No other book published this year has captured the attention of South Africans like RW Johnson’s bestselling “How Long Will South Africa Survive.” One of the most popular articles in Biznews this year was the Andrew Donaldson’s column based on his interview with the author. And when the world’s bestselling writer on money, Robert “Rich Dad, Poor Dad” Kiyosaki popped around for a chat earlier this month, he gave the book a rave review calling it a “fantastic book…read it, read it, read it – I wish I could write as good as this guy.” This week RW Johnson reflected his masterpiece. As you may expect, like the book itself Johnson’s “author’s note” is itself substantial. Here is Part One of three. – Alec Hogg

By RW Johnson*

In the time since I finished writing my book How Long Will South Africa Survive? The Looming Crisis a number of new features have emerged and, of course, so have new questions.

In examining the contemporary period it is important to try to divine underlying elements of the popular mood. This can often be a subtle business. For example if one goes back to 2008 and the first major power cuts it was possible to see – literally on people’s faces – a sea change in the popular mood. The long commodity boom of 2000- 2007 had habituated South Africans of all races to the glad realities of regular and rapid economic growth.

The revelation that South Africa now faced a future of power cuts and down-graded growth brought everyone to a juddering halt. It was quite noticeable that heads went down and spirits fell. There was a sudden collective gasp at the thought “we are going to be just like any other African country with power cuts all the time and nothing working properly”. Despite all the promises, this was not going to be a ‘ better life for all’.

As this realisation sank in there was a souring of the popular mood all the way down to grass roots level. For those who had fought against apartheid it was a particularly bitter pill for this was, they felt, their government. It had promised them that it would avoid the mistakes of other African governments and now it had let them down.

Worse, it had damaged African self-respect by failing in just the sort of way that the old racist right had always predicted. Now a future beckoned in which things would, drearily, be more difficult. It was not long before people looked around and measured their present discontents.

Inevitably they focused upon the central fact of mass unemployment and immediately thereafter on the presence of large numbers of foreigners who were in work. Almost as day follows night the first major xenophobic riots occurred. It is too simplistic to say that the first major power failure caused the xenophobic riots in which over 60 people died but there was indeed a complex and mediated chain of reaction connecting the two events.

Anyone who attempts the analysis of contemporary events has to think carefully about the components of the national mood and what is moving beneath the surface of it.

Underlying Trends

In the same way if we look at the present period it is possible to discern several underlying trends. Consider the following:-

The Government brought forward a new proposal for BEE suggesting that in the place of broad based economic empowerment one should move to a situation in which major corporations had at least one major black shareholder with 25% of the equity. This proposal had to be hurriedly rescinded but the intent was clear. The Government announced a programme backed by over R1 billion in investment to create 100 black industrialists. SALGA (the South African Local Government Association) demanded on behalf of all local councillors that they be paid the same as MPs, vis R1.3m./annum[1]. The Public Service Unions demanded a 15% increase. They settled for 7%, still well ahead of inflation. However, the increases to various fringe benefits actually brought the increase to an average 11.5%[2]. Inevitably the municipal workers union demanded at least equal treatment. Both unions assume, as of right, that they will achieve a real increase in salary every year, regardless of the real economy. Traditional leaders – chiefs and headmen – obtained a pay rise of 28.4%. The provinces, which have no money to pay this increase, are having to fund it by dint of diverting funds from their infrastructure and poverty reduction budgets. That is to say money will be taken from the poor in order to redistribute it to the already well paid[3]. In the current negotiations with the gold mining industry the NUM has demanded an 80% increase and AMCU has asked for 100%. The Minister of Mineral Resources, Ngoako Ramatlhodi, is attempting to insist that those mining companies which distributed 26% of their equity for BEE purposes but whose black investors have since sold their shares, must now make a further distribution of up to 26% in order to retain their BEE status. The companies are fighting this in the courts, for it would mean, in effect, that they would be distributing over half their equity – and thus the control of their companies – on preferential terms in “sweetheart” deals. Naturally, the same principle could be applied to all other enterprises. The Government has passed the Private Security Industry Regulation Act requiring that all private security companies must have at least 51% local ownership. As a result, various foreign investors are threatening to take the government to the WTO and AGOA is in the balance. The government has brought in new visa regulations which have the effect of stifling international tourism with grave consequences for local employment.

The “Big Man” complex and other trends

As one surveys these changes or proposed changes one can see two underlying trends. The first clearly stems from a generalised anxiety that ‘the money is running out.’ (This is simply the obverse side of the collapse in consumer confidence to levels not seen for 15 years[4].) The result is that diverse groups in South African society are all making a large – and often greedy – grab for resources. If, after all, the money is running out then it is best to grab what you can now so as not to be at the back of the queue after the money has run out.

The second current visible in these diverse bids is a very deliberate attempt to privilege the upper sections of the black elite over its lower members. This is visible in both the BEE proposals for mining and the security industry (which would clearly end up with a handful of fat cat black investors as the major beneficiaries).

It is visible again in the aborted proposal for companies to have at least one black investor with 25% of their equity; it is visible in the way in which huge increases are being pushed towards traditional leaders at the cost of the poor; it is further visible in the way that SALGA is pushing for local councillors to get huge increases of up to 200% to bring them level with MPs – at the same time that SALGA is firmly refusing the much lower demands made by municipal workers[5]; and it is further visible in the Government’s bizarre objective of creating black industrialists.

Indeed this last demand makes it obvious that what matters to the government is not the general welfare but the creation of a much smaller group of fat cats. Quite clearly this concern grows out of an African ‘big man’ cast of mind. Just as with the proposal for a black 25% shareholder in major corporations the government’s ideal is to have more Patrice Motsepes or if you like, more black versions of Johann Rupert i.e. black billionaires who can throw their weight around and boss the economic scene.

This objective is not just repellent but also naïve. After all under ANC rule South Africa has been de-industrialising at a steady pace – so the conditions to create new industrialists, black or white, hardly exist. Moreover there is no shortage of comprador capitalists like Bridgette Radebe, now one of the richest women in Africa.

Ms Radebe is a strong advocate for South Africa moving further into the business of the beneficiation of its mineral wealth. But one notices that she does not use her great wealth in order to do this herself. She could become a large black industrialist overnight if she wanted to but the conditions are hardly tempting.

Similarly the proposal for black 25 % shareholders in large companies was simply naïve because almost no such company has a 25% shareholder of any colour. What is striking is the complete obliviousness of the upper black elite at the growing disaster enveloping poor blacks as unemployment remorselessly grows thanks to low growth. This was summed up by the fact that President Zuma told parliament that South Africa was doing ‘very well’ and that the government had ‘a good story to tell’ on the very day that unemployment jumped to a new record[6].

Similarly the visa proposals which could cripple the tourism industry seem to be made without any concern for the hundreds of thousands of jobs which could be lost as a result. One is driven to the conclusion that the black elite simply does not care about high unemployment. This is true even of COSATU which insists that it wants only ‘decent’ jobs – and won’t look at less well paid ones. Indeed, this is central to Cosatu’s entire project: it has concentrated on creating a small labour aristocracy with high minimum wages and strong legal protection against dismissal.

The result is an extraordinary situation in which little more than 40% of South African adults are in productive employment as compared to the international norm of around 60%. Quite clearly if the government’s objective was really to bring down unemployment it would not tolerate such a situation and would behave very differently.

Unemployment has doubled under ANC rule and everything suggests that it will continue to increase. This is the country’s gravest crisis. The sense of crisis is now widespread in South Africa and there is even an edge of hysteria in some of the commentary on it. The government’s response is remarkable.

It has clearly decided that almost the whole problem lies in the media and those who propagate the notion that anything is wrong. (Thus Malusi Gigaba, whose changes to the visa regulations have cost the tourism industry so dear, blames the tourist agencies for creating bad publicity which has, he claims, caused all the damage[7].)

Already the ANC has effectively taken over a large portion of the press and is now exerting maximum pressure on the remaining independent outlets. That is, the ANC has decided to define the national economic crisis as a propaganda problem. This is denialism on a heroic scale. Thus Zweli Mkhize told newspaper editors “Some sections of the media consciously choose to oppose the ANC…What informs the general pessimism in the media? Is it perhaps that you are feeding a certain constituency that reads the news?”[8])

Other trends are visible too. One is that the bien pensant business and professional classes have become noticeably disillusioned and the iron has entered their souls. This is evident in a host of different ways and particularly in the way that both they and many journalists are now willing to face the fact that the government is being towed along to a considerable extent by its SACP core. (President Zuma, speaking at the SACP’s Congress, openly saluted Marxism-Leninism as the ‘science’ which guides government thinking.)

Similarly, the mining companies have passed up many opportunities to take the government to court in the past: the tiny Red Graniti company was the only one to contest the effective expropriation of the companies’ ownership of their mines. But now the companies have clearly decided that enough is enough.

Among the Left intelligentsia a state of complete anomie prevails. Even the most ideological among them are now thoroughly aware that things are not going according to plan. This is visible in the way that SACP figures such as Jeremy Cronin, Colin Bundy or Ronnie Kasrils all lament the way in which the revolution has somehow gone wrong. They all search for the answer in some imagined accommodation between Capital (abstractly apostrophized thus) and the ANC elite in the early 1990s, a sort of selling out in which Mandela was inevitably the main villain. This argument rests on no visible foundations. The only agreement reached between the white and black elites was the Constitution.

No separate economic agreement was ever made limiting the way in which future governments could behave. South Africa’s governments since 1994 were free to do as they wished in the economic realm. And the ANC has had no scruple about moving the goal posts when it suited them. If things have not turned out in the way that Cronin, Bundy and Kasrils would have liked them to, some other explanation is required: there was no elite pact.

In any case, for anyone who was around at the time, the notion that ANC revolutionaries were somehow seduced by Capital seems ridiculous. It would be truer to say that the ANC leadership of the time rushed into the arms of white business, gleefully acquiring sugar daddies as fast as they could. The fact is that corruption already existed within the ANC in exile and, when they returned from exile, such elements merely took advantage of the far greater opportunities for corruption back home.

This disorientation is also visible among the broader group of Left sympathisers. True their ranks have been greatly thinned by defection but many remain for whom being part of the UDF was their fundamental emotional experience, filling them with moral certainty and a large self-righteousness.

Typically, such folk want, at all costs, to retain that sense of righteousness – chiefly expressed by denouncing those who do not agree with them – and yet they feel increasing confusion as to what should actually be done. Many seek refuge with the chimerical illusion of an “Economic CODESA”, whereby the wealthy will simply give away their wealth to the poor, something that has never happened anywhere in history before and which would, in any case, not produce more than a slim dividend when distributed among the vast mass of the poor.

The notion that such a settlement could be reached via a negotiation with the black elite is made with complete disregard for the fact that this elite does not want redistribution towards the poor and will, quite certainly, make a successful grab for any resources that are going. Zuma wants a hundred black industrialists, after all: more African “big men”, like himself.

The resulting confusion and sheer denialism of the Left intelligentsia has to be seen to be believed. Antjie Krog, for example, has called for a two year ‘Radical Reconstruction Period’ in which, apparently, everything else will stop as the country pours all its efforts into a vast project of self-transformation. ‘Every home and every house in the suburb should be confronted by the fact of shackness, every park filled with squatters, every street with vendors. Every home and landowner, every farm free to negotiate a living space with whoever moves in.’[9]

This bizarre nightmare is in effect a call for Mugabeism in South Africa. Should anything like it occur the result would be mass emigration and social collapse. The fact that Ms Krog could give such a speech as she presided over the Sunday Times Book Awards[10] is a sign of how completely lost much of the old South African English-speaking Establishment now is.

Part 2 is available here.

Footnotes:

[1] The Times, 19 June 2015.

[2] Business Day, 30 July 2015.

[3] The Times, 23 June 2015.

[4] Business Report, Cape Times, 3 July 2015.

[5] Typically enough, the ruling group in SALGA, led by Xolile George, has enriched itself. Mr George has a salary of R3.8m., a cellphone allowance of R86,000 p.a., and a car allowance of a further R150,000. (See SAMWU press release, 30.6.15, SAMWU going for Conciliation with SALGBC.) To be fair, one reason that SALGA resisted SAMWU’s demands is that many municipalities are bankrupt and cannot pay their workers at all.

[6] In addition, the drought has caused a 16.6% fall in agricultural output. The Times, 27 May 2015.

[7] Sunday Times, 2 August 2015.

[8] City Press, 5 July 2015.

[9] Sunday Times, 28 June 2015.

[10] Ibid.

* R W Johnson is an Emeritus Fellow of Magdalen College, Oxford, and was the only South African Rhodes Scholar to return to live in South Africa after the fall of apartheid. He has published twelve books, scores of academic articles and innumerable articles for the international press. His former students include three members of the current British cabinet, an editor of The Economist and a large number of leading academics and journalists. He lives in Cape Town.

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