MANUEL White mo­nop­oly cap­i­tal doesn’t EX­IST

The for­mer fi­nance min­is­ter didn’t mince his words when talk­ing about SA’s credit rating, state cap­ture and what needed to change, writes Justin Brown

CityPress - - News -

South Africa has nei­ther the eco­nomic data nor a good enough re­la­tion­ship with rating agen­cies to re­store the coun­try’s in­vest­ment grade rating, for­mer fi­nance min­is­ter Trevor Manuel said this week at an event held at the Nel­son Man­dela Foun­da­tion about “Man­dela’s eco­nomic legacy”. Dur­ing a brief in­ter­view with City Press on the side­lines, Manuel said: “The rating agen­cies sit with a big suite of data, but they also look to re­la­tion­ships. I don’t think that we have ei­ther the data that per­suade them or the re­la­tion­ships that con­vince them.

“Even when Pravin Gord­han was min­is­ter of fi­nance, backed by CEOs, the rating agen­cies gave South Africa the ben­e­fit of the doubt ... Even at the time of his ap­point­ment af­ter the re­moval of [for­mer fi­nance min­is­ter] Nh­lanhla Nene – the rating agen­cies were ask­ing about the di­rec­tion of de­ci­sion mak­ing in the coun­try. So, all of these are fun­da­men­tally about trust re­la­tions.”

For­mer pres­i­dent Nel­son Man­dela es­tab­lished close re­la­tions with the rating agen­cies, Moody’s In­vestors Ser­vice in par­tic­u­lar, Manuel said.

“He [Man­dela] would en­sure that we could be con­tacted. Peo­ple have to trust, pol­icy must be pre­dictable and I think that is a dis­con­ti­nu­ity that we have at the mo­ment.” Manuel was fi­nance min­is­ter from 1996 to 2009. In Fe­bru­ary 2000, S&P Global Rat­ings for the first time granted the coun­try an in­vest­ment grade rating and in July 2000, Fitch Rat­ings did the same. Moody’s In­vestors Ser­vice first as­sessed the coun­try as in­vest­ment grade in 1995.

In early April this year, both S&P and Fitch down­graded South Africa to “junk” in­vest­ment sta­tus af­ter Pres­i­dent Ja­cob Zuma fired Gord­han as fi­nance min­ster and re­placed him with Malusi Gi­gaba.

When asked by City Press for his view on Gi­gaba in his new role, Manuel said: “I don’t com­ment on peo­ple and their skills – it’s in­ap­pro­pri­ate.”

Fitch this week af­firmed South Africa’s “junk” rating. Moody’s has the coun­try’s credit rating on re­view for a down­grade and will an­nounce its de­ci­sion by early July at the lat­est.

“We are at a very bad place as a coun­try... [For Man­dela,] it was al­ways about us­ing eco­nom­ics as a means to some­thing else ... never as an end in it­self,” he said dur­ing the panel dis­cus­sion.

“Right now, pol­i­tics is an end to per­sonal en­rich­ment by what­ever means pos­si­ble and eco­nom­ics is en­tirely by the way.

“So, the lan­guage of car­ing ... build­ing a democ­racy that ac­tu­ally takes ac­count of peo­ple’s needs – that kind of lan­guage is miss­ing,” Manuel told the au­di­ence. Turn­ing to land resti­tu­tion, Manuel said – dur­ing the panel dis­cus­sion – that there was no men­tion in the South African Con­sti­tu­tion of the “will­ing seller, will­ing buyer” prin­ci­ple. “It is ac­tu­ally state fail­ure that has created the prob­lem,” he said. Turn­ing to Par­lia­ment, Manuel said dur­ing the in­ter­view that, over a long time, Par­lia­ment’s over­sight re­spon­si­bil­i­ties had failed. “Par­lia­ment is ill-equipped to over­see what hap­pens. Take the judg­ment of the Con­sti­tu­tional Court of March 31 last year. A unan­i­mous de­ci­sion of the court found that Par­lia­ment had failed in its core man­date to ex­er­cise over­sight over the ex­ec­u­tive. Now, that hap­pened in re­la­tion to the pres­i­dent and Nkandla, but de­part­ment by de­part­ment [is] go­ing in there and not deal­ing with is­sues. “In the con­text of the three arms of govern­ment – we can’t merely de­pend on the courts. Courts are the last line of de­fence. Courts can’t ini­ti­ate pol­icy. They can’t im­ple­ment pol­icy. They can in­di­cate on re­quest when a par­tic­u­lar de­ci­sion is out of line of the spirit and let­ter of the Con­sti­tu­tion. “You need the other two arms of govern­ment to be ac­tive, dy­namic and in­volved in the process of pol­icy to deal with is­sues in peo­ple’s lives. That’s where the break is hap­pen­ing. “I say Par­lia­ment – but I also in­clude the nine provin­cial leg­is­la­tures and elected lo­cal gov­ern­ments – faces enor­mous stresses and strains in ex­actly the same area. As is ev­i­dent now from Johannesburg, it’s not merely chang­ing par­ties. “There is a series of sys­temic is­sues that need to be dealt with in the way gov­ern­ments en­gage with peo­ple and de­liver ser­vices.” Re­gard­ing white mo­nop­oly cap­i­tal, Manuel said that the al­ter­na­tive was “In­dian mo­nop­oly cap­ture out of Sax­on­wold”. “The al­ter­na­tive surely has to be how we build an in­clu­sive econ­omy. White mo­nop­oly cap­i­tal doesn’t ex­ist – other than what has been gen­er­ated by [PR agency] Bell Pot­tinger,” he added. In an­other de­vel­op­ment, Fin24 this week re­ported that Nene said that the coun­try was go­ing through “tur­bu­lent times”. “Our econ­omy is mov­ing at a snail’s pace and for some it may feel like it is not mov­ing at all. “Then there is the po­lit­i­cal drama that grabs the at­ten­tion much more than any of the soapies cur­rently out there.” He was speak­ing at the launch the Uni­ver­sity of Cape Town’s Grad­u­ate School of Busi­ness’ new satel­lite cam­pus in Sand­ton. “Tur­bu­lent times call for a spe­cial type of leader; above all else, they calls for steady nerves. “Tur­bu­lent times call for lead­ers to gaze beyond the fog.”


TOUGH TALK Trevor Manuel and Mandla Langa at the Nel­son Man­dela Foun­da­tion in Houghton

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