On the Brink. Claire Bisseker
bold as to say that [in times of crisis] the leadership of the institution rose to the occasion.’
Gordhan was not afraid to take an unpopular stance on the subject of transformation, even though he must have known it would play into his enemies’ hands. Speaking in Johannesburg towards the end of 2016 he said: ‘The flip side of this transformation, the rotten product in the gift wrap, is what is called rent-seeking. It means every time [we] want to do something, [we] say it is part of transformation. But in the meantime, it means giving contracts to my pals in closets.’14
Gordhan used the 2017 budget in an attempt to reframe the transformation debate in a more constructive way. He agreed with Zuma that too little had changed in the structure of the economy and patterns of wealth accumulation. But while he accepted that growth without transformation would only reinforce the inequitable patterns of wealth inherited from the past, he also acknowledged that there was a flip side: ‘transformation without economic growth would be narrow and unsustainable’.15
He went on to use the word ‘transformation’ more than 50 times in his speech – only he stressed that the kind of transformation South Africa needed was one that was mass-based, and deepened democracy, entrenched open, transparent governance and the rule of law, and was judged by its ability to create jobs and reduce poverty and inequality – all the things that South Africa was failing at.
In Gordhan’s hands, the rhetoric of radical economic transformation, which Zuma had wielded as a racially divisive threat, became recast as an all-embracing call to every South African to participate in ‘inclusive economic transformation’ in order to return South Africa to a path of rising per capita incomes across the board.
For Gordhan, transformative growth was an invitation to the private sector, not a club to beat it with. It was not obsessed with narrow transformation that benefited a well-connected elite, but the creation of jobs and opportunities so as to lift the masses out of poverty.
On the other hand, Zuma, by subsequently calling for the Constitution to be amended to allow for the expropriation of land without just and equitable compensation, made it clear that his vision of radical transformation was infused with an asset-grabbing mindset.
For Gordhan, there was no need to abandon the Constitution, radicalise existing policy, or demonise whites to achieve this. The NDP had already provided the blueprint for how to go about this, he said. He even laid out the required reforms: improving education and skills development; strengthening competition laws to reduce barriers to business entry; exposing SOEs to private-sector competition; providing support for labour-intensive sectors (including agriculture, agro-processing and tourism); and overcoming the spatial fragmentation of South Africa’s cities.
He even invoked a resolution from the ANC’s 1969 policy conference in Tanzania, where the party had agreed that ‘… our nationalism must not be confused with chauvinism or [the] narrow nationalism of a previous epoch. It must not be confused with the classical drive by an elitist group among the oppressed people to gain ascendancy so that they can replace the oppressor in the exploitation of the mass[es].’16
And so the battle lines were drawn between those in the ANC, like Zuma, who were interested in a narrow, nationalistic form of transformation, and those, like Gordhan, who believed in the imperative of reducing substantive inequality.
The battle was complicated by the fact that the ANC had begun resuscitating its populist and anti-white rhetoric, partly because of its failure to improve living standards for many and partly to counter the inroads being made by Julius Malema’s EFF on its voter base.
Political analyst R.W. Johnson argued that, whereas under Nelson Mandela the ANC had been proudly non-racial, as the government’s economic blunders became increasingly apparent its attitude changed. At the same time, the ANC had watched with alarm as the radical, anti-white rhetoric of the EFF had gained traction. ‘This panics [the ANC] completely and its response is to attempt to ensure that, whatever else, it will not be outflanked on that theme. It must fight to ensure that racial nationalism works in its favour and not in Malema’s,’ Johnson said. ‘Thus whites find themselves on the wrong end of a Dutch auction on anti-white racism.’17
At the start of 2017, political analyst Justice Malala warned South Africans to brace themselves for escalating rhetoric about transformation and race over the course of the year as politicians jostled for popularity in the run-up to the ANC’s electoral conference in December. ‘I foresee an era of major anxiety and tumult as the redress rhetoric is cranked up,’ he wrote. But this should not suggest that the party’s leaders actually cared about policy formulation because, as Malala pointed out, they would be ‘too busy fighting and using race in an attempt to appear radical’.18
Indeed, the air was thick with the phrase ‘radical economic transformation,’ wrote BDFM editor-in-chief Peter Bruce, who described it as ‘a piece of political codswallop so astronomic even Jacob Zuma was reduced to calling it “radical economic whatwhat” in a speech the other day. No wonder he won’t say what it means; he can’t remember its name.’19
Though it was all very well poking fun at Zuma’s radical economic claptrap, the fact that he had unilaterally announced a new economic-policy approach raised serious economic risks. For starters, the fantasy of radical economic transformation and its handmaiden, white monopoly capital, were irreconcilable with the NDP. Adopted by government in 2014 but mostly ignored, the NDP was based on the notion that South Africans had to get past party-political differences to grow the economy and that growth needed to be the yardstick against which all policies were measured.
To the extent that radical economic transformation and white monopoly capital placed the blame for South Africa’s lack of growth and transformation on the white community, they tacitly absolved the state for having failed to implement the NDP, and for having made so little progress in reducing unemployment, poverty and inequality despite having had more than 20 years in power.
But since these two slogans, cooked up in smoky back rooms in Saxonwold, were essentially devoid of content, the policy incoherence and paralysis that South Africa had been enduring for years were likely to deepen. No serious commentator believed that Zuma or his chosen successor, Nkosazana Dlamini-Zuma, had any intention of wrecking the economy by implementing Zimbabwe-style land grabs or nationalising industry. But, in that case, what would they implement? More of the same stasis and drift were all but guaranteed on their watch.
The other problem was that Zuma’s appeal to nationalistic, radical solutions had real resonance, grounded, as it was, in the lived experience of many black people. Transformation had to be accelerated, he said, because political freedom was incomplete without economic emancipation. The income gap between blacks and whites remained huge, and there could be no sustainability in any economy where the majority of black people were still excluded.20
This is, of course, 100% true. South Africa is one of the most unequal economies on the planet (a theme we will return to in Chapter 8). Not only is this economically unsustainable, but it is also morally repugnant. What wasn’t helpful, however, was for Zuma to manipulate statistics in his state-of-the-nation address to pretend that nothing had been achieved in the past 20 years and to resort to divisive, identity politics based on the fiction of white monopoly capital to shore up his failing popularity.
Although Zuma bemoaned the fact that only 10% of the top 100 companies on the JSE were directly owned by black South Africans, what he didn’t disclose was that this number rose to 23% when indirect shareholdings through pension funds, unit trusts and life policies were included. This proportion exceeds the 22% share (direct plus indirect) held by white South Africans – surely a remarkable achievement.21
Take Anglo American. Its CEO, Mark Cutifani, estimated that direct black ownership of Anglo’s South African operating assets was 27% but that this rose to more than 45% once the participation by black South Africans in pension funds and as investors on the JSE was taken into account.
‘Many people still don’t understand that the owners of most South African publicly-listed mining companies are not the Randlords or magnates of the previous generations, but rather ordinary pension- and investment-fund owners – that is, average South African citizens of all races: