SA's elite will not be making the sacrifices

Argentina in the early 2000s became riddled with protests as its economy slumped and corruption set in. (AFP)

Argentina in the early 2000s became riddled with protests as its economy slumped and corruption set in. (AFP)

South African political analysts are in great demand these days. The international investor community is eager for our views. They ask: Is the national crisis provoked by the spring of discontent a "pothole in the road" or the start of a terminal decline? Are the unions too weak or too strong? Can the ANC recover its mojo – or words to that effect – or is it, too, in terminal decline?

The more seasoned fund managers who have been around the global block a time or two ask a more elegant and interesting question: Is South Africa about to become Africa's Argentina?

The question is posed without any explanatory memorandums.
"Argentina circa 2001" is a byword for short, sharp, shocking decline from a position of apparent superiority and regional economic power – inflation spirals out of control following a national social and economic crisis in which the institutions of democratic governance collapse under the weight of corruption, inadequate leadership and a complacent elite unable or unwilling to cede power or sacrifice wealth to preserve a fragile social compact.

In this Latin American story, the middle class is soon suffering too, apparently powerless to do ­anything other than watch as a neighbouring country powers past them to assume a new, far more assured ­position of continental hegemony and ­international influence. Is this South Africa's future? Certainly, the 1994 "rainbow" social compact has had its day. The Mandela social contract, which Thabo Mbeki held together for more than a decade, is over.

This is not the root cause of the current crisis, whose triple-pillared basis is long-term unemployment, chronic levels of poverty and vast inequality, but it is the reason why the effects have now come to the fore in a new and more dangerous fashion and at a most inopportune moment in the global economic cycle.

What were the core elements of the 1994 social compact that are now diminished or in disrepair? First of all, the constitutional settlement: the institutions of democratic governance are thankfully still in place, although they are imperilled by internal ANC factional contamination and opportunistic corruption from those who use the state to feather their own nests – witness the latest attempt to sully the reputation of a fearlessly independent public protector as she prepares to the enter the "Nkandlagate" fray.

The resilience of our public institutions – including key ministries of state such as the treasury – and especially the rule of law and the integrity of the court system are the country's most important bulwarks against decline. It is something that, on balance, one can still be very positive about and therefore something that continues to set South Africa apart from some of its global comparators.

The second element of the 1994 compact was the commitment of the government to fiscal rectitude and its determination to protect the poor from rampant inflation. How to grow the economy while maintaining such a prudent stance on public expenditure and borrowing has been a perennially vexing and controversial question and one that the current administration's economic development and industrial policy leadership has made significant strides towards resolving, primarily with its strategic focus on infrastructure – solid progress that, alas, the instability now is threatening.

Next week, Minister of Finance Pravin Gordhan will unveil his medium-term budget policy statement and more attention will be paid to it than ever before. I have little doubt that Gordhan will rise to the occasion, recognising that it is an opportunity to demonstrate the government's commitment to preserving this element of the 1994 social compact and reassure onlookers of the country's policy trajectory and its budgetary safeguards against populist foolishness.

So far, so good. Or relatively so. But the two other, apparently interdependent elements of the compact are in tatters: the ability of the ANC-led alliance to withstand socioeconomic pressures and the system of collective bargaining underpinned by the 1995 Labour Relations Act.

Organisational discipline
Internal divisions and a decline in not just membership, but also organisational discipline and the political integrity of both the ANC and the union movement have fundamentally weakened both organisations and, crucially, the capacity for intermediating the understandable demands and frustrations of the working class.

Cosatu is at least blessed with an astute leader in Zwelinzima Vavi, one who, for the most part, continues to command the respect of his followers, which is not something that can easily be said of the ANC, for whom Jacob Zuma has become a cause of great disunity. But, in a curious way, Cosatu and its main affiliates have become a part of the political establishment: they are veterans of the liberation struggle and the 1994 settlement. Angry young men do not share any sense of nostalgia about the past; they represent fertile ground for breakaway unions and populist leaders who turn up and promise the earth.

Can this part of the compact be rebuilt? Certainly, the "positive" effect of Marikana, if one can even speak in such terms, is that it has focused minds on the need to do so. Gordhan asserted earlier this week that government ministers had been working hard on this, but regrettably added that "we don't have to say publicly what we are doing".

Here I part company with the usually sage finance minister. At a time of crisis, behind-the-scenes action is not enough. More attention has to be paid to the public diplomacy necessary to reassure a range of key stakeholders: international investors, media, analysts and foreign governments. Even after nearly two decades in office, the ANC persistently underestimates the importance of managing external relations and trying to influence assertively the global market sentiment that it rails against.

So what is to be done? The multi-stakeholder dialogue that began on October 12 is a basic precondition. No social compact can be recovered or rebuilt in the absence of such a dialogue and the potential business-union-government accord it could generate.

Why it took almost two months from Marikana for Zuma to convene it remains unexplained. It should have happened a week after the watershed tragedy, not seven.

The middle class needs to heed one powerful message that Gordhan is conveying: irrespective of one's world view, solving this national crisis has to be a shared responsibility.

Unless it wants to live in the Buenos Aires of circa 2000, South Africa's middle class needs to respond by sharing more of its wealth, if not on the basis of progressive principled politics then on one of pragmatic, enlightened self-interest.

Many will resent such a call, saying: "We already pay enough through our taxes, which are then wasted on silly presidential palaces." Sacrifices will be needed, if not now then soon enough.

Think of it as a form of (middle-class) direct action; an emergency measure that cuts out the middle man: do voluntary community work, for example, as a teacher at a night school or a school-holidays teaching project, or double the pay of your domestic worker for a few months. Or sit back and wait, hoping others will perform the necessary brinkmanship while whistling Don't Cry for Me, Argentina.

Richard Calland

Richard Calland

Richard Calland has for past twenty five years been working in the fields of democratic governance and sustainable development in South Africa and beyond. He is a founding partner of The Paternoster Group. Read more from Richard Calland

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