Open for busi­ness

Bat­tle lines be­tween ANC and break­away party in­creas­ingly de­fined by class

Finweek English Edition - - Openers - TROYE LUND troyel@fin­week.co.za

AS THE FALL­OUT from the ANC’s po­lit­i­cal im­plo­sion starts to set­tle more defini­tively in a new po­lit­i­cal party to be launched by back­ers of Mo­siuoa Lekota in De­cem­ber, the jury is out on which side of the po­lit­i­cal di­vide busi­ness will hedge its bets. What’s clear is that the bat­tle for black busi­ness sup­port is on in what seems to be the for­ma­tion of new coali­tions of in­ter­ests and iden­ti­ties within busi­ness com­mu­ni­ties and con­stituen­cies.

Al­le­ga­tions by the ANC Youth League last week that Lekota’s – yet un-named – party had the fi­nan­cial back­ing of Absa brought to the fore a more pro­found process of de-align­ment from the ANC-led tri­par­tite al­liance and re­align­ment of the coun­try’s po­lit­i­cal land­scape. Absa flatly de­nied the al­le­ga­tion. But the fact of the mat­ter is that since the res­ig­na­tion of for­mer Pres­i­dent Thabo Mbeki and the de­par­ture of Lekota and other cab­i­net min­is­ters from Gov­ern­ment, Ja­cob Zuma’s sup­port­ers in the Com­mu­nist Party, trade union fed­er­a­tion Cosatu and the ANC youth and women’s leagues have been in dis­ar­ray as tra­di­tional party loy­al­ties based on race cleave along class lines.

ANC op­po­si­tion par­ties, the SA Na­tional Civic Or­gan­i­sa­tion and many lead­ing black busi­ness fig­ures – notably Wendy Luhabe, Peter Vundla, Andile Mazwai, Popo Molefe and for­mer UDF ac­tivist turned busi­ness­women Hilda Ndude – have thrown their weight and fi­nances be­hind Lekota’s ini­tia­tive in re­cent weeks.

In the­ory, Lekota him­self ap­pears to be the im­me­di­ate ben­e­fi­ciary as he moves swiftly to gain the con­fi­dence of the mid­dle class and busi­ness in a mar­ket-led pol­icy al­ter­na­tive to the ANC’s ap­par­ent at­tempt to re­in­stall the 1994 Re­con­struc­tion and De­vel­op­ment Pro­gramme (RDP) base doc­u­ment as the Gov­ern­ment’s new eco­nomic pol­icy.

But the rul­ing party has also wasted no time launch­ing a charm of­fen­sive to woo black busi­ness and the mid­dle class. Last week­end the ANC raised R30m through a gath­er­ing of 150 mainly young black en­trepreneurs who paid R250 000 for a seat at a din­ner ta­ble with Zuma. The mes­sage from the ANC was it could be “trusted” – be­cause its poli­cies were re­spon­si­ble for fast-tracking the mid­dle class and that it re­mained the home of mid­dle class vot­ers, es­pe­cially black busi­ness.

Yet a left-wing shift in eco­nomic pol­icy would seem to be squarely on the cards as the Com­mu­nist Party and Cosatu pre­vail on the rul­ing party’s lead­er­ship and pol­icy-mak­ing ma­chin­ery. Ac­cord­ing to Com­mu­nist Party deputy gen­eral sec­re­tary and ANC NEC mem­ber Jeremy Cronin, the ANC is sim­ply re­claim­ing “the essence of the 1994 RDP”. Cronin ar­gues the RDP was er­ro­neously “dumbed down in about 1995 into wel­farist tar­gets to be re­dis­tributed out of mar­ket-driven growth” – in stark con­trast to the ANC’s pol­icy that “de­vel­op­ment isn’t pri­mar­ily a re­dis­tribu­tive sub­trac­tion from growth”.

Says Cronin: “We’re now see­ing more peo­ple com­ing to ap­pre­ci­ate that trans­for­ma­tion of health­care, ed­u­ca­tion and ru­ral de­vel­op­ment are crit­i­cal in­gre­di­ents for any sus­tain­able growth.” If there was ever any doubt, Cronin con­cedes the al­liance sum­mit last month helped for­malise and con­sol­i­date the pol­icy shift to the left.

That ap­par­ent con­tra­dic­tion be­tween the pol­icy choices of the ANC and its at­tempt to se­duce the black mid­dle class and busi­ness is prompt­ing con­tro­ver­sial but chal­leng­ing prog­noses in the run-up to next year’s elec­tion.

The ques­tion is whether the ANC’s pol­icy shift confounds the hopes of busi­ness and makes prac­ti­cal al­liances im­pos­si­ble. Should busi­ness still try to re­vive the pro­gres­sive fea­tures of a mar­ket-led growth path in­side the ANC? Or is sup­port be­ing driven by some other, hid­den, agenda?

Those ques­tions have con­gealed into black busi­ness’s para­mount po­lit­i­cal chal­lenge: bluntly, to de­ter­mine where its in­ter­ests are best served.

Some an­a­lysts say sup­port by some black busi­ness fig­ures for the rul­ing party is largely a re­sult of their prox­im­ity to power and pro­cure­ment op­por­tu­ni­ties. Wits Uni­ver­sity po­lit­i­cal an­a­lyst Su­san Booy­sen says the new ANC lead­er­ship ap­pears to be com­mit­ting the same crimes it ac­cused Mbeki of – purg­ing those who aren’t loyal and re­ward­ing loy­alty with po­si­tion and power, in some cases over­look­ing crim­i­nal records. Which raises se­ri­ous cred­i­bil­ity is­sues.

In­deed, some NEC mem­bers and Cab­i­net min­is­ters pri­vately ad­mit to be­ing con­flicted about the very points Booy­sen raises, es­pe­cially af­ter the re­cent ap­point­ment of the ANC’s new chief whip in Par­lia­ment, Nyami Booi, who faces Trav­el­gate cor­rup­tion charges.

Yet it’s also con­ceiv­able that a seg­ment of black busi­ness would be in­flu­enced by the ANC’s left/cen­trist per­spec­tive that the need for eco­nomic growth would have to be con­sis­tent with a recog­ni­tion that growth would fal­ter without ad­just­ments that favoured cap­i­tal ac­cu­mu­la­tion in two re­spects: First, dys­func­tional fea­tures in the so­cial and eco­nomic spheres (low so­cial wage, pro­duc­tiv­ity, skills, health­care and ed­u­ca­tion) had to be ad­dressed.

Sec­ond, the RDP would en­able prof­itable for­ays into new and ex­pand­ing sec­tors and mar­kets iden­ti­fied by the State. Rather than a mere spec­ta­tor, busi­ness would po­si­tion it­self in part­ner­ship as a lead­ing agent in RDP projects. The State’s role in that re­gard would be to fa­cil­i­tate and reg­u­late the econ­omy – as­sum­ing a hege­monic role in the or­der­ing of so­ci­ety.

But al­though his­tor­i­cal pa­tron­age re­mains a ma­jor draw­card for black busi­ness sup­port of the ANC, no­body can deny the wilt­ing in­flu­ence of the “lib­er­a­tion fac­tor” – par­tic­u­larly among younger, more busi­ness savvy en­trepreneurs – that has ceded to mount­ing dis­af­fec­tion by a frac­tion of the black busi­ness com­mu­nity and white-col­lar work­ers within and out­side Cosatu. In essence, black busi­ness leaders in the ANC are in­creas­ingly un­com­fort­able with the es­ca­lat­ing push from the left but would rather re­main in­side the cir­cuit of power and wealth.

Fact is, while the ANC’s poli­cies have been made to har­monise with busi­ness at the level of rhetoric, the bat­tle lines be­tween the ANC and class and macro-eco­nomic pol­icy are in­creas­ingly defin­ing the break­away party.

As Lekota ob­served dur­ing a re­cent po­lit­i­cal de­bate: “We’re bour­geois. We weren’t wanted there [in the ANC].”

In his open let­ter to the ANC last month, Lekota said the dis­tinc­tion be­tween the rul­ing party and its labour al­lies had been blurred, with ANC sec­re­tary gen­eral Gwede Man­tashe also chair­man of the Com­mu­nist Party. “The ANC isn’t the SACP and the SACP isn’t the ANC,” Lekota said.

In a more re­cent in­ter­view with Fin­week Lekota more ex­plic­itly out­lined the con­tours of his pre­ferred pol­icy choice for the new party: es­sen­tially, adap­ta­tions of those im­ple­mented by the Thabo Mbeki-led gov­ern­ment. Lekota stresses that while the new party’s con­stituen­cies still needed to de­bate and de­cide on pol­icy, he po­si­tions him­self at the cen­tre-right of free mar­ket pol­icy.

“The Soviet Union and China have fallen in line with the free mar­ket sys­tem. When Blade (Nz­i­mande, sec­re­tary gen­eral of the SACP) says ‘so­cial­ism is the fu­ture, build it now’ what does he mean? If I go out that door now what is it that I must do? Need­less to say, it means noth­ing,” says Lekota, who sug­gests Marx­ist id­iom isn’t only a cover up for the cor­rupt but threat­ens to paral­yse eco­nomic growth – ex­ac­er­bat­ing in­stead of re­duc­ing poverty.

“State-owned en­ter­prises don’t prove to be as pro­duc­tive as pri­vately held in­sti­tu­tions. Peo­ple work­ing in State-owned en­ter­prises are in­dif­fer­ent (about the suc­cess or oth­er­wise of the in­sti­tu­tion). We need to be­come more com­pet­i­tive in a mod­ern world,” says Lekota, who con­cedes that the Mbeki regime (of which he was very much a part) made mis­takes, es­pe­cially in that it cre­ated a sys­tem where bu­reau­crats and politi­cians were cho­sen more for their loy­alty and con­nec­tions than their abil­ity. Hence his call for an elec­toral sys­tem that al­lows vot­ers to di­rectly choose their state pres­i­dent, pre­miers and may­ors.

Even Lekota’s in­vo­ca­tion of the Free­dom Char­ter and Con­sti­tu­tion as core prin­ci­ples on which his party will stand be­lies a pol­icy thrust that rests on lib­eral val­ues and eco­nomics. “The ANC lead­er­ship has veered away from the found­ing prin­ci­ples of the Con­sti­tu­tion and will move fur­ther away if al­lowed the space. We’re com­ing to­gether on a clar­ion call that the Con­sti­tu­tion must be de­fended and re­tained as it is and ex­e­cuted (by Gov­ern­ment),” says Lekota.

For Lekota, the catch­phrase “free mar­ket” is a pro­vi­sional re­sponse to the ANC’s eco­nomic tra­jec­tory ahead of the new party’s launch and be­lies a mes­sage of “in­clu­siv­ity” be­yond racial pol­i­tics.

That’s cer­tainly a rea­son­able proxy of what UCT an­a­lyst Co­lette Schultz-Harzen­berg ar­gues is a split be­tween dif­fer­ent coali­tions of in­ter­ests rather than par­ties or per­son­al­i­ties. Schultz-Harzen­berg sug­gests there’s a more pro­found de-align­ment from tra­di­tional party sup­port, greater voter volatil­ity and vot­ers seek­ing a new home where their in­ter­ests are bet­ter matched. The rea­son might well be a “si­lent revo­lu­tion” – un­der way since the mid-Nineties – that’s seen sig­nif­i­cant changes in the de­mog­ra­phy and class struc­ture of the coun­try.

Ev­i­dence of that is in the fact that while in­ter-racial in­equal­ity has re­mained fun­da­men­tally in­tact, in­tra-racial in­equal­ity has in­creased con­sid­er­ably. The es­sen­tial as­sump­tion, Schultz-Harzen­berg in­tones, is that racial in­equal­ity is no longer ad­e­quate as a mo­bil­is­ing plat­form for party hege­mony.

Therein lies the rub. Ide­o­log­i­cally, Lekota has coun­tered Mbeki’s racial pol­i­tics and the labour-based ex­clu­siv­ity of the Tri­par­tite al­liance by defin­ing his ini­tia­tive in in­verse terms, stress­ing in­clu­sive­ness and play­ing down dif­fer­ence. At its cen­tre is the con­vic­tion there’s no longer any am­bi­gu­ity within the Tri­par­tite al­liance over the econ­omy. “They don’t want in­tel­lec­tu­als and busi­ness,” says Lekota.

In­deed, Cosatu sec­re­tary gen­eral Zwelinz­ima Vavi has stressed that in­con­sis­tent pol­icy is­sues in the al­liance are no longer a prob­lem. Every­one is on the same page, he says. “You’ll no­tice that he (Zuma) no longer says noth­ing (in eco­nomic pol­icy) will change. He now says he doesn’t have per­sonal poli­cies and that the al­liance will en­sure there’s con­ti­nu­ity and change as things are re­viewed,” says Vavi, who adds he’s sure the break­away ini­tia­tive is the best news for busi­ness.

It may well be. Ac­cord­ing to Booy­sen, ANC party pres­i­dent Ja­cob Zuma’s schizophrenic pol­icy ut­ter­ances in re­cent months may leave the im­pres­sion that the ANC ap­pears to be a “multi-headed or­gan­i­sa­tion” that speaks with dif­fer­ent voices. But there’s greater co­her­ence in what now in­creas­ingly ap­pears to be a labour-based al­liance backed by a frac­tion of black busi­ness.

And while it ap­pears sup­port for Lekota is a mot­ley coali­tion of mal­con­tents who were in some way side­lined by their sup­port of Mbeki, the po­ten­tial to make a se­ri­ous dent in the ANC’s sup­port base is real.

In­sti­tute of Se­cu­rity Stud­ies’ po­lit­i­cal an­a­lyst Prince Mashele says the ANC has, un­til now, been play­ing into the break­away’s hands by do­ing noth­ing since Polok­wane to win the hearts and minds of South Africans. It’s pos­si­bly broad­ened the ap­peal for the new party, as it’s done ev­ery­thing to “se­ri­ously of­fend” peo­ple, in­clud­ing some of its sup­port­ers.

Says Vavi: “I’m sure they’re pour­ing money into their bucket. Some busi­ness fig­ures have al­ways hated the fact that the ANC is so dom­i­nant. Those aren’t nec­es­sar­ily all white, but mainly so.”

If busi­ness­woman Hilda Ndude’s ob­ser­va­tion is any­thing to go by, the ANC should be le­git­i­mately wor­ried: “Sup­port for Lekota’s party from busi­ness has been over­whelm­ing,” she says. “Peo­ple are beginning to see how the ANC has lost it. Many of them are re­main­ing si­lent and in­vest­ing money in in­di­vid­u­als they trust in­stead of in poli­cies at this stage. Peo­ple are wor­ried about the ANC’s val­ues, dou­ble stan­dards and the rule of law and the spe­cial cases be­ing made for leaders who are in trou­ble with the law.”

Iron­i­cally, and de­spite his racial fix­a­tion, Mbeki seems to have laid the foun­da­tion for a class re-strat­i­fi­ca­tion that’s beginning to over­lay a po­lit­i­cally paralysing racial strat­i­fi­ca­tion.

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