🔒 RW Johnson offers a turn-around plan to save SA. MUST READ!

South Africa in the democratic era has not met expectations. A quarter of a century after Nelson Mandela became president, unemployment among the previously oppressed black masses remains stubbornly high and crime is rampant. The education system has not been overhauled to ensure that people from disadvantaged backgrounds can compete for good jobs; the property system is a mess, with home ownership out of reach for the majority. Corruption has scarred South Africa’s reputation, deterring international investors. Under President Cyril Ramaphosa, South Africa has been given a second chance. But it’s not going to be easy for Ramaphosa to ignite economic growth. As RW Johnson, a respected analyst, explains to political journalist Donwald Pressly, there is a danger Ramaphosa will talk things up rather than succeeding in executing significant reforms needed to get new life into the economy. – Jackie Cameron

By Donwald Pressly*

Author and political scientist RW Johnson says he doesn’t believe Cyril Ramaphosa has the gumption to do something radical to get a stagnant South African economy right. If he doesn’t do a Churchill – and offer to fall on his sword so to speak – he is going to prove himself to be a lacklustre, if smooth-talking head of state. Donwald Pressly, who chaired a session with him at the Cape Town Press Club, asked if he was likely to take Johnson’s advice that he put his whole presidency on the line in his appeal for an International Monetary Fund bailout.

___STEADY_PAYWALL___

Donwald Pressly

“I don’t see this happening, no. The structural reforms which have been asked for by the IMF and World Bank… I see no sign he is going to be bold enough to take those steps.” But ominously, Johnson adds: “I don’t think he will get (South Africa) out of the mess… unless he does.” The structural changes would include labour liberalisation, reshaping the education system, cutting back the civil service and making sure the state-owned enterprises don’t lose money.

In Johnson’s latest book Fighting for the Dream, he said Ramaphosa needs to make the equivalent of Winston Churchill’s blood, toil, tears and sweat speech of May 1940, saying that only now, “after 18 months in office, does he fully understand just what an appalling situation he has inherited”.

Ramaphosa would need to restate the promise of the Mandela era “as eloquently as possible and say that he and those like him are not prepared to surrender the dream, but that to get out of the present situation the country will need to make substantial sacrifices”.

Johnson believes Ramaphosa needs to be blunt about his intentions to pull South Africa back on course. He needs to drop the national democratic revolution rhetoric and announce that he had approached the IMF for a major loan “to help turn the country around”. Ramaphosa needed to acknowledge that this was a major turning point “but that he can see no alternative and he is determined to see changes made”. He should appeal for support but make it clear that if support – from within his own party and tripartite alliance – was not forthcoming, he would have to step down “rather than reverse himself”.

Johnson says in the book that this would be both essential and “only logical” for in effect he would be putting his whole presidency on the line in making such a speech, so he might as well acknowledge that fact. “I personally would favour an IMF bailout… with the billions of US dollars which could be made available, it would be easier to deal with these (good) things with that sort of outside help”.

Johnson said the IMF was the lender of last resort. “It is the person (entity) that you go to when the private banks won’t loan to you.” Zimbabwe is desperate for an IMF loan, but it can’t get one because they still owe money from a previous loan. Pakistan has just had its 18th bailout since independence in 1947. Closer to home Nigeria and Zambia had received IMF loans.

When people say it was “terrible” to receive such a loan injection “I ask whether you want a lender of last resort or not?” Johnson told the anecdote about Churchill meeting Stalin and Roosevelt in Tehran in the middle of the Second World War. They were pondering landing their forces against the Germans in France. Churchill did not want to land in Normandy, anticipating another Dardanelles suggesting a Balkan offensive instead. Stalin and Roosevelt said “nonsense… go through Normandy”.

Churchill snapped to his Foreign Secretary Anthony Eden that it was “awful having allies”. The only thing worse was not having allies, so too, Johnson suggested, it applies to opening the door to an IMF loan.

Johnson explained that Ramaphosa was caught up in a party, the ANC and government which now had a “pretty undisciplined free for all” culture. Gone was the ethnic Afrikaner nationalism where there was, at least, a collective view of national interest. Now there were various factions in the ruling class that were “grabbling for whatever’ they could.

On a variety of policy questions – there was little planning. There was “no sense of national priorities” or what drove the national interest. Take for instance Eskom, which Johnson said was the best example of state inertia. Fully 12 years ago, the lights went out. It was then “really a very major national crisis”.  One would have thought that the ANC government would have had time to deal – and fix – the problem since then but “it has not been done”.

If you now look at Eskom prices – tariffs – you can see they had been caused by affirmative action “quite deliberately getting rid of experienced people because they were white and putting people who did not have their skills in their place”. The government had swept away a “very reliable scheme” of getting cheap coal – to fire its power stations – and had substituted this with a BEE scheme “that was altogether less efficient and more costly”.

“The extraordinary thing is both of these things are still being done. The first priority is transformation… making the wrong appointments and they are still going ahead with this BEE coal supply. In effect, transformation, although a woozy word, has been put forward as the highest national goal.”

Then there was the problem of the bureaucratic bourgeoisie. Public servants were earning 40 percent more than comparable private sector workers in the context of co-existing with 10 million unemployed. “This is the most dominant group in the society,” he charged.

When Public Enterprises Minister Pravin Gordhan ushered in the new Eskom board, the first thing they did was look around to find out how many employees at the state-owned power monopoly has associations with embedded private companies which supply services to Eskom. “After a couple of weeks there were found to be 1,000 companies of this kind… then the figure rose to 4,000.”

This is replicated throughout the public service.

To achieve a turnaround, the new cabinet needed to take radical action to resolve these problems. It was not clear whether they had the stomach to do so, Johnson argued. Ramaphosa appeared to have no appetite for structural reform. “The danger is he is going to talk things up. As (Harvard-trained US economist) Larry Summers said… talking the economy up is the very cheapest stimulus. It does really work. It hasn’t worked. It won’t work just getting people together to say something (about economic growth)… you really have to change things.”

Asked about the official opposition, the Democratic Alliance, Johnson said that at one point the second largest party was running well under 20 percent in the polls (it received nearly 21 percent in the May 8 election in the end), but it had not achieved electoral growth this time round. There was a need for a Molteno-style investigation into the party’s need to find the road forward. The Molteno commission made recommendations to the Progressive Party – a DA predecessor party – after its breakaway from the United Party). Asked whether Helen Zille, the retiring premier of the Western Cape and close friend of Johnson, would start a new liberal party, he thought not. She remained loyal to the DA project, he said. “That is the party she wants to succeed.”

  • RW Johnson is a British political scientist and historian who lives in South Africa. A fellow of politics at Magdalen, he has also written How Long Will South Africa Survive? (1977) and How Long Will South Africa Survive? The Looming Crisis (2015). Donwald Pressly is a former editor of The Cape Messenger and is currently deputy chairperson of the Cape Town Press Club.