Can we survive the appetites of the ANC?

Hermann Giliomee writes on RW Johnson's new book warning of SA's looming crisis

Over the past forty years R.W. Johnson has produced several books. Three of them, all dealing with South Africa, became the subject of heated debates. There is an uncanny coincidence. All three were written at a point where South Africa confronted a fork in the road. Looking back it is clear that Johnson has a remarkable ability to read the political pulse and survival prospects of the country.

A theme running through the three books is the historic dependence of South Africa on Western governments and Western financial institutions. Once these bodies turn on the screws a South African government is confronted with diminishing options. It happened in the early 1920s, the early 1930s, the early 1960s and in the mid-1980s, following P.W. Botha’s disastrous Rubicon speech.

The only leader who successfully defied Western pressure was the iron-willed H.F. Verwoerd. The high growth of the 1960s was greatly aided by tough exchange controls that prevented capital flight and equally tough security measures to restore order. Neither option is available to the current South African leadership as a way of returning to a high growth path. Ask Robert Mugabe.

The first of the three books, entitled How Long Will South Africa Survive? (the current book has the same title) appeared in 1977 when Johnson was still an Oxford don. It was such a seminal book that ten years later twelve scholars contributed to a volume in which they assessed Johnson’s analysis and his forecasts.

Johnson’s explicit argument was that the white regime would survive as long as the whites remained united and the government was prepared to suppress any insurrection. The implicit assumption was that the regime had to keep blacks in check without a level of bloodshed that would trigger widespread moral outrage.

There was also another factor, more relevant to the present crisis. South Africa’s growing debt had become an issue of growing concern. As Patti Waldmeir, Finacial Times correspondent and author of Anatomy of a Miracle, wrote: “In the perception of foreign investors South Africa was unstable, and small, unstable countries, unlike large ones, do not borrow money.” It was because South Africa was so vulnerable financially that P.W. Botha’s the Rubicon speech was such an unmitigated disaster.

Johnson’s second “crisis” book was South Africa’s Brave New World: The Beloved Country Since the End of Apartheid (Penguin Books 2009). It was to my mind the most important analysis of the country to appear since 1994. He attributed the decline the country was undergoing to the peculiar thinking of ANC leaders, many of whom spent years in exile, and the system of cadre deployment that they were enforcing.

A fork in the road confronted the ANC in 2009. It could have continued on Thabo Mbeki’s road of respecting the constitution and pursuing market-oriented policies in order to attract investment and stimulate growth. Or it could tear up the constitution, re-open land claims and accelerate BEE and population representivity in the labour market. It chose the latter.

Johnson predicted that the system that ANC would put in place was curious amalgam of “one-party-dominant state”, which took root in many African countries, and the “democratic centralism” of the East European dictatorships. The press and the courts find themselves under increasing pressure. In one of his seminal comments Johnson states that for the ANC leaders returning from exile democracy is not a process but a once-off event. It rules out the idea that the ruling party could be unseated or even commit fundamental errors. All the matters is the retention of ANC power.

In Brave New World Johnson argued that colonialism certainly was cruel and unjust, but there was no predetermined outcome for those states that succeeded a colonial order. Some states become failed states (Algeria and Zimbabwe), but successful states have indeed been born in certain ex-colonies. One of them is Brazil. It is characterised by inequalities almost as pronounced as those in South Africa, but it has avoided the large scale exploitation of the racial issue in a way the impacts negatively on the economy.

Johnson rejected the ANC’s ideology that South Africa must first overcome the devastating and fatal heritage of colonialism by way of BEE, transformation and population group representation. All that such policies do is creating a “bureaucratic bourgeoisie”, who depends on the state to advance their narrow interests in either the public or private sector.

R.W. Johnson’s new book How long will South Africa Survive? The Looming Crisis (Jonathan Ball, 2015) deals with the question on everyone’s lips: When will the blundering Zuma government land the country in such serious financial difficulties that it will be forced to ask the International Monetary Fund to bail it out? We may soon see the spectacle of both the world’s oldest democracy (Greece) and one of the youngest (South Africa) having to accept conditional aid to help it address a grave financial crisis.

When will this happen? Johnson does not give a time frame in his book but in an interview with Andrew Donaldson, posted on Politicsweb on 27 May, he suggests that the government could be forced to ask for a bailout within the next two years. Perhaps it was a mistake to make that comment. It is so much easier to reject a prediction that a crisis was just around the corner than to address the proposition that at some point over the medium term South Africa is sure to encounter a major crisis requiring foreign assistance.

What cannot be denied is that South Africa has become increasingly unattractive for foreign investors and that without the steady inflow of foreign capital we are in serious trouble. At present we have a cabinet of which 40 percent are members of the South African Communist Party. Recently Dr. Niel Barnard, ex-chief of the National Intelligence Service and author of the best-selling book Secret Revolution, stated publicly: “South Africa is presently one of the most advanced communist states in the world.”

Property rights, one of the pillars of both a market-oriented system and a liberal democracy, are under a greater threat than ever before. The government plans to make the state the custodian of all agricultural land. It will destroy agriculture as we know it. The state’s right to expropriate will soon be extended greatly.

One would have thought these threats would have triggered a broad-based alliance of all sectors in society committed to the market and democracy. Tragically sectors such as the corporate sector and organised agriculture (with the exception of the Transvaalse Landbou Unie) are attempting to strike special deals with government. This is the road to disaster. There was never a more crucial need for people across colour lines to stand together for their rights and their freedoms.

The present policies of empowerment and transformation reminds one of the line of Shakespeare of “an increase of appetite [that] had grown by what it fed on.” It does not bring about a middle class that stabilises society but one with an ever greater appetite for more state intervention on their behalf. In the meantime the black underclass languishes. With poor education they have little prospect of a proper job.

An article by Koos Bekker, chairman of Naspers, that appeared in City Press of 24 May spells out the astonishing progress that sections of the black middle class have made since 1994. He pointed to the case of the Government Employees Pension Fund (GEPF), the body that represents the pensions of state employees. Bekker writes: “The majority of [the GEPF] is owned by black civil servants, especially those in top positions. The own 12,5 per cent of the JSA, by far the biggest player... About 52% of homes being bought today are owned by black people as are most cars.”

Bekker also cites the JSE study of the Top 100 listed groups, which concluded that the current split was as follows:

- foreign investors 39%

- local whites 22%

- local blacks 22%

- unclassified 16%

One of would have thought that this kind of transformation would be applauded across racial lines, but as Bekker notes [It ] was met with a surpring outcry. “After all if black people are making progress the justification for future gimme schemes falls away. So some rather well-off people are in the weird position of rubbishing the achievements of the ANV in order to nurture a sense of grievance, which in turn feeds the need for future BEE schemes.

Bekker also refers to a recent proposal that was floated. According to this, no company can reach top BEE points without giving one or more of the elite a direct 25 % stake. He notes: “This is a very big slice indeed: big listed companies usually don’t have a 25 % shareholder. Such a massive percentage gives blocking power for special resolutions. So no one can run the company without the new gatekeeper’s consent.”

The proposal was withdrawn but the appetite remains.

Johnson believes that South Africa will reach a point where the government would be compelled to approach the International Monetary Fund to help to address a serious financial crisis. One expects that IMF assistance would not be given without some strict conditions. A strong ANC faction will almost certainly oppose this. Some may even prefer the Mugabe option. But unlike Zimbabwe there is no real scope here to return to a rural home.

Neither is there a defence force that can impose a state of tyranny. There is only one inescapable reality. As Johnson puts it, “South Africa can either choose to have an ANC government or it can choose to have a modern industrial economy. It cannot have both.”

Hermann Giliomee is a historian.