Be care­ful what you wish for...

Finweek English Edition - - INSIDE -

For decades big busi­ness hoped for a weak­en­ing of the tri­part ite a l l i ance. The ANC/ COSATU/SACP coali­tion was seen as dam­ag­ing to busi­ness. Now that the al­liance is fray­ing at the edges – many are won­der­ing whether or not the sta­tus quo was more palat­able than the height­ened lev­els of po­lit­i­cal and eco­nomic un­cer­tainty with which man­agers are con­tend­ing on a daily ba­sis.

It re­ally is a case of be­ing care­ful what you wish for.

Both Govern­ment and big busi­ness have been taken un­awares by the rapid rad­i­cal­i­sa­tion of the work­force par­tic­u­larly in the plat­inum belt, and the state is stretched to deal with the rapid rise in vi­o­lent ser­vice de­liv­ery protests. For ever watch­ful rat­ings agencies, con­cerned about the sus­tain­abil­ity of a South African turn­around with­out the econ­omy find­ing in­no­va­tive ways to in­clude grow­ing num­bers of dis­af­fected young people, the rise in ac­tivism can­not be ig­nored.

A dra­matic change in po­lit­i­cal cli­mate fol­low­ing the May elec­tions could force the hand of the state and that of big busi­ness to greater lev­els of co-oper­a­tion in the face of a left­wing back­lash. Fi­nance min­is­ter Pravin Gord­han is a strong pro­po­nent of greater co-oper­a­tion be­tween pub­lic and pri­vate sec­tors.

But the ANC is vul­ner­a­ble to a back­lash from first-time vot­ers, who be­lieve that they have lit­tle to lose in voting for what they might re­gard as a rad­i­cal al­ter­na­tive. Julius Malema’s Eco­nomic Free­dom Fighters (EFF) is shak­ing up the po­lit­i­cal land­scape and is likely to get more than a hand­ful of seats in par­lia­ment. That would pro­vide the EFF with a level of po­lit­i­cal cred­i­bil­ity that it craves to achieve and will do one of two things – lead to greater sus­tain­able co-oper­a­tion be­tween pub­lic and pri­vate sec­tors, or a knee­jerk jump to the left of tra­di­tional ANC pol­icy to pla­cate vot­ers.

So far the state has re­mained res­o­lute and fo­cussed on pru­dent long-term fi­nan­cial plan­ning. Gord­han may have got away with a cou­ple of per­cent­age points on the mar­ginal tax rate if he’d cho­sen to fol­low a pop­ulist agenda. But with just 168 000 South Africans earn­ing over R1m a year, the im­pact could have been more neg­a­tive from a com­pli­ance point of view than pos­i­tive.

For now scep­ti­cal rat­ings agencies are giv­ing the fi­nance min­is­ter the ben­e­fit of the doubt.

In as much as big busi­ness was hop­ing for a break­down in the tri­par­tite al­liance, the EFF and its sup­port­ers are ea­ger to plun­der the cof­fers of the rich. They, too, should also be care­ful about what they wish for. The su­per rich are glob­ally wealthy and al­though it might pain them to do so, they are able to pack their bags and take their money gen­er­at­ing in­ge­nu­ity with them.

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