who runs south africa?

The power 100

The Africa Report - - CONTENTS - By Crys­tal Order­son and Pa­trick Smith in Cape Town

From the fight be­tween white cap­i­tal and new money, to the in­sti­tu­tional frame­work hold­ing back the clique at the top, the in­ner work­ings of South Africa.

In a par­tic­u­larly op­u­lent man­sion in the Bish­op­scourt sub­urb of Cape Town – one of the wealth­i­est in all of Africa – a well con­nected busi­ness grandee de­cided to throw a house-warm­ing party in Fe­bru­ary. It was that week when the open­ing of par­lia­ment co­in­cides with the Min­ing Ind­aba, so ev­ery se­ri­ous South African politi­cian or busi­nessper­son was in town. Quite a few showed up at the party. Set out on sev­eral lev­els, with the out­crops of Ta­ble Moun­tain be­hind, were the ex­pan­sive gar­dens with their man­i­cured lawns. Sip­ping a glass of Chenin blanc on one of the many ter­races, a wit re­marked: “So the Great Gatsby fi­nally meets the West­ern Cape.” Al­though the host was less reclu­sive than Jay Gatsby, the main event that evening was the guest list. On the other side of the pool, a group of bil­lion­aires, as iden­ti­fied by the wit, were hud­dled con­spir­a­to­ri­ally around a gov­ern­ment min­is­ter. At the next ta­ble, a hedge fund owner was lan­guidly puff­ing on a Co­hiba while lis­ten­ing to ad­vice from an ex­citable young cur­rency trader: “You’ve got to un­der­stand that [fi­nance min­is­ter] Pravin [Gord­han]’s sack­ing is a huge op­por­tu­nity to short the rand. Are you in my friend?” Two ta­bles down, a clutch of min­ing barons lamented – with no ob­vi­ous fear of con­tra­dic­tion – that South Africa’s econ­omy was be­ing driven off a cliff, their in­dus­try in par­tic­u­lar. A cou­ple of se­nior fig­ures from the gov­ern­ing African Na­tional Congress (ANC) nod­ded in as­sent. One, for­merly a se­nior min­is­ter, took the anal­y­sis fur­ther: “The min­ing min­is­ter in­vites 6,000 in­vestors to the Ind­aba, then dis­ap­pears with­out an­swer­ing se­ri­ous ques­tions.” The other ANC man sighed, launch­ing into a de­scrip­tion of life in the pres­i­dency un­der Ja­cob Zuma: “They’ve tripled the civil ser­vants there to a thou­sand, and they’re sit­ting there play­ing Mo­nop­oly and soli­taire on their com­put­ers.” That evening, it was a lit­tle like be­ing the White Queen in Lewis Car­roll’s Through the Look­ing-glass: one was ex­pected to be­lieve six im­pos­si­ble things, in this case, be­fore the last dram of 25-yearold Laphroaig. From the wit­ness state­ments of the as­sem­bled guests, South Africa’s po­lit­i­cal econ­omy was ev­i­dently in a state of ter­mi­nal col­lapse. The politi­cians were out of con­trol, all the in­sti­tu­tions had been thor­oughly crim­i­nalised. Yet there they all were, sit­ting on sub­stan­tial as­sets in a nearly $500bn econ­omy, speak­ing with pe­cu­liar rel­ish about an Ar­maged­don they could not se­ri­ously con­tem­plate. One man, de­scrib­ing him­self as a gen­tle­man farmer, started sound­ing alarms about “land seizures à la Zim­babwe”. His com­pan­ions cast ner­vous glances at the ver­dant sur­round­ing val­leys. “But it can’t hap­pen here,” one said with plead­ing des­per­a­tion. So when ask­ing the ques­tion: “Who runs South Africa?”, it is use­ful to pref­ace it with an­other – “Who owns South Africa?” That is eas­ier to work out, de­spite the prob­lem­atic data. Some 27 years ago at the time of its lib­er­a­tion elec­tion, South Africa was level-peg­ging with In­dia and Brazil as one of the world’s most un­equal so­ci­eties. To­day, its in­comes and as­sets are more un­equally dis­trib­uted than ei­ther of the other two coun­tries. Elected on a plat­form of cre­at­ing eco­nomic op­por­tu­ni­ties and spread­ing the wealth, the ANC now talks of the need for “rad­i­cal eco­nomic trans­for­ma­tion” af­ter two-and-a-half decades in power. So who has been run­ning South Africa? In truth, power is as con­cen­trated in as few hands as it was be­fore lib­er­a­tion. The cor­po­rate chiefs, hand-in-hand with the hered­i­tary landown­ers, still have huge in­flu­ence over pol­icy-mak­ing and im­ple­men­ta­tion. That in­flu­ence is of­ten bought, some­times in rand or dol­lars, some­times with en­trance tick­ets to the magic cir­cle. The co-op­tion of the po­lit­i­cal class has ac­cel­er­ated. That largely ex­plains why com­pany own­ers and di­rec­tors and their lawyers and ac­coun­tants are so unan­swer­able to the gov­ern­ment, to the vot­ers, even to their share­hold­ers. Yes, in­sti­tu­tions and ac­tivists are strug­gling with this. Mean­while, the new rul­ing class – an un­happy mar­riage be­tween pos­tur­ing po­lit­i­cal lead­ers and cor­po­rate power – looks set to bump along re­gard­less.

In truth, power is as con­cen­trated in as few hands as it was be­fore lib­er­a­tion

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