Patronage Watch

Economic exclusion feeds politics of patronage

Steven Friedman

Factional battle in the governing African National Congress’ (ANC) is building hand over hand. But it’s been coming some time as a proxy war for control over the economy, and is far from over.

This is how Steven Friedman called it in December of last year after a dramatic ANC national executive committee meeting (NEC) meeting in November. He foresaw the drama presently playing itself out within the ANC.

Friedman wrote that it is common to reduce ANC politics to a battle between personalities: more specifically, to one in which the future depends on whether the president stays or goes.

In reality, it is a fight between two factions, both products of trends in the economy. The battle’s outcome will have important economic implications but, without other changes, not as dramatic as we are sometimes led to believe.

To understand what is happening within the ANC, we need to look at the economy’s path since the country became a democracy.

In 1994, South Africans were divided into economic insiders deriving the benefits of the formal economy, and outsiders largely excluded. The main dividing criterion was race.

Since, the economy has absorbed new black entrants into the insider group. But strong barriers to entry into the formal economy remain. So, despite the emergence of black professionals and managers, many black South Africans remain economic outsiders.

What feeds the politics of patronage

This insider-outsider divide explains the ANC factions. Many of the ills associated with Zuma’s presidency are the work of a faction relying on public office to acquire resources used to buy support.

One cause of this style of politics is that it is not that easy for ambitious black people, freed of past legal burdens, to make it in the formal economy. Some see politics as a way of getting ahead.

The insider-outsider divide ensures they have a ready support base when able to hand out resources to people who live on the economy’s margins.

Because many people are still excluded, they cannot rely on formal jobs to make ends meet. If they can, they therefore attach themselves to politicians, giving them support in exchange for (some) resources.

This opens the way to patronage politics, with private and public interests getting together to use public resources for their benefit and, if they are politicians, to build their power base.

The president is part of this faction, and the Gupta family one source of its resources. However, there is far more to it than one politician and one family.

Its goal is to feed the public-private networks which keep its money flowing. Therefore, the eagerness to take over parastatals, and the National Treasury, a potential source of patronage bounty, if people wanting to keep public money public, are removed.

The opposing faction largely represents those already absorbed into the market economy. This does imply all its politicians are directly engaged in the private economy, although many are. But they rely for support on voters whose livelihood depends on the formal economy, and who would lose out if the government damaged it.

This group is also not restricted to business people and professionals. It includes trade union members whose wages/salaries give them a stake.

While cosy relationships between public and private interests happen in the formal economy too, people who have been absorbed into the market economy have an obvious interest in protecting it against a takeover of the National Treasury, or other damage inflicted by the patronage faction.

ANC politics does not make much sense unless seen as a battle between these factions.

While often told that ANC statements are contradictory or confused, it usually means that the factions are taking opposing positions – the patronage faction wanted Des van Rooyen as finance minister, their opponents insisted he be replaced by Pravin Gordhan.

Battles over parastatals hinge around whether they will be used for patronage, as does the continuing fight over nuclear power. The patronage faction wants Zuma to remain in office, its opponents want him out.

The battle continues

This factional battle is likely to continue next year (2017) despite the dramatic developments at the last NEC meeting. The earliest this battle is likely to be settled is at the end of 2017 when a new ANC leadership will be elected.

This means that many skirmishes between the factions lie ahead – over the South African Broadcasting Corporation, power utility Eskom, South African Airways and perhaps the South African Revenue Service too.

In every case, the issue will be whether patronage politics or the public interest (at least the interests of those active in the formal economy) prevail. Although neither side will win a clear victory, the outcome of these battles will signal the direction in which the economy is heading.

Patronage faction victories will erode the market economy, and wins for their opponents would strengthen it. If the patronage faction loses the battle for control of the ANC, the economy in its current form will be insulated from attack those who want to turn it into their property.

But even then, the gains for the economy will remain limited. The problem, which strengthens patronage politics – the exclusion of many from the formal economy – will remain. So, will the poverty and inequality which are its product.

Unless economic change is negotiated opening the formal marketplace to the excluded, the problem, and the potential for damaging patronage politics will remain.

Amid the recent political drama, there was one sign that this negotiation may be beginning. This was represented in the news that business, labour and government were discussing a deal in which a national minimum wage would be introduced in exchange for measures to reduce strikes.

While that would be only the beginning, it is this sort of bargaining which could ensure that the market economy is not only saved from patronage politicians but that it begins to create conditions which will mean that patronage has far fewer takers.

None of this will be possible if the patronage faction wins. But, if it is defeated, the gains may not last long unless negotiation on economic change takes root.

                                                                                                            by Intelligence Bulletin Team

(This article is in main a shortened version of an article by Steven Friedman originally published on The Conversation. Friedman is Professor of Political Studies, University of Johannesburg.)

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