October 18, 2011 10:57 pm
South Africa: Contradictions to confront
Threats of an ‘economic war’ against whites are fuelling concern that a failure to address poverty may erode gains made by the rainbow nation
Weatherbeaten blue and yellow portable toilets are bunched together, some at a tilt on the uneven ground. Behind are tin shacks that have bricks, scraps of plastic and wood laid out on their roofs to help protect against the elements.
These are the homes of the thousands the latrine block serves – black South Africans, mostly jobless and bereft of the most basic services despite living in the continent’s most advanced economy. Wryly chuckling, residents say the toilets are cleaned once a week but fill up in a day because so many rely on them.
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ON THIS STORY
- Opinion Zuma needs to boot out his youth leader
- Editorial Malema dilemma
- South Africa pushes on with Malema hearing
- Person in the news Julius Malema
- Violent clashes outside Malema hearing
It was there in Stjwetla, a settlement in Johannesburg’s Alexandra township, that Julius Malema chose to celebrate the 67th birthday of the African National Congress youth league, which he leads. It provided the backdrop for another militant outburst last month from the country’s most controversial politician. He promised to declare an “economic war” against the white minority, pledging to organise an October 27 march on the Johannesburg Stock Exchange and “take the battle to the monopoly capital”.
If Alexandra’s residents heed Mr Malema’s call to action, they will not have far to go. Africa’s largest stock exchange sits in a gleaming high-rise building just a short drive away in Sandton, an affluent district that hosts designer shops, offices for some of the world’s top banks and an array of fancy restaurants with all the trappings of the first world.
Together, the two neighbourhoods expose the inequalities in South Africa that provide the fuel for Mr Malema’s outbursts – Alexandra was chosen for the youth league celebrations because its residents were apparently the most “reliable forces for the revolution”.
Such language, along with his calls for the nationalisation of mines and the expropriation of white-owned land, have grabbed headlines and sent jitters through investors. Derided as a loudmouth rabble-rouser by some and a streetwise political operator by others, the 30-year-old is currently the focus of an ANC disciplinary hearing that could see him suspended or expelled from the party.
But however he is viewed or whatever his fate, his statements have helped refocus attention on the myriad social and economic problems facing a country where whites still dominate the economy while almost half the population – predominantly black – lives below the poverty line. They have also raised questions about where South Africa and the ruling ANC are headed, a year after the nation basked in its successful hosting of the football World Cup. Growing frustration over poor services and the lack of economic transformation have supplanted those memories.
In corporate South Africa, the fear is that Mr Malema could be representative of a future where the country heads down the path of populism if ANC support slides and youth unemployment, poverty and inequality go unfixed. That raises the spectre of a state both increasingly interventionist and a vehicle of enrichment as cronyism, patronage and corruption rise.
More generally, there is a concern that social instability may increase and the gains of the past 17 years begin to unravel in the “rainbow nation” that has been a model of peaceful transition from oppressive past to vibrant democracy.
“Common sense tells you that you’ve got to address poverty, inequality and unemployment in our country, or else the place burns up,” says Sim Tshabalala, deputy chief executive of Standard Group, the country’s largest bank. “So what are the policy things that need to be lined up, and the institutions that need to be lined up, to solve that problem? Part of the challenge is that there isn’t enough coherence yet, on that vision” – in other words, what the next 20-30 years need to look like.
Next year will be critical. The ANC is to hold a policy conference in June, where a team will report its findings into the merits of mine nationalisation. Then, in December 2012, the party will hold its five-yearly elective conference amid speculation that Jacob Zuma, the country’s president, may face a leadership challenge, with Mr Malema as the public face of those plotting against him.
Nobody is suggesting an Arab-style revolution; rather, concerns are that the country is drifting without clear direction as social pressures mount. A lack of strong leadership is a common business gripe and is blamed for creating the scope for Mr Malema to launch his diatribes. Mr Zuma is criticised for indecisiveness as he seeks to appease competing party factions.
When asked about the concerns surrounding weak leadership and a government not knowing what the next step is, Kgalema Motlanthe, deputy president, says: “That’s a fair criticism.” He speaks of a change of mental and political attitudes in the ANC, from its revolutionary roots in the struggle where the “only reward could be a loss of limb” to a governing movement where “you can ascend into a position of responsibility, which may mean that you get personal rewards”, alluding to self-interest and cronyism among some.
Respected both within the ANC and the corporate sector, he is seen by many as a frontrunner to succeed the president if Mr Zuma is successfully challenged next year. He is also considered the youth league’s choice as South Africa’s next leader in the opaque world of ANC politics.
Mr Motlanthe describes the debate about the mines as “irrational” and says nationalisation will not happen. The crucial issue is job creation for the 2.8m jobless aged between 18 and 25, he adds: youth unemployment is put at about 50 per cent. “When Malema says the mining companies are making huge profits and if we nationalise them these profits will address our issues, our plight, the young people hear that. That’s the only message they hear,” he says.
He describes Mr Malema as an “activist” who hears ideas and “if this or that idea takes his fancy he runs with it”, but holds back from criticising him. “He can’t be blamed for that. We have to provide him with better information to run with; that is what we should do,” Mr Motlanthe says.
African politics: A rich seam of frustration for the continent’s populists to mine
When veteran Zambian opposition leader Michael Satawon his country’s elections last month, it was a classic example of a populist beating the incumbent in a resource-rich nation struggling to combat rampant poverty.
The southern African country is the continent’s biggest copper producer, and has enjoyed impressive growth thanks to the commodities boom of the past decade. Yet 60 per cent of its population lives below the poverty line. So when Mr Sata campaigned against corruption and poverty, and for more equitable distribution of mineral wealth, he found a ready audience. He has also sought to harness complaints about foreign investors, particularly from China – for example, about their treatment of local workers and employment of their own nationals at the expense of Zambians.
Successful populist candidates remain a rarity in Africa but social and demographic pressures suggest it will become increasingly fertile terrain for tub-thumpers. Although the continent has registered high growth rates and emerged relatively unscathed from the global economic crisis, in many countries this has done little to alleviate poverty and unemployment.
One reason is dependence on exports of raw materials. More than 80 per cent of African export earnings come from primary commodities. But according to the Africa Progress Panel – an advocacy group headed by Kofi Annan, former UN secretary-general – growth in the capital-intensive extractive sectors “has little positive impact on employment and income levels, and virtually no effect on employment-intensive sectors such as agriculture”.
Compounding the situation is the fact that many states are burdened with underdeveloped infrastructure and poorly performing education systems, even as their youthful populations grow at a rapid rate.
Corruption and weak capacity – in terms of skills and technology – have also hit development. Where trappings of wealth have materialised in the shape of malls and property projects, they often serve to highlight the gap between the haves and have-nots.
In a bid to fill such gaps, Mr Sata’s new administration has talked of raising taxes on miners to fund broader development. For now that is just a proposal. If it becomes a reality, African populism will have found its test case.
. . .
Bankers point out that South Africa is in prime position to take advantage of the growing interest in Africa from foreign investors. The nation of 50m was welcomed into the group of Bric countries this year and has the continent’s most developed corporate and industrial base. Its financial sector is ranked ninth by the World Economic Forum’s global competitiveness report and first for the regulation of its securities exchanges.
When Walmart became the first foreign mass retailer to move into the continent, it did so by acquiring a South African company this year; on a recent trip to Beijing, Mr Motlanthe oversaw agreements that should bring in $2.5bn of Chinese investment.
Yet statistics paint a grim picture of progress made to redress imbalances. In 1995, median per capita expenditure among black South Africans stood at R333 ($43) a month, compared with R3,443 for whites. By 2008, the black figure was a bare R454 while white spending had risen to R5,668, says the National Planning Commission. In spite of affirmative action initiatives, blacks – more than 85 per cent of the population – hold just 17 per cent of top management posts, while whites have 73 per cent, according to the Commission on Employment Equity.
The ills created by apartheid are much to blame. The “Bantu education” system, which in effect excluded blacks from all but low- and semi-skilled labour, is a particularly damaging legacy: South Africa’s education performance lags behind its poorer neighbours. Mr Motlanthe says the solutions lie in a revamp of schooling, fighting short-termism and addressing infrastructural deficiencies through public-private co-operation and the centre taking a bigger role in development – municipal authorities are notorious for weak capacity and corruption. “Seventeen years is not a hell of a long time,” he says, looking back to the 1994 transition to democracy.
But time is working against South Africa as about 1m exit the school system annually, 65 per cent of them without a final certificate and few with prospects of finding jobs. “The hourglass of patience is running out,” says Martin Kingston, chief executive of Rothschild South Africa. “We’ve got a situation where we have growing discontent among unemployed youth and swelling ranks of a dissatisfied population who anticipated benefits that have not been realised.”
. . .
The contrast between expectations and reality is at its most vivid in Stjwetla – where electricity poles were planted a decade ago but there is still no power supply, where water has to be lugged from outside taps and residents speak of the years they have waited to be properly housed. Stjwetla may be an extreme but it is not an anomaly – 1.2m households live in 2,700 similar “informal settlements”.
Nor are just the uneducated frustrated. Middle-class blacks complain that they too are being shut out. “I’ve got a master’s degree and I fully support what [Malema] says. Probably the argument on the nationalisation of the mines is not the answer, but he’s saying something is fundamentally wrong with the economy,” observes Mamiki Matlawa, general secretary of the Alexandra Chamber of Commerce. “We go to school, we get our degrees but we are still in the same situation because there are no opportunities. A white person the same age and with my qualifications is far more advanced: why?”
Ms Matlawa recently resigned from a development bank because she felt she was going nowhere. She may drive a Mercedes but her frustration is evident. “A lot of educated, middle-class black people agree with what Malema is saying. They are going to get to the point where people say enough is enough,” says the 37-year-old. “The current situation is not sustainable and if anybody sits in their office thinking it’s sustainable there’s something wrong.”
Many of the ANC’s leading figures are aware of the risks of allowing the situation to fester and have a stake in the market economy that has enriched a black elite. Indeed, Mr Malema himself, who grew up in poverty, now lives in posh Sandton and has a penchant for designer goods.
Mounting scrutiny over how he funds his lifestyle has prompted a police investigation into his finances. But even if he is expelled from the party, the causes he champions are unlikely to disappear as long as the divisions in society remain.
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