SA on cusp of political and economic crisis
Calls for current administration to pull country back from edge of the ‘fiscal cliff’
HOW does avoiding the implementation of the 54th ANC resolution on Israel improve South Africa’s economic crisis, international relations and the revolutionary morality of the ANC?
One of the reasons that the ANC adopted a resolution to downgrade Israel was not only its left-learning ideological orientation, but a general trepidation of what occurred to Saddam Hussein, Muammar Gaddafi and some African leaders who visited The Hague.
In the collective wisdom of the ANC delegates at that 54th Nasrec Conference, was among others the 2008 established truce between Israel and the Hamas. On reflection, not a single Hamas rocket was fired until Israel broke the truce under cover of the US election on November 4, invading Gaza for no good reason and killing half a dozen Hamas members.
The Israel government was advised by its highest intelligence officials that the truce could be renewed by easing the criminal blockade and ending military attacks. But the government of Ehud Olmert rejected these options, resorting to its huge advantage in violence: Operation Cast Lead.
The internationally-respected Gazan human rights advocate Raji Sourani analysed the pattern of attack under Cast Lead. The bombing was concentrated in the north, targeting defenceless civilians in the most densely-populated areas, with no possible military basis. The goal Sourani suggested may have been to drive the intimidated population to the south, near the Egyptian border. This is one of the reasons and the context in which the ANC took such a resolution.
How the supposed practitioners and processors of our foreign policy jettison this aspect of global tragedy in terms of implementing the ANC resolution remains a mystery. Instead this resolution is enigmatised by those who are sent to implement it. Historically, the minister who began the implementation of this resolution paid a huge price, I guess her loyalty, conviction and commitment to the ANC doctrine is what compromised her.
The question then arises: If you are not implementing an ANC mandate, whose mandate are you pursuing? And how does your stance improve not only the moral revolutionary fibre of the ANC, but the philosophy of South Africa’s international relations?
Let’s look at it differently from a political economy perspective; it is now abundantly clear that South Africa is on the cusp of a perfect storm of a simultaneous political and economic crisis. The political crisis is expressed in the ideological and consequently policy paralysis as reflected above, which remain unresolved since the Nasrec Conference of December 2017 that led to President Cyril Ramaphosa’s accession to the ANC and subsequently the nation’s presidency at its 54th National Congress by the razorthin majority of 179 votes.
Fast forward to a “New Dawn” which would drag the country out of its political and economic quagmire we have been relentlessly told by our enlightened overseers. Initiatives included the establishment of various commissions of inquiry among which the Zondo Commission of inquiry into state capture was given a starring role with wall-to-wall media coverage, investment envoys, sending the lions into the world with the ambitious target of raising R1.2 trillion in five years – which has so far led to two investment conferences said to have raised pledges of in excess of a questionable R300bn. “New Dawn” has been all too ephemeral.
A cursory glance through commentary in the business press shows a significant overall loss of confidence.
Among the more perspicacious of these analysts, former Financial Mail and Business Day editor, and a staunch status quo’s champion, Peter Bruce, has therefore felt obliged to come out to bat for where we find ourselves.
Commenting sceptically on a proposal by outgoing Goldman Sachs SA head Colin Coleman on how to address the commonly held business-class view that Eskom has 16 000 employees surplus to requirements who must be dismissed, Bruce calls for patience with what we have. In these words is captured depth of the concern of the ruling white economic elite about the extent of the political crisis. It also confirms the intersection of politics and economics, the crisis in the latter reinforcing the crisis of the former not just within the ANC, but beyond it, into the Tripartite Alliance.
Of crucial concern is the plummeting share prices, which have affected the largest SA retailers, hitherto invincible powerhouses, including Mr Price, the king of cash-based clothing retail; grocery pin-up stock Shoprite; Massmart, which owns Game and Makro; apparel company Truworths; TFG, which owns Foschini; druggist DisChem, and grocer Pick n Pay all down by between 17% and 61%.
Business Day (8/8/2019) reported that Statistics SA data showed mining production decreased for the eighth consecutive contraction for the sector by June, a worse outcome than the 2.2% contraction than Bloomberg economists had expected.
Construction giants Aveng and Group Five have lost 98% of their value in the past five years. The contractor, Lubbe Construction – which in better days described itself as “the biggest integrated construction development & management, infrastructure & property development company in SA” – has applied for business rescue”, (BL Premium –14/2/2019). The manufacturing sector is in steep decline with factory output having fallen for the fourth month running by September, with nine out of 10 manufacturing sectors shrinking on an annualised basis, according to Stats SA figures.
Agriculture is experiencing the worst drought in 1 000 years in at least more than one province. The 127-year old Tongaat Hulett is pulling out of sugar production, selling out to black economic empowerment interests among others. Within the business sector there is panic, demoralisation and a deafening hysteria in the calls upon the current administration for urgent measures to pull SA back from the edge of the “fiscal cliff”.
There is a fear that as the budget deficit widens, the repeated failures, over the past five years, to reach economic growth and tax revenue targets will lead to a government default on its debt and those of state-owned enterprises, especially Eskom.
About 10.2 million out of 19 million credit-active borrowers are in arrears. Households spend 72% of annual income on debt servicing. The effects of a downgrade would turn a disaster into a catastrophe for working class people and the question is: who will defend them?
In addition to accelerating the rising rate of liquidations and bankruptcies, and the consequent increase in mass unemployment already standing at 10.2 million, the higher interest rates would ripple throughout the economy. It would mean a rise in house repossessions already standing at 10 000 a year, to which would be added furniture and cars as well as defaults on loan repayments.
Like the Wailing Wall of Jerusalem to pilgrims, the business press is providing captains of industry, business institutions, spokespersons, analysts and commentators a platform to ventilate their despair and to ramp up the volume of demands for more “sacrifices” from the working class.
A feature headlined “SA’s great unravelling, can the economy still be saved?” (BL Premium – 15/9/2019) reads: “SA is in a profound and deepening economic crisis” concludes a fiscal report by the Centre for Development & Enterprise. It is titled, aptly, “Running out of road”.
“SA’s public finances are increasingly precarious, its macroeconomic fundamentals increasingly unsound and the path we are on increasingly unsustainable,” the report says.
“It is hard to avoid despair about whether government and the ruling party fully grasp the depth of the changes required and how much leadership it will take from the president to get this done.”
After meeting President Cyril Ramaphosa, Business Unity SA president Sipho Pityana released a hard-hitting statement, blaming SA’s economic and fiscal deterioration on the government’s reluctance to take the decisions required to stabilise public finances and create conditions more conducive to economic growth. What the hysteria confirms, of course is that, behind the economic elite’s concern for the state of the economy is in reality their main pre-occupation: the loss of profits.
With this gloom and bleak economic depiction, how did the avoidance of implementing the ANC resolution to downgrade Israel improve South Africa’s economic situation? Let alone improving South Africa’s moral global standing.