Lots of potential, not worth the hassle.</p>
</blockquote>
<p>South Africa is thus particularly vulnerable with its relatively liquid portfolio flows and sophisticated financial markets. In addition, the rand, with its high interest rate, is a particular favourite commodity currency for speculators in <a href="http://www.investopedia.com/terms/c/currencycarrytrade.asp">the carry trade</a>. And indeed, both Moody’s and Standard & Poor’s have worried aloud about the combination of low growth, high debt and political risk in the current global environment.</p>
<p>But some healthy scepticism and perspective is also in order. Yes, South Africa’s parliament is out of order, but there have been <a href="http://content.time.com/time/photogallery/0,29307,1912340_1913577,00.html">fisticuffs in South Korea</a> too. </p>
<p>And there is no such thing as “idiosyncratic emerging market risk” – a patently hypocritical concept. South Africa has had its recent share of protests, but the 2011 London riots were intense, with three days of <a href="http://www.huffingtonpost.co.uk/2011/08/09/london-riots-450-arrested_n_921816.html">violence</a> during which 450 arrests were made. Nor are emerging markets essentially “corrupt”. Take Italy, for example. And rent-seeking patronage networks and what the Chinese call <a href="http://www.investopedia.com/terms/g/guanxi.asp?layout=infini&v=5E&orig=1&adtest=5E"><em>guanxi</em></a> – networks of influence – are a feature of politics everywhere.</p>
<h2>Economic policy priorities</h2>
<p>The sooner South Africans realise they have frittered away the Mandela dividend in a cutthroat global economy, the better. But this realisation does not have to come at the expense of equal negotiating power in trade and investment. By growing the economy inclusively with a focus on human development, the business environment also becomes more sustainable. Investors know this too. </p>
<p>Economic policy requires a shift away from the short-termism of a gross domestic product evangelism that is subject to the vagaries of hot money in a panicked and turbulent global economy. If this continues to be the case, economic development will only ever elicit a Pavlovian response from rating action to rating action.</p><img src="https://counter.theconversation.com/content/60715/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Desné Masie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>South Africa has narrowly escaped a downgrade of the rating of its sovereign bonds, but government has its work cut out as it seeks to restore investor confidence and lift economic growth.Desné Masie, Visiting Researcher in International Political Economy, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/598722016-05-25T13:29:08Z2016-05-25T13:29:08ZWhy it’s appropriate that South Africans rally behind their finance minister<figure><img src="https://images.theconversation.com/files/123825/original/image-20160524-25236-qrpbwr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Africa's Finance Minister Pravin Gordhan.</span> <span class="attribution"><span class="source">Reuters/Mark Wessels</span></span></figcaption></figure><p>Advocate Shaun Abrahams, South Africa’s National Director of Public Prosecutions, has stepped into some torrid waters. </p>
<p>At a recent media briefing he dealt with two issues: the first was his announcement that the National Prosecuting Authority will seek leave to appeal a High Court judgment that the matter of the reinstatement of corruption charges against President Jacob Zuma <a href="http://www.news24.com/SouthAfrica/News/live-npa-announces-decision-on-spy-tapes-judgment-20160523">should be reconsidered</a>. No particular surprise there.</p>
<p>But then the advocate ventured an opinion on a matter unrelated to the Zuma case: recent newspaper articles about the possible arrest of Finance Minister Pravin Gordhan.</p>
<p>A leading Sunday newspaper had reported that <a href="http://www.timeslive.co.za/sundaytimes/stnews/2016/05/15/Pravin-Gordhan-faces-imminent-arrest">the arrest of Gordhan</a> was imminent. The rumoured arrest is on a charge of “espionage” pertaining to an investigative unit established during his period of service as commissioner of the South African Revenue Service.</p>
<p>Gordhan held this position before his initial appointment as minister of finance in 2009. He remained in the post until 2014. Following the crisis precipitated by the <a href="http://mg.co.za/article/2015-12-09-nhlanhla-nene-removed-as-finance-minister">removal of Nhlanhla Nene</a> as minister of finance late last year, Gordhan was reappointed in December 2015. This followed the brief but disastrous <a href="http://www.thepresidency.gov.za/pebble.asp?relid=21231">appointment</a> (from the perspective of the exchange rate) of Des van Rooyen to the finance portfolio.</p>
<p><a href="http://www.news24.com/SouthAfrica/News/live-npa-announces-decision-on-spy-tapes-judgment-20160523">Abrahams said</a> that comments by certain media, politicians, analysts and economists on matters pertaining to the possible arrest of Gordhan were unhelpful. </p>
<p>But unhelpful for whom?</p>
<p>As an economist, I beg to differ with Abrahams on this matter. The media and public commentators play an important role in pointing out possible dangers to a country’s economy, and when government or politicians err. As members of civil society these commentators are important gate-keepers helping to shape national debate.</p>
<p>Abrahams not only appears to deny this important role and responsibility of commentators in civil society, but he has also clearly misread the public mood and current distrust of government’s actions when these are not clearly explained.</p>
<h2>Grave situation</h2>
<p>The seriousness of the situation pertaining to the current finance minister was underscored by a <a href="http://www.treasury.gov.za/comm_media/press/2016/2016051701%20Statement%20By%20The%20Minister.pdf">statement</a> released by the country’s National Treasury. In it Gordhan is quoted as saying:</p>
<blockquote>
<p>The recent media reports about my arrest – imminent or not – have been extremely distressing for my family and me. </p>
</blockquote>
<p>He went on to appeal to all South Africans</p>
<blockquote>
<p>to protect the National Treasury staff, who have diligently, honestly and skilfully served the national interest to the best of their ability. They are recognised worldwide for their professionalism and competence.</p>
</blockquote>
<p>This is indeed what happened after the finance minister’s statement. The media, politicians from different political parties, analysts and economists rallied to his call.</p>
<h2>Show of support</h2>
<p>I am one of 22 academics from economics and related fields who wrote a letter, published in South Africa’s leading financial daily, <em>Business Day</em>, on Friday 20 May 2016. The purpose of this letter was to show support for the finance minister and the National Treasury in the wake of their call for support. This letter confirms confidence in the minister and the treasury in averting the danger of a possible <a href="http://city-press.news24.com/Business/sas-creditworthiness-under-scrutiny-by-sp-20160522">credit risk downgrade</a> facing South Africa.</p>
<p>The generalised attack by Abrahams on these groups in civil society is therefore completely misplaced and unfounded.</p>
<p>He went further <a href="http://www.news24.com/SouthAfrica/News/live-npa-announces-decision-on-spy-tapes-judgment-20160523">to say</a>:</p>
<blockquote>
<p>I call on all concerned … to stop playing with our economy. </p>
</blockquote>
<p>Abrahams obviously addresses his comments to the South African public at large, and specifically to the media, politicians, analysts and economists. The only problem is that he misdirects his comments.</p>
<p>The media, politicians from different political parties, analysts and economists indeed support the economy as best as they can. This is illustrated by the fact that, at this point in time, South Africans are generally rallying behind the finance minister and National Treasury. </p>
<p>Abrahams would therefore be well-advised to look elsewhere for those to blame for South Africa’s current economic woes rather than to blame the groups, professions and people identified in his statement. They are merely the messengers.</p>
<p>South Africa still teeters on the edge of a possible credit risk downgrade. Commentators highlighting this danger do so in the interest of averting such a danger, rather than in an attempt to push the country over the edge. Refraining from comment, as Abrahams suggests, would not avert the danger. It would merely hide it from the public eye.</p><img src="https://counter.theconversation.com/content/59872/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jannie Rossouw receives funding from the National Research Foundation as a C2-rated researcher. </span></em></p>A senior public official has berated South Africans for rallying behind Finance Minister Pravin Gordhan, calling the action unhelpful. The crisp question is: unhelpful to whom?Jannie Rossouw, Head of School of Economic & Business Sciences, University of the WitwatersrandLicensed as Creative Commons – attribution, no derivatives.