SA Overview 2015

Jan van Riebeeck set the tone early

2015 overview.jpg

In January of this year President Jacob Zuma set the tone of much of the domestic political debate by playing the ‘race card’ with a remark that Jan van Riebeeck had started all the problems in the country.

Not only did the race issue become more prominent as the year progressed, but the remark also, as we anticipated in our first issue of the year, ensured that the position of Mr Zuma came under strong scrutiny from the very start of the news year. Judging from an analysis of our readership figures, it remained of great interest right through the year.

On the global scene the year kicked off on various fronts under the looming shadow of what we dubbed “Cold War II” and with increasing signs of the development of a new financial order and worldwide economic restructuring.

Momentum was lent to these two notions by, first, China’s decoupling of its yuan from the US dollar. This was followed by the announcement that BRICS’ (Brazil, Russia, India, China and South Africa) New Development Bank (NDB) is ready to go operational in 2016.

That is the broad backdrop, but a number of themes or trends emerged during the course of the year, some of some dating back to 2014 or even earlier.  

Position of Zuma

The position of President Zuma and the many controversies surrounding him and his possible successor remained a prominent theme.

Towards the end of the year, despite efforts by the ANC to postpone it for as long as possible, the succession battle leading up to its 2017 elective conference started in earnest.

For Mr Zuma it was a successful year in the sense that he survived it and succeeded to postpone a ‘Nixon-moment’. But, with a number of court cases pending, it might still come and it is to be expected that his position will remain in the news during 2016.

Elections and new political environment

Already in January of this year it was clear that South Africa was getting back into election mode for the local government elections of 2016, which could give momentum to a new era of coalition politics, especially in metropolitan areas.

The election of Mmusi Maimane as the first black leader of the official opposition, the Democratic Alliance, marked the start of earnest campaigning.

Lending further momentum to the notion that the country is moving closer to a dispensation of coalition politics was, on the one hand, the notion that, in line with a global trend of populist politics, 2016 was ‘the year of the Economic Freedom Front’, and, on the other hand, that the ANC governing alliance has reached its ‘Humpty Dumpty moment.

Policy catch-ups

Adding to the governing alliance’s troubles during the course of 2015 were increasing signs that some of its signature policy programmes were catching up with it.

Among these was the devastating effect that cadre deployment had on key state institutions, like the State Security Agency, the South African Police Service, and on a whole phalanx of state enterprises.

It also had an impact on another hot topic, namely corruption, which ANC National Executive Committee member and Minister of Public Works Thulas Nxesi described as the number-one enemy of the party and the National Democratic Revolution (NDR).

At the heart of it is that under ANC government, nepotism, cadre deployment, patronage and cronyism have eroded ethical standards throughout the country’s body politic at all levels of governance.

It has also created a tangled web of conflicting interests throughout society. This makes taking a neutral stance in its role as the government of the day virtually impossible. It can also in the run-up to next year’s municipal elections rip the ANC apart as sitting councillors are subjected to performance assessments in this regard.

One can expect this topic to remain a hot and thorny one in 2016.

Besides cadre deployment, the way the policy of Black Economic Empowerment has been implemented, has increasingly been labelled a failure and counterproductive. It seems only to have succeeded in redistributing inequality.

Infrastructure failure, climate and services

As early as February this year, when it seemed that the electricity supply crisis was easing a bit, we warned that its ‘terrible twin’, a water supply crisis, was waiting in the wings.

By the end of the year, as the worst drought in two decades gripped the country, the water crisis has become a full-blown reality.

Combined with ever-growing protests over failed service delivery, worsening economic conditions and job losses due to restructuring in, among others, the mining industry, this could become the biggest threat to South Africa’s social stability in 2016.

Economy

The initial big news on the economic front came in the international arena as China let the world know that its economy is restructuring and that commodity prices had collapsed. Heinrich Kruger, CEO of Kruger International Asset and Wealth Management, in an interview with The Intelligence Bulletin, said the world economy is experiencing a situation never seen before. There are no historical precedents on which economists can base analyses or predictions.

This makes not only for high volatility in markets, which is likely to last for quite a while, but also for mostly guesswork, rather than sound analysis, on which to base long-term commitments.

In August we wrote: “… the only real certainty is that especially emerging countries – including South Africa – are set for an extended period of currency and economic volatility. And it is especially the case for countries, like South Africa, that are heavily dependent on commodity exports.”

This story is far from over and last week Moneyweb quoted Simon Brown, founder of JustOneLap, saying he did not expect the country to enter a recession in 2016, and that an economic growth expectation of 2% is probably optimistic.

In November South Africa escaped slipping into a technical recession by showing a tiny growth rate in the third quarter of the year, but as we wrote at the time: “To the vast majority of ordinary South Africans one more digit this way or that way or technical definitions do not matter. For them the economy is slipping dangerously in the wrong direction.”

The recession is in the streets, as evidenced by the discontent demonstrated by what started with the #Rhodes must fall student campaign and morphed from issue to issue. By the end of the year there was an alliance between students and some worker groups operating in public protests.

As things stand, 2016 promises to be another volatile year on broad social, economic, labour and political fronts. The holiday season is probably just a breather before social stability in the country comes under renewed pressure early in the new year.

                                                                                                                                                                                         by Piet Coetzer

Also read: Who knew of Nene-move as Zuma flies into another storm?

                    South Africa: The runaway train



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